If you’re reading this, chances are you’re familiar with the Internet, online news sites and blogs. Chances are also high that you have used the Internet to find or learn about sex in some way, shape or form (if not, click around the site a bit more, you’re bound to find something good). Although sex and socializing are the first things many of us think of when we fire up Firefox® or Safari® (because really, who uses Internet Explorer® anymore?), there is also an amazing array of business opportunities available on the World Wide Web.
However, before you rush out and decide to set up an online business, or to take your business online, or even before you start blogging or reviewing sex toys or some other sex-related online business, be sure to consider the legal implications of your actions. The Media Bloggers Association reports that an increasing number of lawsuits have been filed concerning blogging issues, and as states face ever-increasing deficits, they are turning to online businesses as a source of untapped tax revenue.
Though there is no clear-cut rule of law for Internet related businesses or bloggers as of yet, there are definitely things to keep in mind if this is something you are considering. Also, keep in mind that just because you aren’t making money from a website you run, it doesn’t mean you don’t need to treat it like a business. The below guidelines apply to any site on the Internet, not just those that actually make money.
* Use of images – You probably realize that you cannot use another person’s image without the owner’s permission (and yes, this even applies to Google images). This rule also applies to images used in blogs, even if the blog is merely for informational (non-advertising/non-commercial) purposes. (There are certain “fair use” exceptions, however erring on the side of caution and obtaining permission is never a bad idea). When dealing with a sex-related business, use of images becomes even more of a hot button issue, as you will want to have appropriate releases and proof that any humans appearing in your images are over the age of 18. These releases are technically only required if the models are nude or in sexually related situations, but there is no clear definition of these words, so I generally caution clients to obtain a release (often called a 2257 release) in most circumstances.
* Proper use of trademarks – Ever wonder how competitors can use each other’s names in advertising without facing trademark infringement claims? So long as the user indicates who the mark owner is and uses the ® or ™ symbol, there is generally no possible claim, unless the user makes a false statement about the competitor or their product. This rule applies to blogs as well as traditional advertising, and to any use of another person or company’s trademark. Even if you think the use is complimentary, be sure to use the appropriate symbol and indicate the owner of the mark. There is a lot of misinformation, particularly in the sex industry, related to trademarks and the use of the ®, but a quick check of the trademark records via the U.S. Patent and Trademark website (www.uspto.gov) will determine whether someone does indeed hold a registered mark, therefore allowing/requiring the use of the ®. If your website, blog or even you have a name other than your legal name that has become somewhat known, obtaining a federal trademark may be a good way to prevent others from using it without your permission.
* Taxes – Even the Internet isn’t safe from taxes. However, this wasn’t always the case. Not that long ago, most people shopped online confident that their purchases would not be subject to sales tax (unless they were buying from a merchant located in their state, and the merchant had their web store set up to correctly collect such tax). However, as states began to run deficits, they realized that these online purchases were an area where, in their opinion, they were giving money away. Enter the rise of the “use tax” and “use tax audits.” Many states have begun to subject all businesses (and in some cases individuals) to audits of their online purchases, assessing interest and penalties where it could not be proven that such sales were tax-exempt or that sales tax was collected and paid. If you sell things on your website, even if you operate only as an affiliate of another site, be sure to check that you are applying and collecting (and reporting) sales tax appropriately.
* Laws – If you run a cam or sex-related website, it is best to be sure that whatever you are broadcasting, reviewing or showing doesn’t run afoul of obscenity or other laws. Things that may be fine to show in some states may be outlawed in others (and whether this complies with the First Amendment may not be a fight you want to undertake when/if a local law enforcement presence contacts you). Do some research on the state where you are located and other states, and then consult a professional to determine whether you need to block access from certain states or (generally more likely) need to include a disclaimer.
Though it may be unlikely that your little blog or sex toy review site blows up into the next Internet sensation, no one can predict whether that is certain. For this reason, and for your own peace of mind, it’s best to consider what legal and tax-related issues your web presence may involve BEFORE you become the next viral star.