Wesley Henderson
Disclaimer: This article is designed to be very helpful, but please be aware that it is general information and not legal advice specific to you. Wesley Henderson recommends contacting an attorney for customized advice but hopes this information helps you in your business journey!
I was fresh out of law school, working for a big law firm when I first started listening to the Smart Passive Income podcast. I was immediately inspired because, like me, the host was a business professional who went from a “normal job” to becoming a successful entrepreneur. Every week I looked forward to hearing a new story, tip, or new way of thinking about entrepreneurship. Without SPI, I would likely have never even thought of starting my own law firm, but it has changed my entire career (and life).
Starting my own business has allowed me to choose employees who share my values and to follow other pursuits, including a non-profit, Driving for Downs, and a slew of other businesses. The entrepreneurial mindset has helped me grow professionally and personally, and it is all thanks to a simple podcast.
Combining my passion for the law and my interest in podcasts, I’ve delved into the legal aspects of operating a podcast, and I’ve learned a lot since opening my firm in 2014. This article outlines five steps to help you stay out of trouble.
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Unique Challenges of Podcast Law
Historically, assets have been easily classified into subsections like inventory, equipment, property, etc. However, since the beginning of the digital age, classifications have become increasingly difficult. This led to the rise in intellectual property law, which focuses on protecting creators and their creative works, which is what primarily covers podcasts.
Unlike other assets you can protect with door locks, security cameras, and insurance, podcasts should be protected by trademarks, copyrights, and contracts. This ensures creators are protected from others stealing their ideas or infringing on their creative rights. So, if you own a podcast, it’s crucial to review intellectual property law and other related laws.
Step 1: Protect Your Podcast Name with a Trademark
For months, you have spent endless hours on your podcast. Things are finally starting to come together until you receive a letter in the mail from a fancy law firm in California that says “CEASE AND DESIST” in using your podcast name.
Do you have to rebrand, do you need an attorney, is all of your time for nothing?
This worst-case scenario, unfortunately, happens quite often. For example, you may want to start a podcast about crime scene cleanups and call it Crime Junkie, but that name already belongs to a podcast that talks about criminal cases from around the country. This small mistake can be quite costly and even require you to rebrand and pay an attorney
How do you prevent this from happening?
The good news is that it’s pretty easy to avoid infringing. You should start by researching names online, hashtags, etc on the United States Patent and Trademark Office website to ensure no one is already using your name in the same industry. To learn more about choosing your name, watch this video.
If you haven’t picked a name for your podcast yet, then there are two aspects you should consider:
- Make sure the name you choose is not already being used and/or trademarked. Your goal is to identify a name that can be yours and that has no confusion with any other podcast name. The more unique, the better.
- You will eventually want to register your trademark so no one else can use your name. When to register your trademark is a judgment call based on your budget, but the sooner, the better.
Step 2: Protect Your Business and your Personal Assets with an LLC
Whenever my wife and I go out to eat, we always scan the latest Google reviews. Even with the most well-liked restaurants, you inevitably find those two-star reviews that seem to always find something wrong and something to complain about. I believe that most people are good, but I also know all about these two-star reviewer personalities because I end up dealing with them many times in representing my clients (and they are largely what inspires this next step).
Those difficult people are the same ones that write unwarranted bad reviews, file lawsuits, and threaten your business. So once you have a name picked, you need an LLC or its equivalent to protect your business and personal assets.
An LLC will separate you from your company and guard your personal assets. If your LLC gets sued by an individual for money, damages, or anything else, it is the LLC that will be sued and not you personally. That’s the magic of the LLC: it limits personal exposure even in the worst of scenarios.
Starting an LLC may sound like a daunting task but it can be a very simple process. There are two things you should consider:
1. Create an Operating Agreement
- With your LLC, you should create the governing document for it called an operating agreement. This private document establishes ownership percentages, operating rules, and other things. (To learn more about operating agreements, watch this video.)
2. Separate Bank Account
- I also recommend that you get a separate bank account. This allows you to keep your business entirely separate. It’s a great business practice for your bookkeeping and helps ensure you maintain the liability protection you want from your LLC.
- Important Legal Tip — be sure to run all income and expenses for the business out of the LLC account, and do NOT use it for personal expenses!
If you have any questions about how to file an LLC, please visit our site, Drafted Legal, to learn more and get the help you need.
Step 3: Use Contracts to Protect Your Money, Time, and Business
As an attorney, I have received many phone calls with stories similar to this one:
Wesley, a person I met at Home Depot said he needed help with an irrigation issue. Since I own an irrigation business, I offered to come over and look. I went over and was able to fix the problem. But then he had another problem that he thought I said I would fix. He also disputed the price we agreed upon. So, not only does he want me to do more work than I agreed to but he hasn’t even paid me. What can I do?
Things get lost in communication. While oral contracts can be enforceable, it is always preferable to have a written contract because then you can concretely prove the terms of the agreement.
The beauty of the contract is not just in making it easy to win a lawsuit but also it usually prevents the dispute from ever happening. When the parties take the time to put all their expectations on one document, it becomes quite clear what’s expected, so it avoids misunderstandings.
Contracts set expectations and make your life easier down the road. Here are some general tips when creating a contract:
- Take a few minutes to clarify anything that might not be obvious.
- Make sure you address things like money, deliverables, timeline, etc.
- Make the contract easy to understand and as simple as it can be.
This habit of clarifying expectations and then getting the agreement signed will dramatically reduce your chances of ending up in a dispute. You’ve already done the hard work to make sure you are on the same page (and you’ll have the signed agreement to prove it).
In the wide world of contracts, here are a few your podcast business would benefit from:
Guest Release
The guest speaker signs a guest release, allowing you to use it how you see fit and make derivatives of it, whether it be shorts, reels, or YouTube content. This ensures you won’t have issues in the future with your guests, like the guest trying to have you remove or attempt to control the content later.
For example, if you have a chef on your podcast and his episode blows up in popularity because of his beef tenderloin recipe, he may later want you to take it down with the hopes that he can get all that traffic to his website or podcast instead of yours. Well, if you had him sign a guest release, he cannot force you to take it down because you have a clear agreement. The release gives you permission to do exactly what you are doing (and it also releases you from any liability for doing so).
Employee and Independent Contractor
If you use independent contractors and/or employees, it’s important to lay out the terms of that relationship. This includes everything from payment to timelines to deliverables. These all need to be outlined as clearly as you can.
If you have independent contractors creating intellectual property for the business (such as logos, ebooks, etc.), your contracts need to state that the LLC owns this intellectual property. Inherently, an author owns their works of art, so you need to expressly state that it is a work for hire and that the ownership of such work is transferred to the LLC. Otherwise, you may end up with a dispute over intellectual property ownership down the road.
Sponsorship Agreement
You must have a written agreement if you have advertisers and/or sponsors. For example, suppose you hire a social media guru to market and advertise your business, and they overstep by using material that infringes on another company’s trademark. You need the option to terminate the contract or limit liability. This is when a sponsorship agreement would come into play, because it should include termination terms, payment terms, delivery dates, etc. This ensures your business is protected.
Disclaimers
I’m a lawyer, and I’m giving general information here. It’s designed to help you do a better job with your legal framework, but it’s not customized to you personally. It’s still good and helpful. See what I did there? This is my disclaimer. My disclaimer is not obnoxious; just honest and highlights my limitations.
Disclaimers are necessary for your podcast to protect you from something said on the podcast. What people say can be misinterpreted or misused. For example, if you are a fitness coach operating a healthy lifestyle podcast, you should use a disclaimer such as the one I use above clarifying that the information and advice is general and not specific. Also, if you’re not trained as a physician or nutritionist, then just state that clearly. You’re trying to clearly explain any limitations your information may have. When drafting a disclaimer, it’s best to not assume people know those limitations, so state them clearly.
To purchase all the templates you need for your podcast, Drafted Legal has attorney-drafted templates here.
Step 4: Own Your Podcast Intro Music to Stay Out of Trouble
Although they say don’t judge a book by its cover, many judge a podcast by its intro. So while it may be tempting to play the theme song to Skyfall when talking about foreign intelligence or use the new Taylor Swift song when talking about her new album, this can be a dangerous minefield.
Using someone else’s material can be complicated and very expensive. So instead of going down the rabbit hole of how we can use these famous songs, we recommend that podcasts use original music or purchase music you have the rights to.
If your budget is not limited and you’ve identified a must-have song, go for it (and use an attorney to help with the process).
However, if you’re on a budget, save that money and headache for another day and stick with something you own that you know will not cause you legal problems.
Step 5: Stay Compliant with the FTC as You Monetize Your Podcast
The Federal Trade Commission (FTC) doesn’t regulate podcasts because they are not “broadcast radio;” however, they do regulate podcast endorsement.
If you are reviewing, endorsing, advertising for, or sponsored by a product or service, then you need to disclose that under FTC regulations. For example, if you operate a podcast about cooking appliances and a company pays you and sends you a box of utensils to try and rate, you should disclose that you did not pay for the products. In general, if someone pays you to say something or sell something, disclose it.
A good rule of thumb is to be upfront with your audience, whether it’s a sponsor or an affiliate link. Learn more here from the FTC.
Let’s Simplify: A Legal Checklist for Podcasts
To summarize: if you follow these important legal steps, your podcast will be off to a great start with a proper foundation:
- Pick a Podcast Name (that you can own)
- Get an LLC (with an operating agreement and bank account)
- Own your intro music
- Use Contracts
- Comply with the FTC
Much of this can be done on a budget with some research and know-how (but if you have the budget, you can also get a lawyer to help) or with a reputable online legal services company like Drafted Legal. Try to use attorney-drafted templates and websites with reliable information. You can always submit questions on Drafted Legal’s website too!
We hope this article clarifies what you need to do legally so you can hit record. Best of luck!
Pat Flynn
