LLC for a Content Creator

[Azfa]

Jurisdiction

New Jersey

I am a content creator and I publish content on YouTube, TikTok and the likes. I have four concerns regarding liability:

1. Sometimes I use content that I do not have the rights for. For example, I would download a clip from CNN and post it on my channel. Will an LLC protect my personal assets in the event of a copyright infringement claim?

2. In order to bring my content under the LLC protection umbrella, do I need to say this on camera that "this video is a production of so and so LLC"? Or can I just write that in the description of the YouTube video?

3. Is there anything I need to say within the LLC's operating agreement or articles of organization to better protect my personal assets from lawsuits?

 

[Tax Counsel]

I am a content creator and I publish content on YouTube, TikTok and the likes. I have four concerns regarding liability:

1. Sometimes I use content that I do not have the rights for. For example, I would download a clip from CNN and post it on my channel. Will an LLC protect my personal assets in the event of a copyright infringement claim?

No, because in that instance both you and the LLC would be liable for the damages. LLCs basically protect you from personal liability for debts of the LLC that you have not personally guaranteed and from personal liability for the actions of employees or other members of the LLC. A good general rule to remember is that you are always liable for your own negligence and misdeeds. A limited liability entity like a corporation or LLC does not shield you from that. If your operation is a one person show, a LLC will not be helpful in shielding you from a lot of the obligations of the LLC.

I suggest you consult a lawyer in your state familar with the law regarding limited liability entities so you can find out exactly what a LLC would do, and no do, for you and how to make the most of what the LLC offers by way of asset protection.

 

[army judge]

Sometimes I use content that I do not have the rights for. For example, I would download a clip from CNN and post it on my channel. Will an LLC protect my personal assets in the event of a copyright infringement claim?

You acknowledge knowing you have no right to use certain content, yet you forge ahead using said unowned content.

Think about your admission, mate.

You're potentially destroying yourself, forget about what an LLC is supposed to do.

What it won't do is protect and shelter willful, wanton behavior.

As suggested by @Tax Counsel , you need to retain counsel.

You might consider the consequences of willfully violating society's laws.

 

[welkin]

1. Sometimes I use content that I do not have the rights for. For example, I would download a clip from CNN and post it on my channel. Will an LLC protect my personal assets in the event of a copyright infringement claim?

If you are using the clip for the purpose of criticism, comment, news reporting, teaching, scholarship, or research, the Fair Use doctrine permits a use of a copyrighted work without the copyright owner's permission.

There are literally hundreds of videos posted each day on YouTube that do exactly that without permission.

It depends on the nexus of the clip and your intended use of it. Google Fair Use doctrine and read up on the subject.

 

[Tax Counsel]

There are literally hundreds of videos posted each day on YouTube that do exactly that without permission.

And literally millions of videos posted on YouTube that violate copyright law. So, as a warning, Azfa, don't take what you see on YouTube as representing what is permitted under copyright law.

It depends on the nexus of the clip and your intended use of it. Google Fair Use doctrine and read up on the subject.

I agree. And if in a particular case it is not clear if fair use applies or not, either don't use it to avoid the issue coming up, or consult an attorney who practices copyright law to determine how strong a case you have for asserting the fair use defense. Note that fair use is a defense, meaning the copyright holder can still sue you and you'll incur the costs involved with that, and it will be your burden, Azfa, to prove the fair use doctrine applies. That can get expensive.

 

[welkin]

And literally millions of videos posted on YouTube that violate copyright law. So, as a warning, Azfa, don't take what you see on YouTube as representing what is permitted under copyright law.

There aren't millions of videos posted on YouTube that violate copyright law. If you have some data to show that I would be interested in seeing it.

The reason I say that is because YT has a very very strict DMCA take down policy and together with all the copyright firms that run copyright infringement software 24/7 on uploaded videos, if there are infringements they get taken down in very short order. If a video poster gets a notice of infringement and they don't take it down, prove it does not infringe, or they decide to sue under the DMCA, then and only then they may be sued. So it not automatic that someone posts a video that someone may claim infringement on and the poster gets sued.

There is a US copyright attorney that has a YouTube channel and he analyzes just about every copyright suit filed in Federal court. He has over 1,100 videos doing such. He is a bit eccentric but very thorough on the cases and the law. I have watched several hundred of his videos over the years. For someone that does not practice copyright law, his channel is a good source of information.

https://www.youtube.com/@lawfulmasses/videos

 

[Tax Counsel]

There aren't millions of videos posted on YouTube that violate copyright law. If you have some data to show that I would be interested in seeing it.

The reason I say that is because YT has a very very strict DMCA take down policy and together with all the copyright firms that run copyright infringement software 24/7 on uploaded videos, if there are infringements they get taken down in very short order.

The problem is that while copyright infringement of large corporation copyright protected media is often flagged early because they have the resources to constantly ferret out violations of their work, a lot of the copyright violations out there are use of the copyright of material of individuals or small organizations hold being used by others without their consent. Recall, too, that copyright infringement does not occur just with the video material, but also with music clips and other material. While major corporations and copyright law firms make a good effort to find violations of copyright of their material (or client's material) my observation has been that a lot gets missed, too, again especially copyright material held by persons/organizations that are not major corporations or renowned artists. And a fair number of what does get flagged is not flagged right away and taken down before a lot of people have had the chance to view it. While I do not know the exact number of copyright violations on YT (and I don't think anyone does), there are a lot of them, hence the warning not to think that all videos posted on YT comply with copyright law or to think they are good examples of what is permitted.

 

[zddoodah]

Sometimes I use content that I do not have the rights for. For example, I would download a clip from CNN and post it on my channel. Will an LLC protect my personal assets in the event of a copyright infringement claim?

Maybe. Read this: Piercing the corporate veil - Wikipedia

In order to bring my content under the LLC protection umbrella, do I need to say this on camera that "this video is a production of so and so LLC"? Or can I just write that in the description of the YouTube video?

Neither is strictly necessary, but it would be unwise not to be abundantly clear that the LLC is the entity behind the production.

Is there anything I need to say within the LLC's operating agreement or articles of organization to better protect my personal assets from lawsuits?

If you're looking for "magic words" that will be dispositive of the issue, those don't exist.

No, because in that instance both you and the LLC would be liable for the damages. LLCs basically protect you from personal liability for debts of the LLC that you have not personally guaranteed and from personal liability for the actions of employees or other members of the LLC. A good general rule to remember is that you are always liable for your own negligence and misdeeds.

I disagree with this to the extent it is phrased in absolute terms. This isn't an issue of negligence. If an LLC commits copyright infringement, the members of the LLC are not going to be personally liable in the absence of a successful alter ego argument.

 

[flyingron]

I attended a lecture with the Alphabet VP in charge of YouTube. They have a pretty aggressive rights prescreening on the shear volume of stuff being uploaded. Videos that the system can recognized as carved out of rights holders who have an arrangement with YT don't even see the light of day. Even the music gets screened. Some publishers have a deal with YT to just get their monetization (and a link to buy the real music) on such things, some get banned.

In addition to worrying about being sued, you need to be very careful on YT. You look like your infringing, and they'll cut off your monetization. You get too many strikes, and you're ability to upload stuff goes away.

 

[welkin]

I agree. And if in a particular case it is not clear if fair use applies or not, either don't use it to avoid the issue coming up, or consult an attorney who practices copyright law to determine how strong a case you have for asserting the fair use defense. Note that fair use is a defense, meaning the copyright holder can still sue you and you'll incur the costs involved with that, and it will be your burden, Azfa, to prove the fair use doctrine applies. That can get expensive.

You are under a misconception that Fair Use is just a defense to be used if being sued for infringement. Fair Use is a right authorized by law in the DMCA. In March of 2016, the United States Court of Appeals, Ninth Circuit said so.

The Court also stated that any copyright holder that files a DMCA takedown notice without first determining if the alleged infringer's use of the material is Fair Use will be liable for actual and nominal damages. And that any alleged infringer may sue the copyright holder if they did not make a reasonable good faith effort at determining if the use was Fair Use or not.

I think you would benefit from reading the opinion.

Lenz v. Universal Music Corp., 815 F. 3d 1145 - Court of Appeals, 9th Circuit 2015 - Google Scholar

 

[Tax Counsel]

You are under a misconception that Fair Use is just a defense to be used if being sued for infringement. Fair Use is a right authorized by law in the DMCA.

That's true, and nothing in my post says anything different. I think you are reading more in my response than is there. The fact of the matter is that if the rights holder sues the alleged infringer the alleged infringer will have to defend the case asserting that he/she/it met the requirements for fair use. And that is all my previous post says. This is no different from any other right. I did not say that it is an affirmative defense, which the court case you cited takes some time discussing. But I'm not saying it is an affirmative defense. Look at my post again, nowhere there did I use that phrase.

In March of 2016, the United States Court of Appeals, Ninth Circuit said so.

That court opinion does not contradict what I wrote above. That case involves whether the rights holder must consider whether the use may be fair use before issuing a take down notice. The court concluded that it must do that. It doesn't address my statement at all. I did not say that fair use was an affirmative defense. My take is that you seem to think I did, but reread it and you'll see it is not there. What the court case you linked does is cite with approval the statement in the Bateman case that the better view of fair use is not as affirmative defense but but rather a right, and that Bateman quote also says "Regardless of how fair use is viewed, it is clear that the burden of proving fair use is always on the putative infringer."

And that matches what I wrote when I said:

Note that fair use is a defense, meaning the copyright holder can still sue you and you'll incur the costs involved with that, and it will be your burden, Azfa, to prove the fair use doctrine applies.

And that is exactly the same point I raised: fair use must be proven by the defendant being sued, and thus is a defense to the claim of infringement. In this case the defense would be that the defendant had the right to use it.