Legal Traps
Online amateur erotica has blossomed at an astounding rate in recent times. Many individuals with little or no experience in the adult entertainment industry are choosing to express their sexuality online for fun and profit. While amateur Websites can offer an interesting diversion for individuals and couples, and can generate significant profits, any involvement in the adult entertainment industry comes with some legal risk. This article will identify several common misconceptions and legal traps lying in wait for the unsuspecting, novice Webmaster. It goes without saying that neither this, nor any other legal article is a substitute for competent legal advice by an attorney with adult entertainment experience.
Myth #1
My content is legal so long as it goes no further than nudity or heterosexual contact.
The way the obscenity laws are written, even nudity or heterosexual content can be declared obscene. The legality of your content is dependant on local community standards, which, in turn, are a function of which jurors happen to be selected for your trial. Obscenity is the only offense where you do not know if you are guilty until the jury renders its verdict. This author has defended such classic adult titles such as Deep Throat and Behind the Green Door against obscenity charges. The highly publicized obscenity case against Tammy Robinson, a.k.a. Becka Lynn (www.beckalynn.com) involved primarily nude images, with some “simulated” fellatio. While generally the government prosecutes more extreme, bizarre or fetish images for obscenity, most states allow for prosecution of works involving “lewd display of the genitals.” This could potentially encompass most amateur erotica available on the Web. The government must prove other elements before the jury can convict on obscenity charges, such as the fact that the work is patently offensive, appeals to prurient interest and has no literary, scientific, artistic or political value. However, it is not safe to assume that your content is immune from prosecution merely because it involves “simple” nudity or heterosexual content. Simply stated: There is no “safe harbor.” While very few obscenity prosecutions have been initiated against online content, all erotica is at risk for such charges. An attorney with a trained eye and years of obscenity law experience should review your content to help identify and reduce your legal risks in this area.
Myth #2
Newsgroup images are in the public domain
Years ago, an urban legend began circulating around the Internet, leading Webmasters to believe that images could legally be obtained from newsgroups, without permission of the copyright holder, and posted on TGPs or other pay sites. Nothing could be further from the truth. The tried and true legal principle in this area is: “If you don’t own it, you can’t sell it.” This author has represented numerous small Webmasters against six figure damages claims by content providers who identified copyrighted images on their Websites. Occasionally, these clients paid for licenses to the images from disreputable content distributors, only to find out later that the distributor did not have a proper license from the content producer, and therefore were liable for intellectual property infringement. This is serious business, and can bankrupt a small Webmaster, particularly given the legal fees associated with defending such a claim. The lesson here is that you should either produce your own content, or purchase content from a reputable content producer.
Myth #3
Amateur Website businesses are too small for incorporation.
Another common misconception amongst the amateur Webmaster community is that amateurs need not bother with incorporation of their business, since their operation is too small. A corporation can provide valuable protection from liability regardless of the size of your operation. For example, when a corporation incurs debt, the individual shareholders and officers are not personally responsible for this debt. Also, if a corporation is sued for some sort of negligent conduct, only the corporation has to pay any judgment rendered in the case. Often, if debts or judgments exceed the net worth of the corporation, the corporate entity can file bankruptcy to extinguish those obligations without affecting the credit history of the individual officers and shareholders. All of that is also true for limited liability companies. Setting up a corporation or limited liability company is not terribly complicated, and minimal effort is required to keep either active. It is important to treat your corporation as a separate legal entity from yourself. This means that you must establish a separate bank account for the corporation, and avoid paying personal expenses with corporate funds. No Website is too small to consider incorporation. You should consult a CPA and an attorney about this as if you are running a real business.
Myth #4
The Records Keeping and Labeling Law only applies to big corporate adult Websites
Section 2257, of Title 18 to the United States Code, is a law which applies to the commercial dissemination of sexually explicit images, regardless of the size of the producer or distributor. Much has been written about compliance with Section 2257, and a detailed explanation is beyond the scope of this article. However, it is important for the amateur Webmaster to understand that the records compilation and disclosure requirements imposed by Section 2257 apply equally to the single model amateur site as they do to large corporate adult entertainment companies. Even if this federal law did not apply to your operation, it is important to comply with the records keeping obligations to ensure that; 1) all models appearing on the site are over the age of 18, and 2) you can prove this later if some law enforcement agency challenges this fact in the future.
Myth #5
I do not have to worry about the content on my links; everyone is responsible for their own content
Linking is a common practice in the amateur industry. Linking can be a good source of revenue sharing and cross marketing. However, promoting another company’s, or individual’s Website through linking or banner exchange programs can result in additional potential liability. There is legal precedent for applying the criminal conspiracy laws to the practice of linking to illegal Website content. The most highly publicized of these cases is the federal “Landslide” prosecution against Mr. and Mrs. Reedy in Texas, for linking to child pornography. While the facts of that case were somewhat extreme, and knowledge of the content of the linked sites could readily be presumed by the advertisements found on the Reedy’s Website, it is always important to know whom you are linking to, and what kind of content is involved. This is particularly true in regards to the specific page to which your site is linked. In the Brick and Mortar world, you would not form a partnership with someone you did not know, or whose business practices were shady. The same principles apply in cyberspace. Just because a Website can deliver traffic does not mean it is always a good business opportunity. In particular, it is important to carefully investigate any sort of teen content, youth sites, rape fantasy content, or gambling affiliates.
Myth #6
Amateurs don’t need attorneys
Many amateur Webmasters proceed without legal counsel. This can be a costly mistake. A single legal error can cost hundreds of thousands of dollars in attorneys fees should you find yourself involved in a lawsuit. Some legal errors can also lead to criminal liability. The profits available in the adult entertainment industry only exist because of the legal risks involved. If there were no legal risk, large public companies would get into the act. The adult video industry has recognized this for decades, and those companies often budget a significant percentage of their profits for legal expenses. The same is true with the adult cabaret industry. For whatever reason, the adult Internet industry has not yet globally accepted the necessity, and value of competent legal services from the very beginning. It may take some sweeping law enforcement actions against adult Webmasters, or simply a change in the corporate culture, before the majority of adult Webmasters retain legal counsel. However, you need not make the same mistake as many in the industry have, and obtain your legal information from your brother’s uncle’s roommate’s cousin who once hired an attorney. The same holds true for your CPA, insurance broker and other professionals.
Conclusion
There is no end in sight for the exploding amateur industry. Educating yourself regarding the legal issues applicable to your business is part of the due diligence associated with entering this field of endeavor. With the right information, you can enjoy your work and avoid unnecessary legal risks. Lawrence G. Walters, Esquire is a partner with the law firm Walters Law Group. Mr. Walters represents clients involved in all aspects of adult media. Walters Law Group handles First Amendment cases nationwide, and has been involved in significant Free Speech litigation before the United States Supreme Court. All statements made in the above article are matters of opinion only, and should not be considered legal advice. Please consult your own attorney on specific legal questions. You can reach Lawrence Walters at [email protected] orwww.FirstAmendment.com Lawrence G. Walters 407.788.7337 [email protected] www.FirstAmendment.com