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It’s Not Just Legal Jargon!

Don’t overlook provisions for Choice of Law, Forum Selection and Arbitration About a month ago, I started thinking about topics to cover in this column and right about the same time I had to upgrade to the latest version of Microsoft Office. As I was installing the software, a message popped up on my monitor that asked me whether I had read and understood the terms and conditions of the software upgrade. I can honestly say that I didn’t spend any more than 3 seconds reading the terms and conditions before I checked the box and proceeded with the installation. Seriously, does the average user actually spend the 10 hours it would take to read the 300-page document? No way! The average user wants to get on with the installation and use the damned software. Somewhere around the “Your installation is 35% complete” mark, the topic of this month’s article became clear. The adult industry is no different than any other industry: Every adult business is engaged in the process of being a party to a contract on a daily basis. The subject matter of the contract may change but ultimately the contract contains some very important provisions that are…

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Mounting Breaches: Are You Paying Enough Attention to Internet Security?

For those of you who haven’t been paying attention to the news, there is an epidemic in the online world and it’s getting worse. Last month JPMorgan Chase announced that 76 million households were affected by a recent security breach in which many individuals had their personal information stolen by hackers. To put things in perspective, JPMorgan Chase has 65.8 million open accounts including 30.1 million checking accounts. It’s the second largest mortgage originator in the U.S., and the third largest auto-lender not owned by a car manufacturer. According to the Identify Theft Resource Center, there have been 579 data breaches this year, a 27.5 percent increase over the same period last year. In addition to JPMorgan Chase, reportedly, Target, P.F. Chang’s, Jimmy John’s, Neiman Marcus, Michaels and Sally Beauty Supply have all recently fallen victim to massive hacks and data theft. Millions of pieces of data including names, birthdates, addresses, telephone numbers, drivers license numbers, credit card numbers and more are now in the hands of individuals with bad intentions. This sensitive data is being traded, sold and utilized unbeknownst to individuals all over the world. Sadly, the media doesn’t find all data breaches juicy enough to make the…

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Revenge Porn: Is a Federal Criminal Ban Imminent

According the National Conference of State Legislatures, “revenge porn” is defined as “the posting of nude or sexually explicit photographs or videos of people online without their consent, even if the photograph itself was taken with consent. A spurned spouse, girlfriend or boyfriend may get revenge by uploading photographs to websites, many of which are set up specifically for these kinds of photos or videos. The victim’s name, address and links to social media profiles are often included with the images, and some websites charge a fee to have the materials removed.” In case you haven’t noticed, numerous states across the U.S., the U.S. federal government and various provinces in Canada have been quite busy in 2013 and 2014 in their attempt to fight back against the revenge porn epidemic. Revenge porn has been labeled by lawmakers as a form of “cyberbullying” that is a wildfire raging out of control. Numerous jurisdictions have already passed or are in the process of passing laws that make revenge porn a serious crime. For example, Ariz. Gov. Jan Brewer, recently signed a law that makes it a felony to post intimate images of others online without their consent. Under Arizona law, perpetrators of…

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Legal Sense: Tradeshow Etiquette

Instead of writing an article about a specific legal issue that the adult industry may be facing at the moment, I decided to write about something that has bothered me for quite some time. There is no shortage of tradeshows in the adult industry; in fact, some may argue that there may be too many tradeshows at the moment (I’ll save that discussion for another day). Nonetheless, like many other mainstream industries, tradeshows are an invaluable tool in the adult industry. The people who plan and present tradeshows spend a great deal of time and energy planning, organizing and ensuring that the events go smoothly for the benefit of its attendees. One thing that we can all agree on, is that tradeshows are expensive. Tradeshows are expensive in both money and your time. In terms of money, the costs associated with attending a tradeshow include, travel expenses, lodging, meals, entertainment and admission. Then of course there is your time; time away from your family, time away from the office, time away from doing whatever is included in your daily routine. So with the large financial and personal investment required to attend a tradeshow, you should be making the absolute most…

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Acquiring Online Businesses

2013 was a busy year in the online adult industry; especially in terms of business purchases, sales and mergers. Online businesses were purchased at record prices in 2013 and I expect that 2014 will continue the trend. This is the first of a series in which I will discuss some of the more important do’s and don’ts when purchasing an online adult business. This article is not meant to replace the services of an attorney nor is it meant to be an inclusive list of everything that a purchaser should do. Part 1 will focus on a purchase from a buyer’s perspective while Part 2 will focus on a purchase from a seller’s perspective. Keep watch for Part 2 in XBIZ World. Due Diligence I am always amazed by how many purchasers contact my office in the course of purchasing an online business and have no idea what they are buying. The seller of an online business or any business for that matter is always going to present its business in the most favorable light in order to attract more potential buyers and obtain a better purchase price. As the saying goes “don’t buy a book by its cover;” do…

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Obscenity Charges against Florida Store Owner Dropped

BARTOW, Fla. - Polk County prosecutors dropped all charges yesterday against a store owner who was charged with distribution and possession of obscenity with intent to sell after detectives purchased 10 adult movies at a Sunoco gas station and convenience store in Dundee, Fla. "There will be no jail time, no conviction and no fines" for Minakashiben Patel, adult industry attorney Lawrence Walters told XBIZ. Walters and another adult industry attorney, Corey D. Silverstein, represent Patel and worked together to strike a deal with prosecutors. A total of 20 misdemeanors and one felony charge were filed against Patel, relating to adult DVDs sold from her gas station and convenience store in Polk County. Patel also was charged with sale of drug paraphernalia, based on selling Detox brand energy drink. Those charges were dismissed early on. "The obscenity charges have now been dismissed per an agreement with the state, where Ms. Patel agreed to make a $2,000 donation to a drug education and prevention fund," Walters said. "She further agreed to abide by existing state obscenity laws and not to sue the sheriff or prosecutors as a result of the arrest. “Corey and I are proud of the result we obtained…

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Learning from the Financial Crisis in Cyprus

There are a multitude of reasons why you may want to have your adult entertainment business set up outside of the United States. Some of the reasons include favorable tax laws, decreased individual liabilities, and staying outside of the jurisdiction of state and federal agents and prosecutors, just to name a few. For the record, I am not suggesting that you pack up your bags and move your corporate entity and money overseas. Nor am I suggesting that setting up your corporate entity and bank relationships overseas is a bad idea. I am merely urging you to carefully analyze all of the legal and financial aspects of your decision whether or not to pursue an overseas business entity and banking relationship. Imagine that you were running a highly successful adult business that you spent a tremendous amount of time, money and energy setting up overseas. Imagine that your business was financially strong and that you had loads of cash in the bank. Finally, imagine that your hard-earned cash was being kept in your overseas bank account, safe from taxation. Sounds pretty good, doesn’t it? Now, I want you to imagine waking up one morning and realizing that you don’t have…

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The Proper DMCA Takedown Notification

On October 28, 1998, President Bill Clinton signed into law the Digital Millennium Copyright Act (the “DMCA”). Since becoming valid law, the DMCA has been controversial to say the least, with many demanding reform. For many in the adult industry, the DMCA has been helpful and beneficial in intellectual property protection while others in the adult industry feel that the DMCA provides too much protection and has allowed “content pirates” to abuse the DMCA for its own financial gains. The adult industry is no stranger to the DMCA. The exponential growth of “Tube” style websites over the past several years has led to an unquantifiable number of lawsuits, disputes, articles and controversies. There are enough articles from adult industry experts regarding the pros and cons of the DMCA and there are equally enough articles from adult industry experts regarding intellectual property protection. The purpose of this article is to examine an often neglected but important piece of the DMCA. This article will discuss what must be included in a properly formatted DMCA notification of claimed infringement (commonly referred to as a “Takedown Notice”). Pursuant to the DMCA, specifically, 17 USC § 512(c), (c) Information Residing on Systems or Networks At…

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Let’s Talk Content and Licensing Agreements

As I write this column, the holiday season has arrived and with it the end of the year. And when the new year rolls around, the adult industry enters into one of the busiest trade show schedules of the year. In the month of January alone, AVN presents an array of shows in Las Vegas: the AVN Adult Entertainment Expo—both the B2B show and the Fan Fest—the Adult Novelty Expo, the AVN Awards Show, and InterNext. Also in the month of January, XBiz presents XBiz 360. Trade shows are a fantastic way to network, learn, improve and grow as a member of the adult industry community, and I urge you to take advantage of the many benefits of the trade shows. I have been attending AVN-sponsored trade shows for over a decade and I am continuously amazed by the great seminars and speakers put together by the AVN team. There is a good chance that you are reading this article while you are at one of the trade shows mentioned above and I encourage you to attend as many seminars as possible. Don’t be afraid to step into a seminar that you don’t think affects your particular business; you never…

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Silverstein Legal Welcomes Lawrence Walters

Attorneys Corey D. Silverstein and Lawrence Walters (firstamendment.com) announced that effective December, 2012, they have entered into a mutual of-counsel relationship. Walters and Silverstein will serve as of-counsel to each others law firms in order to expand the services, resources and locales of both firms. The of-counsel relationship will permit the two firms to share resources, strategies, research and experience for the benefit of all of their respective clients. Of-counsel is often the title of an attorney who works at a law firm but is not an associate or partner. Welcome Larry; its great to have you!

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