As you may remember twelve days ago Mastercard sent out a press release indicating that their rules for adult websites were changing. ( https://adultbizlaw.com/2021/04/15/what-do-the-new-mastercard-rules-mean-to-content-creators/ ) Mastercard has now released updated language to their actual rules and regulations. We don’t know if this is the final version or whether these rules and regulations will go through a process of edits and changes. What we do know, is that they will go into effect on October 15, 2021 so owners/operators of paysites, tubesites, fan sites and any platform that accepts Mastercard has approximately 6 months to make the necessary changes to their policies and websites. This affects everyone – from the largest platforms such as OnlyFans all the way down to you — if you have your own website and have a monthly membership fee. I can only assume that failure to abide by these rules and regulations will result in the loss of your ability to use Mastercard to charge your members – which means you will lose roughly 50% of your monthly membership revenue, assuming 50% of your members pay with Mastercard.

In order to comply with Mastercard’s new rules, you will need to adopt new account and age verification policies as well as content take down, reporting and appeals policies. Most notably, websites will need to offer an independent third party appeal process for those performers that want their content removed, if the website refuses to remove such content.

If you own your own website or platform, your terms of service will need to be updated to reflect these new required policies. This may also require that the model releases you are currently using also be updated to reflect Mastercard’s new streaming and downloadable content policies.

Here are the details;

Chapter 9 Specialty Merchant Registration Program

9.4.1 Non-face-to-face Adult Content and Services Merchant Registration Requirements for Adult Content Merchants

A non-face-to-face adult content and services Transaction occurs when a consumer uses an Account in a Card-not-present environment to purchase adult content or services, which may include but is not limited to subscription website access; streaming video; pictures and images; and videotape and DVD rentals and sales.

An Acquirer must identify all non-face-to-face adult content and services Transactions using one of the following MCC and Transaction category code (TCC) combinations, as appropriate:

• MCC 5967 (Direct Marketing—Inbound Telemarketing Merchants) and TCC T; or

• MCC 7841 (Video Entertainment Rental Stores) and TCC T.

Before an Acquirer may process non-face-to-face adult content and services Transactions from a Merchant or Submerchant, it must register the Merchant or Submerchant with Mastercard as described in section 9.2 of this manual. By registering an adult content and services Merchant or Submerchant, the Acquirer is certifying that the Merchant or Submerchant meets the following requirements and has effective controls in place to monitor, block, and where necessary, take down all content as appropriate.

All of the following Merchant requirements also apply to Submerchants.

In situations where the Merchant allows a third-party user (“content provider”) to upload or generate content, including real-time/live streaming content:

1. The Merchant must enter into a written agreement with each content provider and such written agreement must:

a. Specifically prohibit any activity that is illegal or otherwise violates the Standards

b. Require the content provider to obtain and keep on record written consent from all persons depicted in the content specific to the following areas:

• Consent to be depicted in the content

• Consent to allow for the public distribution of the content and to upload the content to the Merchant’s website

• If the content will be made available for downloading by other users, consent to have the content downloaded

c. Require the content provider to verify the identity and age of all persons depicted in content to ensure that all persons depicted are adults and to be able to provide supporting documents upon request.

2. The Merchant must only permit content uploads from verified content providers and must have a robust process for verifying the age and identity of the content provider, which includes the review and validation of a government-issued identification and steps to ensure that the government identification is in the possession of, and belongs to, the content provider. The use of a third-party vendor that specializes in the validation of government identifications is recommended.

3. All uploaded content must be reviewed prior to publication to ensure that the content is not illegal and does not otherwise violate the Standards.

4. If providing real-time or live video streaming services, the Merchant must operate on a platform that the Merchant is able to fully control and that allows for real-time monitoring and the removal of the content being streamed.

For all adult content and services Merchants: AN 5196 New Specialty Merchant Registration Requirements for Adult Content Merchants:

1. The Merchant must not market the content of its website or permit content search terms to give the impression that the content contains child exploitation materials or the depiction of nonconsensual activities.

2. The Merchant must support a complaint process that allows for the reporting of content that may be illegal or otherwise violates the Standards and must review and resolve all reported complaints within seven (7) business days. In the event that such review yields evidence of illegal content, the Merchant must remove that content immediately.

3. The Merchant must offer the ability for any person depicted in a video or other content to appeal to remove such content. Once triggered, the Merchant must, through a reasonable process, confirm that the appropriate consent was obtained, including as required above. If consent cannot be established, or if the person depicted in the content can demonstrate that the consent is void under applicable law, the Merchant must remove the content with immediate effect. If the Merchant disagrees that consent is void under applicable law, the Merchant must allow such disagreement to be resolved by a neutral body, at the Merchant’s expense.

4. The Merchant must provide its Acquirer with monthly reports that include a list of all content, including URLs and videos, flagged as potentially illegal or otherwise in violation of the Standards and the relevant actions taken by the Merchant, as well as details of all complaints and take-down requests the Merchant received. The Acquirer must share these reports with Mastercard, upon request.

5. The Merchant must not attract users to its website by utilizing adult content that is illegal or otherwise violates the Standards.

6. The Merchant must have effective policies in place that prohibit the use of its website in any way that promotes or facilitates human trafficking, sex trafficking or physical abuse. Active membership and participation in an anti-human trafficking and/or anti-child exploitation organization is highly recommended.

7. Upon request, the Acquirer must be able to provide Mastercard with temporary account credentials that allow access to a Merchant website for up to seven (7) days to view all content that is behind a paywall or otherwise restricted to members of the website

Forming a new Limited Liability Company is exciting.  It can mean the start of a new idea, a new dream, or just a new way of doing business better than before. Forming a new LLC for an online entity is just a small step on what should be a long run of doing business, but some entrepreneurs make a big decision by choosing a specific state with little to no grounds for their choice.  Why is so little thought put into choice of venue when the new LLC could be formed in any one of a variety of states?

If you are forming a traditional, brick and mortar business, the state where you have that physical presence is probably the best choice to form your LLC, but when you are planning to build an online business or need a US outpost for a foreign company there may be many choices. Some of the most common choices are not the right choices, showing no effort or consideration of the facts and individual circumstances of the business. I have been amazed at how many new companies are formed in Delaware without any real reason to be formed in Delaware. Don’t get me wrong — because of its body of business law and separate business court system, Delaware is probably the best state to incorporate a stock company. Companies that decide to go public often move their places of incorporation to Delaware as part of the IPO process, and it is the place to be for large, public stock companies. However, for virtual businesses or others that can locate just about anywhere, Delaware makes little sense.

Delaware Court of Chancery, or “Business Court”

Delaware has two big things going for it as a state of incorporation: 1) Delaware is the state publicly traded stock corporations choose because of a body of business law that makes Delaware a good state for stock corporations and 2) Delaware has a separate business court, known as the Delaware Court of Chancery, that provides a unique and predictable court system for the internal affairs of big businesses, recognized worldwide for its fairness and expertise settling corporate issues. However, the Delaware business court system is only a benefit if you plan to use it. Publicly held stock companies need a predictable court system for governance affairs and the business court in Delaware is that system, which is why Delaware is a good choice for big, publicly held stock companies. It holds little value for small, privately held Limited Liability Companies. When you are ready to form your new company, ask yourself: 1) Do I plan on needing to go to court regarding my business organization on a regular basis? 2) Do I have a Delaware-licensed attorney that can represent me in Delaware if I am sued or need to file suit? If you answer “no” to those questions, what advantage does the Delaware business court give you? If you are like most small businesses, your answer is “nothing,” and most likely, choosing Delaware for your LLC makes your life more difficult if you end up in court. If you are told to form a company in Delaware and given its business court as one of the reasons to do so, ask your advisor to elaborate on that and explain why the Delaware business court system is an advantage and when you can expect to make use of it. In real life if someone decides to sue your new business for something, do you want to defend yourself in Delaware? Have you tried to find a Delaware attorney? If you are creating an adult-oriented business, have you tried to find a Delaware licensed attorney that accepts adult clients? At the time of this writing, out-of-state attorneys can be admitted pro hac vice (special admission that is specific to your case) to represent a client in a Delaware court for a fee of $407 per case, but must have a Delaware-licensed attorney sponsor, so the attorney you normally use would still need to find a local sponsor before defending you. The court rules require the Delaware-licensed sponsor attorney to be present at all court proceedings and sign all the filings, so the Delaware attorney must be intimately involved, usually by the billable hour, in every part of your case. That means you are going to pay a Delaware-licensed attorney and your adult-entertainment attorney for every court appearance and every filing. The rules were written by Delaware attorneys, for Delaware attorneys, and to benefit Delaware attorneys. You will likely pay two attorneys for everything if you are haled into court in Delaware. If you want to create a new company, you have to be prepared to defend that company, and Delaware is probably not the place you want to find yourself as a defendant.

Costs over the Long Run
The next negative factors with Delaware LLC’s are the annual filings and fees required to maintain them in good standing. Delaware currently has a hefty $300 annual fee, in addition to maintaining a Registered Agent and filing annual reports. Over 5 years, that’s $1500 or more in filing fees just to have an active LLC and doing nothing for your bottom line. By comparison, there are currently no annual fees at all for Arizona, Idaho, Mississippi, Missouri, New Mexico, Ohio, South Carolina, or Texas LLC’s, and no annual report or filings for Arizona, Missouri, New Mexico, Ohio, and sometimes South Carolina. Here’s a list of annual LLC fees and filing requirements by state for comparison purposes:

https://www.llcuniversity.com/llc-annual-fees-by-state/

Like all parts of your business, the cost of maintenance of your LLC over the course of years should be taken into account before diving in.  The differences will add up.

Taxation

All states levy taxes of some kind to raise revenue and support expenditures.  States generally utilize some combination of excise taxes, income taxes, property taxes, and sales taxes, with significant differences in allocations but all raising billions.  Some states are celebrated for having no income tax, although every state with no income tax typically has relatively higher sales or property taxes to make up for it, which is less well known.  There is no such thing as a state with no tax because there is no such thing as a state with no budget, and that money must come from somewhere. A state with no income tax has higher taxes on other things to fund its expenditures, so you cannot make an apples-to-apples comparison simply by looking at the income tax rates. It is important to consider the total tax burden on your business activities, not just income tax, when comparing states for business locations.

Because of the absence of state income tax in various states, erroneous recommendations are made based on that alone. It is foolish to blindly accept someone telling you Nevada/Wyoming/Texas/etc. is a good state to form an LLC “because there is no income tax.” That is an all-too-common mistake that belies a lack of understanding of LLC taxation. Most LLC’s are pass-through tax entities, so their income is not taxed at the LLC level but instead passes through to the owner, who then pays taxes on the income at the owner’s rate, in the owner’s jurisdiction. If you are going to form a pass-through LLC for an online company and don’t plan to have a physical office, for the purposes of taxation it doesn’t matter if your LLC is formed in Texas or Tennessee — the income isn’t taxed at the LLC level, it’s taxed at the owner-of-the-LLC level. Consult with your tax advisor because this can depend on specific circumstances, but don’t buy the “no state income tax” as a selling point for LLC location.
CONCLUSION

If you do not plan to have a physical office, there are many options for locating your new Limited Liability Company. Delaware and Nevada always come up when I talk to someone about forming a new LLC, and rarely are either of those states a good choice. Consult with a professional about annual fees, maintenance costs, taxation, and the practical effects of forming a new LLC in various states before making a decision that could come back to haunt you.  If your chosen professional does not ask you a lot of questions about how you intend to operate your business before telling you to form a Delaware or Nevada LLC, find someone who will.

 

Chad Anderson is an accountant and attorney licensed to practice in Arizona, Nevada, and Iowa.

https://www.linkedin.com/in/chadknowslaw/

The preceding is not legal advice, and no attorney-client relationship is created by reading or adopting the opinions of the author. Consult with your licensed legal or tax advisor.

This will be the last of my 5 articles pertaining to content production for Content Creators that post their content up for sale on various platforms such as OnlyFans.com, AVNStars.com, JustFor.Fans and even ManyVids.com and Clips4Sale.com.

If you missed the first four articles you can find them here;

Part 1 – https://adultbizlaw.com/2020/05/18/new-to-onlyfans-heres-what-you-need-to-know-part-1-of-5-class-is-in/

Part 2 – https://adultbizlaw.com/2020/05/19/new-to-onlyfans-heres-what-you-need-to-know-part-2-class-is-in/

Part 3 – https://adultbizlaw.com/2020/05/20/new-to-onlyfans-heres-what-you-need-to-know-part-3-who-owns-your-content/

Part 4 – https://adultbizlaw.com/2020/05/21/new-to-onlyfans-heres-what-you-need-to-know-part-4-protect-your-content/

The final article in this series will focus on shooting porn or flashing content in public. This is a relatively quick and simple answer – DO NOT shoot content in public. Public places are generally defined by whether you may be seen by others. Beaches, parks, forests, shopping malls, libraries, gas stations and even in your own car are defined as public places. Even if you are in an area that you believe to be deserted but you do not have control over that would still be considered public. For example, a deserted quarry pit or an old road leading to an abandoned mine. These types of locations may seem perfectly fine to shoot at, but they are still considered public lands/locations.

If you are lucky enough to own a large farm or a friend that owns a piece of property large enough where you absolutely cannot be seen by neighbors, then you can shoot as you wish since that would be considered private property.

What Happens if I’m Caught Shooting in Public?

This really depends on what you are doing and whether law enforcement deems the situation to be serious. The least severe punishment might be a simple warning to stop shooting and leave the area. The next level might be that you are given a misdemeanor paper citation for public nudity and your content and or cameras are seized by the police as evidence of a crime. The worst possible situation is that the police believe you committed a felony; your content and cameras would be seized and then you would be arrested, placed into handcuffs, booked into a holding cell and then arraigned in court. If so, you will need to make bail in order to be released. Misdemeanors don’t usually require an actual physical arrest. You are given a paper citation and told when to show up for your court date – like a traffic ticket. If you do not appear on the court on that date, a bench warrant will issue for your arrest though.

These types of crimes in California (public nudity and/or lewd acts in public) are referred to as wobblers. A wobbler crime may be a charge as either a misdemeanor (up to 1 year in jail) or a felony (more than 1 year in prison).

Lewd conduct in public is defined as “…every person who commits any of the following acts is guilty of disorderly conduct, a misdemeanor: (a) An individual who solicits anyone to engage in or who engages in lewd or dissolute conduct in any public place or in any place open to the public or exposed to public view.” Lewd conduct can also occur if you touch your genitals, buttocks or female breasts in public for the purpose of sexual gratification,  or to annoy or offend someone else. The more serious the lewd conduct the more likely you will be charged with a felony instead of a misdemeanor. If you are engaged in public sex, it is fairly reasonable to believe that you will receive a felony charge.

California Penal Code 314 PC prohibits the sex crime of “indecent exposure.” This means willfully exposing your genitals to someone else, motivated by a desire to sexually gratify yourself or offend the other person.

You may only be charged with disturbing the peace. Penal Code 415 PC is the California statute that defines the crime of disturbing the peace. Disturbing the peace can be filed as either a misdemeanor or a noncriminal infraction.

Needless to say, none of these situations are desirable for you.

You may also be charged with a criminal violation of shooting without a permit. In many California cities, in order to shoot content for a commercial purpose you need to have secured a filming permit to do so. Failure to secure a filming permit is a misdemeanor.

Can My Content be used as Evidence ?

Yes, your content can absolutely be used as evidence against you in a criminal matter. That rarely happens but it has occurred in criminal cases and with violations brought by CalOSHA against companies that did not use condoms or other protective barriers.

There have been several recent cases where Content Producers have been charged with criminal offenses solely based on complaints made to the police – after – the content was posted to their website or account. While you may not get “caught in the act” you can still be prosecuted after the fact, especially if the locations used in your content are well known and/or other people appear in the videos.

Should I be Worried if I have Public Sex or Nudity Content Posted on my Site ?

Yes you should. Depending on when the content was produced, if you fall within a statute of limitations for a particular crime, you can still be prosecuted. It does not require the police to initially investigate you. A report of a crime can come from anyone in the community – someone who lives in your town, a former friend, family member or former significant other that might have a vendetta against you. Whether such a complaint will be taken seriously by the police and/or the District Attorney’s Office depends on a lot of different conditions, including where you live, how busy law enforcement is, how much press did your content receive by the mainstream media and how explicit the content really is. There is no way to tell you which cases will be prosecuted and which cases will not be prosecuted. These types of crimes are wide open to selective enforcement. Obviously, producing  public porn in a small community carries the greatest risk.

Conclusions

This issue is completely dependent on your own level of risk you choose to take with your production. As a lawyer, I can only tell you that shooting nudity and/or sex in public is a crime in most jurisdictions. While the above mentioned laws all pertain to California, I can assure you that your state/county/city has similar laws. If you have shot and posted content to your site or account involving public nudity and/or sex you should contact a criminal lawyer in your area and inquire as to what criminal statutes your actions may violate.

If you believe that you will not be caught, I can tell you that the crimes mentioned in this article are some of the most common I see people being charged with for the production of pornography through-out the United States.

 

 

Protect Your Content !

Now that you have read the prior three articles – which you can find here;

Part 1 – https://adultbizlaw.com/2020/05/18/new-to-onlyfans-heres-what-you-need-to-know-part-1-of-5-class-is-in/

Part 2 – https://adultbizlaw.com/2020/05/19/new-to-onlyfans-heres-what-you-need-to-know-part-2-class-is-in/

Part 3 – https://adultbizlaw.com/2020/05/20/new-to-onlyfans-heres-what-you-need-to-know-part-3-who-owns-your-content/

You need to know how to protect your content from theft and copyright infringement. Someone can simply come along and download/copy your content, strip off any watermark you may have on it, possibly even blur or cut out your face, repost the content as their own and begin collecting income off your hard work. This recently happened to several models whose photos and videos were infringed by another model who had a similar look and body. It was alleged that in one week, the woman who stole the content made $21,000 from the stolen content. So as you can see, infringement does pay. So you need to lock your content down and prevent people from stealing and reposting it.

Unfortunately, that is not an easy or inexpensive process. It will require time, effort and investment.

Copyright, Copyright, Copyright !

The first, the easiest and least expensive way to protect your content is to register a copyright for it. A copyright is a way to tell the world that you own that content. Again, I could fill a book on the topic of copyright. Entire practice guides for lawyers are devoted to copyright enforcement and infringement. Unfortunately, I cannot go into that level of detail in this article. However, I have previously discussed the issue of registering your copyrights. You can find a link to that article below. I recommend that you read it and then return to this article and continue reading.

Copyright, Piracy and the DCMA

One aspect that registering your content with the US Copyright Office is that it shows anyone who may want to steal your content that you are serious about protecting your work. Those Content Creators who are too lazy to file for and receive this basic level of protection are basically telling thieves and infringers that they do not care enough about their own content to protect it, therefore its likely you won’t do anything to them once its stolen. It’s like leaving the front door of your house open to burglars. You would lock your front door, and you should register your copyrights.

If you were just insulted because you don’t register your copyrights and I called you lazy, I apologize, but it literally takes just a few hours each month to complete the registration process. Spending hundreds of hours shooting and editing content, and then not spending a few hours to register the copyrights is laziness. And I can promise you that not registering your copyrights will cost you money.

Trademarked Watermarks & Logos

The next level of protection you can have when it comes to making sure your content is not stolen or infringed, is registering a trademark for the logo or the name that you embed on your content. First, if you are not adding a watermark to your videos, you should do so immediately. The watermark may be your company logo, or it may be the domain name of your website address or it maybe your performer name. Whatever you choose to embed into your content, I would suggest that you also have it registered as a trademark or service mark with the US Patent and Trademark Office.

The benefits of having a trademarked logo embedded into your videos is immense. I have found that it is much easier to remove my client’s content from tube sites and illegal offshore hosting companies when I send a Cease & Desist letter under a theory of trademark infringement as opposed to a DMCA take down notice for copyright infringement. The DMCA has no real teeth to it. Honest companies will abide by your DMCA requests but dishonest companies and tube sites will have your content reposted in a few days. Once a trademark C&D is sent, it is on that webhost or tube site to make sure your content stays down. That is not true with the DMCA.

To learn more about trademark and piracy see – https://adultbizlaw.com/2012/11/15/piracy-trademark-law-a-way-to-stopcontent-theft/

Unlike copyrights, I would recommend that you do not DIY with trademarks. Trademark registration is far more complicated and expensive. If you make a mistake you may have to start all over again and pay an additional filing fee. Further, if your filing is incorrect, your trademark may be worthless.

You should definitely hire an experienced adult industry attorney that understands the issues surrounding registering a trademark for models and performers with large fan bases and potential stalkers. If done incorrectly an inexperienced lawyer can expose your real name to stalkers. I have filed dozens of trademarks for adult performers and for some of the largest companies in adult. There is a way to do it right.

DMCA Take Down Services

Despite my above mention comments about copyright and DMCA, I still think its important that each Content Creator, utilize the services of a DMCA take down service. These are companies that usually charge a monthly rate to automatically scan the Internet for your content, and if they find it on a tube site or another file sharing site, they send a DMCA letter on your behalf demanding that your content be removed.

They may send a few letters a day on your behalf or dozens. It depends on how popular your content is and how widely it’s been stolen and infringed. Obviously, the more widely your content is shared on free sites, the less likely customers will pay you for it.

Depending on the costs of the service, I would highly recommend hiring one such as;

http://www.TakedownPiracy.com

They have been around forever and are well respected in the adult industry. They have removed millions of illegally uploaded and infringed videos. However, be aware, as good as they are, and this is true with all DMCA take down services, they will not be able to get all of your content removed from every site. That’s when you may have to hire an attorney to assist. Often a letter from an attorney will have more effect than from a notice from a DMCA agent.

Conclusions

I cannot recommend strongly enough that you immediately do the following;

1. Register your content with the US Copyright Office;
2. Hire an adult attorney and register your logo as a trademark; and
3. Hire a DMCA take down service to send DMCA take down notices for you.

While registering your content and sending DMCA take down letters may result in most of your content from being stolen and illegally uploaded, having a trademarked logo embedded on your videos provides even greater protection.

While these steps are neither cheap nor easy, they are necessary to make sure that your content is protected. The sooner you take these steps, the better protected your content will be. If a majority of your content has already been stolen or infringed, it will be much more difficult, if not impossible to protect that content after the fact. You must register your copyrights within the first 90 days after you post your content to your account for the strongest protection.

Work for Hire Agreements? Do you own your content?

If you have been checking back you have already read my two prior posts about Porn vs. Prostitution & 2257 Documents as well as Model Releases and why you need them. If not, I strongly suggest that you go back and read those two articles. You can find them here;

Part 1 – https://adultbizlaw.com/2020/05/18/new-to-onlyfans-heres-what-you-need-to-know-part-1-of-5-class-is-in/

Part 2 – https://adultbizlaw.com/2020/05/19/new-to-onlyfans-heres-what-you-need-to-know-part-2-class-is-in/

In this article I will cover the one basic copyright issue that many Content Creators face – ownership of their content. So many people think that if they pay for something, then they own it. That is not necessarily true when it comes to copyright. Even if you pay (or don’t pay) someone to record video or take photographs for your OnlyFans account, you probably do not own that content unless that person as signed a Work for Hire Agreement assigning their rights in the copyright to you or your company.

Copyright: Employment vs. Agreement

Copyright is a property right – no different from purchasing a house or a condo. For you to gain ownership of real estate the sale has to be in writing. You wouldn’t purchase a house without a contract, and you shouldn’t have someone shoot your content without one either.

There are two ways to secure copyrights in your work, either though a Work for Hire Agreement or through employment. What “employment” refers to is that you or your company regularly employs your videographer or photographer, pays them a salary, withholds taxes and pays employment taxes to your state on their behalf. That is employment. Through employment, you own everything your employee does based on a Master-Servant relationship theory. While quite archaic, lawyers and courts still use that term. If you do not regularly employ your videographer or photographer, then you will need to use a Work for Hire Agreement.

A Work for Hire Agreement is a simple form contract that basically states that you are paying your videographer/photographer for not only their work that day, but also, so he/she will assign you their rights in the copyright to the videos or photos they captured that day. Once those rights are assigned to you in writing, you own them and you can whatever you want with your content. Failure to secure the copyright can result in that videographer/photographer coming back later and demanding to be paid more for your continued use of their videos/photos. Or if you refuse to pay them more money – called a “licensing fee” – they can contact the platform and force them to remove your content. If you continue to use their videos/photos, you could actually get sued for copyright infringement.

So Why Do They Own My Content If I Paid Them?

The law surrounding copyright in the United States indicates that the owner of the copyright of a particular video or photo is the person who fixes;

in a tangible medium of expression “when its embodiment in a copy or phonorecord, by or under the authority of the author, is sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration. A work consisting of sounds, images, or both, that are being transmitted, is ‘fixed’ . . . if a fixation of the work is being made simultaneously with its transmission.” See 17 U.S.C. §101. Fixation is a requirement for obtaining a copyright.

This basically means that the person holding the camera is the person who owns the copyright. A full analysis of copyright law on this topic could fill a book. However, what you need to know is that every time someone takes a video or photograph of you that you want to use on your OnlyFans page or your website/social media accounts, you should have them sign a Work for Hire agreement.

If you do not have a Work for Hire agreement, you may be able to find a free one on the Internet, or we do include one in the Production Packet of forms that we sell here;

https://adultbizlaw.com/2694-2/

Conclusion

If someone else has held the camera and shot your content and you do not have Work for Hire Agreements signed by that person for each and every shoot, there’s a good chance that person owns your content. Usually, I find that in situations like this, it is usually a boyfriend, girlfriend or spouse who has held the camera. While your relationship is strong, there may be no issues now, but what happens when and if you break up ?

You may want to read – https://adultbizlaw.com/2018/01/04/so-you-broke-up-with-your-scene-partner-now-what-who-owns-your-content/

Plan for the worst, and immediately have your significant other to sign the necessary Work for Hire Agreements. That way you will be protected if the two of you ever happen to split. I have had clients in the past that have spent tens of thousands of dollars in legal fees fighting over who owns the content once they break up. And I have had clients that have lost tens of thousands of dollars in income when their ex contacted the platform and demanded the content be removed. Protect yourself !

Now you’ve read Part 1 of my five part series, we can continue on to the next lesson – Model Releases. If you have not read Part 1 – you can read it here;

https://adultbizlaw.com/2020/05/18/new-to-onlyfans-heres-what-you-need-to-know-part-1-of-5-class-is-in/

So now you know you’re a pornographer and you are producing either R Rated, X or XXX Rated content. What’s next ? You need to own the rights to your content in order to post it and distribute it on a platform such as OnlyFans. If you are performing or are paying people to perform or if you are having your spouse, friends or tinder dates appear in your videos, you need a model release signed by everyone who is in the scene.

Without a model release, you really don’t own your content, you share the rights with the people in the videos, and they can force you to stop distributing your content if they so choose.

What’s a Model Release ?

A model release is a simple contract/agreement that assigns or sells certain rights of publicity, rights of privacy and other inherent rights model’s posses to you or your company – if you have formed one – so you can sell the content without having to pay royalties.  Depending on the rights you want to own, it may be 1 page or as long as 5-10 pages. Model releases for XXX Rated content are usually longer since they involve more rights being sold than a model release for a topless video/photos.

To learn about model releases, here is an article that I wrote in 2007 for XBiz.com and it is still relevant today.

All About Model Releases & Why You Need Them!

Oh No! I Don’t Have Signed Model Releases!

You are 3 months in on your OnlyFans account and you are just reading this… and now you are wondering what you can do since you never bothered to secure signed model releases from the people in your content. Do not lose hope, all is not lost.

First, get your hands on a proper model release. Ask a friend, buy one from the internet or purchase our packet of Adult Production Forms found here;

Purchase Adult Content Production Forms

If you are doing content trades where you and the other performers are each getting a copy of the content to use on your own accounts, you will need what is called a Content Trade Release. A standard for pay model release is not the correct agreement to use. Again, if you don’t have one and need one, click the link above – we offer a Content Trade Agreement in our package of Production Forms.

Once you have your model release, you will need to track down and send everyone who appeared in your content, a model release, and have them sign it and return it to you. And if you have formed an LLC or Inc for your productions and if you have performed in the scenes you will also need to fill one out and assign the rights to your company.

Be aware, if you have someone that has appeared in more than one scene/photo, you will need a signed model release for each and every scene/photo set that they appeared in. Even if you shot 2 or more videos/photo sets in one day. That also includes you, for each and every scene.

What if I Cannot Get a Model Release from Everyone ?

If you do not have a signed model release from someone that has appeared in your scenes/photos, you have a choice to make. If you continue to sell that scene on your OnlyFans or other platforms, you may at some point be forced to split any profits you made on that scene with anyone else who is appears in the scene.

While it is not likely you will be on the receiving end of a lawsuit, it is a possibility especially if the other model(s) realize that you may be making a lot of profit from the video. Greed is a classic motivator.

If you are not making a substantial amount of profit from the scene, it may just be easier to remove the content from being sold and basically hold it until you can get a signed model release or perhaps never use it again.

Finally, you may at some point in the future find that the scenes where you do not have a signed model release will be removed from your account by the platform. All that is necessary is a model sending a simple cease and desist letter to the platform requesting that the content be removed and allege that you do not have a signed model release. The platform will usually comply and immediately remove the content. They may not even inform of you of their decision. In order to prevent a fraudulent C&D and to prove to the platform that you own the content – you will need to show them the model release.

What About 2257 Documents ?

If you are someone that has not secured the necessary model releases from the various models that have appeared in your content, I have to assume that you have also not asked them for an ID proving they were 18, made a copy of it and had them fill out and sign a 2257 Document.

Are you scratching your head and wondering what a 2257 Document is and why do you need one – then you need to read the first article in this series;

https://adultbizlaw.com/2020/05/18/new-to-onlyfans-heres-what-you-need-to-know-part-1-of-5-class-is-in/

If you are producing X or XXX Rated content and don’t have an ID and 2257 Document from every model in every scene you have produced, you are then in violation of a federal law (18 U.S.C. 2257). It is recommended that you immediately stop using any scene where you don’t have the necessary IDs and documents.

You can try to go back and secure 2257 Documents and IDs from the models, however, be aware that the law requires that all producers check IDs prior to shooting a scene to ensure that you are not producing child porn. And the IDs need to be valid US govt issued IDs at the time of the production, not days, weeks or months later.

If you do not have the proper signed 2257 Documents and IDs from your co-stars, you will need to speak to an attorney who knows and understands 18 USC 2257. If your attorney is not an adult entertainment attorney, now would be time to seek out an attorney who specializes in adult. Even a mainstream entertainment attorney in Los Angeles will know little to nothing about 18 U.S.C. 2257.

Tomorrow, I will be posting the next article in the series… “Do You Even Own Your Content?“

Are you new to OnlyFans or one of the other Content Creator platforms such as AVNStars.com, ManyVids.com, Clips4Sale.com, IWantClips.com, JustFor.Fans ?

Are you creating adult content for the first time? Well… then you might be a pornographer. Welcome to the wonderful world of explicit XXX content creation ! Since you are creating “adult” content – some laws that you may be completely unaware now apply to your productions. Unfortunately, this article can only cover the basics. To fully understand what it is to be pornographer would require hours of consultations and hundreds of pages of articles. This will be the first of a 5 part series. Each day I will be posting a new article, so check back daily. Unfortunately, there is just too much to know to cover in one article.

R vs. X vs. XXX Content ?

The first question I am often asked is  – what are differences between R and X Rated content. That’s fairly easy. R Rated content is nothing more than nudity. X Rated content begins, basically, when you begin to touch yourself either while fully nude or even partially nude. If your content contains images of you either playing with your nipples or touching your genitalia or “spreading” any of your body parts, it would probably be X Rated. So then what is XXX Rated content ? XXX Rated content usually involves the penetration of an orifice. If your content contains images of you masturbating with anything, a finger, your hand, a vegetable or a sex toy, that would be considered XXX Rated content. This also applies if you are being penetrated by a partner (oral, vaginal or anal sex).

So Why Should I Care About Producing R, X or XXX Rated Content ?

Depending on which type of content you are producing will determine which laws apply to your production and your content. If you are producing R Rated content (mere nudity) you do not need to comply with a federal law called (18 U.S.C 2257). Once you venture into X or XXX Rated content you will need to comply with the requirements of 2257. Though, you probably should comply even if you are producing just nudes.

If you do not comply with 18 U.S.C 2257, you can face up to 5 years in jail per violation. Each failure to secure the necessary IDs and 2257 Document can be seen as one independent violation. If you have produced numerous X or XXX Rated scenes and do not have IDs or 2257 Documents on any of your models, you may be guilty of multiple 2257 violations. 18 U.S.C. 2257 also applies if the only person in your content is you. You need to keep a copy of your ID on file, and to sign a 2257 Document for each solo scene you produce.

See also – 18 USC 2257 Information & How to Comply

So What’s the Difference Between Porn and Prostitution ?

If I had a dollar for every time I was asked this – I could retire. Honestly, there is no one correct answer since it really depends on how the prostitution laws are written in your state or municipality. However, here is a good generalization.

If you are the producer of XXX Rated content and you are also talent in the scene, then its probably prostitution. If you are paying money and receiving sexual services/pleasure that makes it prostitution. If you are paying other people to perform in your scenes and you are just getting the content to sell, then its probably just porn.

If you are producing XXX Rated content (hardcore) then you will also want to know that there are only 2 states in the US where it is legal to produce XXX Rated content – New Hampshire and California. Everywhere else, the other 48 states, it is still a gray area of the law and you can still be prosecuted for producing hardcore content. While it is rare, producers have been charged with various criminal charges (prostitution and pandering usually) because of producing XXX content.

POV style shoots are obviously problematic when it comes to criminal statutes. Even in California and New Hampshire, where the producer is also the talent, these shoots are illegal. Just because you have a model release and a camera doesn’t turn prostitution in porn and make it legal.

Conclusions

If you are producing R Rated content (just nudity or topless) – here is the good news, you’re more safe, not completely safe. Just like Playboy wasn’t considered porn by most people, neither will your content. While your content is probably not porn, it is still adult, and without question, everyone in your content should be 18 years old. Capturing images or video of someone under 18 years old would be considered illegal and child porn. So make sure you are checking everyone’s ID and make sure it is a legal and current ID and not a fake. Otherwise, you will have legal issues and could end up in jail.

If you are producing X or XXX Rated Content, you’re going to have to know a lot more in order to produce your content legally and safely. If you haven’t done so, scroll back up and read the article I have linked to about 2257.

Click on the link and read Part 2 – All Your Need to Know About Model Releases!

https://adultbizlaw.com/2020/05/19/new-to-onlyfans-heres-what-you-need-to-know-part-2-class-is-in/

 

 

There seems to be a disagreement amongst producers, performers and even testing facilities as to when adult studios can resume production. The Free Speech Coalition continues to state that all adult productions are on a hold while many states attempt to slowly reopen their societies. Their decision has been backed by one of the Free Speech Coalition’s largest financial supporters, Mindgeek – ie., Brazzers and Pornhub. While, on the other hand, Talent Testing Services and Sixto Pacheco, the owner, has added COVID-19 testing to the performer panel test through-out the United States. Thus, hinting that with a full panel testing including that for COVID-19, studios and content creators can get back to making pornography with one of their tests.

Obviously, I am not a doctor and I will not comment on whether shooting now or later is the best course of action. Nor will I comment on what are the best practices to return to shooting. However, I will comment on what may be your or your company’s liability if one of your performers or crew are infected while on your set.

Obviously, everyone wants to be as careful as possible when production does resume. One of the most important ways you can protect yourself as well as your performers and crew is to have workers compensation insurance.

If you decide to resume production prior to California lifting their “State of Emergency” declaration (or have already done so), and someone on your set contracts COVID-19, from anywhere – not just your set, you might be forced to accept their infection as a work related injury. On May 6th, Governor Gavin Newsom issued this Executive Order for the State of California. It reads in relevant part;

IT IS HEREBY ORDERED THAT:

• Any COVID-19-related illness of an employee shall be presumed to arise out of and in the course of the employment for purposes of awarding workers’ compensation benefits if all of the following requirements are satisfied:

1. The employee tested positive for or was diagnosed with COVID-19 within 14 days after a day that the employee performed labor or services at the employee’s place of employment at the employer’s direction;
2. The day referenced in subparagraph (a) on which the employee performed labor or services at the employee’s place of employment at the employer’s direction was on or after March 19, 2020;c.The employee’s place of employment referenced in subparagraphs (a) and (b) was not the employee’s home or residence; and;
3. Where subparagraph (a) is satisfied through a diagnosis of COVID-19, the diagnosis was done by a physician who holds a physician and surgeon license issued by the California Medical Board and that diagnosis is confirmed by further testing within 30 days of the date of the diagnosis.

 

• The presumption set forth in Paragraph 1 is disputable and may be controverted by other evidence, but unless so controverted, the Workers’ Compensation Appeals Board is bound to find in accordance with it. This presumption shall only apply to dates of injury occurring through 60 days following the date of this Order.

The full text can be found here:

https://www.gov.ca.gov/2020/05/06/governor-newsom-announces-workers-compensation-benefits-for-workers-who-contract-covid-19-during-stay-at-home-order/

As a business you can rebut the presumption that COVID-19 was transmitted on your set. However, if you do not have workers’ compensation insurance, you will need to hire your own lawyers, as well as pay medical professionals to review medical records as well as perform an examination of the person who has alleged that they were infected on your set. This will cost tens of thousands of dollars in legal and med-legal fees.

If you believe that you will be protected by defending such a lawsuit through the claim that the performer or crew member was an independent contractor – it is likely that will no longer be successful. With the passage of California Assembly Bill 5, performers and or crew will most certainly be determined to be your employees.

If you do not have workers compensation insurance, it is highly recommended that you contact a commercial insurance broker to obtain the necessary insurance in California. If you produce outside of California, the Emergency Order above only applies to California employers. However, it is possible that your state of Governor has implemented a similar Order. Or, in the alternative, without such an Order, a performer or crew member that is infected while on your set could still be determined to have a work related injury.

Please seek the appropriate legal counsel.

Recently, I spoke with one of my larger clients whom was trying to purchase non-exclusive rights to content that was being created by performer/content creators – at home with their own partners – during the COVID-19 quarantine.

It was a simple offer, the company would agree to pay a flat rate for any content that the performer/content creator wanted to license to the company. The performer/content-creator would retain all ownership rights in the content and could continue to use the content on any of their sites or any platform or license it to anyone else. The company just wanted some fresh content to update their company’s websites with. It was meant to be a win-win for both the company and the performer/content-creators.

However, not a single performer/content-creator whom they spoked to could complete the deal.

Why not ? Not a single performer/content creator had the necessary “paperwork” to go along with the content, so the company could actually use the content.

If you are creating content at home with your friend(s), lover(s), significant other(s) or even someone you met on Tinder, YOU NEED A SIGNED MODEL RELEASE AND 2257 DOCUMENT FOR EACH PERSON FOR EACH SCENE.

If you are producing content and you are not securing the necessary agreements signed by your models, whether they are amateurs of professionals, you really don’t own your content and you can lose the right to use it. And certainly, in the case of my client, your content can never be sold or licensed to anyone.

For some reason amateur models/performers/content creators have a mistaken belief that the same laws that apply to mainstream pornography companies such as Blacked, Brazzers, AdultTime, Gamma ect., do not apply to small amateur productions. This is simply not true. Small production companies – and even you only self-produce for your own OnlyFans account – must also comply with the same laws as the large mainstream studios.

Failure to secure a signed model release means that whoever appears in your content can at some point demand that you stop using the content and remove it from all of your accounts.

See also – https://adultbizlaw.com/2018/01/04/so-you-broke-up-with-your-scene-partner-now-what-who-owns-your-content/

Failure to secure a signed 2257 Document and a valid ID from the other performers in the scene can result in jail time at worst, and at best, without such, no one will purchase or license your content.

See also – https://adultbizlaw.com/2012/10/22/porn-101-18-u-s-c-2257-the-basics/

Failure to secure a signed work for hire agreement from your photographer and/or videographer means that you don’t actually own the copyright to the scene even though you may have paid that person for their work.

See also – https://adultbizlaw.com/2012/07/30/who-owns-your-content/

If you are reading this and do not have the necessary documents/agreements, there is hope but you will need to backtrack and secure the documents now. Which may be difficult from people that appeared in your content that you no longer have contact with.

And what if you do not have the “right” documents or do not even know where to find them ?

For $100 you can purchase a complete package of production forms – including a Content Trade Release that needs to be used instead of the standard Model Release when you trade content with other performers.

See also – https://adultbizlaw.com/2694-2/

Don’t sell yourself short and not be able to capitalize on licensing fees. Your content has value more than just what you may make from it by posting it to your OnlyFans account. With the correct documentation, you can resell that same content, usually over and over again. Owning your content is probably one of the most important aspects to be a Content Creator.

California’s new Consumer’s Privacy Act (“CCPA”), which came into effect on January 1, 2020, is the most far-reaching privacy law enacted in the United States by either the federal government or a state government. It mimics, to a certain extent, the GDPR privacy laws of the European Union.

The CCPA is quite difficult and onerous to comply with. First you have to determine if it applies to your website. If your website has customers that are California residents, then you may have to comply with the CCPA. It doesn’t mean that just companies located in California must comply, rather anyone who has a website that has customers in California whom provide 25% of the company’s total revenue are liable if they do not comply. And if your company pays more than 25% of its costs/compensation to California residents, independent contractors or other companies you may also be liable if you do not comply with CCPA. In summary, if you “do business” in California then you must comply with the CCPA. You can obviously “opt out” of compliance but you would need to block all internet traffic that is visiting your site from an IP addresses located in California. This is what many US companies do with regard to the GDPR in the European Union. Rather than complying with EU law, they simply do not allow visitors to the website from any of the twenty-six (26) European Union member countries.

The next step is to determine when you met the other initial thresholds of the CCPA.

The CCPA applies to any business, including any for-profit entity that collects consumers’ personal data, which does business in California, and satisfies at least ONE of the following thresholds:

• has annual gross revenues in excess of $25 million;
• buys, receives, or sells the personal information of 50,000 or more consumers or households;
• Earns more than half of its annual revenue from selling consumers’ personal information.

You may want to stop reading here, but don’t. For some the threshold of 50,000 consumers per year is very easy to meet. From an internet traffic standpoint, if your website is receiving an average of 137 unique visitors per day, then it is quite possible that the CCPA applies to your business. If your website utilizes any type of web traffic analysis software or application – ie., Google Analytics – then you need to comply with the CCPA. Google Analytics captures information from your visitors through the use of cookies and shares that information with Google directly.

If you have an email capture form on your website where you ask visitors for the personal identifying information such as name, phone number or email address, you also receive information on your visitors that might cause CCPA to be applicable to your business.

If your website meets just one of the three thresholds then the CCPA applies to your business and your visitors are protected under the CCPA.

The intentions of the Act are to provide California residents with the right to:

1. Know what personal data is being collected about them.
2. Know whether their personal data is sold or disclosed and to whom.
3. Say no to the sale of personal data.
4. Access their personal data.
5. Request a business to delete any personal information about a consumer collected from that consumer.
6. Not be discriminated against for exercising their privacy rights.

The question then becomes what happens if my company does not comply with the CCPA?

The two most severe penalties are;

 

• Companies that become victims of data theft or other data security breaches can be ordered in civil class action lawsuits to pay statutory damages between $100 to $750 per California resident and incident, or actual damages, whichever is greater, and any other relief a court deems proper, subject to an option of the California Attorney General’s Office to prosecute the company instead of allowing civil suits to be brought against it (Cal. Civ. Code § 1798.150).
• A fine up to $7,500 for each intentional violation and $2,500 for each unintentional violation (Cal. Civ. Code § 1798.155).

For example, if your website’s data is breached, and you have 500 California residents who are victims of the breach you may be ordered to pay more than $375,000 in restitution to all of those California residents.

Obviously, with the recent data breaches by numerous adult companies (Ashley Madison, Cam4, ImLive) it is clear that not enough is being done to protect performer’s and client’s private information. Failure to protect such information and to not comply with California’s CCPA can lead to the financial destruction of your business.

If your website does not have a current Privacy Policy, it is absolutely required by California law. If you do have one, it is now time to update that policy with the new requirements imposed by the CCPA. You have until June 30, 2020 to implement and post your new policies.