Influencers and Brands

It is no wonder that intellectual property (IP) rights play a key role in IM, and as such they must be observed and protected to ensure a fair playground and safe environment for all the parties involved. Companies own the brands and have the financial resources to advertise their products or services on social media, whereas influencers with their content and followers are the promoters of such merchandise and thus the vehicle through which brand owners reach consumers.

In this way of advertising and selling products, the numbers matter not only in terms of revenue but also in terms of the followers a brand or an influencer has, since this serves as a key performance indicator (KPI) to predict the amount of consumers brands are able to reach and engage with around the world. Likewise, on the influencers’ side, the number of followers and the prestige of their image and name are crucial aspects that companies assess in order to select the influencer they will work with as a liaison and brand ambassador to promote and build loyalty among consumers.

This article addresses key legal IP considerations to keep in mind when dealing with IM on social media for both brand owners and influencers.

Legal Framework of Influencer Marketing

Currently, in many countries, there are no influencer-specific regulations or laws, and only IP and consumer protection laws govern this commercial sector. However, this topic has become more relevant for lawmakers and society given the huge impact and reach of IM. There is an urge to bring legal certainty to a fast-paced growing commercial and very particular sector and adequately protect the rights of the agents involved.

Brands and companies are normally very careful and aware of what they can or cannot post on social media since they receive legal advice from in-house or external IP counsel before making any publication and have solid guidelines in place to avoid liabilities. Traditionally, companies would hire professional models or actors for their advertising campaigns and would develop a script to properly communicate certain messages to consumers and promote their products and brands in a successful way.

In IM, however, things are different. An influencer is, in broad terms, a person who stands out in a communication channel (such as a social media platform) and who expresses their opinion on topics without necessarily being an expert on the subject or having any specific knowledge regarding advertising or the IP aspects related to it. Still, an influencer has the power to deliver a strong message and reach large audiences, which is what brand owners want.

Because of the accustomed creative freedom to produce, influencers might come up with wrongful publications where they make comparative advertising or unsupported claims or even free ride on the IP rights of others to get the attention of their followers. Doing so in promoting a brand product can lead influencers to incur IP infringements and bring negative consequences for the company that hired them.

As such, when entering into any IM contract, both influencers and companies must set creative limits and guidelines for the development of the content, limit each other’s liability, and clearly describe their expectations and deliverables. Not doing so can jeopardize the IM’s purpose and result in a failed advertising campaign with an adverse effect for the brand owner.

Even when an influencer posts something as “personal opinion” on some product, trying to disguise it as freedom of expression to avoid being governed by the advertising and IP regulations, there is still a thin line on whether such publication is subject to the same strict scrutiny and compliance with IP, consumer protection, and regulatory laws as if the post were being made as a professional advertising service (namely, given the number of followers and the global reach of the publication).

In fact, some jurisdictions, such as the United States, Australia, and the United Kingdom, have introduced regulations requiring influencers to add certain hashtags to distinguish and clarify the publications they make as part of IM services (e.g., #AD, #ANZEIGE, etc.) from those they make as personal statements. The aim is that when people see those hashtags, they can easily identify and be aware that they are looking at an advertising or paid collaboration and not a personal opinion or point of view of the influencer.

The platform itself, such as Instagram, may have an added feature to help influencers clearly indicate when they are posting content as part of a paid collaboration with a brand, which also helps them to be shielded from liability if a publication posted on their platform infringes IP rights or other applicable regulations.

Before making any publication as part of a collaboration with a brand, influencers must be sure that they are not making any unauthorized use of IP rights belonging to third parties, or make sure to get the corresponding licenses to avoid any infringing behavior.

IP and Influencers

On the other side of the coin, influencers can also be IP rights holders.

An influencer is paid to advertise and promote a product or service through publications on social media, either permanent posts or time-limited clips. However, not only are the third parties’ brands displayed on IM content, but the very content created by the influencer—such as pictures and videos and even the characters of their own creation that they decide to include—qualifies for protection under copyright laws.

Likewise, an influencer’s name may be considered a brand that can be protected under trademark law since it distinguishes their advertising services from those of other influencers in the market, serving as a source of origin indicator.

The influencer’s personal image is also protected under personality rights and cannot be used or exploited for commercial purposes without authorization.

Bearing in mind that IP rights entail exclusivity, an influencer can prevent other brands or competitors from unauthorized exploitation of their content. Therefore, it is highly advisable that influencers complete the corresponding paperwork to be able to protect their creations and content against misappropriation, enforce their rights against infringers, and provide added value to their work.

Most importantly, when entering into an IM contract, influencers must be fully aware of their own rights involved in the content they will create and carefully review the contractual language and legal jargon to avoid assigning rights over their IP to brand owners without the payment of a fair consideration.

Influencer Marketing Agreements

IM is indeed a professional service, and therefore both brands and influencers should negotiate and enter into proper agreements to define the rights and obligations they will acquire. Following are the contractual clauses and legal aspects considered a must-have in every agreement related to IM.

Professional legal advice. Considering that many countries do not have specific legislation regulating IM, standard services agreements governed under civil law can be useful. However, particular aspects need to be addressed and reviewed by competent legal counsel with IP and entertainment expertise.

Liability clauses. Because the influencer will serve as an ambassador and speaker for the advertised brand, wording that clearly states what the influencer can or cannot do regarding the IP of the company must be included, as well as contractual sanctions in case of any breach and scenarios in which the influencer is exempt from liability.

After all, brands and companies try to communicate a message to consumers via the influencer, and therefore the behavior of the influencer is of vital importance for the success of the advertising campaign, especially taking into account that choosing the wrong person or a mistake from the influencer can backfire and expose the brand to negative reviews.

IP ownership. As mentioned, it is important that both parties mutually recognize their ownership of existing IP and respect the use of it when working together. Afterward, it is of the essence to determine the ownership of the newly produced content.

For example, the videos or photos the influencer will produce and post on their account are most likely to stay on their channel, but brands would probably like to have freedom to use such content for their own commercial interests as well. Under such scenarios, a “work for hire” clause should be added, particularly in those jurisdictions where copyrights also encompass the so-called moral rights and IP laws tend to favor the authors in the absence of clear contractual language, as normally is the case in countries with a civil law system. In practical terms, the inclusion of such a clause will ultimately determine and clarify the rights that both parties will have regarding that new content. It will be up to their negotiation and understanding to determine these aspects.

Image rights. In connection with copyright ownership, image rights around the influencer are definitely something to bear in mind. Companies and brand owners should make sure to include provisions that would enable them to exploit the image of an influencer, at least throughout the duration of the advertising campaign.

Brands must also clearly inform the influencer of the type of product they will be advertising and provide them with the “dos” and “don’ts” to avoid delivering and conveying a wrong message. Negative effects can also impact the influencers themselves, and working for the wrong brand or advertising the wrong product (e.g., faulty, unethical, fraudulent, etc.) could be harmful for their image and name and can result in a loss of followers or the creation of a bad reputation.

Exclusivity. Another important aspect is exclusivity, since brands are prone to retain certain models, ambassadors, and influencers as they do not want the same person to be advertising or promoting a product belonging to any direct competitor. Overlooking this clause can imply that an influencer can freely decide to work with any other competitor brand or company.

Scope. In every professional services agreement, KPIs and goals such as number of posts and mentions should be agreed upon by the parties. Brands will have to describe in detail what is expected from the influencer, and the scope of the services must be thoroughly put in writing, especially the “don’ts” the influencer will have during the time of the advertising campaign.

Representations and warranties. As in every agreement, representations and warranties are a must. Influencers who are not being represented by an advertising agency or a manager are more likely to make beginners mistakes and assert false claims, use IP belonging to third parties, or engage in other infringing behavior that can lead to the imposition of sanctions.

Worth highlighting is the usage of music in the content created by influencers and brands for advertising purposes. It is natural to believe that using a popular track in the background of an ad will make it more attractive to the public. However, licenses must be acquired to avoid infringing copyright around that music. Collective management organizations have approached platforms and companies requesting the payment of royalties, given the lack of proper licenses for exploiting such music.

Conclusion

Social media has become a part of modern society, and therefore it is important to create safe environments between influencers and brand owners so that this marketing and advertising model can positively evolve.

So how do we do that? First, IM agreements should contain very clear wording delimiting rights and obligations, IP ownership, duration, deliverables, etc. A good IM agreement will be one where both parties recognize their existing IP rights and decide to work together to create promotional content that one of them will own. It will also be clear in terms of liability from both the influencers and the companies, establishing solid indemnities in the event of any breach.

Drafting an agreement for an IM campaign is not an easy task, so seeking legal advice from a professional is highly advisable to help close a mutually beneficial deal. Influencers are internet and social media celebrities as well as independent authors; therefore, special attention will be required in these negotiations.

Finally, it will be very important to pay attention to how legislators, judges, and authorities respond to this new marketing model, as their decisions will be key to establishing a solid legal framework to be applied to future cases.