United States: Overview Guide to Advertising and Marketing

Last Updated: August 6 2015

The Frankfurt Kurnit Advertising and Marketing Advice Centre comprises the following forms, letters, checklists, and other templates.  We’ve made it easier to find what you’re looking for by breaking these documents into nine main categories, with the forms, letters, checklists and other templates listed within the respective categories below.

Advertising Agency-Client Relationship

· Letter and Guidelines for Receipt of Unsolicited Material.  This letter agreement, release, and corresponding memorandum can be used by a producer when he or she receives unsolicited materials suggesting any creative concepts or proposals and wants to make sure that the receipt of such materials does not trigger any affirmative obligations or liabilities in connection with the use or non-use of the materials.

· Agency Pitch Letter.  This letter agreement can be used by an advertising agency when it is asked to prepare and/or deliver a presentation for a client on how to advertise and market the client’s product or services, i.e., when the agency is asked to pitch or make a proposal about its advertising services for a particular client account.  This agreement includes terms governing payment, confidentiality, and ownership rights in connection with the presentation concept and materials developed for the pitch.

· Purchase Order and Terms & Conditions Granting Rights to Client-Buyer.  This purchase order can be used when a client is purchasing creative materials produced or supplied by an advertising agency for advertising purposes, including artwork, drawings, sketches, writings, photographs, idea, concepts, and any other property created or supplied by the agency to the client.  The terms and conditions for the purchase order govern (i) ownership rights in the purchased materials and any incorporated intellectual property (copyright, patent, trademarks); (ii) securing model and property releases relating to the materials and releases from any persons whose names, voices, or likenesses are incorporated or used in the materials; (iii) representations and warranties, and indemnities provided by the agency and client; and (iv) invoicing obligations. 

· Alternative Compensation Systems for the Advertising Industry. This document explains the traditional advertising agency commission model and outlines alternative, compensation structures — including cost recovery, and fee-based, incentive-based, and stock-based models.

Hiring Executives and Creative Talent

· Executive Compensation Checklist.  This checklist covers key topics that should be considered by employers in determining executive compensation packages for new employees or creative talent, including the compensation terms, methods for evaluating the position within the industry, negotiating the offer, and key elements of the written employment agreement.

· Employment Offer Letter.  This letter can be used by an employer when presenting an offer of employment to a new employee.  It sets forth the terms and conditions of the offer, including with regard to compensation and benefits, when and how the employment relationship may be terminated, and other requirements on which the offer of employment is conditioned.  

· Employee IP Rights and Confidentiality Agreement (or Non-Disclosure Agreement (NDA)).  This agreement between employer and employee can be used along with the employment offer letter (described above) for any new employee hires.  In the agreement, the employee agrees to keep confidential all employer/company information, and to affirm that all work product created by the employee within the scope of his or her employment belongs to the employer.

· Phantom Equity Checklist.  This checklist explains what a phantom equity plan (or phantom stock plan) is, how to establish one, and the advantages of implementing such a plan.  So-called “phantom equity” plans are employee benefit plans that are used frequently in the advertising industry to incentivize and retain key talent while permitting the owners of the agency to retain ownership and control.  As part of the plan, Equity Participation Units (EPUs) or Equity Appreciation Units are given to employees so that they have a stake in the growth and eventual sale of an Agency. 

Commercial Production

· Legal Review of Advertising Checklist. This document lists items and themes (e.g., children’s advertising, money and stamps, alcohol) which should be reviewed by legal counsel as early as possible in the creative process due to the legal risks associated with including these items in advertising.

· Commercial Director Agreement Checklist. This checklist covers key topics that should be considered when a production company is looking to engage a director for a television commercial, including things like the term of the potential agreement, approval rights and exclusivity, compensation terms, audit rights, requirements for members of the Directors Guild of America, and termination rights, among other terms.  

· Clearing Advertising and Promotion Creative Content Checklist.  This checklist describes a process for reviewing advertising and promotional materials which contain creative content for potential legal issues. This checklist outlines (i) the key legal rights that may be implicated by use of creative content in advertising (e.g., copyright, trademark, unfair competition, right of publicity/privacy, contract rights, and other special rules); and (ii) the types of content which typically implicate these legal rights and should be cleared prior to use, such as artwork, photographs, flags and governmental materials, film footage, music, and consumer or celebrity endorsements and testimonials, among other content elements.  

· Freelance Contractor Agreement. This agreement can be used by an advertising agency when the agency hires an independent contractor to create or supply materials or services.  It requires the contractor to (i) agree to keep confidential all agency and client information; (ii) affirm that all work product created by the contractor under the terms of the agreement is owned by the agency; (iii) agree not to solicit any agency clients or employees during the specified term; and (iv) indemnify the agency for any claims and damages resulting from a claimed breach of the agreement by the contractor.  This agreement should be used along with a purchase order, which should set forth more specific details about the materials and services the contractor agrees to provide to the agency, and the terms of compensation. 

· Consent & Release for Right of Publicity I.  This release can be used by an advertising agency to obtain authorization to use an individual’s name, signature, picture, likeness, voice, and biographical information for advertising purposes.  As part of the consent and release, the individual (or the releasing party) should acknowledge that he/she has no right of approval regarding the use of his or her personal attributes or information in the advertising materials (as described in the agreement), no claim to compensation, and no claim arising out of the use of his or her name, picture, etc.  The releasing party should also agree not to provide such services to a company competitor for advertising purposes for a specified term. 

· Consent & Release for Right of Publicity II.  This release is similar to the one noted above, except that it should be used to obtain consent from a model when using the model’s name, signature, picture, likeness, voice, and biographical information for advertising purposes. 

· Location Release for Film Shoot.  This release can be used to obtain consent from a property owner to film the desired property, including any signs or trademarks appearing on or near the property, and to use the resulting film for advertising purposes.

· Prop Release.  This release can be used to obtain consent to use, distribute, publish, exhibit, digitize, broadcast, display, reproduce, and otherwise exploit a prop (for example, a toy) for advertising purposes.  This release grants permission to use the prop itself, as well as any names, pictures, likenesses, signs, company names, trademarks, logos, designs, writings and any other materials of any kind included on the physical item itself. 

· Talent Agreement and Release I.  This agreement can be used by an advertising agency when hiring an artist to film a commercial, on behalf of one of the agency’s clients.  It includes provisions governing (i) the advertising materials that will be created to advertise the client’s products or services; (ii) the type of media in which the advertising materials will be used; (iii) the term of the agreement; (iv) compensation terms;  (v) the release of claims and representations and warranties by the artist; and (vi) the client’s indemnification of the artist for any claim or losses arising out of the use of the advertising materials, or the products or services advertised.

· Talent Agreement and Release II.  This agreement can be used when a celebrity artist is hired by an advertising agency on behalf of a client (or sponsor) to provide on-camera and other services (for example, where the artist will appear in television and radio commercials and also at promotional events) and where materials featuring the artist (for example, promotional and display materials, print, billboard, and outdoor advertisements) will be created and used for advertising purposes.  This agreement is written such that the celebrity artist must agree not to provide similar services to a client competitor for a specified term (the exclusivity period).  This agreement includes additional provisions specific to the use of celebrity talent in advertising.

· Producer’s Affidavit.  An affidavit should be obtained from anyone who is producing an advertisement attesting to all relevant factors of the advertisement, particularly where the advertisement either shows the client’s products or includes a demonstration of the product’s performance (i.e., a product demonstration).  Producer’s affidavits typically state the following: (i) the source of the products used – the products should be ordinary, and not specially prepared; (ii) the products were used in accordance with package directions and consumers’ actual use; (iii) the products were used as depicted in the advertisement; (iv) no special lighting or other effects were used in the advertisement; and (v) the ad or commercial looks the same as the actual event depicted in the ad.  In addition, the advertiser must have established that what is shown is consistent with what the consumer can generally expect in actual use of the advertised products or services.  The producer’s affidavit provided here is drafted for use with a television commercial. 

· Crew Non-Disclosure and Work-for-Hire Agreement.  This is a release that can be used for crew members working on the production of a commercial on behalf of a client.  It requires the crew member to agree to keep confidential all information concerning the commercial, and to affirm that the work product (i.e., the commercial), shall be a “work made for hire” for the client and thus owned by the client. 

Sponsorships and Endorsements

· Under the Radar Issues Arising from Sponsorship and Endorsement Agreements.  This checklist outlines key issues that should be considered when negotiating sponsorship and endorsement agreements in the sports and entertainment industries.   Topics include (i) obtaining the appropriate rights (e.g., marketing/media rights); (ii) negotiating for the ability to terminate or extend the relationship based on circumstances unique to these industries (e.g., including options, right of first refusal/negotiation); (iii) mitigating business risks to the extent possible (e.g., fee reduction or termination for changed circumstances like athlete/sponsor injury or if certain metrics aren’t met); (iv) obtaining flexibility from the sponsor, for example, to modify marketing assets or fees; and (v) preparing for hidden costs (e.g., stemming from third-party IP licenses, SAG-AFTRA pension and health costs, the replacement of marketing materials). 

· Endorser’s Certificate.  An endorsement, sometimes referred to as a testimonial, is when a person’s statements are used to promote a product or service.  This endorser’s certificate can be used to obtain written authorization to use a person’s (or organization’s) name and statements in advertising.  As part of the certificate, the endorser should confirm the accuracy of any statements attributed to him or her and that the statements quoted reflect the endorser’s current honest opinions, findings, beliefs, or experience.  The endorser should also undertake to inform the advertiser of any change in the quoted views in order to ensure that the views are current and accurate when the advertising is published in the future. 

· Hiring Endorsers Checklist.  This checklist highlights a number of issues to consider in negotiating with potential spokespersons, including (i) the products/product categories to be advertised; (ii) the services and advertising materials that are included in the guaranteed fee to be paid to the performer during the specified term (e.g., personal appearances, TV commercials, radio commercials, promotional events, still photographs); (iii) the term of the agreement; (iv) the territory or territories in which it applies; (v) guaranteed compensation; (vi) expenses; (vii) exclusivity, and (viii) permitted media in which the advertisements will be featured, along with other customary deal terms.

Branded Entertainment

· Outline of Key Issues. This document presents an overview of issues that may arise in the development, production and distribution of a branded entertainment concept. The document cites examples of branded entertainment executions, and identifies key deal points including ownership of content, financing, medium, exclusivity, termination, and statutory and regulatory considerations.

Selling Your Agency

· Pre-Sale Checklist from Seller’s Point of View.  This checklist covers a number of issues a prospective seller of an advertising agency should consider before setting out to find a buyer or entertaining an offer to purchase the agency, including things like how a seller’s motivations for selling should inform any final deal, how to develop a proper valuation of the agency, preliminary steps to negotiating a deal, such as due diligence and confidentiality and no-shop agreements, and strategies for negotiating and closing the deal.

· Exit Strategies.  This checklist covers reasons for selling an advertising agency, pre-sale preparations that should be undertaken by the seller, and the basic elements of a sale. 

Sweepstakes, Contests and other Promotions

· Your Chance to Win: Promotions Law in the Digital Age.  This presentation covers (i) the regulatory framework for contests and sweepstakes and the differences between the two types of promotions; (ii) social media promotions and recommended disclosures on the various social media platforms; (iii) contests which ask participants to submit user-generated contest and the associated legal risks; and (iv) text message sweepstakes.  

Litigation and Dispute Resolution

· Litigating and Resolving Advertising Disputes Outline.  This outline provides an overview of the actions an advertiser can take when it believes a competitor’s claims are unsubstantiated or otherwise false and misleading and the pros and cons of the various approaches, which include (i) direct contact with the competitor via a phone call or demand letter; (ii) direct contact with media/networks; (iii) filing a complaint with the National Advertising Division (NAD) of the Council of Better Business Bureaus (CBB), the advertising industry’s self-regulation forum for resolving disputes over truth and accuracy in national advertising claims; (iv) initiating a lawsuit in federal court by filing a claim under the Lanham Act to recover for injury resulting from false and/or misleading claims made by competitors; (v) filing a complaint with the Federal Trade Commission (FTC) asking it to investigate and file a complaint against a competitor for violation of Section 5 of the FTC Act, which prohibits false and deceptive acts or practices; and (vi) filing a complaint with a state Attorney General alleging that a competitor is violating state unfair business practices or consumer protection statutes. 

Twitter, Facebook and other Social Media Marketing

· Hot Topics in Digital Advertising for In-House Counsel.  This presentation covers (i) how brands can comply with the terms of various social media platforms, including those governing how brands interact with users, rights in user-generated content, and use of platform brand assets; (ii) the FTC’s guidance on digital media disclosures and endorsements; (iii) intellectual property implications of sharing/posting third party content in social media; and (iv) updates to various privacy laws, including the Children’s Online Privacy Protection Act (COPPA), the California Online Privacy Protection Act (CalOPPA) and Canada’s Anti-Spam Law (CASL), and the enforcement of the EU-US Safe Harbor. 

This document is not intended to create an attorney-client relationship. You should not act or rely on any information in this document without first seeking legal advice. This material is intended for general information purposes only and does not constitute legal advice. If you have any specific questions on any legal matter, you should consult a professional legal services provider.

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