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Brands must take care when drafting influencer contracts

 Melissa Moriarty, of VaynerMedia (left) and Lydia Cheuk, of Away (right)

Panellists from Quality King Distributors, VaynerMedia and Away explain what companies need to know to build relationships with influencers

“One thing we’ve been doing is to run searches on the hashtags we plan on using for campaign activation motions,” said Jessica Cardon, deputy general counsel at health and beauty products company Quality King Distributors in New York.

Speaking on a panel called Focusing on Communities at this year’s Managing IP Global Trademark Forum in New York, Cardon added that these searches are not just done for trademark clearance.

“They are also done to see if we’ll have near exclusive use for the hashtag for activation,” she said. “That way, we can direct any viral activity from that hashtag in favour of our product.”

The panellists also discussed the fact that the Federal Trade Commission (FTC) requires influencers to disclose a relationship with a brand when producing a sponsored post.

“One thing that I would urge you to consider, in order to evaluate what makes a clear, conspicuous and effective disclosure, is how people are using the platform,” said Melissa Moriarty, New York-based assistant general counsel at VaynerMedia, an advertising agency.

Giving an example, she said that those who are watching an Instagram story would be unlikely to turn the sound on. As such, an influencer creating an Instagram story would have to take this into account when making their disclosure.

Cardon added that her company emphasises the importance of following FTC guidelines to its employees who make social media posts.

“We want our employees to be passionate about products, but in a way that is aware and follows the rules. If they are going to promote, they have to be clear about the employment relationship.”

Areas of influencer

Lydia Cheuk, New York-based deputy general counsel at Away, a luggage company, said that brands that draft contracts need to understand what the influencer and the brand feel comfortable with. Her company works with smaller influencers, but also with individuals like Serena Williams.

Moriarty said that a celebrity or more prominent influencer will be more likely to negotiate a contract and be aware of their obligations.

“But a micro-influencer will sign anything you put in front of them,” she added.

She explained that companies should use the contracting period as a training and vetting process for influencers.

She added that brands don’t always hire influencers directly. It’s often the case that a brand will hire a media agency, which hires a publisher, which then hires an influencer, so a brand might find itself several steps removed from the influencer. This level of distances underscores the need for clarity when drafting contracts.

“The more specific you can get, the better off you are. I would encourage you to dig into the contracting process.”  

Panellists also said that brands typically draft agreements with influencers using a licensing model that gives the brand the right to use the Instagram influencer’s post for a specific time period.

Cheuk said brands should write clauses that specify that they have no responsibility to take down the posts if they are not asked to do so, to avoid liability in such cases. But she added that an influencer is unlikely to care.

Cardon said brands have to consider the fact that many influencers no longer do their own photography. Those brands therefore need to make sure they secure the rights to the photos that the photographer has taken.

While building relationships with influencers might not seem to go hand-in-hand with trademark law, one speaker said that trademark attorneys need to be aware of the process.  

“You cannot be a trademark lawyer today without understanding this end of the advertising spectrum and social media,” the source said.

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