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User Generated Content (ucg) Presents Big Advertising Oppoutunity for Small Online Businesses

User generated content (UGC) is a rapidly growing phenomenon on the Internet. Popular social networking sites that rely on UGC for content include YouTube, MySpace, Facebook, Friendster, just to name a few. Generally, UGC refers to various kinds of media content produced by regular, every-day people (as distinguished from traditional media producers).

But UGC is not just for social networking sites anymore. It’s now moved into online advertising, but there’s a catch — claims for false advertising.

In a recent case, Subway sued its competitor, Quiznos, claiming false advertising. This case may offer some valuable insight into pitfalls to avoid.

UGC Offers Business Opportunity For Small Online Businesses

One way for small online businesses to create inexpensive advertising is to let your customers do it for you — through UGC.

Quiznos is one of several companies that have extended UGC to advertising; however, a recent suit by competitor Subway reveals pitfalls involving false advertising claims. Doctor’s Associates, Inc. v. QIP Holders, LLC, 2007 WL 1186026 (D. Conn. April 19, 2007).

Subway v. Quiznos

As part of a nationwide call for user-generated ads, Quiznos posted 3 user-generated examples of ads that compared its prime rib cheese-steak sandwich to Subway’s competing sandwich. Subway complained that the ads contained false and misleading statements and sued Quiznos for false advertising under the federal Lanham Act.

Quiznos filed a Motion to Dismiss the false advertising claim based on 47 U.S.C. Sec. 230 (“Section 230”) which immunizes internet service providers and website operators, from being liable for what their users post. The U.S. District Court in Connecticut ruled that Section 230 was not appropriate for a Motion to Dismiss, but that Quiznos could still raise it later as an affirmative defense.

While the highly technical distinction made by the Court is of little interest to Internet marketers, the important question is whether Quiznos will actually succeed with a Section 230 defense later. The Court pointed out in a footnote in the ruling that Subway would be authorized to learn through Discovery the extent to which Quiznos was involved in the user’s videos. It would appear that Section 230 would shield Quiznos from liability even if Quiznos provided some technical input for the videos, but probably not if Quiznos went beyond technical input to participation in the statements at issue.

An additional issue regarding the applicability of Section 230 to this case is whether Subway’s claim is an “intellectual property” claim. Section 230 expressly provides that it is not available as a defense to an “intellectual property” claim.

Conclusion

We won’t know whether Section 230 will be a defense to liability for Quiznos until the case is fully adjudicated. This future ruling promises to be of significant interest to Internet marketers, particularly small businesses.

About the Author

Chip Cooper is a leading intellectual property, software, and Internet attorney who advises software and ecommerce businesses nationwide. Chip’s 25+ years of experience include 20 years as Adjunct Professor of Computer Law at Wake Forest University School of Law. Visit Chip’s http://www.digicontracts.com site and download his FREE newsletter, Website Law Alert, and also learn about his “Do-It-Myself” and “Do-It-For-Me” service options.

I just opened a nationwide contract mortgage processing company after 20 years processing loans for companies?

What is the best way to advertise my business to mortgage companies and loan officers. I have a website now, but other than that, what is the best bang for my buck when it comes to advertising methods.

In addition to the good answers you’ve gotten so far…

Join local mortgage professional organizations, like AMPW, NAMB, and MBAA and attend the meetings to meet prospective customers. Do what the Title Company and MI reps do – bring stuff to the offices. Bake cookies or brownies and bring them in with your card. (Remember to not violate RESPA.)

And remember, keep you message to them broadcasting on WII-FM – What’s In It For Me. Tell them how you will clear their plates of the stuff that keeps them from making money – the paperwork – to allow them time to spend on the things that make them money – finding customers and closing loans.

And once you get customers, treat them like royalty and do the job right and quickly. It’s easier to keep customers than get new ones.

Good luck.

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