UGC Campaigns and Right of Publicity

Section 652C: Appropriated Likeness Liabilities

Section 652C of The Restatement of Torts 2nd, provides that: 'One who appropriates to his own use or benefit the name or likeness of another is subject to liability to the other for invasion of privacy (i.e., the 'right of publicity.')

While the elements of the claim vary from state to state, typically, a plaintiff must establish three elements:

1. Use of a protected attribute (this ordinarily means a plaintiff's name or likeness, but may include other personal attributes);
2. An Exploitative Purpose for the name or likeness, or both (comments on Section 652C of The Restatement of Torts 2nd note: 'The common form of invasion of privacy under the rule here stated is the appropriation and use of the plaintiff's name or likeness to advertise the defendant's business or product, or for some similar commercial purpose. Apart from statute, however, the rule stated is not limited to commercial appropriation. It applies also when the defendant makes use of the plaintiff's name or likeness for his own purposes and benefit, even though the use is not a commercial one, and even though the benefit sought to be obtained is not a pecuniary one. Statutes in some states have, however, limited the liability to commercial uses of the name or likeness.' (Emphasis added)); and
3. No consent (when establishing consent, it is important to note that minors ' typically under the age of 18 in most states, but 19 in Alabama and Nebraska, and 21 in Mississippi) can void agreements, and so it is advisable to limit programs to individuals who are at least the age of majority in their jurisdiction of residence. Also, the state of New York requires a 'signed' writing in order to consent to the grant of publicity rights. See, N.Y. Civ. Rights Law '51.

For instance, relating to the third point in the immediately preceding list of elements, Facebook has been sued in several class-action lawsuits across the country for its alleged failure to get valid consent from users ' minors among them ' in connection with associating users' pictures with sponsored ads generated when a user initiates the 'Like' function when it applies to an advertiser. These cases argue that there was insufficient notice that users' friends would be served sponsored ads indicating they 'like' an advertiser for consent to have been obtained and that minors cannot make a valid consent.

On Dec. 16, 2011, a federal district court in California rejected Facebook's motion to discuss finding that Facebook did not qualify for CDA immunity, given that:

• It was a provider of the sponsored ad content;
• Even non-celebrities have an economic interest in controlling their rights of publicity;
• Unauthorized use constituted actionable harm; and
• Issues of fact existed as to whether the users had knowingly consented to the association of themselves with the advertisers they 'liked.' See, Angel Fraley, et al. v. Facebook, Inc. ('Fraley'), 2011 U.S. Dist. LEXIS 145195 (Case No. 11-CV-01726-LHK, N.D. CA).

Enter the First Amendment

Notwithstanding that a sponsor may not have a CDA immunity in some circuits for misappropriation of the rights of publicity of those depicted in user-generated content (UGC) made available by the right, the right of publicity does not lack limitations and exceptions (see, Parisi v. Sinclair, 774 F.Supp.2d 310 (D.D.C. 2011) (declining to apply the Ninth Circuit interpretation of '230(e)(2) but dismissing right-of-publicity claim on free speech grounds under the 'newsworthy' privilege). There is, to be sure, an inherent tension between an individual's right to control the use of his or her identity, and the free dissemination of speech and ideas guaranteed by the First Amendment. The level of protection given to speech depends on how it is categorized. For example, is it:

• News (e.g., real-world happenings, or information of public interest)?;
• Expressive speech (e.g., fiction, commentary, or entertainment)?; or
• Commercial speech (e.g., advertising)?

The first two will be referred to here as 'editorial' speech, which has significant First Amendment protection. Commercial speech, on the other hand, has very limited protection. First Amendment protection for certain content applies to online publishers just as it does to traditional media.

The Supreme Court has ruled that rights of publicity should prevail over free speech only when necessary to prevent 'unjust enrichment by the theft of goodwill where 'the defendant would get free some aspect of the plaintiff that would have market value and for which he would normally pay.” Zacchini v. Scripps-Howard Broad. Co., 433 U.S. 562, 576 (1977).

Promotions and Advertising

Still, although commercial speech is not without First Amendment protection, 'the use of a person's identity for purely commercial purposes, like advertising goods or services, or the use of a person's name or likeness on merchandise, is rarely protected.' Doe v. TCI Cablevision, 110 S.W.3d 363, 373 (Mo. 2003).

The line between editorial and commercial speech, particularly when the unauthorized use of a person's likeness in allegedly editorial speech is closely associated with related promotional messages or advertising is dependent on the context and purpose of the use, and the degree to which the editorial and commercial aspects of the content are separated. (See, Friel, Alan, 'Bask in the Light of Stars Without Paying Them, and You Might Get Burned,' in Bloomberg Law Reports ' Intellectual Property (Vol. 5, No. 32, 2011) (comparing rights-of-publicity cases where the use was deemed either protected editorial speech or unprotected commercial speech, and making recommendations on how to stay on the editorial side of the line); and compare, Downing v. Abercrombie & Fitch, 265 F.3d 994 (9th Cir. 2001) (editorial piece in what was primarily a promotional publication was not protected speech), Abdul-Jabbar v. GMC, 85 F.3d 407, 416 (9th Cir. 1996) (basketball star's record was newsworthy, but use in an advertisement was not protected) and Facenda v. N.F.L. Films, 542 F.3d 1007 (3rd Cir. 2008) (so-called documentary was really a promotional infomercial), with Stewart v. Rolling Stone LLC, 105 Cal. Rptr. 3d 98, 104-06, 114-18 (Ct. App. 2010) (ad thematically tied to magazine article did not transform article into an ad in which editorial separation was maintained), Hoffman v. Capital Cities/ABC, Inc., 255 F.3d 1180 (9th Cir. 2001) (use of actor's image in editorial pictorial was sufficiently separated from advertising content for apparel depicted in the pictorial), and Stephano v. News Group Publications, Inc., 474 N.E.2d 580, 584'86 (N.Y.1984) (indicating that where apparel could be purchased did not make editorial content an ad.))

Fraley Court and Facebook 'Likes'

Indeed, the Fraley court considered this issue in the context of Facebook's 'Like' sponsored-ad program and, at least at the motion-to-dismiss stage, found that '[b]ecause Facebook's publication of plaintiffs' 'Likes' is alleged to be for commercial-advertising purposes and not part of 'any news, public affairs, sports broadcast or account, or any political campaign,” it was not newsworthy editorial speech entitled to protection. Fraley at 48 (applying the California statutory exception to the right of publicity for newsworthy content, and discussing Downing and other cases on the issue).

Accordingly, a potential way to reduce a sponsor's risk is to design a UGC campaign as a venue for users to create expressive editorial content, and to take measures to minimize and segregate the sponsor's promotional messaging, particularly within the UGC itself.

Likeness, Persona Rights Limited

However, the right to make an unauthorized use of another's name, likeness or persona, even in an expressive context, is not unlimited, and courts have struggled with how to balance the interests of the parties. A recent case looking at the issue of the scope of protection for expressive speech is Hart v. Electronic Arts, Inc., 2011 U.S. Dist. LEXIS 101254 (Sept. 8, 2011), which held that a video game publisher's use of a former football player's likeness in its annual NCAA Football video games was fully protected non-commercial speech.

Recognizing that the right of publicity may encroach First Amendment rights in some circumstances, the court found little clarity in the existing case law as to how the competing interests should be balanced, ultimately concluding that under either the transformative use test grounded in copyright law, which it favored, or the Rogers v. Grimaldi (875 F.2d 994 (2nd Cir. 1989)) balancing test from trademark law, Electronic Arts' First Amendment rights should prevail. As an initial matter, the court concluded that under existing Supreme Court law, video games are expressive works fully protected under the First Amendment.

Juggling Balancing Tests

Transformative Use Test

Turning to what it deemed the 'more thorny question' of whether the First Amendment grants Electronic Arts the right to impinge upon plaintiff's common-law rights of publicity, the court noted the lack of clarity as to how to balance the competing interests that each set of rights protects, pointing to at least eight 'balancing' tests other courts have used, and noting that neither New Jersey nor the Third Circuit has explicitly adopted any one test. Ultimately, the court focused on the transformative-use test developed by California courts and the balancing test set forth in Rogers v. Grimaldi. Concluding that the transformative test is more refined and better balances the competing interests of right of publicity and the First Amendment, the court nevertheless declined to explicitly adopt either test because it found that the First Amendment prevailed under both tests.

Regarding the transformative test, the court in Hart noted that this test looks to whether artistic expression takes the form of a literal depiction or imitation of an individual for commercial gain without adding significant expression, in which case the right of publicity prevails, or whether the use of an individual's likeness is only one of the 'raw materials' from which a work is created, making it transformative and protected.

Specifically, the court looked to two California cases involving videogame avatars, and found that the facts in the case before it fell somewhere in between. In Kirby v. Sega, 144 Cal. App. 4th (2006), that court found that a video-game character modeled after, but not meant to be, the singer Dee Lite was transformative, as contrasted with No Doubt v. Activision, 192 Cal. App. 4th 1018 (2011), where the court found that avatars of the band members from No Doubt in the Band Hero game that were literal depictions and could not be altered, were not transformative. Because users of Electronic Arts' videogame could change player features, the Hart court concluded its facts were more akin to Kirby, and thus transformative. This suggests that the greater degree of transformative ability the UGC program provides to, or better yet requires of, users, then the more likely a defense will be available.

The Rogers Test

Turning next to the Rogers test developed in the context of trademark law, the Hart court explained that, under this test, there is no liability for trademark infringement unless the challenged mark is wholly unrelated to the underlying work and misleads the public as to the source or content of the work, or in the case of a right-of-publicity claim, there is no relevance to the underlying work and it is essentially a disguised commercial advertisement.

Noting that the Third Circuit has not specifically adopted Rogers in the context of either a Lanham Act claim or a right-of-publicity claim, the court nevertheless acknowledged some precedent for applying it to misappropriation actions like the one before it. The court concluded that it could not reasonably be argued that plaintiff's image is wholly unrelated to the game, that its inclusion did not mislead the public as to the content or source and that it was not used to advertise an unrelated product, thereby satisfying the tests enumerated in Rogers.

Because Electronic Arts was entitled to First Amendment protection under either test, the court granted summary judgment in Electronic Arts' favor.

While disclaimers have typically not helped prevent liability in rights-of-publicity cases, the Hart court's consideration of the likelihood of consumer confusion as to source or endorsement suggests a benefit in doing so. Such a notice is discussed further below in the discussion of false-endorsement claims.

False Endorsement

Use of another's name or image in connection with advertising may also expose a sponsor to liability for false endorsement under Section 43(a) of the Lanham Act, which prohibits use of a 'word, term, name, symbol or device' that is 'likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association' or 'as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person.'

An advertiser will be held liable where its use of another party's name, image or mark creates a likelihood of consumer confusion as to whether the that party has endorsed the product or service. Such false, implied endorsement claims may further be actionable even where all the elements of a right-of-publicity claim do not exist.

The Lanham Act and IP Claims

As noted earlier in this article, federal intellectual property causes of action remain outside the scope of either the Digital Millennium Copyright Act (DMCA) or the CDA. While the Lanham Act is part of the U.S. Code's codification of federal trademark law, much of it concerns consumer protection, false advertising and unfair business practices ' issues that are really beyond the scope of intellectual property.

Although no appeals court has directly ruled yet on the issue, several district courts have treated Lanham Act claims to be intellectual property claims exempted from CDA immunity. (See, Gucci, 135 F.Supp.2d 409, 414 (S.D.N.Y. 2001); Doctor's Associates, 2010 WL 2313818; Friendfinder, 540 F.Supp.2d at 305; and Stayart v. Yahoo! Inc., 651 F.Supp.2d 873, 885 (E.D. Wis. 2009), aff'd, 623 F.3d 436 (7th Cir. 2010) (not addressing the CDA issue)).

However, effective disclaimer language can potentially help reduce a sponsor's chance of liability for false-endorsement claims if it can obviate the potential for consumer confusion as to the source or of an implied endorsement. Even if a sponsor includes a disclaimer, it may still end up litigating a Lanham Act cause of action, because effectiveness of disclaimers is an issue of fact that must be determined in context.

Also, the user may still have a right-of-publicity claim notwithstanding a disclaimer's effectiveness in mitigating against consumer confusion, as disclaimers are generally deemed irrelevant to a misappropriation of right-of-publicity claim (aside from the recent Third Circuit approach in Hart).

Beware of Those Risks!

In summary, advertiser-sponsored UGC promotional activities carry a very real risk that the sponsor may be responsible for UGC content that misappropriates third-party rights of publicity or suggests a false endorsement, and CDA immunity may not be available to the sponsor. Care must be taken from the initial development phase of the UGC program to reduce these risks. Ultimately, the sponsor has to evaluate its risk tolerance in deciding how, if at all, to operate a UGC campaign.

The safest approach is to limit the extent to which UGC users can create a mashup of pre-cleared content elements the sponsor provides. In this way, the sponsor can prevent inclusion of content or claims that could create liability for which immunity is not available, but the users can still exercise creativity in how they order the elements made available to them.

If original elements can be submitted by users, then ways to minimize the risk include:

• Limiting the ability to submit images;
• Employing technology to filter out images of people other than the user;
• Preventing copying or distribution of the UGC content output (e.g., only the user can view his or her own content); and
• Designing the UGC program to further transformative and expressive content creation.

Whether users can submit images or not, sponsors should avoid sponsoring activities that could be seen to direct or shape infringing content or violations of law, and sponsors should require users to have all necessary rights and to confirm they do at the point of submission.

When users submit UGC, it is recommended that they agree to a click-wrap terms-of-use agreement and to official rules that include a non-exclusive license to the UGC, and that include representations and warranties of non-infringement and that also provide indemnities.

If the UGC is publicly displayed, then it is also recommended that sponsors undertake to maintain strict separation of the sponsor's promotional messages and the UGC, and to employ the use of disclaimers explaining that parties depicted in or associated with the UGC do not necessarily endorse the sponsor, or its products or services.

Additional structural approaches should be considered to promote the maximum of the likelihood of a DMCA safe harbor for copyright infringement, which will be discussed in a follow-up article.

Conclusion

So, it is impossible to eliminate all risk from the operation of UGC promotions, but sponsors can mitigate their risks by designing and operating campaigns with the scope and limitations of DMCA and CDA protections in mind.

Doing so will allow e-commerce and related undertakings the possibility of healthy growth, continued profit, maintenance of goodwill ' and to avoid the problems that could arise in the ordinary course of business but that with careful application of content and attention to the letter and the spirit of the law can be relatively easily avoided.

Part Two of a Two-Part Article

In most states, one can be sued for using a person's name, likeness or other personal attributes for their own purposes without permission. The right of publicity is essentially the right of a person to control the exploitation of his or her identity.

The right of publicity is traditionally one of four types of privacy torts (see, Section 652A of The Restatement of Torts 2nd. However, this article addresses only the right of publicity and not the other torts concerning invasions of privacy that have been developed since establishment of the right of publicity; after all, it is rights-of-publicity claims, because they are treated as property rather than as personal rights, and not other types of privacy claims, which are merely personal, that some courts have excluded from Communications Decency Act (CDA) immunity as a form of intellectual property.

Section 652C: Appropriated Likeness Liabilities

Section 652C of The Restatement of Torts 2nd, provides that: 'One who appropriates to his own use or benefit the name or likeness of another is subject to liability to the other for invasion of privacy (i.e., the 'right of publicity.')

While the elements of the claim vary from state to state, typically, a plaintiff must establish three elements:

1. Use of a protected attribute (this ordinarily means a plaintiff's name or likeness, but may include other personal attributes);
2. An Exploitative Purpose for the name or likeness, or both (comments on Section 652C of The Restatement of Torts 2nd note: 'The common form of invasion of privacy under the rule here stated is the appropriation and use of the plaintiff's name or likeness to advertise the defendant's business or product, or for some similar commercial purpose. Apart from statute, however, the rule stated is not limited to commercial appropriation. It applies also when the defendant makes use of the plaintiff's name or likeness for his own purposes and benefit, even though the use is not a commercial one, and even though the benefit sought to be obtained is not a pecuniary one. Statutes in some states have, however, limited the liability to commercial uses of the name or likeness.' (Emphasis added)); and
3. No consent (when establishing consent, it is important to note that minors ' typically under the age of 18 in most states, but 19 in Alabama and Nebraska, and 21 in Mississippi) can void agreements, and so it is advisable to limit programs to individuals who are at least the age of majority in their jurisdiction of residence. Also, the state of New York requires a 'signed' writing in order to consent to the grant of publicity rights. See, N.Y. Civ. Rights Law '51.

For instance, relating to the third point in the immediately preceding list of elements, Facebook has been sued in several class-action lawsuits across the country for its alleged failure to get valid consent from users ' minors among them ' in connection with associating users' pictures with sponsored ads generated when a user initiates the 'Like' function when it applies to an advertiser. These cases argue that there was insufficient notice that users' friends would be served sponsored ads indicating they 'like' an advertiser for consent to have been obtained and that minors cannot make a valid consent.

On Dec. 16, 2011, a federal district court in California rejected Facebook's motion to discuss finding that Facebook did not qualify for CDA immunity, given that:

• It was a provider of the sponsored ad content;
• Even non-celebrities have an economic interest in controlling their rights of publicity;
• Unauthorized use constituted actionable harm; and
• Issues of fact existed as to whether the users had knowingly consented to the association of themselves with the advertisers they 'liked.' See, Angel Fraley, et al. v. Facebook, Inc. ('Fraley'), 2011 U.S. Dist. LEXIS 145195 (Case No. 11-CV-01726-LHK, N.D. CA).

Enter the First Amendment

Notwithstanding that a sponsor may not have a CDA immunity in some circuits for misappropriation of the rights of publicity of those depicted in user-generated content (UGC) made available by the right, the right of publicity does not lack limitations and exceptions ( see , Parisi v. Sinclair , 774 F.Supp.2d 310 (D.D.C. 2011) (declining to apply the Ninth Circuit interpretation of '230(e)(2) but dismissing right-of-publicity claim on free speech grounds under the 'newsworthy' privilege). There is, to be sure, an inherent tension between an individual's right to control the use of his or her identity, and the free dissemination of speech and ideas guaranteed by the First Amendment. The level of protection given to speech depends on how it is categorized. For example, is it:

• News (e.g., real-world happenings, or information of public interest)?;
• Expressive speech (e.g., fiction, commentary, or entertainment)?; or
• Commercial speech (e.g., advertising)?

The first two will be referred to here as 'editorial' speech, which has significant First Amendment protection. Commercial speech, on the other hand, has very limited protection. First Amendment protection for certain content applies to online publishers just as it does to traditional media.

The Supreme Court has ruled that rights of publicity should prevail over free speech only when necessary to prevent 'unjust enrichment by the theft of goodwill where 'the defendant would get free some aspect of the plaintiff that would have market value and for which he would normally pay.” Zacchini v. Scripps-Howard Broad. Co. , 433 U.S. 562, 576 (1977).

Promotions and Advertising

Still, although commercial speech is not without First Amendment protection, 'the use of a person's identity for purely commercial purposes, like advertising goods or services, or the use of a person's name or likeness on merchandise, is rarely protected.' Doe v. TCI Cablevision, 110 S.W.3d 363, 373 (Mo. 2003).

The line between editorial and commercial speech, particularly w hen the unauthorized use of a person's likeness in allegedly editorial speech is closely associated with related promotional messages or advertising is dependent on the context and purpose of the use, and the degree to which the editorial and commercial aspects of the content are separated. ( See , Friel, Alan, 'Bask in the Light of Stars Without Paying Them, and You Might Get Burned,' in Bloomberg Law Reports ' Intellectual Property (Vol. 5, No. 32, 2011) (comparing rights-of-publicity cases where the use was deemed either protected editorial speech or unprotected commercial speech, and making recommendations on how to stay on the editorial side of the line); and compare , Downing v. Abercrombie & Fitch , 265 F.3d 994 (9th Cir. 2001) (editorial piece in what was primarily a promotional publication was not protected speech), Abdul-Jabbar v. GMC , 85 F.3d 407, 416 (9th Cir. 1996) (basketball star's record was newsworthy, but use in an advertisement was not protected) and Facenda v. N.F.L. Films , 542 F.3d 1007 (3rd Cir. 2008) (so-called documentary was really a promotional infomercial), with Stewart v. Rolling Stone LLC , 105 Cal. Rptr. 3d 98, 104-06, 114-18 (Ct. App. 2010) (ad thematically tied to magazine article did not transform article into an ad in which editorial separation was maintained), Hoffman v. Capital Cities/ABC, Inc. , 255 F.3d 1180 (9th Cir. 2001) (use of actor's image in editorial pictorial was sufficiently separated from advertising content for apparel depicted in the pictorial), and Stephano v. News Group Publications, Inc. , 474 N.E.2d 580, 584'86 (N.Y.1984) (indicating that where apparel could be purchased did not make editorial con tent an ad.))

Fraley Court and Facebook 'Likes'

Indeed, the Fraley court considered this issue in the context of Facebook's 'Like' sponsored-ad program and, at least at the motion-to-dismiss stage, found that '[b]ecause Facebook's publication of plaintiffs' 'Likes' is alleged to be for commercial-advertising purposes and not part of 'any news, public affairs, sports broadcast or account, or any political campaign,” it was not newsworthy editorial speech entitled to protection. Fraley at 48 (applying the California statutory exception to the right of publicity for newsworthy content, and discussing Downing and other cases on the issue).

Accordingly, a potential way to reduce a sponsor's risk is to design a UGC campaign as a venue for users to create expressive editorial content, and to take measures to minimize and segregate the sponsor's promotional messaging, particularly within the UGC itself.

Likeness, Persona Rights Limited

However, the right to make an unauthorized use of another's name, likeness or persona, even in an expressive context, is not unlimited, and courts have struggled with how to balance the interests of the parties. A recent case looking at the issue of the scope of protection for expressive speech is Hart v. Electronic Arts, Inc., 2011 U.S. Dist. LEXIS 101254 (Sept. 8, 2011), which held that a video game publisher's use of a former football player's likeness in its annual NCAA Football video games was fully protected non-commercial speech.

Recognizing that the right of publicity may encroach First Amendment rights in some circumstances, the court found little clarity in the existing case law as to how the competing interests should be balanced, ultimately concluding that under either the transformative use test grounded in copyright law, which it favored, or the Rogers v. Grimaldi (875 F.2d 994 (2nd Cir. 1989)) balancing test from trademark law, Electronic Arts' First Amendment rights should prevail. As an initial matter, the court concluded that under existing Supreme Court law, video games are expressive works fully protected under the First Amendment.

Juggling Balancing Tests

Transformative Use Test

Turning to what it deemed the 'more thorny question' of whether the First Amendment grants Electronic Arts the right to impinge upon plaintiff's common-law rights of publicity, the court noted the lack of clarity as to how to balance the competing interests that each set of rights protects, pointing to at least eight 'balancing' tests other courts have used, and noting that neither New Jersey nor the Third Circuit has explicitly adopted any one test. Ultimately, the court focused on the transformative-use test developed by California courts and the balancing test set forth in Rogers v. Grimaldi. Concluding that the transformative test is more refined and better balances the competing interests of right of publicity and the First Amendment, the court nevertheless declined to explicitly adopt either test because it found that the First Amendment prevailed under both tests.

Regarding the transformative test, the court in Hart noted that this test looks to whether artistic expression takes the form of a literal depiction or imitation of an individual for commercial gain without adding significant expression, in which case the right of publicity prevails, or whether the use of an individual's likeness is only one of the 'raw materials' from which a work is created, making it transformative and protected.

Specifically, the court looked to two California cases involving videogame avatars, and found that the facts in the case before it fell somewhere in between. In Kirby v. Sega, 144 Cal. App. 4th (2006), that court found that a video-game character modeled after, but not meant to be, the singer Dee Lite was transformative, as contrasted with No Doubt v. Activision, 192 Cal. App. 4th 1018 (2011), where the court found that avatars of the band members from No Doubt in the Band Hero game that were literal depictions and could not be altered, were not transformative. Because users of Electronic Arts' videogame could change player features, the Hart court concluded its facts were more akin to Kirby, and thus transformative. This suggests that the greater degree of transformative ability the UGC program provides to, or better yet requires of, users, then the more likely a defense will be available.

The Rogers Test

Turning next to the Rogers test developed in the context of trademark law, the Hart court explained that, under this test, there is no liability for trademark infringement unless the challenged mark is wholly unrelated to the underlying work and misleads the public as to the source or content of the work, or in the case of a right-of-publicity claim, there is no relevance to the underlying work and it is essentially a disguised commercial advertisement.

Noting that the Third Circuit has not specifically adopted Rogers in the context of either a Lanham Act claim or a right-of-publicity claim, the court nevertheless acknowledged some precedent for applying it to misappropriation actions like the one before it. The court concluded that it could not reasonably be argued that plaintiff's image is wholly unrelated to the game, that its inclusion did not mislead the public as to the content or source and that it was not used to advertise an unrelated product, thereby satisfying the tests enumerated in Rogers.

Because Electronic Arts was entitled to First Amendment protection under either test, the court granted summary judgment in Electronic Arts' favor.

While disclaimers have typically not helped prevent liability in rights-of-publicity cases, the Hart court's consideration of the likelihood of consumer confusion as to source or endorsement suggests a benefit in doing so. Such a notice is discussed further below in the discussion of false-endorsement claims.

False Endorsement

Use of another's name or image in connection with advertising may also expose a sponsor to liability for false endorsement under Section 43(a) of the Lanham Act, which prohibits use of a 'word, term, name, symbol or device' that is 'likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association' or 'as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person.'

An advertiser will be held liable where its use of another party's name, image or mark creates a likelihood of consumer confusion as to whether the that party has endorsed the product or service. Such false, implied endorsement claims may further be actionable even where all the elements of a right-of-publicity claim do not exist.

The Lanham Act and IP Claims

As noted earlier in this article, federal intellectual property causes of action remain outside the scope of either the Digital Millennium Copyright Act (DMCA) or the CDA. While the Lanham Act is part of the U.S. Code's codification of federal trademark law, much of it concerns consumer protection, false advertising and unfair business practices ' issues that are really beyond the scope of intellectual property.

Although no appeals court has directly ruled yet on the issue, several district courts have treated Lanham Act claims to be intellectual property claims exempted from CDA immunity. (See, Gucci, 135 F.Supp.2d 409, 414 (S.D.N.Y. 2001); Doctor's Associates, 2010 WL 2313818; Friendfinder , 540 F.Supp.2d at 305; and Stayart v. Yahoo! Inc. , 651 F.Supp.2d 873, 885 (E.D. Wis. 2009), aff'd , 623 F.3d 436 (7th Cir. 2010) (not addressing the CDA issue)).

However, effective disclaimer language can potentially help reduce a sponsor's chance of liability for false-endorsement claims if it can obviate the potential for consumer confusion as to the source or of an implied endorsement. Even if a sponsor includes a disclaimer, it may still end up litigating a Lanham Act cause of action, because effectiveness of disclaimers is an issue of fact that must be determined in context.

Also, the user may still have a right-of-publicity claim notwithstanding a disclaimer's effectiveness in mitigating against consumer confusion, as disclaimers are generally deemed irrelevant to a misappropriation of right-of-publicity claim (aside from the recent Third Circuit approach in Hart).

Beware of Those Risks!

In summary, advertiser-sponsored UGC promotional activities carry a very real risk that the sponsor may be responsible for UGC content that misappropriates third-party rights of publicity or suggests a false endorsement, and CDA immunity may not be available to the sponsor. Care must be taken from the initial development phase of the UGC program to reduce these risks. Ultimately, the sponsor has to evaluate its risk tolerance in deciding how, if at all, to operate a UGC campaign.

The safest approach is to limit the extent to which UGC users can create a mashup of pre-cleared content elements the sponsor provides. In this way, the sponsor can prevent inclusion of content or claims that could create liability for which immunity is not available, but the users can still exercise creativity in how they order the elements made available to them.

If original elements can be submitted by users, then ways to minimize the risk include:

• Limiting the ability to submit images;
• Employing technology to filter out images of people other than the user;
• Preventing copying or distribution of the UGC content output (e.g., only the user can view his or her own content); and
• Designing the UGC program to further transformative and expressive content creation.

Whether users can submit images or not, sponsors should avoid sponsoring activities that could be seen to direct or shape infringing content or violations of law, and sponsors should require users to have all necessary rights and to confirm they do at the point of submission.

When users submit UGC, it is recommended that they agree to a click-wrap terms-of-use agreement and to official rules that include a non-exclusive license to the UGC, and that include representations and warranties of non-infringement and that also provide indemnities.

If the UGC is publicly displayed, then it is also recommended that sponsors undertake to maintain strict separation of the sponsor's promotional messages and the UGC, and to employ the use of disclaimers explaining that parties depicted in or associated with the UGC do not necessarily endorse the sponsor, or its products or services.

Additional structural approaches should be considered to promote the maximum of the likelihood of a DMCA safe harbor for copyright infringement, which will be discussed in a follow-up article.

Conclusion

So, it is impossible to eliminate all risk from the operation of UGC promotions, but sponsors can mitigate their risks by designing and operating campaigns with the scope and limitations of DMCA and CDA protections in mind.

Doing so will allow e-commerce and related undertakings the possibility of healthy growth, continued profit, maintenance of goodwill ' and to avoid the problems that could arise in the ordinary course of business but that with careful application of content and attention to the letter and the spirit of the law can be relatively easily avoided.