Five Important Legal Issues for Online Novelty Stores

  

 

Five Important Legal Issues for Online Novelty Stores

 

By J. D. Obenberger, 
Attorney at Law
Chicago, IL 

obiwan@xxxlaw.net

 

               This piece was written for AVN's Novelty publication and its target audience is those who sell novelties online. Since the writing of this article, the DOJ has amended the requirements concerning the contents of the Section 2257 Disclosure Statement; the name of the actual human being who serves as custodian of records need no longer be disclosed in the Statement, but he may be identified by title alone; also, the date of production no longer needs to be disclosed there, though producers must record it.                               
 

             The business of selling erotic novelties online possesses obvious appeal to entrepreneurs getting their first start in online commerce: Independence, freedom to set one’s own hours, the potential to make substantial money without substantial up front costs, and for many, a strong sense of personal fulfillment.

But no business opportunity worth much exists without risk, and legal risk in particular. Selling sex toys on the Internet carries its own distinctive risks. As an entrepreneur, you must become aware of them, size up your operation in terms of compliance, and make smart changes to reduce your risk.

While this article cannot hope to address all of those issues, it will present the most obvious dangers. You should consult with an attorney experienced in this area before you proceed into or further continue online sales of sexual devices.

 

1. Selling Sex Toys is a Crime in Some States.

To those of us who live in parts of the US that consider themselves enlightened (I’m thinking about the Blue States here) it seems like a natural thing that vibrators and dildos and other more creative novelties should be available in stores and online for anyone who wants them. It may be surprising to learn that some states have laws criminalizing the sale and distribution of sex toys, but it is true.

Though it genuinely should seem troubling in light of the United States Supreme Court’s decision n Lawrence v. Texas (2003) that the Texas law against consensual sodomy could not constitutionally stand against the privacy rights of persons in their homes, as recently as February, 2007, the federal courts have upheld criminal statutes in Alabama criminally proscribing the sale of “any device designed or marketed as useful primarily for the stimulation of human genital organs.” Williams v. Morgan, (11th Cir., February 14, 2007). The Eleventh Circuit court, sitting in Atlanta, determined that “public morality” survives the decision in Lawrence, so that states can legitimately enact laws designed to protect that public morality; The Eleventh Circuit distinguished the unprotected sale of sex devices from the protected sodomy in Lawrence by the nuance that private sodomy in the home is constitutionally different – and more protected - than the public commerce in sex devices.

A number of states which did have such laws have seen them overturned by the courts using different reasons in different jurisdictions. For example, the Louisiana prohibition against “obscene devices” was overturned by that state’s Supreme Court in State v. Brennan (2000) on the grounds that the statute did not bear any rational relationship to a legitimate state interest. Challenges in some other states are just now beginning.

The Bottom Line: Don’t sell and ship sexual devices in Alabama or any other state prohibiting them unless you wish to fund a test case. Consult with a lawyer experienced in the representation of online or mail-order novelty sales to create a “Don’t Ship” list of jurisdictions.

 

2. Does the Packaging Comply with Section 2257?

            What in the world do sex toys have to do with Section 2257? (There probably are readers who wonder if I can write a grocery list without mentioning that statute!)

            When a Disclosure Statement is required under Section 2257, it is a five-year maximum felony to distribute material without that notice. For many years, the scope of 2257 was limited to the actual plumbing connections of sex, masturbation, bestiality, and sadistic and masochistic abuse. That changed on July 27, 2006 with the enactment of HR4472: Images and videos actually depicting “lascivious exhibition of the genitals or pubic area of any person” are now regulated by the statute, including its Disclosure Statement obligations.   

There exists some possibility that a retailer or distributor may retain in its inventory materials containing depictions that are now newly covered by the July 2006 amendments to Section 2257 – but without bearing the mandatory Disclosure Statement; This category would most likely consist of packaging materials containing photographs that depict the genitals or public area in a lascivious manner.

When it is required, the Disclosure Statement must contain:

* The name of the work, unless it is otherwise “prominently” set out elsewhere in the work;

* The date of its production, manufacture, publication, duplication, reproduction, or reissuance;

* The address at which the records required by law may be inspected;

* If the producer is an organization, the name and title of the natural person employed to maintain the records.

The required statement must be displayed in typeface that is no less than 12-point type or no smaller than the second-largest typeface on the material and in a color that clearly contrasts with the background color of the material.   

It is not the responsibility of the retailer to assure the accuracy of the information contained in the notice; He discharges his responsibility in the law by ascertaining that a notice containing the required information is affixed in the manner also prescribed by the statute and regulations.

The Bottom Line: Packaging material should be closely inspected.  The packaging of novelties produced offshore or by small, independent domestic producers, as well as novelties in long and constant production deserve special scrutiny..

 

3. Email Marketing: CanSpam

 

            If you chose to market your products via email, your advertisements are subject to the CanSpam Act, which provides serious penalties for their violation. CanSpam is addressed to unsolicited advertisements, and not to “transactional” communications with persons who have had dealings with you or those who have consented to receive email from you.

            The CanSpam Act is complex, but the most critical elements you should know about include:

            a. You can’t use misleading header identification or spoof origination from another email address.

            b. You can’t use deceptive subject headings.

            c. You must include a valid “repy-to” email address.

            d. If the recipient objects to receiving your emails, you must remove him within ten days. Caution: Make sure this is covered during any vacation or illness.

            e. You must indicate in the email message that it is an advertisement or solicitation.

            f. If the advertisement is sexually-oriented, specific words must appear in your subject header.

            e. You must include an “opt-out” mechanism.

            f. You must include a physical address for communications to be sent to you in the real world by snailmail.

            The Bottom Line: Before using email to advertise, develop and fine tune your understanding of the requirements of law, and establish protocols to comply with an attorney skilled in this area.

 

4. Advertise Only with Images and Copy that You Own or Have Permission to Use

 

            Any time online publishers (that includes you!) use an image to advertise or promote, there are at least four dimensions that must be considered with respect to each image. Unless all four dimensions resolve satisfactorily, the image should not be used. Each image must be assessed for obscenity, Section 2257 compliance, Copyright or license to use the images – in the way you want to use them, and release of personal rights of the models depicted for publication of the model’s image – in the way you want to use it.  The use of images pilfered from cyberspace is bad business for many reasons beyond the obvious liability for copyright infringement that will probably arise. It also makes Section 2257 compliance impossible. Because you don’t know the origin of the images, you are in a tough position to defend if the age of the model is asserted against you, and you open youself, of course, to a lawsuit brought directly by the model.

            Advertising copy is subject to copyright law, too, and you should only use copy that you have written, bought, or licensed.

            The Bottom Line: Don’t Steal Advertising Content.

 

5. Don’t Misrepresent Your Merchandise

 

            From every possible perspective, it makes eminent good sense to market your materials in a manner that is accurate and comprehensive, and to avoid exaggeration and misleading statements and partial truths like the plague. The federal government and a large, if not universal, segment of the states have enacted legislation which vigorously protects against consumer fraud and deceptive business practices, usually awarding attorney’s fees and punitive damages to the disgruntled customer who may sue you in an inconvenient location. You should have enough personal familiarity with your products to determine their quality, durability, effectiveness, and amenability to habits of good hygene. Don’t sell cheap crud. Take care of your customers. Be generous in all of your policies. You will not only avoid expensive chargebacks, but you will have invested in the best kind of advertising, satisfied customers.

            The Bottom Line: Be an honest and helpful merchant.

 

 

Copyright 2007-2011 J. D. Obenberger. All rights reserved.

This article is written to generally inform the public and does not provide legal advice nor does it establish an attorney-client relationship. If you have a legal issue or question, contact a lawyer. If you are arrested, make no statement and contact a lawyer immediately.

Joe Obenberger is a Chicago Loop lawyer concentrating in the law of free expression and liberty under the United States Constitution, and his firm has represented many owners, employees, and customers of adult-oriented businesses, both online and in the real world. He can be reached in the office at 312 558-6420. His e-mail address is obiwan@xxxlaw.net. 

J. D. Obenberger and Associates are available for consultation, representation, and defense of adult-oriented businesses.