Enrico Schaefer - May 24, 2019 - Online Advertising, Social Media Lawyer
Are you a social media influencer or brand looking to hire a social media influencer? Whether you are an Instagram, twitter or youtube or other social media influencer – or a company hiring a virtual influencer to promote or endorse your brand – you are going to need a influencer agreement to set forth license, payment and other key contract terms. You are licensing more than simply the right of publicity. You are licensing copyright, name and likeness and potentially trademark rights. There are not many social media influencer form contracts on the internet to help you draft the right agreement. And the brand influencer contract templates and influencer agreement templates that are available may not be right for you (in fact they are pretty basic and many clearly were NOT drafted by influencer attorneys).
Coronavirus ALERT: Can you enforce a contract if the other party uses coronavirus as a defense or excuse? In the age of coronavirus, force majeure clauses in contracts may relieve parties from having to perform their agreements. We are reviewing contract terms and advising clients on enforceability of obligations as a result of coronavirus as an act of God, or principles of impossibility, impracticability and impossibility, as well as equity.Contract & Business Attorney Enrico Schaefer
(See below! We will update this list as we find more. Don’t hesitate to contact us if you find a good one we should add to our free form and template list).
In this episode, social media attorney Enrico Schaefer discusses the most important contract terms you will need for your social media influencer agreement. If you can’t afford an attorney to draft the perfect influencer contract for you, you might want to check out the virtual influencer contract forms and templates (we make no representations about whether they are good, bad, valid or invalid) set forth below. While it is typically best to hire an attorney with experience and expertise in social media influencer issues, sometimes a template is all you can afford. In the meantime, listen to this Tech Law Podcast and don’t forget to subscribe to our show!
Welcome to Traverse Legal Radio: The Tech Lawyer Podcast, a show dedicated to helping entrepreneurs, CEOs, and founders navigate legal issues, grow revenue, and increase their valuation. This podcast is sponsored by the IP and litigation attorneys at Traverse Legal PLC. Visit TraverseLegal.com to learn how Traverse Legal’s attorneys are changing the way law is practiced. Now, here’s your host, trial attorney Enrico Schaefer.
Enrico Schaefer: Today on Tech Lawyer Radio, we’re going to be talking about some issues that are going to be applicable to influencers and online celebrities, as well as the brands and companies that are hiring social media influencers in order to promote or endorse their brands.
My name is attorney Enrico Schaefer, and we welcome you to the show. We love our fans. Thank you for listening, first off. If you have any ideas for future shows, feel free to leave a comment or send us a message. I’m always happy to talk about the things that are important to you.
Today, I want to share with you some of my best tips from both the brand and social media influencer perspective about social media influencer contracts. And specifically what we’re going to be talking about is the licensing of your name and likeness to a brand, which is one piece of the agreement that you need to pay special attention to.
As a celebrity influencer lawyer, we see a lot of preventable copyright and publicity issues. An ounce of prevention really is worth a pound of cure. Get it right the first time and you will save on attorney fees later.Enrico Schaefer, Celebrity Influencer lawyer
Now, we represent both brands entering into contracts with social media influencers, we also represent social media influencers entering into agreements with either networks or brands, and so we get to see both sides of the equation.
And what we always say is, it doesn’t matter whether or not you’re the brand or the social media influencer, the key thing is to enter into an agreement that sets expectations for both sides.
What is now starting to happen in this evolving market is people are starting to pay more attention to the contracts they’re entering into. It used to be in the social media influencer space that someone had some money, a brand had some money, they paid the money to the influencers, tell the influencers what hashtags to use and what the messaging would be, and that would be the sum and substance of the agreement between the parties.
And I think now as the market is continuing to develop and continuing to emerge, we’re now seeing people pay a lot more attention to what are in the influencer agreements. And this is important, because with any relationship, you want to set expectations. If you set expectations with the contract, then you’ve really reduced the risks that someone’s going to be disappointed or that there’s going to be a dispute down the line.
(See below! We will update the contract and agreement forms and templates list as we find more. Don’t hesitate to contact us if you find a good one we should add to our free form and template list).
So let me talk a little bit about that from each perspective. Let’s say you are the social media influencer or online celebrity. You are going to be licensing a variety of different things, potentially some photographs, potentially some text, you’re going to be allowing the brand to leverage your platform, your social media platform. But perhaps most importantly, you’re going to be licensing your name and likeness.
This is an area of law that gets far too little attention in the social media influencer space. Your name, your likeness, your image, your voice, these things are what the brand is looking for. This is what they’re paying you for. And so, you are licensing the use of those things to the brand, but you’re not giving them to the brand, you’re not assigning them to the brand, you’re not giving the brand carte blanche to do whatever they want with your reputation, your name, and your likeness, are you? Of course not.
There’s a limited engagement and a limited scope of use, and all of that needs to be spelled out in the agreement, because let’s face it, if the brand is paying you $5,00, that might allow them to license a particular slice of use for a particular amount of time. If they’re paying you $20,000, number one, you could simply be a bigger online celebrity, a bigger influencer, but it also means they may be paying for more rights, more license rights in your name and likeness.
Now, the scope of the use and the length of the use are all going to impact on price. And so, one of the great things about licensing is that you can really scale up or scale down on these variables in order to make sure you can do something within the brand’s budget.
If the brand only has X number of dollars, then perhaps you can license them X amount of use. If they have a bigger budget, then you can certainly license a greater amount of use.
If you’re the brand, you are really in the more vulnerable position here, because you are going to have to make sure the license agreement spells out exactly what you can and cannot do with the social media influencer’s name and likeness. And the reason why is if you exceed the scope, implied or expressed scope of the license agreement, you’re going to be potential sued for violation of those rights. And if it happens to be a copyright, then obviously the damages can be pretty extreme if it’s some sort of willful infringement. So, you want to be very careful as the brand to know exactly what you can and cannot do with the influencer’s name and likeness.
Today what we’re going to talk a little bit about, the contract, the agreement between the brand, between the company that represents the brand and social media influencers. Here are the things that both sides, both contracting parties need to make sure is in the agreement. And you do want it to be a written agreement.
Now, these things can be implied, and a court can take a look at the nature of the transaction and all the circumstances surrounding the transaction in order to figure out what was licensed, but that is definitely not the way you want to go. You want to have an express agreement that lays things out and again sets expectations. This isn’t about taking advantage of the brand, or about the brand taking advantage of social media influencers. This is about setting expectations so you guys can have a healthy relationship moving forward.
All right, jumping right in, you’re going to have an agreement, and one of the aspects of the agreement is going to be the license from the social media influencer to the brand, to the company, of the licensor’s, of the social media influencer’s name and likeness.
Let’s talk about what’s being licensed, and this is very important. The licensed property or the licensed works or the licensed materials by the social media influencer can include or may not include a number of different things. Typically the social media influencer is going to license their name, but also could include their social media handle or account name, and all that should be spelled out. Social media influencers could also be licensing their image, but not necessarily, their potential, their signature, their voice, their likeness, their goodwill, the sound of their voice or audio of their voice could be licensed.
(See below! We will update the contract and agreement forms and templates list as we find more. Don’t hesitate to contact us if you find a good one we should add to our free form and template list).
And so, you need to spell out exactly what the licensed property is. And depending on what the advertising and marketing
campaign is by the brand, you’ll identify the specific components that need to be licensed in order to meet the goals of that marketing campaign. What are you licensing of the licensor’s name, image, voice, et cetera? It could be photographs, it could be videos, it could be pictures, it could be audio recordings. You need to identify not only what is being licensed, but what is the media through which these things are going to be displayed to the world on behalf of the brand. So, first of all, what’s being licensed, second, what are the social media elements that the license is going to pertain to?
And then, you also want to say, what are the legal rights that are going to be bundled up here in terms of the licensed material? Typically, you’re going to be talking about legal terms such as the right of publicity, and those then will be the right of publicity in what — the name, the image, the signature, the voice, the likeness, and any other elements of the personality or identify of the social media influencer.
And those things, those legal rights, are recognized under most state common law. And there are some statutory rights, if they happen to implicate federal copyright law, for instance, or trademark law. And so, you want to spell all that out — what is the licensed property, what is the licensed material?
All right, let’s now talk a little more specifically about a very important contract term that is going to spell out how the brand can use the licensed material. Can they use it on their website, can they republish a social media post onto their social media platform? Is this going to go in an online, a third-party magazine? Is it going to go into books, is it going to go into some sort of video program or video recording that’s going to show up on a website or YouTube or otherwise? Is this going to be something that could be used on a radio or podcast, if it includes a licensing of the voice? Some sort of video or audio programming? You want to spell all that out.
Is this going to be purely online, or potentially offline marketing? Is it going to be on the internet, is it going to be on mobile devices? Can the licensing include the registration of domain names by the brand which incorporate the licensed materials — for instance, your Instagram name or Twitter handle? How broad is the use going to be — it could be digital, electronic, print.
You have to identify all these different aspects, and then you have to identify on whose behalf — is it purely the company, purely in relation to the particular brand, or is it broader than that? Is the company subsidiaries? Can the company relicense the materials to its for instance affiliates, or to its third-party franchisees? Can the divisions and subsidiaries of the brand or the company use the material?
The scope of use is really where we determine what the price is going to be, what the royalty or the license fee is going to be for the contract. And again, just like with the licensed property, the product or the media in which the licensed property can be used is important for a lot of reasons — setting expectations is one, but other is to be able to develop what is the pricing scheme that’s going to apply here? Broader use, broader rights, typically requires the payment of more money.
All right, let’s talk a little bit about another important contract term, and it’s going to be the grant of license. You’ve identified definitionally what’s being licensed and how it can be used. Now you have to actually have language in your contract that grants a license, and you’re going to say something to the effect of licensor hereby grants the company the right to what — and then you have to define the scope of the license.
Is this going to be a worldwide license? Is there going to be exclusivity, or exclusivity within a market? So let’s say the brand is an apparel — can the social media influencer do other apparel companies, competing apparel companies? How long does the exclusivity remain in place? Is it for the duration of the campaign, or is it for a year, or is it for a longer period of time? Again, all these things factor into price.
And typically, you’re going to want to limit the license for the particular use defined above, promotion of the company, and who else?
Another really important aspect of the grant of license is, can it be authorized, can the works, can the media be authorized for use by the company to third parties? If so, it needs to be spelled out. If not, it needs to be precluded. Again, set expectations.
Can the company or the brand file for copyright protection for, for instance, a social media post by an influencer that they republish on their website? If so, who is going to be able to register that copyright? Is it going to be the social media influencer, or is it going to be the brand?
Can the brand file any trademarks coming out of the social media campaign that are tied to the influencer’s name and likeness? So, you want to identify what kinds of registrations can occur as a result of the marketing campaign, and who has the right to file them.
Typically there’s going to be a reservation of rights clause, where the social media influencer is going to reserve all other rights very specifically, so that it’s very clearly spelled out what the brand can do, what the brand cannot do, with the social media influencer’s name and likeness.
Now, there’s a lot that goes into these agreements, obviously, and we’re just touching on a couple of the items here that are important, and I know that both the brand and the social media influencer will also think the fee is going to be important.
And here’s where it gets creative. You can really slice and dice what is paid for what and how, and any way you can dream up. And so, these could be as simple as, I’m going to pay for $5,000 for each Instagram post, and here’s the hashtag that’s going to be used by the influencer.Social Media and Celebrity Attorney Enrico Schaefer
You need to spell out who gets to control what words get used in relation to the post. Is it going to be the social media influencer who comes up with the words that are published with the post? Do they have to be approved by the brand, does the brand get to actually control what the social media influencer posts — these types of things.
Of course, when you’re talking about what gets posted, you have to always make sure you’re paying attention to part 255. The Federal Trade Commission requires you to specifically identify at the top of the fold the fact that this is a paid advertisement or endorsement. We’ll talk about that in another show, what the requirements are for hashtags for social media influencers.
Influencer marketing is on the rise. But understanding what and how to pay social media and celebrity influencers and celebrities for their endorsements is still a mystery for brands and social media influencers. So, let’s talk a little bit about the types of different fees that could be paid. You can pay a licensing fee of X number of dollars over a period of time, or in a lump sum, when is the fee going to be paid.
You can also negotiate royalties. If there’s going to be sales coming out of this particular influencer marketing campaign, then potentially the social media influencer can get paid a royalty equal to whatever –30 percent of the annual net revenue derived from the sale of the product as tracked through, for instance, an affiliate’s log from the social media post. Or, just from a gross amount of sales across the board.
Now, let me tell you why this might work well from the brand’s point of view. Let’s say the brand doesn’t have a lot of upfront money — then, they can choose to pay a royalty based on sales, either sales directly tied to the influencer post, or gross sales or net sales of the product for some period of time.
You should always spell out when the royalty payments are due. And any time you get into a royalty situation, you’re going to have a right of accounting to the social media influencer so they can do some sort of audit in order to make sure that correct amounts have been paid. That’s where a lot of folks get into trouble — the brand doesn’t accurately account for the royalties due. There’s typically penalty provisions in that particular piece of the royalty payment.
All right, some other ideas: there could be a talent expense or allowance for expenses, which allows the social media influencer to purchase clothes or to do makeup and hair; any sort of travel expenses for any sort of experiences, or any other expenses related to getting to a particular location for a shoot; or to simply pay for a professional photographer to do the shoot. You could typically see some sort of talent expense or allowance that goes into the contract, because that helps the brand ensure the content’s great, it’s the right content, and makes it easier for the influencer to get wherever they need to go and look as good as they need to look in order to do the endorsement.
Social Media Influencer Contract Forms and Templates (Free)(These are online forms and templates. We make no representations about these forms. These templates are provided so that virtual influencers and brands can get ideas. You should hire a virtual influencer attorney and customize a contract that meets your specific needs and addresses your risk tolerance).
Obviously there’s a lot more that needs to go into these influencer contracts and agreements. There are some influencer agreements and forms that are out there for you to take a look at. I will post them in this podcast. As you know, we love to share here, and we want to empower our influencer clients and friends to be able to engage in self-help where possible.
Some influencers just do not have the funds to pay an attorney, we totally get that. If you do have the funds to pay an attorney to help you negotiate your influencer contract, all the better; you’re certainly welcome to give us a call. Find out how we go about changing the way law is practiced. We come at it from a different perspective than most law firms.
My name is Enrico Schaefer. We’ve really enjoyed having you on the show today. Again, make sure you take a look at our Facebook page, and like us on Facebook — we’re at Traverse Legal. Definitely like and share this podcast with your friends. Feel free to leave a comment or send us an email. We love to hear from you.
And, we’ll see you next time.