• by Karl Greenberg , March 12, 2009

Marketers may realize that communication, participation and engagement are essential to interactive marketing, but do they know when consumers are playing fast and loose with their intellectual property (IP)?

No surprise if they don't--since the law is lagging on the subject, attorney Brian Murphy told this week's Association of National Advertisers conference on advertising law and business. "Until two or three years ago, we were being spoon-fed content--but today, everyone in the world is an author. All of us are creators and critics. The dark side is that all of us are infringers," said Murphy of Frankfurt Kurnit Klein & Selz.

He shared a table for a Charlie Rose-esque luncheon chat with PepsiCo's senior legal counsel Brian Nurse on day two of the conference. "So, is there anything left of intellectual property in the digital age?" Murphy asked, rhetorically. He answered in the affirmative, but his analysis made it clear that marketers should keep their legal hounds in the kennel for all but the most egregious IP interlopers.

What brands have to learn, he said, is to play nice with consumers in the IP sandbox. Pepsi has done that well, he said--both by letting consumers use Pepsi IP with a fair degree of impunity on fan and even detractor postings, and by setting "guardrail" rules of engagement with user-generated-content (UGC) programs that allow consumers to participate in branding.

In a notable 2007 contest, Pepsi let consumers design its can for a limited run, and for a Doritos UGC program, it allowed consumers to create Super Bowl ads for the snack brand. "When you invite consumers in to play with your brand, you have to protect your brand," said Nurse. "You have to have lots of control around it, and set the rules."

Examples: no mention of third-party brands, even partner brands (the NFL, in the case of the Doritos program)--and rather than let consumers pick any music, "give them a body of songs as opposed to sampling other music," thus obviating legal challenges from publishers, and then decide at which point in the program one takes ownership of creative. For the Doritos campaign, said Nurse, PepsiCo did not take ownership of creative "until we got to five finalists."

With regard to Pepsi-fan and detractor sites on social media sites like Facebook, Nurse said the company stays mum most of the time. "But," he added, "it is important to have a relationship with the social networking sites to tell when to take [a site] down."

So what constitutes actionable offenses against a brand? Murphy offered legal cases past and present, including a recent prank ad on AdRants--ostensibly by Virgin America--which showed the US Airways flight in the Hudson River with the tag: "Fly Virgin America" and Virgin's logo. Virgin, said Murphy, compelled AdRants to take it down. When the site held off, the airline sued.

"This is an example of crossing the line, of defamation," agreed Nurse. Another "ad" from 2003 was more problematic, and illustrated the challenges surrounding viewer perception. The ad, for VW's European market Polo, was slick enough to seem legit, and was a huge hit online. The ad shows a terrorist in a keffiyah wiring himself with explosives. He gets in his Polo, drives to a busy cafe, sits in the car and detonates the bomb. The explosion is contained within the vehicle, ostensibly demonstrating its durability.

Murphy said that challenging the ad would require VW to demonstrate that viewers would believe VW made the ad. "But you have to take into account the way the world has changed and the likelihood of confusion. People understand that everyone is an author and are therefore less likely to be confused by the Internet." In 2005, Volkswagen filed a "cease and desist" action against the producers; the outcome is unclear.

The idea of protecting IP by claiming tarnishment of brand or dilution of the brand is, per Murphy, also very controversial even today--and therefore, risky to pursue. The classic example of such a case was "Coca-Cola vs. Gemini Rising," tried in the 1970s around a t-shirt that read "Enjoy Cocaine" in Coca-Cola-style script. Said the ruling judge: "A strong probability exists that some patrons of Coca-Cola will be 'turned off' rather than 'turned on' by defendant's so-called spoof with resulting loss to plaintiff."

Murphy says there is less likelihood of such success today because people are savvier. "You should now ask yourself, is the brand really being harmed? And can you find the infringer." The ubiquity of UGC has created a "whack-a-mole" situation, he says, in which going after brand-tarnishers can cost a lot of money and backfire in the end.