THE ABC OF NDA’S

WHAT IS A CONFIDENTIALITY AGREEMENT? 

A confidentiality agreement is a legally binding contract between two or more parties in which at least one of the parties agrees not to disclose certain sensitive information. The name of this kind of an agreement may depend on the industry; they are often also called an NDA or non-disclosure agreement.

Most companies derive substantial value from their confidential information and data, both by having exclusive use of it in their own businesses and by sharing it selectively with customers, suppliers, and others. A confidentiality agreement is used by individuals or businesses to protect information, data, ideas, trade secrets, intellectual property, transaction details, and more from being revealed to a third-party during the course of a business deal, project, or employment agreement with another party.

In larger transactions or relationships, there are usually confidentiality clauses within an agreement, such as in an influencer agreement. If you want to prevent the receiving party from misusing your business contacts, you should include a non-circumvention clause or agreement.

WHAT IS THE PURPOSE OF A CONFIDENTIALITY AGREEMENT?

A confidentiality agreement is used to protect the disclosure of various types of information. Confidential information takes various forms in different businesses and industries, but it includes:

  • Customer information (any information relating to customers or clients, including client lists)
  • Employee and contractor lists and records
  • Supplier and vendor lists and information
  • Pricing and discount structuresfinancial budgets, projections
  • Marketing information (campaigns, projects, plans)
  • Business methods and operations
  • Intellectual property (IP) (including patents, trade secrets, trademarks, software, copyrights)
  • Recipes and chemical formulas and compositions
  • Blueprints, designs, and drawings
  • Terms of commercial contracts
  • Product and service information (production processes, procedures, packaging, equipment, and techniques used to produce a product or service)
  • Accounting information
  • Software algorithms and source code

WHEN SHOULD I USE A CONFIDENTIALITY AGREEMENT?

A confidentiality agreement is recommended as the first step in situations when an individual or business needs to disclose sensitive information in the context of specific business negotiations, such as:

  • When an employer wishes to keep company information protected while negotiating a position with a potential new hire
  • Evaluating or engaging a business or marketing consultant or agency
  • Considering an independent contractor or consultant for hire and the client wishes to keep some of the disclosed information private
  • Soliciting proposals from vendors and other service providers, which usually involves the exchange of pricing, strategies, personnel records, business methods, technical specifications, and other confidential information of both parties
  • During a pending company acquisition to keep the proposed terms of the agreement and company information private
  • When two or more businesses or individuals wish to begin working together (for example, a joint venture, merger, etc.) and the parties involved want to hold certain information discussed in negotiations in confidence

WHY IS IT NECESSARY TO HAVE WRITTEN CONFIDENTIALITY AGREEMENTS?

There are several reasons why parties should have a written confidentiality agreement, including

  • Avoiding confusion over what the parties consider to be confidential
  • Enforcing written contracts is easier than oral agreements
  • More flexibility in defining what is confidential
  • Demarcating treatment of confidential information between the parties
  • Ensuring protection of trade secrets, because in some jurisdictions this protection can be weakened or lost (deemed waived) if disclosed without a written agreement

WHAT TYPES OF CONFIDENTIALITY AGREEMENTS EXIST?

The three main types are 1) fully mutual confidentiality agreement, 2) unilateral confidentiality agreement and 3) reciprocal confidentiality agreement.

In the first situation, each party is both disclosing and receiving confidential information on a fully mutual basis. Each parties have the same set of rights, restrictions and obligations. An example could be where two companies form a strategic alliance. However, mutual confidentiality agreement can be used in transactions and relationships where the confidential information to be exchanged is not of equivalent kind or value.

In the second situation, only one party is disclosing confidential information. For example, where a consultant will have access to the client’s business information in the course of the service. The nondisclosure obligations and access and use restrictions will apply only to the party that is the recipient of confidential information but the operative provisions can be drafted to favor either party.

In the third situation, both parties are disclosing confidential information but not on a fully mutual basis. In that kind of an agreement, the scope and nature of the confidential information that each party will disclose is separately defined and their respective nondisclosure obligations and access and use restrictions may differ accordingly.

Many confidentiality agreements have similar structures and share key provisions, but there is still great variation in the form, structure, and substantive details that should be customized to the specific circumstances of each agreement.

WHAT ARE THE KEY PROVISIONS OF A CONFIDENTIALITY AGREEMENT?

While the form and structure of confidentiality agreements vary, they usually include at least the following provisions:

  • The persons or entities that are parties to the agreement
  • The business purpose of the agreement
  • The definition of confidential information
  • What is excluded from the definition of confidential information
  • All nondisclosure obligations
  • Any use and access restrictions
  • Any safekeeping and security requirements
  • Any provisions relating to the return or destruction of confidential information
  • The agreement’s term and the survival of nondisclosure obligation

In addition, condidentiality agreements usually have some boilerplate clauses such as an entire agreement clause.

WHEN SHOULD I SIGN A CONFIDENTIALITY AGREEMENT?

The parties should sign a confidentiality agreement as early as possible in their relationship, preferably before any confidential information is disclosed. If a party discloses information before signing the confidentiality agreement, it is important that the agreement specifically covers prior disclosures.

HOW LONG DOES A CONFIDENTIALITY AGREEMENT LAST?

The confidentiality agreement’s term is up to the persons who write the agreement. Confidentiality agreements can run indefinitely, covering the parties’ disclosures of confidential information at any time, or they can terminate on a certain date or event.

It is also possible to state that the rights and obligations (mostly, not disclosing the information received) shall survive the expiration or termination of the agreement for a period of time – the typical survival period ranges between one and five years.

Trademark License Agreements

Trademark License Agreement – What You Need to Know

Trademark license agreement is a legal contract between a trademark owner and another party that have agreed to use the trademark on preapproved terms. A trademark owner can commercially exploit its brand through its own use or by licensing others to use the brand. However, a trademark owner risks devaluing or even losing its trademark rights through licensing if it fails to obtain and enforce key contractual protections in the license agreement.The complexity and length of trademark license agreements vary depending on a variety of factors, including:

  • The relationship between the parties
  • The types of licensed products or services
  • The value and duration of the licensing arrangement

Elements of Trademark License Agreement

There are several elements to a trademark licensing agreement. One of the most important ones is to properly demonstrate that the licensor remains in control of the quality of the goods or services sold in connection with use of the mark. This provision regarding quality control is one of the most central elements integral to trademark licensing agreements. The quality control provision of a trademark licensing agreement must ensure that the licensor of the trademark has set standards to maintain the goodwill attached to the mark that consumers of the goods or services have come to rely upon.

Where the licensor exercises no quality control (also called a naked license), the licensor risks abandonment of the mark. Common requirements under the quality control provision of a trademark licensing agreement may include, but are not limited to, the ability to audit the licensee’s accounting records or bookkeeping, reviewing and approving prototype and production samples for any new products, inspecting of the licensee’s facilities, internal audits of the licensee’s protocols, reviewing of media and advertisement use printed in connection with use of the mark, requiring proper disposal of defective or rejected products or other materials bearing the mark, and reviewing customer service comments and complaints.

However, one needs to be careful with the amount of quality control. Too much of it risks having the license construed as a franchise agreement and increased exposure to product liability claims.

Licence Grant

Ensure that the license grant clearly addresses the licensed mark; the specific goods and services covered by the license; and the specific licensed uses of the mark for the licensed goods or services, for example, sale, distribution, and advertising and promotion.It should also address any restrictions on the trade or distribution channels to be used by the licensee; exclusivity, for example, particular goods or services or geographic areas. Moreover, whether the licensee can sublicense some or all of its rights, and, if so, any conditions that the licensee must satisfy before entering into a sublicensing agreement and what control the licensor will have over the sublicensee; and an express reservation to the licensor of all rights not expressly granted to the licensee.

Exclusivity

There are several types of trademark licenses. The licensor may grant to the licensee an exclusive license. An exclusive license grants the rights to the licensee to the exclusion of all others, including the licensor. An exclusive licensee has the contractual right to exclude all others from its particular area of exclusivity.A non-exclusive license grants the rights to the licensee, but does not preclude the licensor from granting similar licenses to others, so the licensor can license the same rights to third parties as well as use them itself.A sole license is one that grants the rights to only the licensee, but not to the exclusion of the licensor. Therefore, a sole license prevents the licensor from granting other similar licenses, but does not prevent the licensor itself from using the licensed rights. This is appropriate where the licensor is already operating in or plans to operate in the license territory.

Consideration and Payment Terms

The financial terms of trademark license agreements vary based on the particular transaction. A trademark license agreement can be fully paid-up and royalty-free, or it may require payment of a license fee, ongoing royalties, or other consideration. License fees and royalty provisions vary greatly.The licensor may consider requiring the licensee to pay fixed license fees at set dates during the term of the license, which would likely be instead of payment of royalties based on the licensee’s sales of licensed products or services. If the parties agree to these fixed fees, the parties should ensure that the agreementincludes a payment schedule setting out the payments and corresponding due dates.Earned royalties are ongoing royalties the licensee pays to the licensor calculated against an agreed royalty base. The method parties use to calculate earned royalties depends on a variety of factors. The most conventional approach is a royalty paid on a recurring basis calculated as a percentage of the net sales price of the licensed products.The royalty rate itself depends on many factors, such as the value and strength of the licensed trademark, territory, degree of exclusivity, etc. It is not uncommon for trademark licensors to set minimum sales objectives or expectations in the licensing agreement.A well-drafted trademark licensing agreement will also be specific when it comes to how the licensor is to be paid, how often payments may be made, and what consequences there will be if payment is late.

Geographical Scope of Trademark License

The geographical scope of a trademark licensing agreement is another important element of a trademark licensing agreement Because a licensor may license the trademark to multiple licensees, it is important for the licensing agreement to clearly address the geographical areas that the licensee may use the trademark. For instance, a licensor may grant trademark rights to different licensees based on the continent, state, or city they are in.

License Duration – Term and Termination

The duration and right to terminate provisions of a trademark licensing agreement are also important because it gives the licensor the ability to license the trademark for a short amount of time in order to see whether business relationship is profitable enough to renew for another term.

Similarly, the right to terminate the agreement is important for the licensor because it allows the licensor to terminate the agreement immediately upon the licensee’s misuse of the mark or for other breaches of the agreement. This way, the brand owner of the mark can stop the erosion of the goodwill associated with the mark if a licensee fails to meet the standards of quality that consumers have come to expect in relation to the original provider of the goods or services associated with the mark.

Risk Allocation

The parties to a trademark license agreement typically allocate risks in the trademark license agreement through indemnification, limitation of liability, representations and warranties, and insurance provisions.Trademark license agreements typically include basic representations and warranties concerning each party’s corporate authority to enter and be bound by the agreement, and the licensor’s ownership interest in or other basis for its control of the licensed trademark and ability to grant the license set out in the agreement.Licensors are also typically unwilling to represent and warrant that use of the licensed mark as permitted by the agreement does not infringe a third-party’s trademark rights.A trademark license agreement often includes an indemnity provision that requires each party to be liable and indemnify the other party for certain claims, for example, third-party claims resulting from the other party’s breach of the agreement. A licensee generally seeks to have the licensor indemnify the licensee for any third-party intellectual property infringement claims asserted against the licensee for using the licensed trademark. A licensor often seeks to have the licensee indemnify the licensor for third-party product liability claims relating to the licensee’s use of the licensed trademark.To back up the indemnity, the licensor may want to include a provision requiring the licensee to maintain insurance policies to cover third-party claims arising from defective licensed products the licensee distributed, and the licensee’s indemnity obligations regarding any product liability claim.

Definitions Section of Agreement

Definitions, common to most business contracts, are also an important part of especially more complicated trademark licensing agreements. In order to avoid confusion between the parties, it is important for the licensor to clearly set forth what specific words or terms used in the agreement mean so that there is no confusion between the parties and to avoid potential conflict if litigation happens to arise.

Other provisions

Trademark license agreements often include other provisions. We list here some typical ones without further explaining: sublicensing, subcontracting, license recordation, trademark enforcement, most favourable licensee, licensor audit rights, taxes, sell-off period, condifentiality, assignment, marketing and advertising requirements.

General Contractual Terms

Trademark license agreements will have the same general provisions that appear in business contracts, which include but are not limited to: description of the parties; governing law; jurisdiction; severability; entire agreement.

How can Vedinor help you?

There isn’t one type of trademark license agreement that would fit all purposes and businesses. You should discuss with an experienced intellectual property counsel about your situation and what is the best solution for you.

We here at Vedinor often draft international trademark license agreements on a cost efficient flat fee. Email us at communications@vedinor.com for a quote or schedule a free consultation to get your trademarks in order.

5 Essential Provisions in Social Media Influencer Agreements

Every type of agreement has its own tricks and traps. The contract made between the advertiser/brand and influencer is a unique agreement. There are several issues you should pay attention to when you are signing one. One of the most obvious and top-priority provisions include the influencer’s services in detail and compensation. In this article, we will not talk about them but other things that should not be ignored.

Depending on whether you are an advertiser or an influencer, some of the other provisions are more important to you. Although in an excellent agreement there aren’t any unimportant clauses, some terms are always more central. In this article, we will share 5 clauses that we think should be carefully formulated in an influencer agreement.

LEGAL COMPLIANCE – WHO NEEDS TO FOLLOW THE LAWS?

Depending on the jurisdiction, the brand is also responsible for following the relevant regulation if the influencer does not. For example in Finland that is the case. In most jurisdictions, the advertiser has a duty to inform the influencer about the relevant legislation, such as consumer protection and marketing laws.

Falling foul of the relevant laws puts you on the risk for sanction and negative publicity. For example, in many jurisdictions, it has been made clear that using only the social media platform tool to mark commercial collaboration is not sufficient.

We recommend using a clause that requires the influencer to acknowledge and comply with the relevant laws, regulations and soft law instruments in your jurisdiction. It is good practice to include a written guidance that has the relevant legislation and guidelines that needs to be followed.

It is important to bear in mind that being in compliance with relevant legislation benefits both parties of the influencer agreement. In today’s world, ignoring legislative obligations and requirements in social media influencer marketing campaigns can be hazardous for both the influencer and the brand.

Consumers are fully aware of the sponsored content on social media and they don’t generally like if they see advertisement that is not clearly disclosed as such. Non-compliance with legislation affects negatively on the influencer’s and brand’s reputation. Making sure legal compliance is in the top priority for parties should, therefore, be highly important for both parties.

Do not forget to include writing about following the terms and conditions of each platform and not infringing others’ intellectual property rights.

If someone paid for your ticket to paradise, do not forget to disclose it.

CONFIDENTIALITY – WHO HAS TO BE HUSH-HUSH?

Social media influencer agreements often contain confidentiality provisions to protect sensitive information both parties may learn during the agreement’s term. For example, the brand might launch a new product or tell other sensitive information to the influencer. Often it’s also in the advertiser’s interest to keep the influencer from sharing the terms and conditions of the influencer marketing campaign.

It can also be that the influencer discloses to the brand something that they want to stay confidential, for example about their metrics. Quite often the writing of confidentiality provision is such that it only obligates the influencer. If two-way confidentiality is desired by the parties, pay special attention to the writing of this clause.

Usually, unless there is a large quantity of confidential information, a separate confidentiality agreement is not necessary to broaden the scope of the protection provided by a well-drafted confidentiality provision. On the other hand, a separate non-disclosure agreement might be needed if confidential information is shared during the negotiations before signing the final contract.

Remember to decide whether the confidentiality will survive expiration or termination of the agreement. Sometimes the confidentiality obligations should only survive for a certain period after termination of the contract, and if that’s the case, it should be clearly stated.

SCOPE AND OWNERSHIP OF INTELLECTUAL PROPERTY – WHO OWNS WHAT?

There is a lot of intellectual property (at least copyright and trademarks) related to the influencer agreement. The brand owns intellectual property, for example its’ trademarks. The influencer will usually be creating content for the brand and owns the copyright for that unless nothing else is agreed. Sometimes the influencer has trademarks, perhaps their own name is trademarked, and the brand can not use it without a license.

Therefore, negotiating the scope and ownership of intellectual property is a huge part of the deal. From the influencer’s point of view, assigning the copyright ownership of the content that has been created is not very alluring – unless the compensation is very good. The brands don’t often want to pay that much extra for owning the copyright. That’s why it’s quite usual to agree upon licensing the copyright to the brand.

From the brand’s point of view, the license should be as extensive as possible. It’s good to consider where they want to use the posts, photos and names: only “repost” on social media or also on other platforms, such as in print? Pay also attention to the time the license is valid.

Sometimes the brands forget to permit a license to their logo and other trademarks. From the influencer’s point of view, in that case, there is a risk that the brand could accuse the influencer of trademark infringement if something goes wrong. From the brand’s point of view, it is never good practice to allow anyone to use your trademarks and logo without a license.

EXCLUSIVITY – WHAT ELSE CAN BE PROMOTED?

Influencers are loved and respected for their authenticity. Part of that authentic image is engaging with several brands and products. Their followers value their opinions which is the point of using them in marketing campaigns and collaborations.

In the influencer’s interest is to be as unlimited as possible when it comes to choosing brands they work with. Of course, working with two or several competing brands from the same sector is not good for the influencer’s creditability either.

From the brand’s point of view, an influencer-led campaign may easily lose its effect if the influencer goes on to promote a competitor’s brand or products not long after. Many nasty disputes are caused because of not including an exclusivity provision in the contract. However, negotiating about exclusivity may be hard and expensive when dealing with the major influencers. Micro-influencers are more willing to agree on exclusivity.

It is good to say explicitly in the influencer agreement what is prohibited: name the direct competitors and define similar products or services. Don’t forget to set a time limit for this obligation.

When drafting an exclusivity clause, make sure it’s in compliance with relevant laws.

TERM AND TERMINATION – WHAT HAPPENS WHEN THE CAMPAIGN IS OVER?

Normally the relationship between the influencer and the brand is not meant to be eternal, and in any case, it never will be. Even if the co-operation is for longer time, there should still be provisions about the term and termination.

In the brand’s interest is to obtain strong termination rights for reputational damage, failure to comply with applicable legislation and breach of the terms of the agreement.

If the advertiser sets special success results, the influencer needs to be very careful that they understand what is actually expected from them. The measures of success need to be in clear writing.

One important thing to consider related to the termination is survival of other clauses in the contract. Which provisions shall still apply after the termination? Think especially confidentiality, exclusivity and ownership of the IP.

HOW CAN VEDINOR HELP YOU?

If you are dealing with influencer campaigns and need help with contracts, we are more than happy to assist and advise you. We bring to the table the following combination: our profound understanding of this unique form of marketing, an in-depth understanding of social media and how different platforms work, and a sound legal experience. If you are interested in our influencer marketing related services, please schedule a free consultation, email us at communications@vedinor.com or reach out to our Partner, Legal Counsel Anne Nyström directly.

Processing Data During the COVID-19

On 19 March 2020, the European Data Protection Board (“EDPB”) released a statement on the processing of personal data in the context of the COVID-19 outbreak. The main message of the statement is that EU data protection law (in particular, the EU General Data Protection Regulation (“GDPR”)) does not stand in the way of fighting against COVID-19. However, the measures adopted need to be necessary, proportionate and consistent with safeguards required under EU member state laws. Emergency is a legal condition which may legitimize restrictions of individual freedoms, when certain criteria is met.

The GDPR already allows competent public health authorities and employers to process personal data in the context of an epidemic. Processing can be necessary for reasons of substantial public interest in the area of public health. The other relevant legal grounds include personal data processing to protect an individual’s vital interests, or to comply with another legal obligation. In these situations, there is no need to rely on consent of individuals.

WHAT INFORMATION EMPLOYERS CAN PROCESS?

In the employment context, certain personal data processing may be necessary for an employer to comply with legal obligations, including those related to workplace health and safety or the public interest. However, these measures need to be made in accordance with national laws.

Requiring health information from visitors and employees can be made if applicable national law permits that. An employer can perform medical check-ups on employees if the applicable national employment law or relevant health and safety law allows for it.

In addition to following national laws, employers need to take steps to minimise the amount of information collected and make sure the collecting is done in a proportionate manner.

DATA PROTECTION PRINCIPLES

The EDPB sums up that personal data processed for a particular objective should only be processed for “specific and explicit purposes”.

Individuals should receive transparent information on the processing activities that are being carried out and their main features, including the retention period for collected data and the purposes of the processing. The information should be easy to access and provided in clear and plain language.

It is important to pay attention to adequate security measures and confidentiality policies ensuring that personal data are not disclosed to unauthorised parties. These measures should be appropriately documented.

CAN LOCATION DATA BE USED?

As a means to monitor, contain or mitigate the spread of COVID-19, some governments in member states may use mobile location data to geolocate or send public health messages to individuals. In these situations, the public authorities should first try to anonymise location data (e.g., by aggregation) or, alternatively, obtain the consent of individuals to process such data.

When it is not possible to process anonymous location data, Art. 15 of the ePrivacy Directive enables Member States to introduce legislative measures to safeguard public security. Such exceptional legislation is only possible if itconstitutes a necessary, appropriate and proportionate measure within a democratic society. Member State is obliged to put in place adequate safeguards, such as providing individuals of electronic communication services the right to a judicial remedy.

WHAT IS PROPORTIONATE?

The proportionality principle means that the least intrusive solutions should always be preferred, taking into account the specific purpose to be achieved. Invasive measures, such as the “tracking” of individuals could be considered proportional under exceptional circumstances and depending on the concrete modalities of the processing. However, it should be intensively examined and have safeguards to ensure the respect of data protection principles.

HOW CAN VEDINOR HELP YOU?

If you need advice on processing data, do not hesitate to contact us or book a free consultation.

Schrems II and the Invalidating of Privacy Shield

We want to inform our clients about this recent CJEU ruling that invalidated the Privacy Shield mechanism.

The central question in the Schrems II case was can personal data from the EU be transferred to and stored in the US while guaranteed an adequate level of data protection as that under the GDPR?

Data Protection Commissioner v Facebook Ireland and Maximillian Schrems

The EU Court of Justice (CJEU) delivered on Thursday July 16, 2020 a ruling in the case Schrems II (C-3111/18), in which the mechanisms for personal data transfers between the EU and US was challenged based on the argument that US law cannot adequately ensure protection of EU personal data.

In a landmark decision, the CJEU struck down the Privacy Shield, one of the most widely used mechanisms allowing US commercial companies to transfer and store EU personal data in the US.

The decision by the CJEU to rule the Privacy Shield invalid renders the US a non-adequate country without any special access to Europe’s personal data streams.

Next, the CJEU considered the Standard Contractual Clauses (SCCs) valid, another commonly used mechanism for transatlantic data transfers, saying that this mechanism does make it possible in practice to ensure compliance with the level of protection required by EU law.

However, the decision requires data controllers to assess the level of data protection in the data recipient’s country and to suspend transfer if deemed non-adequate. It also underlines the strong obligation of each data protection authority in all EU member states to suspend the transfer of personal data if they deem them unsafe according to EU data protection requirements.​

You can read the official press release on the ruling here.

What is the Schrems II case about?

Named after Austrian lawyer and data privacy activist Max Schrems, the Schrems II case challenged two of the most widely used mechanisms for transferring personal data from the EU to the US, namely the Standard Contractual Clauses (SCCs) and the Privacy Shield framework.

The EU’s General Data Protection Regulation (GDPR) requires a country to have an adequate level of data protection before personal data can be transferred to it from the EU. Adequacy decisions made by the EU Commission determine whether personal data can legally be sent to a country outside the EU.

The United States is not recognized by the EU as having an adequate level of data protection, but several transfer mechanisms allow commercial companies and organizations in the US to engage in transfers of personal data from the EU to the US where it is then stored.

These include the Standard Contractual Clauses (SCCs), Privacy Shield and Binding Corporate Rules (BCRs).

Is EU personal data protected adequately after transfer to the US?

The Schrems II case made its way to the CJEU from a request in 2015 by Max Schrems to the Irish Data Protection Commissioner to order Facebook to suspend its data transfers from the EU to the US.

Facebook’s practices of transferring personal data out of the EU via their servers in Ireland to their headquarters in the US relies on the SCCs.

The CJEU ruling in the Schrems II case on July 16, 2020 sided in large part with Max Schrems, invalidating the Privacy Shield as a mechanism for EU-US personal data transfer and imposing strong obligations on data controllers and data protection authorities in each EU member state to ensure adequate protection for personal data transfers when using Standard Contractual Clauses as a mechanism.

How can Vedinor help you?

If you need assistance in implementing this ruling into your business, you can contact us. Call us +358931546648 or schedule a free consultation to discuss your situation further.

Common Mistakes in Instagram Giveaways

Throwing contests and giveaways or sweepstakes is a popular marketing technique. Your audience becomes more engaged and aware of your brand. However, there are many issues that need to be taken into account when throwing a social media contest. We know how challenging and overwhelming the legislative obligations can feel, but don’t worry, we are here to make things more clear for you.

Note: this post is not written to follow any specific jurisdiction’s rules, but Instagram Promotion Guidelines and general legislative rules typical to contests and giveaways internationally.You should always make sure you are following the rules relevant in your jurisdiction and in the jurisdictions where your contest/giveaway is targeted to.Instagram’s Promotion Guidelines are subject to change every now and then, so always check the current version before launching a promotion. This article is based on the Guidelines as they were on March 14, 2020.

YOU DON’T HAVE THE OFFICIAL RULES

How often I see the official rules of a contest or giveaway on Instagram? Rarely. Usually, only the biggest and most-compliant brands use them regularly, but even they don’t always follow the rules, especially when they are co-operating with influencers. However, whenever I see a small brand or company having promotions with official rules, I am thrilled to find more about them. If they are professional and compliant in small things, I am definitely interested in doing business with them. You should never underestimate the impact of what these kinds of things can have on your prospects or clients.

Obviously the above is not the most important reason to have the rules. The most important reason in our case is simply that Instagram obligates you to have one. Being non-compliant with Instagram’s Guidelines, you might end up getting your promotion removed. Imagine how that would affect your brand!

The real reason why you should have the rules is that it is basically a contract between you and the participant. It defines the relationship between you and grants you both rights and obligations that you would not have otherwise. It protects you from getting sued or ending up in litigation. The most recommendable way is to have a link to your webpage where you have the official rules. Remember, do not change the rules after launching the promotion.

YOU DON’T DISCLOSE ELIGIBILITY REQUIREMENTS AND CLEAR TERMS

You should at least offer eligible age and place of residency in the promotion post if those are included in the criteria to enter. You can simply state something like“Giveaway open to Canadian citizens age 18 and up.”

Remember that often the minors are protected by stricter regulation and if you through your promotion in many geographical areas (foreign jurisdictions) you are more likely to be non-compliant with local regulations.

If there are any additional terms, for example, that the entrant’s profile must be public, not private or the participants need to pay for postage, you must state this in the original promotion post.

YOU DON’T DISCLOSE COMMERCIAL CO-OPERATIONS

If the prize is sponsored by a third-party and you disclose that information, in most cases and jurisdictions you are considered to be in commercial co-operation with that party. That means that relevant regulation and guidelines related to (influencer) marketing and consumer protection become relevant (see for example the CAP guidance in the UK). Most importantly, you need to disclose clearly the commercial relationship.

In the EU, UK, and US, the safest option is to start your promotion posts with #ad, #advertisement or “In commercial collaboration with [Party X]”. Remember that in most jurisdictions, it is not enough to only use the paid partnership tool.

YOU IGNORE RULES AND REGULATIONS GOVERNING SUCH PROMOTIONS

Instagram obligates you to follow with any rules and regulations that govern contests, giveaways, and sweepstakes in your jurisdiction. These tend to vary in detail, so make sure you know what is relevant for you.

For example, if you need to register it or get approval from some authority, you need to do that also to be in compliance with the Instagram Guidelines.

YOU ENCOURAGE USERS TO INACCURATELY TAG CONTENT

One of the often ignored and violated Instagram rules is that you cannot make it an entry requirement to get users to tag their friends in a picture which is not an image of them. Guess how many promotions are shut down because of not following this rule?

Instead, in light of the current guidelines, we suggest using branded hashtags, following requirements, asking for creative captions or asking users to share the promotion post in their Stories.

YOU DON’T RELEASE INSTAGRAM BY EACH ENTRANT OR PARTICIPANT

It’s a good business practice to follow Instagram’s rule that you need to release Instagram by each entrant or participant, so remember to include that in your posts and rules.

YOU DON’T ACKNOWLEDGE THAT INSTAGRAM IS NOT INVOLVED IN THE PROMOTION

Using Instagram’s own wording related to this guideline is the simplest way to be in absolute compliance, therefore our suggestion goes: “The contest/giveaway is in no way sponsored, endorsed or administered by, or associated with, Instagram.”

There is a reason why Instagram uses word verbs in that part of their Guidelines, and it’s not the same thing to ONLY mention “sponsored” or “endorsed”.

CONSEQUENCES OF NOT FOLLOWING THE INSTAGRAM PROMOTION GUIDELINES

“You agree that if you use our service to administer your promotion, you do so at your own risk.”

Instagram Promotion Guidelines

As it is clearly stated in Instagram’s Promotion Guidelines, using Instagram for promotions is done at your own risk. Among other things, that means that if you are not in compliance with Instagram’s Guidelines, you could get your account canceled in the worst case (for example, if you constantly run non-compliant contests and giveaways in your account).

Secondly, not following relevant and required rules and regulations will make your brand look ignorant and amateur. This will essentially have a negative impact on brand reputation. This also applies to any influencers that brands use in their marketing, but naturally, the influencer has their own reputation to protect, as well. As influencers are professionals in commercial collaborations, they should be aware of the relevant legislation that concerns those activities.

HOW CAN VEDINOR HELP YOU?

We are experienced in the legal side of different kind of promotions and marketing techniques online, such as giveaways, sweepstakes and contests. With our help, you can be sure that your campaigns meet both legal and platform standards and rules. If you need help with official rules, promotion compliance or information about different social media platform requirements, do not hesitate to contact us or book a free consultation.

Advantages and Disadvantages of a Cease and Desist Letter

A cease and desist letter we mean in this context is a legal document used in situations where you think someone is infringing your intellectual property. It literally demands (or requests) the other party, the alleged infringer, to “cease”, i.e. immediately stop, and “desist”, no longer continue. The condition set in the letter is normally that if the alleged infringer doesn’t comply with the letter’s terms and conditions, legal action will be taken. This means normally a lawsuit.

ADVANTAGES OF A CEASE AND DESIST LETTER

A cease and desist letter has many advantages. One of the most significant ones is that when used correctly, it has a huge potential in preventing long, expensive trials. If the alleged infringer respects your conditions and stops the infringing actions, you have just avoided a messy lawsuit phase. Obviously, not always the owner if the IP plans to take further actions, but if that’s a possibility for you, you should consider the potential benefits related to this scenario.

The second benefit is actual especially in relation to trademarks. By sending cease and desist letters to alleged infringers, you are gathering concrete evidence of the actions you take to defend your mark. This kind of evidence can sometimes become very much needed, because one condition to keeping the trademark is that you enforce your rights when needed. It can also be very useful in future disputes.

One other advantage is that very likely, you’ll get to know the basis for the alleged infringer’s defense if the alleged infringer sends a response to the letter. Even if the alleged infringer wouldn’t comply with your demands, you have now learned his defense and can prepare a counterclaim. If you need to go to litigation, it is expressly valuable to know the alleged infringer’s defense in order to effectively object it.

An important practical advantage is that you may get evidentiary support for a finding of willfulness and enhanced damages if the alleged infringer ignores the letter. This is sometimes worded in the cease and desist letter to make it more likely that the alleged infringer stops their actions.

RISKS OF A CEASE AND CESIST LETTER

One very common and easily actualising risk is the label of “bully”. The internet is filled with published cease and desist letters from companies all kinds and size. On the social media, the letters can easily be shared and get negative publicity to the owner of the IP. The general public does not often take the side of the intellectual property right owner in these situations. This is more likely when the alleged infringer is individual and the rights owner a large, powerful corporation.

Nevertheless, this is one very big concern related to cease and desist letters. You want to make sure you have a good case and that the tone of your letter is appropriate in the relation to the alleged infringement and the alleged infringer. For example, sharing your logo on personal social media account should be addressed in a constructive way, when someone copying and selling your authorial works reserves stronger words.

The second risk lies in the situation where the IP owner doesn’t follow up on the letter in a timely manner. In these situations, depending on the jurisdiction, the alleged infringer may get a benefit of different kinds of defences and waivers.

HOW CAN VEDINOR HELP YOU

Anne Nyström has a profound understanding of trademark and copyright infringements and the enforcement, both online and offline. She’s extremely experienced on infringements occurring on social media, and is happy to provide her advice on your situation. “If someone is allegedly infringing your rights on internet or social media, it’s important to gather evidence as soon as possible. Take screenshots of everything you can before taking any actions”, she says.

An experienced lawyer can help you to choose the best strategy in your situations after knowing all relevant facts. If you think someone has infringed your IP rights, do not hesitate to contact us communications@vedinor.com, directly partner, European trademark attorney Anne Nyström at anne.nystrom@vedinor.com or book a free consultation.

Informing Customers about the European Online Dispute Resolution Platform

SThe European Online Dispute Resolution (ODR) platform is provided by the European Commission to make online shopping safer and fairer for both consumers and traders. It is regulated by Regulation (EU) No 524/2013 on online dispute resolution for consumer disputes that came into force in January 2016. The ODR platform was launched shortly after. 

The platform provides opportunities to solve disputes between traders and consumers and an alternative dispute resolution process. The dispute resolution bodies listed on the ODR platform meet strict standards of quality and independence. 

We recommend registering on the ODR platform. That makes it easier for your customers to get in touch with you if they have a problem. You will get notifications on time and are able to deal with the issues faster before they potentially grow into bigger disputes. 

The main obligations for traders are set in Article 14 of the Regulation: 

  1. You have to clearly provide your e-mail address on your website. Providing only an interactive contact form is not sufficient.  
  1. You have to provide a link from your website to the Online Dispute Resolution platform ec.europa.eu/consumers/odr. This link has to be visible and easily accessible on the website.  

If an offer is made by e-mail, then the link to the ODR Platform must also be included in the e-mail. 

The information should also be mentioned in the general terms and conditions applicable to online sales and service contract. 

The obligations apply to all traders established in the European Union and in Norway, Iceland, and Liechtenstein 

The regulation doesn’t define what is needed regarding the placement of the link on the website. The term “easily accessible” needs to be interpreted in a uniform manner throughout the EU which means that in the future we will probably see judgment from the CJEU. 

As all EU regulations, this one is enforceable as law in all member states simultaneously. 

In the meantime, we recommend providing the link at least in the terms and conditions of your website. Also, make sure to have your email address on the website and not just a contact form. 

HOW CAN VEDINOR HELP YOU? 

If you have questions about obligations set by consumer protection laws in the EU, please schedule a free consultation or contact partner Anne Nyström. We have a profound understanding of consumer laws and regularly advise and represent clients in engagements related to consumer protection.