Ask the Attorneys: What Lies Around the Corner in 2015?

Rhett Pardon

Corey Silverstein

Last year I predicted that 2014 would not be the year that the adult industry saw a conclusion to the Free Speech Coalition’s battle with the U.S. Government regarding 18 U.S.C. § 2257. But for 2015 I predict that while the battle may not conclude in its entirety, this may be the year that the record-keeping statutes and requirements do see some activity or clarification. 2257 remains valid law and compliance remains a necessity for 2015 unless we hear otherwise from the courts.

At least one dating site has found itself in the crosshairs of the FTC and all of them are paying attention. As the industry introduces new ideas and techniques to meet increasing consumer pressure for more personally-directed forms of entertainment, the legal landscape will grow more complex and confused until cases decide the issues. - J.D. Obenberger

Hacking, malicious attacks, data theft and piracy were making headlines in 2014 on a daily basis and I believe that in 2015 the trend will continue. Regardless of their motives, hackers and pirates continue to adapt to advancements in data security and become more aggressive.

There is no doubt that now is the time for everyone in the adult industry to review their data security measures and ensure that sensitive data is being adequately protected.

I anticipate that governments across the world will spend more money and resources than ever before on the prosecution of hackers and pirates and I foresee a spike in domain seizures.

I expect that in 2015 the Federal Trade Commission will continue to aggressively investigate and prosecute those who the FTC believes are engaged in unfair or deceptive acts or practices in or affecting commerce. I also believe that the FTC will increase their enforcement of the Restore Online Shoppers’ Confidence Act (ROSCA).

Rosca prohibits unfair deceptive Internet-based sales practices including certain third-party billing practices and enrolling consumers in negative option programs without adequate disclosure.

For the last three years I have correctly predicted that the adult industry would consolidate and more parties would engage in joint business ventures. I expect that in 2015 adult businesses will continue this trend and in fact I expect the quantity of these types of ventures to increase.

Finally, I think that in 2015 more members of the adult industry will unfortunately become parties to patent enforcement lawsuits.

Efforts last year by Silicon Valley and Congress to crack down on so called “patent trolls” made little progress and thus other than the FTC’s efforts to curb “patent trolls” little has changed in this arena that would make patent holders less eager to pursue claims in the courts.

Marc Randazza

Privacy law issues. The industry has been ignoring them, the way that it ignored piracy when it first reared its head.

Lawrence Walters

On the horizon we’re sure to see continued intellectual property issues and disputes within the industry, as content become more easily replicated, uploaded, and indexed on multiple distribution points throughout the web.

The indexing business model will likely result in some litigation, in an effort to clarify how such businesses must adopt and enforce DMCA policies. New media like 3D modeling will also come into its own, with the associated legal uncertainties.

The online escort advertising industry will continue to be a flash point, as law enforcement struggles to decide whether it is better to have access to the information provided by these sites, or shut them down entirely.

Bills like the SAVE Act could change the entire legal environment for this industry, if passed. Operators will continue to flow into the dating and live cam businesses, as content becomes more expensive to produce, and more difficult to protect. However, the FTC will likely continue its enforcement actions against these industries, in an effort to protect consumers (and justify its existence).

The FSC’s challenge to Section 2257 will almost certainly be decided soon by the 3rd Circuit, and that case will set the rules, once and for all, with regard to 2257 compliance — absent an unlikely review by the U.S. Supreme Court.

With the L A condom law upheld, we may see more cities, counties or states pass similar laws – particularly in the 9th Circuit, which covers both California and Nevada. Content producers could therefore look at other destinations outside of the 9th Circuit to set up shop, such as South Florida.

Karen Tynan

For my areas of practice, I’ve got two updates:

1. We expect Cal/OSHA to put forth their draft of new adult film production regulations in February 2015. The public comment period and time for our work in addressing areas that concern the industry follows the release of the draft. FSC is taking the lead in this area with presenting our proposed revisions and information from industry professionals and medical experts.

2. Once again, we anticipate that Isadore Hall or another southern California legislator will introduce an Aids Healthcare Foundation “condoms in porn” bill in either the State Assembly or Senate. Last year’s bill failed in the Senate. We expect that any bill will continue to have problems addressing medical privacy concerns, and AHF will not have performer support. We will work with production companies and performers to once again defeat this ill-conceived proposal. It will take a lot of work in educating new legislators and committee members about the adult film industry and the real agenda of AHF.

J.D. Obenberger

1. 18 U.S.C. § 2257. It would be a real surprise to see any actual Section 2257 enforcement until the Free Speech Coalition’s challenge to the statute in federal court is resolved. On Dec. 11, the 3rd U.S. Circuit Court of Appeals heard extended, robust argument from attorneys representing the Free Speech Coalition and the U.S. Department of Justice for the second time; When this case was last before the 3rd Circuit, in April, 2012, the panel remanded the matter back to Judge Michael M. Baylson in the District Court to develop facts by conducting a trial. In sending the case down to the trial court, the 3rd Circuit expressed serious misgivings about the way that Section 2257 operated to deny fundamental privacy to ordinary people who create a record of their intimate activities. At that time, the 3rd Circuit flatly rejected the DOJ’s argument that constitutional decisions might avoided by trusting the DOJ to avoid wholesale deprivation of personal rights by selectively prosecuting only commercial producers. Judge Baylson conducted that trial during June, 2013, though the parties decided to introduce only little evidence about the issue of personal privacy so highlighted by the 3rd Circuit. In turn, Judge Baylson’s trial memorandum determined that Section 2257 was fundamentally constitutional, finding only a few matters to be invalid. The recent argument before the three-judge panel of the 3rd Circuit, which can be heard here, shows the judges questioning the attorneys on each side, in dramatic jumps from one issue to another, in a manner that suggests that all of the issues are very much still in play.

Their questions suggest far more a testing and probing of the parties’ respective positions in search of a judicial solution than the affirmation of any particular analysis. To one extent or another, the judges displayed obvious signs that their minds were still open at the time of argument. The effect of this criminal statute on ordinary Americans, in a culture that accepts and encourages exchanges of home-baked graphic sexual imagery, however, and which protects both privacy and free expression by its fundamental law, remains very much on their minds and may represent the most critical or central issue to them, notwithstanding the circumstance that the law’s effect on private individuals was largely relegated by the parties to amicus briefs submitted by nonparties. It is really not possible to responsibly predict how they will resolve this case.

There was hardly a syllable of sympathy expressed about the expense and burden of typical commercial compliance, and only a bit more about the privacy of producers who do business at home. From this, and other aspects of the argument, one can fairly conclude that the court is far more concerned with protecting individual privacy of ordinary people than it is with relieving the members of this industry from the expense and burden of records creation, maintenance, and inspection. The abstract devotion to ideas of privacy, when applied in the setting of commercial porn, seemed to garner only attenuated interest by the judges forming this panel.

My hunch is that the statute will fall if the court determines this to be necessary to protect personal privacy and that it will survive if the court can fashion a way to exempt those noncommercial interests from its application. A hunch and nothing more. Whatever its decision, it is likely that one party or the other will seek Supreme Court review, and in any event, it is unlikely that any broad program of inspections will resume during the Obama Administration. The effect of this court’s determination just might be less significant to the adult industry than the attitudes of Congress and the next incumbency in the White House.

2. Obscenity charges at any level have become a rarity and Federal obscenity prosecution has become wholly moribund during the Obama administration. I expect this to continue until obscenity becomes a dead letter. The Department of Justice under President Obama has not brought forth one actual obscenity prosecution and there is no rational reason to suspect that it will do so in its declining days. The DOJ has cleared the docket of cases initiated before Obama became president and has evaded the Bible Thumpers’ demands for new prosecutions.

3. Relatively small producers will continue to be the victims of international copyright piracy with increasingly outrageous affronts to their rights. The fundamental problem here is the expense involved in finding practical, solid means by which to take down the offenders, and the existence of laws and prejudices in the legal system which protect them. The destruction and absorption of the smaller and medium-sized producers (a trend for some years, now) diminishes and saps the best video creativity in this industry.

4. Static DVD releases will continue to regularly diminish in profitability and numbers. Programs that offer more personal and direct person-to-person experiences, or promise the same, are likely to succeed and grow while the market for unexceptional static video will tread water or diminish. New innovations will create new and dramatic legal risks. Cam operations, special one-time webcasts, dating sites, sugar daddy sites, remote, robotic, sexual penetration control, 360 degree user-selected viewpoints from which to view scenes, and escort advertising all live in topical zones that are relatively unthreatened by copyright infringement issues and appeal to the consumer who hungers for an experience more personal than the consumption of prerecorded video and still images.

These areas are experiencing dramatic growth at the expense of static video. It is no surprise that online adult entertainment is moving in the direction of more personal encounters in order to meet the demand for excitement. However, as the commercial experience becomes more personal and direct, the legal issues become different because different laws are implicated and the general situation generally grows in complexity from the comparatively simple issues arising in static video. Escort advertising has met with organized attack by the Attorneys General of states. State statutes have been enacted in several places that resemble Section 2257 requirements, requiring site owners to harvest ID documents at the risk of presumptive guilt of complicity in child prostitution, should a depicted escort be underage, and court cases challenging those statutes have emerged. At least one prevailed against the statute.

At least one dating site has found itself in the crosshairs of the FTC and all of them are paying attention. As the industry introduces new ideas and techniques to meet increasing consumer pressure for more personally-directed forms of entertainment, the legal landscape will grow more complex and confused until cases decide the issues.

5. It has become increasingly clear for more than 20 years that the dominant segment of the public, consuming erotic material, demands both authenticity and fantasy perfection at the same time. Sites that perfect the art of making it seem effortless to present what appears to be a performer walk-in accomplishing a flawless sexual fantasy gratification in about twenty minutes, will continue to succeed wildly — and they will then become the most valuable target for the pirates.

6. The darkest side of the force just may be the revenge porn sites. They will face increasing legal pressure and criminalization.

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