Category: Internet law

  • ChatGPT: What’s in the Fine Print

    Everyone seems to be going crazy about ChatGPT – using it to write everything from social media posts to books, worry about if kids are using it to cheat at school, and wondering if this is our new robot overlord that will ultimately replace all professional writers.

    Ok, maybe I’m exaggerating with that last one.

    But how many people have read the terms of service and its privacy policy?

    I have.  😉

    Photo by Barney Moss (Creative Commons)

    OpenAI is Winning the Internet

    Did you know that the same company that created ChatGPT also created DALL-E? I’m not usually one who makes predictions, but so far, OpenAI is winning this year. They are creating the standard against which other AI will be compared.

    As long as they don’t fuck it up, OpenAI is going to kick ass this year.

    OpenAI’s terms and privacy policy are the same for all its services, including ChatGPT and DALL-E, so plan accordingly.

    What Can’t You Make with ChatGPT

    OpenAI has a policy that you can’t use its services to create content related to:

    • Political campaigns
    • Adult content
    • Spam
    • Hateful content
    • Content that incites violence
    • Uses that may cause social harm

    Hat tip to OpenAI for acting with integrity from the start. I understand why it doesn’t want to be connected with these activities. Use AI for good not evil.

    Yes, some of my clients are porn companies. I see nothing wrong with consenting adults creating adult content. (Yes, that means sometimes I get paid to look at porn.) However, I understand why OpenAI made a blanket rule against using AI to make adult content because you know some sicko will use it to try to make virtual kiddie porn. It’s just easier to prohibit the entire category.

    Photo by James Lee (Creative Commons)

    You Can’t Claim You Made the AI-Generated Content

    The terms of services clear say that when you use OpenAI’s services, you cannot “represent that output from the Services was human-generated when it is not.”

    They obviously wanted to get ahead of suspected problems like students using ChatGPT to do their homework. That also means if you’re a marketing agency, you can’t claim the content created by ChatGPT was made by your staff.

    Previously, I predicted that “handcrafted artisanal content” would become a real label in content marketing. I think this could be the beginning of it.

    Photo by Torley (Creative Commons)

    You Own the IP – or Do You?

    The terms say “OpenAI hereby assigns to you all its right, title and interest in and to Output.” This might make you think that you’ll own the copyright in everything ChatGPT creates for you.

    But that’s not true.

    It’s well-established that copyright only exist in works created by humans. The output from AI-software can be copyrightable in only two situations:

    1. The software code was written by a human and it original enough to be by copyright. If this is true, then the output would be a derivative work of the software code.
    2. What you input into the software was protected by copyright, and therefore, the output is a derivative work of the input. If the input was something you owned the copyright in, you don’t need OpenAI’s assignment to own the rights in the output.

    However, if the input is merely facts or ideas (no copyright) and there’s no copyright in the software code, there’s no copyright in the output. OpenAI can assign you the rights in the output, but those rights won’t include copyright.

    Photo by Levork (Creative Commons)

    Warning: Two Users May Get the Same Output

    Heads up: the OpenAI’s terms say its “Services may generate the same or similar output for OpenAI or a third party.”

    So, there’s a risk that two users could get the same output from ChatGPT, think they own the copyright in it, and then accuse each other of copyright infringement when neither one owned a copyright in the output to begin with.

    That’s also another strike against ChatGPT – if you ask it to create the ordinary, the output isn’t likely to differentiate your brand from your competition.

    And by the way, the terms also say that there’s no guarantee that the output from their software doesn’t infringe on another’s rights. (If you outsource your content creation to a third party, double check your contracts to make sure that if you’re accused of wrongdoing for what they created, that they’ll be responsible for your damages and attorneys’ fees.)

    OpenAI Can Use Your Content Too

    Did you also notice that the terms say OpenAI may get the same output as what it creates for you?

    They also say that OpenAI can use your input and output from its software to develop and improve its services.  

    Photo by Lorie Shaull (Creative Commons)

    Don’t be a Dick to OpenAI

    They already thought of this – you’re not allowed to create multiple accounts to take advantage of their free tier of services.

    If you want more than that, pay for it.

    Additionally, you’re not allowed to use their services in any way that infringes, misappropriates, or violates anyone’s rights.  

    Photo by Steve Spezz (Creative Commons)

    You Have to Protect OpenAI

    Just I said to double check your contract with your third-party creators, the same verbiage is in the OpenAI terms. You have to indemnify OpenAI against any “claims, losses, and expenses (including attorneys’ fees) arising from” your use of their services.

    This is actually a standard term I include in a lot of my clients’ contracts.

    Photo by Steven Depolo (Creative Commons)

    Cool Points to OpenAI

    Whenever you read a contract (terms of service are a contract), remember that whichever side wrote it, did so to protect their interests, not the other guy.

    However, if you are constrained to take OpenAI to arbitration to resolve a dispute, but you can’t pay your half of the arbitration fees, “OpenAI will pay them for you.”

    That’s a classy move. In most terms of service, including the ones I write for clients, if you can’t pay your half of the arbitration fees, you’re screwed and you have no other recourse.

    The terms also say, “OpenAI will not seek its attorneys’ fees and costs in arbitration unless the arbitrator determines that your claim is frivolous.”

    In many contract disputes, it’s a given that the winner will ask for attorneys’ fees and costs. That’s often one of the upsides to bringing a breach of contract claim.

    Photo by DonkeyHotey (Creative Commons)

    What’s OpenAI Doing with Your Personal Info?

    I’m not sure what OpenAI is doing with my personal information, but they can use it for research and make it generally available. That’s what their privacy policy says.

    This is separate from their policy about how they use aggregate information, which they can also use for research.

    OpenAI’s privacy policy also says, “We do not and will not sell your Personal Information. (CA users).” I don’t know if this means that the personal information of people who aren’t California users might be sold, of if this is a policy that applies to everyone, but was included to comply with the California privacy law.

    As always, buyer beware. If you’re not paying for a product, there’s a good chance you are the product.

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    Ruth Carter

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  • Legal Side of the Try Guys-Ned Fulmer Situation

    Photo courtesy of 2nd try llc

    I have a somewhat different perspective on the Try Guys/Ned Fulmer situation given that I’m a business and internet lawyer as well as someone who has built a business from scratch.

    Disclaimer: I am not at all involved in this situation. I’m just a person with legal knowledge who is watching from the sidelines. Also, I’m a fan of the Try Guys, so my analysis may be biased in their favor.

    Quick Overview of the Situation

    Eugene Lee Yang, Zach Kornfeld, Keith Habersberger, and Ned Fulmer were four guys who worked at Buzzfeed but then left to start their own business based on a YouTube channel called The Try Guys. The channel has millions of subscribers.

    A few weeks ago, it came out that Ned, who’s married, was having an affair with one of his employees, Alexandria Herring, after photos of the two kissing were posted online. Shortly thereafter, the Try Guys released a post that Ned was no longer with the company followed by a scripted video entitled “What Happened.”

    Some of the online reactions said the guys were acting like they were self-important and acting as if Ned cheated on them, not his wife.

    Now that we’re all on the same page, here’s my two cents:

    The “What Happened” Video Wasn’t as Self-Important as Some People Say.

    As YouTubers, the Try Guys put a lot of their personal lives and feelings on the internet. Sharing what happened and how they felt about it was on-brand for them.

    I also wondered if they’d been holding it together for weeks, keeping everything hush hush as they were investigating what happened and deciding what they were going to do, and this video was their first chance to vent how they really felt.

    Ned Cheated on The Try Guys as Business Partners.

    The Try Guys seemed to put their hearts and soul into this business without a Plan B if it didn’t work out. They based their professional futures and livelihoods on the belief that the Try Guys would be a successful business. Like many entrepreneurs, myself included, there is no differentiation between when their professional and personal lives.

    As Eugene, Zach, and Keith said in their video, Ned went against the values of the company that the four of them had created together. When they learned about Ned’s infidelity, they were rightfully worried about how this news would impact their company’s reputation and future opportunities. Not only were they worried about their company’s future, but also for their employees who rely on their jobs to provide for their families.

    Photo by Hooiserillusion from Flickr (Creative Commons)

    Ned Shit the Bed and the Remaining Try Guys are Left to Clean it Up.

    It’s important to remember that these guys weren’t just co-workers, they’re co-owners of a company. They’re creating content and running a business. It’s basically two full-time jobs in one.

    As the Try Guys said in their “What Happened” video, they felt they had found their cadence where their company was consistently creating content and they finally had enough time to explore other personal projects as well. Just as they had established this balance, Ned, through his actions, fucked all that up.

    The Try Guys had to drop everything and deal with hiring someone to do an HR investigation and talk to lawyers all day to figure out what they could and couldn’t do. Given what they do for a living and that they live in Los Angeles, I would not be surprised if their lawyers cost $500/hour. Dealing with this situation could have easily has cost them tens of $1000s so far. On top of that, The Try Guys had created weeks’, if not months’ worth of videos, that probably cost $1000s to make, and now have to be scrapped because there’s no way to edit around Ned. They also reduced their publication schedule from two videos a week to one, so that means less revenue coming in. So not only are they having to deal with substantial unexpected expenses, but they’ve also lost money on top of that that they’ll never recoup.

    Photo Courtesy of 2nd try llc

    The Try Guys Aren’t Done Dealing with the Ned Situation.

    While everyone else is moving on to the next internet drama de jour, the Try Guys are still dealing with this. I suspect they’re still having regular contact with their lawyers as they continue to clean up the figurative debris from this mess.

    Alexandria Herring was listed as an Associate Producer for the company until their latest video. It was clear from the responses from others in the company, it would not be a work environment for her to remain employed there. I bet she wasn’t terminated when Ned was voted out because they had to work with their legal team to give her a severance package that would allow them to terminate her employment without bringing a lawsuit onto themselves. 

    Additionally, even though they voted Ned out of the company, the remaining Try Guys are still dealing with him from a legal perspective. He may be gone as a creator, but he’s still an owner of the company. To get rid of him completely, somebody has to buy his ownership interest.

    Assuming each of the Try Guys owns 25% of the company, they have to determine what the entire company is worth, and negotiate a buy/sell agreement to purchase Ned’s 25%. Finding a company that performs business valuations and having it done can take weeks, and then there could be weeks of negotiations about the contract’s terms, including releases of liability. If I were a surviving owner, I’d want all the costs of having to deal with the Ned situation to be deducted from the purchase price of Ned’s share.

    The only way I can think that would prevent the Try Guys from having to buy Ned out would be if they had an operating agreement in place that said certain bad acts by an owner would result in that owner forfeiting their ownership interest in the company and getting kicked out with nothing. My gut says that didn’t happen in this situation because, as of October 28th, Ned (meaning Fulmer Media Inc.) was still listed as an owner of the company on the California business entity database.

    So, while Ned is doing his own thing, the other three guys have had to take a lot of time and energy away from what they want to be doing to clean up Ned’s mess, keep the company going in the interim, and probably will have to give him a lot of money to make him go away.

    Given all this, if I were Eugene, Zach, and Keith, I’d be pretty upset too.

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    Ruth Carter

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  • You Have the Domain. They Have the Trademark. Who Wins in the IP Dispute?

    “Stone Stacks – Lindisfarne” by Linton Snapper from Flickr (Creative Common License)

    I saw this scenario come through my Reddit feed. Two U.S. companies are in the same industry and using the same name for their brand. One has the dot-com web domain. The other has registered the brand as a trademark with the U.S. Patent and Trademark Office (USPTO). Which company should get to use the brand and force the other to change their name?

    Timing Matters: Who Was First

    The answer to every legal question starts with “It depends,” and here it depends on which company was using the mark in commerce first. By “use” I mean which company made the first bona fide offer for sale to the public, not who came up with the idea for the brand first.

    Option #1: You Started Using the Domain Before They Registered the Trademark

    If two companies in the same industry the U.S. are using the same trademark, but not one has registered it with the USPTO, then each one can establish what are called common law rights in the mark in the geographic areas where they are respectively using the trademark. They can co-exist peaceful as long as one doesn’t try to infiltrate the other’s established geographic market.

    Here’s what happens when they register the trademark with the USPTO – they get the exclusive right to use the trademark everywhere in the U.S., except within your established geographic area at that time. It’s like a snow globe drops over your geographic market. They can’t go into your area, but you can’t expand your market beyond that boundary. This is what happened when the chain Burger King registered their trademark and there was a mom-and-pop restaurant with the same name already in existence. If you want to expand your geographic market beyond that invisible boundary, you have to rebrand.

    These rules are easier to follow when businesses were brick and mortar establishments. Now that commerce is largely internet-based, a company is likely to naturally expand merely by being online. You probably can’t add any new social media platforms using the trademark without them claiming your infringing on their intellectual property rights.

    If you come to me with this situation, unless you’ve established nationwide common law rights before they registered the trademark, it’s often best to save your money on litigation and rebrand instead.

    Option #2: They Registered the Trademark Before You Start Using the Domain

    Remember, when they registered their trademark with the USPTO, they got the exclusive right to use their trademark everywhere in the U.S. except any geographic area where you established your market for the same mark prior to that date. If they registered before you started using the mark at all, you can’t enter the marketplace using that trademark in that industry. They win. You lose. You have to rebrand.

    What if it’s the same situation, but you were using the mark before they registered but you hadn’t created the website yet? Publishing the website after they registered, even if you were already selling the product using that brand, would be an act that would expand your market beyond your now-limited established geographic area, which is not allowed. I would expect them to send you a cease and desist letter demanding that you take down the website.

    Getting the Domain is Not Proof to Trademark Availability

    A lot of people make the mistake of thinking that if they can get the dot com domain they want that there aren’t any trademark issues that they need to worry about. There are many reasons why a company might not get the dot com of the trademark, even if it was available:

    • They are using another type of domain, like .org.
    • They are only use companyname.com for their website and not get separate domains for each of their brands or other trademarks used by the company.
    • You and they have trademarks that sound the same but spelled slightly different.
    • You and they have slightly different domains, such as XYZ.com and TheXYZ.com.

    When I’m working with a client on selecting a company name, product name, or other trademark, I encourage them to search for their prospective trademark on the internet as well as on the USPTO database. What’s tricky about this is that even if you don’t find an exact match to the trademark you want to use, there could be one out there that is confusingly similar to the one you want to use. It’s best to do as thorough of a search as possible before investing your time and money into your brand.

    Can the Trademark Owner Force You to Give Them the Domain?

    There are lots of reasons why a person or company would have a domain that matches your registered trademark that don’t violate your intellectual property rights. If it’s a situation where your website infringes on their rights, they can demand that you remove the website. It doesn’t mean they can force you to give them the domain, though that is something you can try to leverage. They can always offer to buy it off you. (I often advise my clients wait for them to offer to buy it first so as to avoid looking like a cybersquatter.)

    If they are willing to fight you for the domain, there is a risk that they may file a claim against you in court or under the Uniform Domain-Name Dispute-Resolution Policy (UDRP). If you find yourself in a trademark dispute where you have the coveted domain, it’s best to consult a trademark attorney who can examine your specific situation, explain your options, and advocate on your behalf.

    Question of the Day: Two Companies Using the Same Trademark 

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    Ruth Carter

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  • Share, Don’t Steal Content in Response to COVID-19

    Don’t Steal by Marguerite Elias from Flickr (Creative Commons License)

    During this pandemic, many companies are reaching out to their audience with message of reassurance, information about changes in their services, and ways their audience can help during this challenging time.

    My friend, Jessica Bay, walks dogs professionally as well as educates would-be professional dog walkers. She created a helpful graphic for her audience:

    A short while later, she noticed this in her social media feed:

    And later this one:

    She asked me if these were instances of copyright infringement. If someone is copying word-for-word or close to it, that raises the red flag for copyright infringement. There are definite similarities. I wouldn’t be surprised if one of these graphics were inspired by another’s post.

    Let’s assume that one of these graphics is a rip-off of another. It doesn’t make sense to me that someone would do that. In a niche market like dog walking and pet sitting, there’s no downside to sharing another’s graphic since the provider has to be in the physical vicinity of their clients. And for companies that educate would-be dog walkers, you should be confident enough in your work that your clients aren’t going to jump ship because of a graphic on social media.

    Conversely, there are only so many ways to convey the same information, and independent creation is a defense against copyright infringement. It’s possible that each of these three companies independently came up with the idea of creating a graphic about how their audience could support the dog walking/pet care industry while under quarantine or practicing social distancing.  

    My Two Cents

    Speaking as a lawyer and as an entrepreneur, if you see a graphic that would be helpful to your audience, share it. The best way you can add to the conversation would be to create your own content that builds on the original message, not just repeats it. (If you’re going to create content that repeats another’s message or general information, at least find an original way to do it.) If someone wanted to build on this, they could have created a graphic about the importance of maintaining normalcy in your pet’s life, which includes their walking schedule.

    If you get caught copying another’s content that’s so blatant that everyone will know that one is a rip-off of the other, it’s going to have an adverse impact. Instead of coming across has helpful, you risk being seen as lacking integrity and creativity.

    If You Get Caught Stealing Content

    If someone calls you out for potentially stealing content, and that’s what you did, just delete what you created, and don’t do it again. Saying it’s a “good message to spread” is not a valid excuse for copyright infringement.

    Ripping off a company’s graphic is on the same level as claiming another person’s poem as your own because you thought it was pretty. I think some people have a mental disconnect where they don’t think copying commercial speech is as bad as other infringing behavior. (Creating a graphic with your business logo on it, even though it is not a sales pitch, is commercial speech.)

    If someone has a good message to share, and their original content is shareable, then share it. That’s the best way to share the valuable message with your audience.

    Sharing Done Right

    I have seen this graphic all over social media over the last few days:

    Hat tip to The Counseling Teacher for creating such a helpful graphic. This graphic has the right message at the right time. Additionally, I haven’t seen any instances where sharing this graphic had a negative impact on anyone’s business.

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    Ruth Carter

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  • How to Legally Use User-Generated Content

    https://www.flickr.com/photos/zoidberg72/16243539933
    Selfie by dr_zoidberg from Flickr (Creative Commons License)

    Here’s a question I get from companies and their marketers: What are the legal dos and don’ts for using user-generated content? These are situations where a company wants to use a photo, video, or text created by one of their fans, usually from a site like Instagram, Facebook, or Trip Advisor. Many companies merely want to approach the person through the platform where they found the content they want to use and ask for permission to use it. While this strategy is convenient, it may not be in the company’s best interest.

    Using Content Within a Platform

    It’s easiest when a company wants to share someone’s post within the social media platform – e.g., sharing someone’s Instagram photo on the company’s Instagram. Many social media sites build this option into the platform where you don’t even have to ask for permission to share someone’s post on another’s account.  

    Of course, I’m a risk-adverse lawyer so I tell my clients to review the terms of service first to see what happens just in case it turns out the person who created the post you shared didn’t have the right to do so and now you have to deal with the fallout. Depending on the circumstances, I might contact the person to ask the person if they took the photo (which would indicate if they’re likely the copyright holder), try to verify that the original poster is complying with the platform’s rules

    Using Content Across Different Platforms

    Here’s where it gets a little more complicated. These are the situations where you want to take content from someone’s post on one platform and share it on a different social media site, your website, or another third-party platform. For this situation, I recommend you have a contract drafted by a lawyer. You could have them create a template for you if curating user-generated content is part of your marketing plan.

    If I were creating a contract template for obtaining permission to use content created by a user or fan, I’d likely include terms such as:

    • The user owns the IP in the content: either they created it or they have permission to use it
    • The user has authority to grant the company permission to use the content
    • The user grants the company a perpetual, irrevocable, worldwide, sublicensable, paid-in-full, royalty-free license to the company to use the content for any purpose without needing the person’s consent or credit, including the creation of derivative works (or in the alternative, that the user grants the company a copyright assignment)
    • The user will reimburse the company’s legal fees and damages if it is accused of wrongdoing because the company used the user’s content

    Such a contract would also include boilerplate verbiage, like a dispute resolution provision that states how the company and user will resolve disputes if one occurs.

    Always Apply Reality

    In any potential legal situation, be sure to apply reality. If a company wants to use a photo with two people in it, whoever posted the image may not be able to speak on behalf of the other person in the photo, and you may need release from identifiable people to avoid being accused of violating their right of publicity.

    Additionally, it will likely take longer to get permission if you want to use images and other content across platforms. Be sure to build that into your timeline if your marketing plan involves using user-generated content.

    There are also those who may question whether it’s worthwhile to have a lawyer create a contract for these circumstances. When there are no issues, a contract may seem superfluous; however, contracts are imperative in situations where there is a dispute and/or the parties forget the terms of their agreement. When you work with your lawyer to create you contract, make sure it has provisions that will apply to situations that are likely to occur as well as the worst-case scenarios.

    If you liked this post and want to know more about my work, please subscribe to the Carter Law Firm newsletter where I share behind-the-scenes information and readers get exclusive access to me.

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    Ruth Carter

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  • Side Hustle Contracts

    https://www.flickr.com/photos/joybot/6701744493
    Do the Hustle! by Joybot from Flickr (Creative Commons License)

    Note: The links for Chris Guillebeau’s books are affiliate links.

    I admire people like Chris Guillebeau who run with ideas and make stuff happen. He’s written a number of books, including The $100 Startup: Reinvent the Way You Make a Living, Do What You Love, and Create a New Future. The most recent book of his that I wrote was Side Hustle: From Idea to Income in 27 Days where he walks you through, day-by-day what you should do to launch a side hustle business. It’s a good book, but Chris and I disagree about how to approach contracts.

    Day 14: Contract

    Chris calls Day 14 “Set Up a Way to Get Paid.” This chapter covers selecting a payment system, creating invoices, and using simple contracts. For your contract, he says you only need to specify what you’ll do, how much you’ll get paid, when you’ll get paid, and “any protections you require.” Chris also says that that you can communicate all of this via email without needing a separate agreement document.

    <cringe><shudder>

    While Chris is technically right, I would never advise a client to operate their business this way. This is the type of contract that works when nothing goes wrong; however, contracts exist to save you in two situations:

    1. When there’s confusion about the parties’ obligations, and
    2. When there’s a problem or dispute.

    Always Have a Separate Written Contract

    If there is situation where lawyers are needed to resolve a dispute, the first thing I ask my client is “Where’s your contract?” If it’s a series of emails, and perhaps some text messages, and phone calls or conversations you claim occurred, the first part of my job will be compiling the terms of the agreement.

    When there’s a single agreement, all the terms are in one place. And when the contract requires that all changes must be in writing and signed by both parties, it minimizes the risk of confusion or a he-said-she-said situation.

    When you don’t have the terms of the contract in a single document, it opens the door for complications in the future. In many cases, it’s more cost-effective to have a lawyer create a contract template for your side hustle than to have to hire one to piece together the terms from the parties’ communications and actions. 

    Minimum Contract Terms

    In general, I don’t advise people to write their own contracts (unless they have a law degree or sufficient contract experience), but here are the basic terms I’d expect to find a side hustle contract:

    • Parties to the contract
    • Purpose of the contract
    • Payment terms, including what happens if the customer doesn’t pay (e.g. entrepreneurs who require ½ the fee up front and ½ upon completion)
    • Intellectual property terms – related to creation, assignment, and/or license
    • Where and how problems will be resolved, including the venue, jurisdiction, and which state law will govern
    • If/how the parties can make changes to the contract
    • “Entire agreement” – all the terms in the contract are in the agreement
    • “Severability” – if the contract has any invalid terms then the parties will throw those out and the rest of the contract will remain
    • A provision that states if a party chooses not to use a right granted by the contract, they don’t waive their right to use it in the future

    When I approach a new contract for a client, I try to mentally walk through the customer’s journey and address the problems that the client is trying to avoid and pre-plan how you want to deal with problems when they occur.

    Using a Lawyer for your Side Hustle

    If you’re going to have a side hustle, I recommend you sit down with a lawyer for an hour. Tell them your goals and your budget. An understanding lawyer will tell you about the legal issues you need to be aware of, can do a quick trademark search to see if the name(s) you want to use are already registered, and they can tell you want you can do yourself and what tasks you should hire a lawyer to do for you.

    A Few Final Thoughts

    Thinking about what missteps I’ve seen companies inadvertently commit, here are a few extra tidbits of information:

    • The terms of service for a website, online course, or mobile app are contracts. Write them or have them created with care.
    • Please don’t rip of another company’s terms of service and just change out the company and product names. That’s a recipe for trouble. You don’t want to represent that you do things that you don’t. I’ve also seen situations where the company’s terms of service says that it’s governed by New Jersey law and the company has no connection to that state. (The company they stole the terms from was in New Jersey.)

    If you liked this post and want to know more about my work, please subscribe to the Carter Law Firm newsletter where I share behind-the-scenes information and readers get exclusive access to me.

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    Ruth Carter

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  • Legal Checklist to Protect Online Entrepreneurs

    Labib Ittihadul from Flickr (Public Domain)

    I was recently asked to create a list of what legal steps an entrepreneur should take if they operate solely online to protect their business. The person who asked appears to be primarily a YouTuber. Here’s the list I created for him: 

    1. Consider having Two LLCs. One is a holding company for the intellectual property and licenses the IP to the other LLC to use it. This way if the holding company is sued for infringement, there are no assets to be collected if the holding company loses the lawsuit. We recommend this tactic for many businesses, not just online entrepreneurs.

    2. Create an Operating Agreement if the LLC has more than One Owner.  Yes, this includes if you go into business with relatives, best friend, or romantic partner. This is a master document that lays out how the company will operate, each person’s obligations and responsibilities, and how the owners will address problems when they occur.

    3. Move your Website to a Server Outside the U.S. The reason for doing is if there is ever a court order against the website, it will be more difficult to enforce if the website is house by a company outside the U.S. and not bound by U.S. law.

    4. Register your Trademarks with the USPTO. So many legal issues could be minimized or avoided if every company properly registered their trademarks. This could include company names, product names, event names, logos, and slogans. When you have a registered trademark, you can stop a competitor from entering the marketplace while using a trademark that is confusingly similar to yours. If you have a strong international presence, it may be wise to register your trademarks in multiple countries.

    5. Create a Copyright Strategy. Many professional content creators do guest posts for and collaborations with others and allow guest posts on their sites. It’s best to have contract templates for these situations that include clarification about who owns the copyright, what the other person gets, any limitations regarding the content, and an indemnification clause if appropriate.

    Additionally, your copyright strategy should address when and how you can use others’ materials. You should have an understanding about fair use and where to look for materials that come with a license to modify the original as well as a license to use it for commercial purposes.

    6. Consider Registering your Copyrights. You do not have to register your copyright to get your copyright rights, and you do not have to register everything you create; however, it’s beneficial to have the discussion about what you might want to register. You are required to register your copyright if you want to sue for infringement. Additionally, I frequently recommend registration to people who want to license or sell their copyrights.

    7. Create an Action Plan for Addressing Suspected IP Infringement. Decide how you want to respond to suspected infringement before it occurs, so that you or your lawyer can be prepared to respond based on your desired outcome when it happens. Depending on how you want to respond, there may be things you need to do before the infringement occurs to best protect your rights.

    8. Have a Contributor Contract Template. This is the contract you will use with people who contribute content to you, your site, your channel, or a social media account. It will state what rights each party has to use the content – most likely that they own it, and they grant you a license to use for certain purposes. It should also have an indemnification clause to protect you in the event you’re accused of violating another person’s IP rights or other legal wrong by using what the contributor provided to you.

    9. Have an Influencer Contract Template. This is the contract to use when brands hire you so that the expectations on both sides are clear, and you state that you comply with FTC regulations. (You should probably have internal documents about FTC compliance as well.) Companies that hire influencers may have their own contracts that they want to use, but having your own template will help you analyze their contract to see how well it addresses your needs and concerns.

    10. Create Website Terms and a Privacy Policy. These documents may need to comply with U.S. privacy laws, the Canadian Anti-Spam Legislation (CASL), and the General Data Protection Regulation (GDPR), and manage the expectations of visitors to your website. Many of the new privacy laws interfere with how many companies collect and use others’ personal information. These issues are complicated. Many people copy another content creator’s terms and privacy policy, but that could be a recipe for disaster if what you use is insufficient for your needs.

    This may not be a complete or comprehensive list of legal steps to take to protect your business. It’s always best to consult a lawyer who understands the legal implications related to your business, preferably someone to specializes in business, intellectual property, and internet law. Hopefully this list gives you a place to start to evaluate your legal needs as a professional content creator or online entrepreneur.

    If you liked this post and want to know more about my work, please subscribe to the Carter Law Firm newsletter where I share behind-the-scenes information and readers get exclusive access to me.

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    Ruth Carter

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  • GDPR: How to Handle a Data Breach

    Photo by Christoph Scholz from Flickr (Creative Commons License)

    Every company that sends commercial emails to people who reside in the EU or process their data has to comply with the new privacy law, the General Data Protection Regulation (GDPR). This law has specific rules about how companies have to respond when a data breach occurs. It’s so much better than the current rules in the U.S.

    Report the Breach to Supervisor within 72 Hours

    When a data breach occurs, the employee must report the breach to their supervisory authority without undue delay, and where feasible, within 72 hours of learning of the breach. This notice must include the likely consequences of the breach and the measures the company is taking to mitigate the potential adverse effects.

    The only exception to this rule is if the breach is unlikely to result in a risk to the rights and freedoms of natural persons. The company doesn’t have to report the breach if it’s will not likely cause harm to those impacted.

    Report the Breach to Consumers

    In addition to reporting the breach up the chain of command, the company, without undue delay, must notify the people’s whose data was compromised if the breach is likely to result in a high risk to their rights and freedoms. The law doesn’t specify a number of days or a rubric to determine what is notification “without undue delay.”

    Companies should notify the effected persons unless it would require a disproportionate effort. In that case, notification may be made by public communication.

    There is an exception to this requirement. The company does not have to disclose that the data breach occurred if the personal data would be unintelligible (e.g. encrypted) to whomever stole it or if the risks have been sufficiently mitigated that adverse results are unlikely to occur.

    These new requirements are fantastic. These will hopefully eliminate the problem of companies waiting weeks or months to disclose to impacted consumers that their personal data was hacked.

    You can learn more about this aspect of the GDPR here:

    Remember, if you are subject to the GDPR, you must comply with this law by May 25, 2018 when it goes into effect.

    If you want more information about GDPR, please watch this site and my YouTube channel because I’m creating a substantial amount of content on this topic. You can also send me an email (Note: I can’t give advice to non-clients). I use my mailing list to I share my thoughts about being a lawyer/entrepreneur, updates about projects I’m working on, upcoming speaking engagements, and I may provide information about products, services, and discounts. Please add yourself if you’re interested.

    You can also connect with me on Twitter, Facebook, YouTube, or LinkedIn.

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    Ruth Carter

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  • GDPR: Protecting Personal Data

    Image by Descrier from Flickr (Creative Commons License)

    The General Data Protection Regulation (GDPR) is the new privacy law that goes into effect on May 25, 2018. Every company that sends commercial email to the European Union must comply with it, even if you’re not located in the EU. The purpose of this law is to obtain consent before using a person’s personal data and to adequately protect it.

    Protection by Design and Default

    The GDPR requires that you take adequate precautions to protect the personal information entrusted to you. The law does not specify exactly what you must do protect this data beyond the requirement that you take the appropriate technical and organizational measures considering the cost, available technology, and why you are processing individuals’ data. The level of security should correlate to the level of risk related to the nature of the data and what you’re doing with it. Additionally, you should only process the necessary data to fulfill your purpose for doing so.

    Another requirement of GDPR is that the people who have access to the data subjects’ information are only permitted to process it per the data controller’s instructions. This is a rule that every organization should have: only those who need access to the data subject’s information should have it, and it should be limited to only for the tasks for which they need it.

    You can learn more about these requirements here:

    Maintain a Records of Processing Activities

    The GDPR requires certain companies to maintain a record of all their processing activities. These companies fall into one of two categories:

    1. Companies that employ 250 or more persons.
    2. Companies whose work with data subjects’ information presents a high risk to the data subjects’ rights, or the companies process data that falls into one of the following special categories:
    • Racial or ethnic origin
    • Political opinions
    • Religious or philosophical beliefs
    • Trade-union membership
    • Genetic data
    • Biometric data for the purpose of uniquely identifying a natural person
    • Data concerning health
    • Data concerning a natural person’s sex life or sexual orientation

    As a company with no employees (just me running this show) and the only information people give me are their email address and name, I don’t have to maintain this record. If I did, it would only be a list of newsletters I sent and the service I use keeps my list protected behind a password.

    If you want more information about GDPR, please watch this site and my YouTube channel because I’m creating a substantial amount of content on this topic. You can also send me an email (Note: I can’t give advice to non-clients). I use my mailing list to I share my thoughts about being a lawyer/entrepreneur, updates about projects I’m working on, upcoming speaking engagements, and I may provide information about products, services, and discounts. Please add yourself if you’re interested.

    You can also connect with me on Twitter, Facebook, YouTube, or LinkedIn.

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    Ruth Carter

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  • GDPR: Full Disclosure Required

    «Via sicura» by Falk Lademann from Flickr (Creative Commons License)

    If you’ve been following this blog, you know I’m all about preparing for the General Data Protection Regulation (GDPR) as it applies to content marketing. This rule applies to every company that sends commercial emails to anyone in the European Union. (If you don’t know where everyone on your list is located, assume at least one of them lives in the EU.) We’ve already talked about how, under this law, when you want to add a person to your email list, you must get their specific informed consent and you must be able to prove that you obtained their consent to be on your list.

    The GDPR requires, when you obtain this consent, to provide the person (aka data subject) with the following information:

    • The identity and contact information of the controller of the data subject’s information or their representative;
    • The contact information for the data protection officer (if applicable);
    • Your purpose for processing the data subject’s information and legal basis for doing so;
    • The period of time the data will be stored;
    • The data subject’s right to request erasure or corrections of their data or to restrict the processing of their data;
    • The data subject’s right to withdraw their consent;
    • The data subject’s right to lodge a complaint with the supervisory authority; and
    • Whether the data subject giving their information fulfills a statutory or contractual obligation.

    If you want to process the subject’s data for another purpose, you must tell the person in advance, and when a person’s data is processed for direct marketing purposes, the data subject has the right to object at any time.

    At the first reading of these requirements, my first thought was that the signage at conferences where vendors collect business cards would have to become much more complicated to comply with GDPR. I thought about how this firm will comply with these requirements. People voluntarily add themselves to my email, so I don’t know where they live. I will be adding double opt-in consent for my email list, and I believe the most effective way to comply with these requirements is to include this information in the confirmatory email.

    You can hear more about these requirements here:

    We have to comply with these rules by May 25, 2018 when this new rule goes into effect.

    If you want more information about GDPR, please watch this site and my YouTube channel because I’m creating a substantial amount of content on this topic. You can also send me an email (Note: I can’t give advice to non-clients). I use my mailing list to I share my thoughts about being a lawyer/entrepreneur, updates about projects I’m working on, upcoming speaking engagements, and I may provide information about products, services, and discounts. Please add yourself if you’re interested.

    You can also connect with me on Twitter, Facebook, YouTube, or LinkedIn.

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    Ruth Carter

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