How Affiliate Marketers Can Avoid Legal Pitfalls

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The session will provide an overview of the legal landscape affiliate marketers face, including the common pitfalls that can threaten every business. Experience level: Beginner Target audience: Network Niche/vertical: Compliance Eric Crusius, Senior Attorney, Centre Law Group (Twitter @InternetBizLaw)

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  • 1. AFFILIATE SUMMIT WEST 2013 How Affiliate Marketers Can Avoid Legal PitfallsEric S. Crusius, Esq. | Jan. 15, 2013 | Session 10b | Florentine 3 & 4 Centre Law Group, LLC 1953 Gallows Road, Suite 650 Vienna, VA 22182 (703) 288-2800 Website: www.centreinternetlaw.com Blog: www.internetlawforbusinesses.com Centre Law Group, LLC 2013 E-Mail: ecrusius@centrelawgroup.comAll Rights Reserved
  • 2. Todays Topics Three Areas of Importance For Any Company 1.Ensure Predictability Why contracts are important and what needs to be in them. This will be illustrated with my uber-predictable cat. 2.Manage Risks What legal risks are out there? This will be illustrated with what else? A casino! 3.Corporate Incubation how to protect your company from internal and external maelstroms. This will be illustrated with an adorable 15 week old fetus. Yes, I am the father!Centre Law Group, LLC1953 Gallows Road, Suite 650Vienna, VA 22182(703) 288-2800
  • 3. Todays Topics 1 2 3Centre Law Group, LLC1953 Gallows Road, Suite 650Vienna, VA 22182(703) 288-2800
  • 4. Predictability The Importance of ContractsCentre Law Group, LLC1953 Gallows Road, Suite 650Vienna, VA 22182(703) 288-2800
  • 5. Predictability The Importance of Contracts THE PLAYERS WHY HAVE A CONTRACT? Merchants: control how your products are marketed and under what conditions; CAN-SPAM compliance and other compliance issues; set payment amounts. Networks: keep control over affiliate marketing practices; payment amounts; ensure compliance with merchant agreements; set-up website contracts. Affiliates: set the terms and conditions of marketing and payments; also set-up website contracts.Centre Law Group, LLC1953 Gallows Road, Suite 650Vienna, VA 22182(703) 288-2800
  • 6. Predictability The Importance of Contracts Merchants Website Contracts: general terms and conditions, payment terms and conditions, and privacy policy. Network Contracts: protect intellectual property how and when your text, photos, logos, etc. can be used; try to obtain indemnification for legal wrongs by networks or affiliates working for networks; set payment conditions. Affiliate Contracts: same as network contracts if working directly with affiliates.Centre Law Group, LLC1953 Gallows Road, Suite 650Vienna, VA 22182(703) 288-2800
  • 7. Predictability The Importance of Contracts Networks Website Contracts: terms and conditions and privacy policy. Contracts with Merchants: use of merchants intellectual property how and when merchants text, photos, logos, etc. can be used; try to obtain indemnification for legal wrongs by affiliates; set payment conditions. Affiliate Contracts: govern how affiliates advertise; avoid indemnification.Centre Law Group, LLC1953 Gallows Road, Suite 650Vienna, VA 22182(703) 288-2800
  • 8. Predictability The Importance of Contracts Affiliates Website Contracts: if applicable - terms and conditions and privacy policy. Network Contracts: governs how affiliates can utilize intellectual property how and when text, photos, logos, etc. can be used; network/merchant may try and obtain indemnification for legal wrongs; set payment conditions. Merchant Contracts: same as network contracts if working directly with merchants.Centre Law Group, LLC1953 Gallows Road, Suite 650Vienna, VA 22182(703) 288-2800
  • 9. Predictability The Importance of Contracts What is Intellectual Property? Trademarks: include logo, name, and trade dress. Violating a trademark can lead to significant statutory damages. Copyrights: text, pictures, images, etc. Significant statutory damages available though work is considered copyrighted upon creation; easy to register a copyright; beware of DMCA Takedown Notices. Other IP: includes trade secrets and patents.Centre Law Group, LLC1953 Gallows Road, Suite 650Vienna, VA 22182(703) 288-2800
  • 10. Manage Risks Your Business is Not a CasinoCentre Law Group, LLC1953 Gallows Road, Suite 650Vienna, VA 22182(703) 288-2800
  • 11. Managing Risks Your Business is Not a Casino What are the risks? Risk #1: the Federal Trade Commission (FTC). Among other things, the FTC monitors advertising claims made by affiliates, networks, and other marketers. Avoid trouble no deceptive formats (fake news stories), no false endorsements, no unsubstantiated claims. Risk #2: State Attorney General (AG) investigations. Oftentimes State AGs will investigate a company after receiving complaints from consumers especially free trial complaints. There is only one FTC, but there are 50 State AGs!Centre Law Group, LLC1953 Gallows Road, Suite 650Vienna, VA 22182(703) 288-2800
  • 12. Managing Risks Your Business is Not a Casino What are the risks? Risk #3: the CAN-SPAM Act. Ensure soliciting e-mails are in compliance with the CAN-SPAM Act. Risk #4: violation of IP rights. IP in this field is often very murky. Can you use a trademark in an AdWord campaign? Can you tag a trademark in your blog? Can you use product photographs that are not yours? What are the rights among the parties in this situation?Centre Law Group, LLC1953 Gallows Road, Suite 650Vienna, VA 22182(703) 288-2800
  • 13. Managing Risks Your Business is Not a Casino From a merchants perspective, what are the risks? Networks and affiliates violate various laws Networks and affiliates misappropriate merchants IP Networks and affiliates draw the ire of the FTC Product does not function properly Product does not work in accordance with claims made by advertisersCentre Law Group, LLC1953 Gallows Road, Suite 650Vienna, VA 22182(703) 288-2800
  • 14. Managing Risks Your Business is Not a Casino From a merchants perspective, what are best practices? Have iron-clad contracts with networ