Creator Economy Law Newsletter – Issue #11

Franklin Graves

My influencer agreement checklist, Adobe now sells AI stock, Discord launches subs, Oversight Board shames Meta, SCOTUS briefs filed, and more!

This is Creator Economy Law, a newsletter dedicated to exploring and analyzing the legal issues surrounding the creator economy, creators, and internet platforms. If you enjoy what you’re reading, share with friends, and invite them to subscribe using the button above and share using #CreatorEconomyLaw.

If you’re like me, it can feel overwhelming trying to keep up with all of the trends and happenings in the creator economy space. One of the ways I stay in-the-known is when YouTube releases its trend reports. Just recently, they launched a trends podcast! It’s hosted by MatPat and is a great listen/watch. The first episode dives into a fascinating topic — virtual avatars and influencers called “vtubers.” I’d also note the awesome production on the video podcast (#goals). Check it out!

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Here’s what’s been happening in the world of Creator Economy Law.

Adobe Stock begins accepting AI-generated stock assets

In incredibly important AI news, Adobe Stock has announced its own set of standards that, if met, would allow stock content submission of generative works. Here’s what you should know:

🤖 Stock content will be clearly labeled as generative AI content, both in the name of the stock asset, as well as in the description and tags.

🤖 Contributors bear the burden of disclosure, but Adobe alludes to content moderation teams being involved if the content is flagged as being generative AI content.

🤖 Contributors must ensure that the outputs are accurate (no third ears or eyes, please!) and do not depict real people or places.

🤖 Adobe only wants one output from each prompt used.

🤖 Model releases are required if the generative AI is developed using “a photo of a real person as a prompt, name a specific individual in the prompt, or include prompt keywords intended to instruct the generative AI tool to draw a real person.”

📖 Read: Adobe also offers an in-depth FAQ for contributors.

🗣️ Franklin’s Take: I first learned about this after a tip from Kristina Kashtanova, the AI researcher and artist currently at the center of a dispute with the U.S. Copyright Office over the registration of a graphic novel that was made, in part, with generative art from the use of Midjourney, an AI-powered text-to-image tool. The screenshots that Adobe included in the announcement feature some of her work.

I think Adobe is making the right move by ensuring there is clear disclosure of generative AI assets. It should be up to the customer/licensee to determine whether or not they can accept the risk of using AI-generated assets or incorporating them into projects that contain human-authored works. Michael Weinberg highlights some of the legal issues with Github’s Copilot, which are relevant to issues creators should consider when working in the AI-generation content space.

For Adobe Stock, it also appears as though there are no pricing differences based on these assets being generative works. It will be interesting to see how this plays out in the long run as AI tools become more user-friendly and more powerful with less technical knowledge or experimentation with settings on an algorithm.

Discord is launching server subscriptions

Discord announced the launch of server subscriptions (and a creator portal), which will impact creators for a variety of reasons, such as:

👉 When an audience becomes a customer, it can dramatically change the relationship. Creators, and their mod teams, need to ensure they understand how to manage customer relations. This subscription offering may be different to manage than that of other platform subscriptions or purchases, such as on YT or Twitch, and more akin to Patreon.

👉 Creators should have clear and concise rules and policies for their server, and follow through on their enforcement of them (either with a mod team, bots, or a combination of both).

👉 Does this create additional liability for a creator that is operating a “server”? Still trying to process this one and explore what it means for Discord to be the hosting and platform provider, and to what extent legal and regulatory obligations extend to creators that create and manage the server community, and the content generated within.

👉 The Discord Server Subscription Policy prohibits monetization of a community with a “Primary purpose of marketing, advertising, or promotional benefit of a third party, such as third party servers, applications, businesses, or services.” I’m curious as to how Discord interprets who is a “third party” under these circumstances.

👉 Discord has to approve the buying and selling of servers. This could potentially impact creators that conduct business dealings, like merging with another business, selling their own business, or acquiring another business.

📖 Read: Creators and their business teams exploring the new server subscription options should review the following:

⭐️ Monetization Terms

⭐️ Discord Server Subscription Policy

The Oversight Board criticized Meta for giving celebs and politicians special treatment

On Tuesday (Dec. 6) Meta’s Oversight Board issued a policy advisory opinion regarding the use of a cross-check program on Facebook and Instagram. “When users on Meta’s cross-check lists post such content, it is not immediately removed as it would be for most people, but is left up, pending further human review.”

The Board goes on to write: “In our review, we found several shortcomings in Meta’s cross-check program. While Meta told the Board that cross-check aims to advance Meta’s human rights commitments, we found that the program appears more directly structured to satisfy business concerns. The Board understands that Meta is a business, but by providing extra protection to certain users selected largely according to business interests, cross-check allows content which would otherwise be removed quickly to remain up for a longer period, potentially causing harm. We also found that Meta has failed to track data on whether cross-check results in more accurate decisions, and we expressed concern about the lack of transparency around the program.”

📖 Read:

Triller pulls entire music catalog in a latest move following Sony Music lawsuit

As of last Thursday (Dec. 1), social short-form video-sharing app Triller has removed sound recordings from its music library distributed by Sony Music, Universal Music, Warner Music, and the indie music collective Merlin. Without licenses or relationships with these four groups, Triller is left with very few options, let alone widely-recognized tracks, for its users to incorporate into their videos. The move comes after Sony Music filed a lawsuit against Triller for alleged copyright infringement.

📖 Read:

🗣️ Franklin’s Take: I’ve written about the issues with music licensing for social media and content platforms. If creators rely on a platform’s licenses, those present a couple of pitfalls:

  1. The licenses are usually for the non-commercial, personal use of the music. The line between where non-commercial and commercial use for creators is blurry given that it’s arguable any creator using the music tracks to share information or build a community would be considered commercial use.
  2. The licenses usually don’t transfer to other platforms. Meaning, if a creator uses music from the YouTube Music Library or the TikTok Audio Library, it is likely they need to confirm licenses anywhere else the upload the content.
  3. The licenses may expire since most platforms are licensing for only a couple of years at a time. This leaves creators potentially exposed unless the platform’s license offers coverage for works that incorporate the music beyond just the term length for when the music is available in the platform’s music library.

Instead, I always recommend creators focus on using music that they have licensed directly from another creator, or from a reputable stock music site. Sometimes, though, it doesn’t really matter for a creator’s long-term growth plans and they strategically take advantage of the licenses for posting content that isn’t intended to stay up or remain relevant, beyond a short amount of time.

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  • Briefs were filed in Gonzalez v. Google and Twitter v. Taamneh, the two U.S. Supreme Court cases that have the potential to impact Section 230 of the CDA. Check out coverage over on The Verge by Adi Robertson.
  • “Company ‘Hijacks’ Blender’s CC BY-Licensed Film, YouTube Strikes User (Update)” by Andy Maxwell via Torrent Freak
  • Kanye West (or Ye as he goes by now) has backed out of his previously announced purchase of Parler, the right-wing social media app confirmed on Twitter on December 1st. In other Ye news, former fans are turning his social media communities into hubs of educational content about the Holocaust and posting content supportive of Taylor Swift.
  • “TikTok Music Lawsuits Fire Warning Shots to Brands, Influencers” by Isaiah Poritz via Bloomberg Law
  • Hive Social, the social network that’s seen incredible user growth in the last couple of months, shut off its servers on Thursday, Dec. 1st. The platform, operated by just two people, has over 2 million users. Zerforschung, a security advisory firm out of Berlin, found that the social network’s operations contained numerous vulnerabilities that exposed ALL data, including user email addresses, phone numbers, private messages, posts, and other content regardless of whether or not it may have been deleted. Interestingly, they reported the issues on Saturday (Nov. 26th), and the platform was only taken offline when they went public with the security alert. It remains to be seen whether or not the vulnerability was exploited and data was accessed without authorization.
  • Did someone order more pricing options? Apple is serving them up! 700 (😱) additional price points are now available as part of an upgrade to App Store pricing for developers, including new pricing tools.
  • Twitch has banned one of its streaming stars, Hasan Piker, for 48 hours, as noted by the automated Twitter account @StreamerBans. Hasan shared more details on his own Twitter account claiming that the DMCA was used by the right-wing extremist Censored.tv following Hasan’s stream that included a brief clip from the company along with Hasan’s own commentary and criticism of the content. Dot Esports offers additional coverage and history behind Hasan’s content.
  • The NYT offers a fascinating profile on Rhett & Link and their company Mythical. The duo just recently won a Streamy Award for their show Good Mythical Morning.
  • Feeling lucky? Popular streamer Trainwreck lost a big sponsor when Twitch banned gambling companies from sponsoring streamers on the platform. It now seems like Trainwreck is taking matters into its own hands. Tubefilter has full coverage by James Hale.
  • Meta released an official statement opposing the Journalism Competition and Protection Act (JCPA) after reports that congress might include it as part of the must-past defense authorization bill. The bill would allow news outlets to collectively bargain for a cut of ad revenues social media platforms generate. Gizmodo has more.
  • A Ridgefield, CT, town employee was charged with disorderly conduct following an incident in which she used a file folder to hit two YouTubers that were filming in the town hall. The YouTube channel, Accountability for All, is known for filming government employees while working.
  • The Trademark Trial & Appeal Board (TTAB) has affirmed the USPTO’s refusal to register “#” as a mark when part of “#LAW”, a mark attempting to get registered in connection with providing legal services when the referral occurs via telephone. The Board noted the widespread use of #law on social media platforms. “Press # For Options, but Not for a Trademark Registration” Read about the case with coverage by Brennen Baylor.
  • “The New York Collegiate Athletic Participation Compensation Act (S.5891-F/A.5115-E) allows New York college athletes to receive compensation for their name, image, and likeness (NIL) without losing their scholarships or eligibility. It also allows these players to use an attorney or agent for business deals without punishment.” Read full coverage by Susan Friedfel via Jackson Lewis PC 
  • web3 avatar startup Genies announced three new “digital fashion rights” that can be applied to items in their marketplace: (1) commercial rights; (2) DIY rights; and (3) DIY and Sell rights. Creators have the choice.
  • “Elon Musk’s Release of Documents Triggers Twitter Lawyer Jim Baker’s Exit” by Alexa Corse and Tim Higgins via WSJ. Coverage is also available from Bloomberg.
  • “Facebook Can’t Shake Lawsuit Over OnlyFans Bribery Allegations – Dangaard v. Meta” by Eric Goldman
  • In what appears to be one of the first national campaigns with student athletes and their universities, “Dunkin’ Launches National NIL Campaign With 24 Universities And Student Athletes” by Kristi Dosh via Forbes
  • “Artist Turns Down $3,000 Fortnite Job Offer, Calls It ‘Hilarious’” By Sisi Jiang via Kotaku
  • “Fox Sued for Patent Infringement When Scheduling NFL Broadcasts” by Michael McCann and Jacob Feldman via Sportico (Apple News)

Working on an influencer agreement? I’ve put together the following checklist of items to keep in mind:

  • Is the influencer receiving any free products, services, travel, etc.? Are they “reviewing”? Be sure to review the FTC’s disclosure resources.
  • Are there any industry-specific regulations that apply (medical, food and drug, children, etc.)?
  • Who owns any intellectual property (IP) in connection with the content created? Does it involve the creation of content (video, images, blog posts, email blasts, etc.) about a specific topic, service, or product?
  • What existing IP needs to be licensed between the parties (brand logos, influencer name/image/likeness, etc.)?
  • Do KPIs have to be met? How will data, insights, or analytics be shared, if at all? Will the influencer and brand have a way to automatically share data (such as a social media monitoring platform)? Or, will there be manual steps involved?
  • If lead generation is involved, what privacy rights are triggered? How are consumer consents properly obtained, and who is responsible for ensuring compliance?
  • Is the influencer represented by anyone? Agents? Unions (SAG-AFTRA)?
  • Who has final creative decision-making authority?
  • Is there an obligation to plan, or work on a pre-release schedule of some kind? Such as required meetings in advance between teams, idea-generation sessions, etc.
  • When will the content be released? How long will it be released for / remain online?
  • Exclusive deal? Blackout period/window for competitor products or products within a certain industry?
  • Non-disparagement clause?
  • How is payment handled? Who receives it, how, when, and any triggers/gated payment? Affiliate-based (paid based on sales?)? Audit rights?
  • Insurance? (both influencer and business/brand)
  • Morals clause?
  • Do the parties have a confirmed relationship as independent contractors to avoid employment law issues?

What else would you add?

If you are looking for an example from a publicly available resource, check out this SEC filing between Papa John’s and Shaq. It is definitely a more complex example, but some of the language and clauses may be a helpful guide and starting point for reviewing your own agreements. Also, Impact, a leading partnerships platform, published a fairly robust guide to influencer marketing (I mean, they do call it the “ultimate guide”).

Grab your eggnog, spiked cider, or holiday drink of choice… sit back and enjoy the smooth sounds of Sam Smith and a timeless Christmas classic 🎄

Watch on YouTube or Apple Music.

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No Legal Advice. This newsletter is published solely for educational and entertainment value. Nothing in this newsletter should be considered legal advice. If you need legal assistance or have specific questions, you should consult a licensed attorney in your jurisdiction. I am not your attorney. Do not share any information in the comments you should keep confidential.

Personal Opinions. The opinions and thoughts shared in this newsletter are my own, and not those of my employer or any of the third parties mentioned or linked to in this newsletter. No affiliation or endorsement is implied or otherwise intended with third parties that are referenced or linked.

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