Entertainment Legal News

Adult Entertainment Marketer Settles FTC Charges

An Internet marketer of adult entertainment will pay a $465,000 civil penalty under a settlement reached with the Federal Trade Commission and the Department of Justice, which charged the company with initiating sexually explicit commercial e-mails. The action is part of an FTC crackdown on illegal “X-rated” spam announced in July 2005, when seven companies were charged with violating federal laws requiring warning labels on sexually explicit e-mail. Settlements with five of the operations have resulted in civil penalties totaling $1.624 million. The FTC’s Adult Labeling Rule and the CAN-SPAM Act require commercial e-mailers of sexually explicit material to use the phrase “SEXUALLY EXPLICIT:” in the subject line, and to ensure that the initially viewable area of the message does not contain graphic sexual images. The Rule and the Act also require that unsolicited commercial e-mail contain an opportunity for consumers to opt out of receiving future e-mail and provide a postal address.

Under the proposed settlement, TJ Web Productions, LLC, is permanently prohibited from violating the FTC’s Adult Labeling Rule. The company also is permanently prohibited from violating the CAN-SPAM Act by initiating commercial e-mail without clearly and conspicuously displaying a physical postal address and a functioning return e-mail address or other Internet-based mechanism, so that recipients may decline to receive any more such e-mail. Although TJ Web Productions did not send the e-mail directly to consumers, the Nevada-based company operated an “affiliate marketing” program and induced others, by monetary payments and other considerations, to transmit commercial e-mail messages on its behalf. Read more at ftc.gov.

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	Did You Know?
	The title of Option is a defined factor When a creative entity, such as producer, artist, or studio, discovers a property and evaluates the rights status, they will, in most cases, attempt to negotiate an 'option' for the rights. An option is the right to acquire ownership of an intellectual property for a pre-determined amount of time. Size of the option payment often determines length of the agreement as well as how many forms of the rights will be included in the deal. While most option payments are subject to negotiation, script deals often work out to an even percentage of the purchase price.