User generated content (“UGC”) has quickly come to dominate the current landscape of online promotions and marketing initiatives. As UGC is generally made available for public viewing without prior screening, its growing prevalence raises liability concerns when the UGC contains third party references or materials. Web site operators/promotion sponsors have broad protections under the Communications Decency Act (“CDA”) and the Digital Millennium Copyright Act (“DMCA”) against liability for infringing UGC, but that protection is not without limits.
Promotion sponsors often want the right to exploit certain UGC beyond posting it online in connection with the promotion. For example, a sponsor may want to incorporate artwork created by entrants in an online contest in a print or television advertisement for a new product or service. Similarly, video submissions entered into a contest tied to a motion picture’s theatrical release may make a great “extras” feature to include in the DVD release of the motion picture. To secure such rights, the official rules for UGC promotions generally accord the promotion sponsor a broad grant of rights to further exploit UGC submissions or require a transfer of ownership in the UGC to the promotion sponsor upon posting. These mechanisms enable the promotion sponsor to utilize the UGC more fully, if it so chooses, but these options also raise the question of whether a transfer of ownership in UGC affects the scope of protection offered to the promotion sponsor under the CDA and DMCA.
Most major players in the promotions industry know that the so-called Cairns patent (U.S. Patent No. 6,173,267) is an online business method patent relating to online sweepstakes that involve unique codes. Although it should be clearly understood that I am not a patent attorney (a highly-technical legal specialty), and this blog entry does not constitute legal advice and most certainly does not constitute a legal opinion of this firm, there are several steps that can be taken to potentially avoid at least one of the elements, or its equivalent, for each claim of the patent.Continue Reading...