XBIZ Summer ’06 Forum Seminar: Protecting Your Business 101

Michael Hayes
LAS VEGAS — While many adult webmasters came looking for ways to enhance profit, a panel moderated by XBIZ editor-in-chief Gretchen Gallen focused on a slew of ways industry professionals could protect themselves from civil, criminal and business liabilities.

Kicking off with a topic often overlooked by many in the adult entertainment industry, attorney Greg Piccionelli gave a primer on contracts.

“Industry contracts mean knowing about intellectual property law, but they also mean being aware of the potential criminal liabilities for those in the adult business,” Piccionelli said. “It’s important for the industry to adopt a professional standard here because contracts can solve business disputes, they can be used as evidence in your favor to defend against allegations of child pornography in some cases and they can protect your intellectual property.”

Picking up on the intellectual property theme, attorney Lawrence Walters told the crowd that issues of copyright and trademark infringement need to be taken seriously by the industry.

“A lot of people say that copyright prosecution isn’t economically feasible,” Walters said. “But if you register your copyright, you can seek statutory damages, which makes those cases worthwhile.

Attorney J.D. Obenberger told the crowd that webmasters were akin to major print publications in terms of risk, saying that they needed to think like major mainstream media outlets.

“You may not have the resources of a Playboy, but the risks are the same, which means you need to take rights clearance issues seriously,” Obenberger said. “You need to have an attorney clear your content for possible trademark and copyright infringements.”

Changing course, insurance attorney Michael Abelson gave the attendees a workshop on insurance basics for adult webmasters.

“You need to look into property insurance if you have hardware or a physical space,” Abelson said. “You should look into cyber liability insurance for issues of defamation, copyright and trademark. Business interruption insurance is a good idea. And if you can find it, coverage for the costs of a criminal defense.”

Above all, Abelson stressed to the crowd that perhaps the best feature of any insurance policy is the duty to defend.

“You never want to be the one who has to pay for something,” he said. “An insurance policy often means that if you meet the triggering criteria, the company pays for your lawyer. It’s important to insist on a good lawyer and not take no for an answer.”

While the panel was dominated by lawyers, not all the advice was purely legal. Joan Irvine of ASACP stressed the importance of best practices.

“This is big business, not the wild west,” Irvine said. “You need best practices. Mainstream consumers want to do business with you, people want to buy your product, but you can’t use unethical marketing tactics that target children.”

Tom Hymes of the Free Speech Coalition concurred with Irvine.

“To this day we’re still hearing about bad business practices that haven’t been used in years,” Hymes said. “Mainstream has a very long memory. Every webmaster is a representative of the community and they need to act accordingly.”