Instagram's Island of Misfit Terms

Santa's elves aren't the only ones who have been working feverishly before the holidays. The lawyers for Instagram recently posed new Terms of Use for the popular photo-sharing service, and after a public backlash put Instagram on the Internet's naughty list, they're back at their office workshops hammering out another revised draft.

Counterfeit Chic has had several inquiries from fashion folks uncertain about what Instagram's new terms will mean for them.  If the terms as written take effect on January 16, will Instagram have the right to sell their names and likenesses without permission?  Would it be possible for a brand to use a model in an ad without paying a fee?  Could a competitor legally copy a photographed design or trademark?

Although Instagram --or its PR team -- insists that it never intended to do any of these things, the fashion community has a legitimate basis for concern. There are plenty of instances where companies felt free to exploit others' names and likenesses without permission or payment, so why trust a company to respect your rights when its lawyers expressly take them away?

Better watch out ...

As South Park cleverly noted in its classic (albeit crude) episode on iTunes updates, most people don't bother to read online terms of service.  However, the announced changes to Instagram's terms illustrate why this can be a big mistake.  

Posting a photo on any social network site raises at least three significant legal concerns:

  • ownership of the photo itself;  
  • right of publicity in regard to the use of your name or likeness; and
  • privacy and intellectual property rights in any other material posted to or generated through use of the site.

Ordinarily, U.S. copyright law protects photos, and a patchwork of state laws recognizes each individual's right of publicity, limiting the use of your name or likeness without permission.  But accepting terms of service like Instagram's can wipe out those legal protections with a single click.

What's naughty and nice

For anyone wishing to keep control the rights in material on Instagram, the first four paragraphs in the section entitled "Rights" raise substantial problems.

Paragraph 1: Instagram's license to use your photos and other user data

Although Paragraph 1 states that a person who uploads a photo to Instagram retains the copyright, it goes on to grant Instagram a "non-exclusive, fully paid and royalty-free, transferable, sub-licensable, worldwide license to use the Content that you post on or through the Service." 

This establishes a clear baseline: unless there are any other limits stated in the terms, Instagram can use your photos and other user data any way it chooses, in commercial or noncommercial transactions, without obtaining your permission or paying you fee. It can also sell or sublicense the right to exploit your photo and data to third parties.

Paragraph 1 goes on to state that this worldwide, non-exclusive license is subject to Instagram's privacy policy, which also has revised terms as of January 16. Although the privacy policy states that Instagram "will not sell or license your information to third parties outside Instagram" or its affiliates (i.e., Facebook) "without your consent", the policy also includes an "except as noted" clause. 

The "except as noted" clause matters, because the privacy policy expressly states that by registering for Instragram, "you consent to the transfer of information ... and the use and disclosure of information about you." In this context, "information" includes both your user data and the photos you upload. 

The privacy policy states that it respects the choices you make regarding the use of your photos. Nonetheless, when this provision takes effect on January 16, 2013, what that means does not appear to be clear. The current terms state that "Content not shared publicly ("private") will not be distributed outside the Instagram Services," but the first paragraph of the updated Rights section does not include this provision.

Paragraph 2: Instagram's unrestricted license to sell you photos and other information to advertisers

Even if there were any ambiguity regarding your consent to give Instagram an restricted right to use your photos, name and other information, Paragraph 2 gives Instagram an unfettered license to exploit your material by selling it to third-party advertisers. 

To help us deliver interesting paid or sponsored content or promotions, you agree that a business or other entity may pay us to display your username, likeness, photos (along with any associated metadata), and/or actions you take, in connection with paid or sponsored content or promotions, without any compensation to you. 

This means exactly what it says: if you are a designer, model or indeed, anyone else, being on Instagram means that you have given Instagram the right to sell everything--your pictures, your username, your likeness, your metadata (including your personal name and address), even what you do on Instagram to an advertiser for use in ads without payment or prior notification.

Therefore, if you are a model, international brands from Coca-Cola to Viagra could use your name and likeness in an ad without having to pay you. They could also advertise your views of their photos as an implicit endorsement.

If you are a designer, knockoff artists could advertise using your name, your face, your photos, your copyrighted textile designs or jewelry, and even your trademark. And competitors could track your views on Instagram.

Minors are also expressly covered by this consent, at least in theory.  Instagram states that any underage user on the site represents that parental permission has been granted to sell all photos and user data to advertisers -- although it's not clear that a court would buy this.

Paragraph 3 - Instagram's right to post commercial material without notice

Paragraph 3 is a gift for any stealth marketing campaign that uses your name, image or other material. Its language is straightforward: "you acknowledge that we may not always identify paid services, sponsored content, or commercial communications as such."

In other words, even if you are on the lookout for the use of your material in others' advertising, it's entirely possible that it is appearing in seemingly noncommercial content that is actually advertising in disguise. This paragraph also means that Instagram has no obligation to tell you when your material will be used in an ad. 

Paragraph 4 - Instagram's rights when someone else uploads a photo of you, your design or your trademark

Tech icon, actor and ugly sweater pioneer Wil Wheaton raises an equally important question in regard to publicity rights and other IP: what happens when you're not the one uploading the photo?

The answer is somewhat complex.  Assuming you did not give the uploader permission to post the photo, you have not waived any of the rights you might have in your name, likeness or photographed material. 

However, that does not mean Instagram won't sell it.

According to Paragraph 4, anyone who posts content to Instagram represents that they have a legal right to do so.  Morever, uploaders represent that they have the right to make the content available for Instagram to exploit under the new terms. 

For Instagram and its attorneys, this means that they would see no legal barrier to using or to selling your name, likeness and other material as if you had posted it yourself.

Of course, you would have a right to try to enforce your rights in a lawsuit, but even then Instagram has created a way to get itself off the hook.  Paragraph 4 also provides that if there are any "royalties, fees, and any other monies owed by reason of Content" posted on Instagram, the uploader agrees to pay them all!

Instagram's Terms of Surrender?

Just this afternoon, Instagram's PR team tweeted an acknowledgment of the public backlash and announced that the company will address it soon.

Instagram's Tweet of Surrender?

Even if the updated terms are withdrawn in their entirety, the controversy illustrates the dangers that may be lurking in legalese.  Indeed, current terms of service for Instagram and other social networks might include licenses and waivers that could be detrimental to your personal or company brand if exploited to their fullest potential.

And a lump of coal from Santa in the stockings of Instagram's policymakers won't necessarily ward off future Instagrabs, especially now that Facebook investors are expecting to see gold (if not frankincense and myrrh)