When a TikTok Costs You $150,000 – Copyright Pitfalls in Influencer Marketing

Warner Music Group just sued DSW for using 200+ hit songs in social media ads—without permission. Those TikToks could now cost $30M. On this episode of The Briefing, entertainment and IP attorneys Scott Hervey and Tara Sattler break down the legal firestorm and what every brand needs to know before hitting “post.” Watch this episode on the Weintraub YouTube channel. Show Notes: Scott: A major music label just did the legal equivalent of a mic drop on one of America’s best-known shoe retailers. Warner Music Group has filed a lawsuit against Designer Brands Inc, the parent company behind DSW, accusing them of using more than 200 hit songs by artists like Cardi B, Fleetwood Mac, and Lizzo in TikTok and Instagram videos without a license. And they’re not just suing for direct infringement, they’re going after DSW for contributory and vicarious infringement tied to the influencer content. I’m Scott Hervey, a partner at the law firm of Weintraub Tobin, and I’m joined today by my partner, Tara Sattler. We’re going to talk about the DSW lawsuit and the lesson for brands that engage and Influencer Marketing on today’s installment of The Briefing. Tara, welcome back to The Briefing. We’ve got another, I don’t know, A scary piece of influence or marketing gone wrong here on the docket today. Tara: Yeah, we definitely do. I’m looking forward to talking about it with you. Scott: So earlier this month, Warner Music Group filed a federal lawsuit against DSW, claiming that over 200 of its copyrighted songs were used in social media ads on TikTok, Instagram, and other platforms without getting permission. Tara: Yeah, this isn’t about just one rogue post. The complaint alleges that DSW DSW’s marketing team, its influencers, and its in-house content creators, produced and shared branded videos that featured hit songs like Up by Cardi B and Barbi World by Nicki Minaj without securing proper licenses. Scott: The complaint alleges that DSW knows all about licensing music for advertising and that it had previously licensed music for use in its traditional ads. The complaint alleges that DSW knew exactly what it was doing when it skipped the licensing process for its influencer marketing ads. Tara: Right. In the complaint, Warner Music Group states that DSW, like many retailers, has shifted much of its marketing focus from traditional advertising to promoting its products through social media platforms like Instagram and TikTok, as well as through paid partnerships with well-known social media influencers. Scott: And as you and I discussed on a different episode, as we know, more than 50% of advertising spend has moved from traditional TV to social media. From my experience with my own brand clients, it seems that brands find social media advertising more effective and less expensive than traditional advertising. Well, I mean, less expensive when you don’t get named as a defendant in a claim like this. Tara: Right. Here’s what Warner Music Group is doing for. First, direct copyright infringement based on DSW’s posts. Second, contributory copyright infringement based on the content created for DSW by the influencers. And third, vicarious copyright infringement because DSW benefited financially from the infringing influencer content and had the ability to control or remove the content. Scott: Right. So this is where this type of advertising campaign gets more expensive than traditional media. Warner Music Group is asking for statutory damages of up to $150,000 per work. That’s $30 million if they win on the 200 songs. Now, the judge has discretion whether to award up to the full amount of statutory damages. But still, it’s a substantial… This is going to be a substantial bill to pay either way. Tara: Yeah, that definitely is expensive. So let’s take a step back and briefly talk about copyright infringement. Management and the different claims made by a Warner Music here. Scott: Sure. Copyright law protects creative works like music, videos, photos, and more. It gives the copyright owner the exclusive right to reproduce, distribute, publicly perform, and publicly display that work. When a brand or an influencer uses a copyrighted work, whether it’s a song or an image in a post without permission, technically, that’s infringement. And unless the use qualifies as fair use, which is very narrow in a commercial context, the copyright owner has a claim. Tara: And we’ve covered numerous cases of celebrities being sued for posting a photo that wasn’t taken by them, even where that post wasn’t part of an integration. Using a photo or music on TikTok or Instagram may seem casual or informal, but the Copyright Act doesn’t make exceptions for viral marketing or these types of posts. Scott: Right. No, that’s a really good point. All right, so let’s break down the three claims that Warner is making. Let’s start with the claim for direct copyright infringement. This is the most straightforward. Warner says that DSW itself posted videos on its own official social media accounts using the copyrighted music without a license. It’s similar to airing a commercial on TV with a Beyoncé track you didn’t pay for. If you post it, you’re liable. Tara: Yeah. The second claim is a claim for a contributory copyright infringement, and this covers the influencer angle. Warner Music alleges that DSW encouraged, collaborated with, and paid influencers to create videos featuring its products and the copyrighted music. Even if the influencer technically uploaded the video, if DSW helped plan or promote it and knew about the infringement, DSW can also be held viable. Scott: Right. Lastly, Warner Music alleges that DSW engaged in vicarious copyright infringement. This one is all about control and profit. If DSW had the right and ability to supervise the content and directly benefit it from it through increased sales or through brand visibility, it can be held vicariously liable, even if it didn’t know about the infringement at the time. So it’s a serious trifecta of liability here. Tara: That’s exactly right. I think this DSW lawsuit It is definitely a wake-up call for brands relying on social media marketing. Scott: Right, and a lot of brands do. Here’s the bottom line. If you’re using music in a video, and if that video promotes your product or your brand in any way, you need a license. This is true whether you post a video yourself or whether you repost an influencer’s content that was made for your brand. Tara: Also, it doesn’t matter whether the video or photo runs on the brand’s channels or on the influencer’s social channels. If the video is the result of an integration and it just runs on the influencer’s channels, the brand may still be liable for contributory copyright infringement. Scott: It doesn’t matter if the music is only a 15-second clip. I get that a lot, and I’m sure you do, too. The client-client will say, What I only use two seconds? Or my understanding is, If you only use five seconds, it’s fair use. No, there’s no magic number that equals fair use. Fair use is, as you know, if you listen to this podcast, it’s a multifactor test, and it’s much more than the amount and substantiality of the work that’s used. Also, it doesn’t matter if it’s trending, and it definitely doesn’t matter that TikTok or Instagram provided the video or audio unless they state in their license that it is available for use for commercial purposes. It’s your responsibility to make sure that that the work, the music or video, is cleared for commercial use. To help avoid lawsuits like this, here’s a checklist of terms every brand should include in its influencer agreements. Tara: Okay, here we go. First, consider including a music usage clause. Require influencers to use only music that is licensed by the brand, royalty-free, or from a platform’s cleared for Commercial Use Library and require the influencer to show proof of licensing. Also, prohibit use of any commercial tracks without prior written approval. Lastly, have influencers warrant that their content is not infringing of any third-party IP rights. Scott: The brand should also have content review rights, retain the right to review and approve all videos before publication, and have the ability to require the influencer to make changes after the video is posted. Also, disclosure obligations. This one is a pretty basic requirement, but your contract should require compliance with FTC guidelines on sponsored content and make sure that the influencer is required to provide proper disclosure. Tara: Also, influencer agreements should have an indemnification clause. So include provisions requiring that influencers indemnify the brand for any legal claims arising from unlicensed content that they create or post. However, don’t over rely on the indemnification clause. If the influencer is agreeing to indemnify the brand and doesn’t really have the financial capacity to do that, then the brand still has significant exposure. Scott: Right. That’s a great point, Tara. Also, brands should have takedown requirements in their agreements. Require influencers to promptly take down any content if the brand request that it be done, especially if there’s a legal claim that arises. Lastly, licensing education. Now, this is not a bad idea, and I don’t know if it’s regularly done by the brand, but provide influencers with basic education or guidelines about music licensing, especially what not to do. Now, the downside of this is that this type of information could be used against the brand in litigation like this. So maybe, I think in the contract, just having more discussion about the...