Earlier this week, we posted a blog entry that discussed the issue of signatory talent payment obligations in relation to the unauthorized posting of commercials on third party websites such as YouTube. A number of readers have asked for clarification on the following two points:

Q: If an advertiser is made aware that a commercial has been posted on a website without their authorization and the advertiser does not notify the website to remove the commercial, is the advertiser obligated to make an internet payment to the performers in the commercial?

A: No. It has consistently been the JPC’s position that regardless of whether an advertiser has been notified of an unauthorized posting or not and regardless of whether it decides to demand that a spot be pulled down or not, the advertiser is not obligated, at any time, to pay any fees to performers who appear in those spots.  The individual performers can, of course, pursue action against the third party website or the third party that posted the spot to protect their individual rights, but they cannot look to the advertiser to make payments for such use.

You should be aware that the unions may not share the JPC’s position on unauthorized postings. In our experience, although the unions may seek internet use payments in their initial claim, they withdraw such a demand if the advertiser requests removal of the material from the offending website. The JPC does not believe that an advertiser is required to do so under the contract, but some advertisers have chosen to in order to avoid the costs and risk associated with defending a claim. That determination is up to each individual advertiser.

The JPC is unaware, however, of any advertiser capitulating to the unions’ demands for internet use payments in the case of unauthorized use. Nor does the JPC recommend doing so, as it may not only place advertisers at a competitive disadvantage relative to the market but also create unhelpful precedent for the industry in future negotiations or arbitrations.

Q: What about other copyrighted or licensed material in the commercial?

A: Signatory obligations under the contracts relate only to the payment of performers in commercials. Commercials may contain other material the use of which may be restricted by license/contract agreements, e.g. stock music, celebrity contracts, photographers contracts, etc. You are advised to seek legal counsel on these issues in regard to specific ads and commercials should you receive a demand from those third parties.