Chapter 22

Advertising: Being Content with Commercial Content

Advertising is chock full of fascinating content rights issues. Ads often contain music (new and old), video and photos, jingles, trademarks of the advertiser and its competitors, digitally doctored images, claims, and come-ons. The commercial nature of advertising greatly circumscribes the scope of third-party content that can be used without permission; in short, what is fair use. While our focus is on copyright and trademark, advertising is closely scrutinized not just by competitors, but by public agencies and private watchdogs that want to make sure the advertising is accurate and not deceptive or misinforming.

Most obviously, commercials on television, radio, and cable generate the money to pay the bills at the facilities; however, the outlets cannot be insensitive to the copyright and trademark issues contained in advertising because they bear direct responsibility for errors. Sometimes, failure to attend to the logic of the law can result in heavy exposure for the stations in terms of lost revenue, monetary damages, and harm to reputation. Commercials produced for radio, television, and cable fall into three types: ads created by sponsors, ads they create for others, and ads they create themselves to promote their own operations.

Third-Party Spots

When selling commercial time to others, media outlets usually receive the finished spot from the advertiser and play it repeatedly. Since the content of these spots is given to the station by the ad agency or client, the outlet should require by a written agreement that the content of the spot already be cleared at the source. If music, photographs, trademarks—any third-party material—is used, a specific representation that the matter is either cleared or otherwise allowed for use must be provided, and the sponsor or agency must be prepared to stand by that warranty. Any spot from a third party that does not contain these representations or warranties should be not be aired, no matter how tempting the payment money. Only if a contract with the advertiser or the agency provides written assurance that the spot contains no infringement of copyrights, trademarks, or service marks as well as related rights of privacy and publicity can a station be assured that the advertiser will stand in front of the outlet in case of infringement. Not only is this good practice, most liability insurance policies for media outlets require such documentation.

Nevertheless, such contractual assurances may not be sufficient to shield the station from liability. The contracts between the station and the advertiser are not binding on the copyright owner or trademark proprietor. Therefore, station personnel experienced in looking for these issues should review all spots before they air and raise questions that come to mind. For example:

• Music. Is a theme used in the spot? Is it familiar? If so, has it been cleared?
• Video. Does the spot contain third-party video? Is there a known source for it, and has it been cleared?
• Photos. What pictures are used in the spot? Who took them? Are celebrities or trademarks of others prominent? Have the copyrights and images been authorized for this use?
• Trademarks. Are logos of anyone other than the advertiser used in the spot? If so, is the content of the spot designed as comparative advertising or is some exploitation of another's trademark designed to promote an association between sponsor and competitor? Is that association authorized?

The station's in-house reviewer should make certain that the spots have all vital material cleared. As publishers, stations can bear liability even if they innocently air the spot. Copyright law, for example, makes an innocent publisher liable for minimal damages of $200, even in the absence of any knowledge of wrongdoing. More critically, these disputes can tie up personnel and run up legal bills. Forethought in the handling of spots can eliminate the potential for these undesired expenses.

Spots Produced for Others

Many broadcast licensees are blessed with marvelous production facilities. For them, the ability to produce spots for advertisers can be a significant source of extra revenue. But if a station composes the spot for a client, great care must be exercised to ensure that no copyright or trademark infringements are embedded in the commercial. Not only would the station have violated a duty to the client, it would also bear direct liability to the owner of the works or the marks. Moreover, the opportunity for foul-up is high because (1) the desire to please the client is great, (2) recall of third-party material from available sources or archives is easy, (3) spots are often produced quickly, and (4) cutting corners helps maximize revenue return.

Every element of a spot should be analyzed as to proper use in commercials. In-house materials available from the station's archives, like photos or video clips, may be the property of the station, but it is a separate question whether they can be used in advertising. For example, photographs taken by station personnel, which are clearly the copyrighted property of the station, may include individuals whose right of publicity could be violated if included in a commercial. A spot for a local shoe store could not use a station's photo of Ken Griffey sliding into home, without clearing the right with Griffey's agent. If Griffey is shown wearing Nike shoes and they are prominent in the spot, the ad may suggest that Griffey is a spokesman for the company. If that is not true, Nike may object, forcing the station to pull the ads and compensate Nike and Griffey, even perhaps the shoe store. Video obtained from a viewer who responded to a hotline request for breaking news stories should not be included in a spot without consent, even though the station purported to obtain “all rights” to the tape.

As discussed in the preceding chapter, music should be scrutinized for its source and cleared. The use of common musical notations in commercials is a recipe for an infringement claim. A local department store thought its Christmas spot that contained five bars from “Rudolph, the Red Nosed Reindeer” was perfectly acceptable. After all, the song was as old as the hills. It turned out that Rudolph is still under copyright. The grandson of the composer learned about this spot and was on the telephone, threatening an infringement case. The settlement cost the station and the advertiser far more dearly than if the music had been cleared in advance (or an alternative song selected).

Station Promos

Even if the station is not in the business of producing spots for advertisers, every station creates and airs its fair share of station promos. These spots contain clips of upcoming news stories (motorist distracted while eating a McDonald's Happy Meal crashes a Ford automobile into local Wal-Mart), use familiar logos in contests (guess where the DJ Donnie will appear and win a GE microwave oven), or associate the station personnel with events of the day (sports anchor witnesses local football players in fistfight at training camp). As with spots for clients, someone needs to scrutinize the content of these ads and make sure that all the elements are appropriate for inclusion. While greater latitude is allowed when presenting spots for upcoming evening newscasts, because the advertisements themselves are creatures of the news programming, there is no absolute safe harbor in using third-party content in advertising.

Generally, the fair use doctrine is not available for commercial content. While not an absolute rule, it is a good standard to live by, because commercials can be easily shown to lie on the negative side of several of the fair use formula criteria:

• Commercial use. The spots start out as commercial content. Although public service announcements (PSAs) are an exception, the vast majority of aired commercials are designed to generate profits for someone.
• Substantiality. Because spots are short, most often ranging 10–60 seconds, use of third-party materials will be for only a fraction of the total and, therefore, will encompass a relatively modest amount of time. However, since the sponsor has a message to present, taking the original work of others is probably done because of the fame of the original work. Therefore, even though only a small percentage of a copyrighted work is involved, the taking is often the “heart of the original” and hence substantial.
• Economic impact. Many copyrighted works are or could be sold for use in commercials. A thriving business licenses the use of copyrighted material, including videos, photos, and music, for commercial use. Think of the widely telecast spots for U.S. Healthcare, incorporating old film footage from Laurel and Hardy, Buster Keaton, Charlie Chaplin, and others. Or the Alcatel spots featuring Martin Luther King on the steps of the Lincoln Memorial, delivering his “I Have A Dream” speech to no one. Each video clip from a classic film or from the archives of Dr. King must be cleared.

  By contrast, some copyright owners actively forswear any interest in allowing their work to appear in commercials. The composer of an inspirational theme, such as “Chariots of Fire,” may simply refuse to allow the work to be licensed for commercial purposes or certain types of products or services. Therefore, the impact on the marketplace value for the works, a key copyright test, is usually a heavy negative for the infringer.

Treatment of trademarks poses an interesting contrast in advertising. During the 1950s, the standard television spot compared the advertiser's products to the infamous Brand X. Wisk got out stains better than Brand X. Not surprisingly, so did Tide. No mention was made of a competitor's product name for fear that casting negative aspersions would result in a lawsuit. Then, in the early 1970s, the Federal Trade Commission clarified public policy: By all means, use a competitor's trademark in the ad to generate useful marketplace comparisons for the consumer. The key, of course, is that all claims must be truthful. Paint a competitor in a false light and one faces assertions of trademark misuse and deceptive advertising.

This policy shift has not guaranteed that all spots are true; however, it permits Ford to say that Taurus outsells Toyota Camry and Honda Acura by two to one; it allows Safeway to say its prices are lower than Ralph's or D'Agostinos'; it ensures that Channel 4 can say its newscasts are watched in twice the number of homes as Channel 7's, as long as the statements are based in truth. While some puffery creeps into advertising, the stations bear the burden of challenging claims made by advertisers that are questionable, lest they be liable for contributing to patently false claims and trademark misuse.

While we focus on the media side of the ledger in noting commercial rules, the rules for ad agencies and PR firms also deserve mention. Often, they need to be as attentive as the media to the copyright and trademark issues of their work. When dealing with sponsors, advertising agencies are independent contractors. If the arrangement between the sponsor and the ad agency is not in writing or if, as is often the case, it lacks a clear work for hire copyright clause, then copyright law holds that the agency owns the copyright to the spot, even though the advertiser has the right to use it in its market. How far an agency can go in redirecting advertising for different clients is a delicate matter, but if there is no understanding to the contrary, the option at least exists for the agency to reuse the ideas and images in the created spots.