In 2020, Fiverr had more than 3.4 million active buyers from more than 160 countries. In the U.S., 40% of workers generate 40% of their income through a side hustle, many using Fiverr to unite them with buyers. Fiverr’s Terms of Service is the agreement that controls the interactions between buyer and seller, but who really owns the intellectual property of the items being sold?
Intellectual property attorney Rachel Brenke talks about Fiverr’s Terms of Service and how she sees many intellectual property issues on the backend that user and contract attorneys just didn’t contemplate. She also discusses who owns the user-generated content and how both buyers and sellers may not understand who owns what at the end of the purchase.
Questions in this episode:
- Does responsibility lie with Fiverr, the buyer, or the seller?
- Who owns the rights to user-generated content?
- When stock photos are used, how does that affect the rights issue?
- Can you copyright and trademark Fiverr-bought material?
- What does confidential top secret mean?
The Fiverr Platform
Sellers on Fiverr offer their services in pre-priced packages that usually come in three different price ranges: basic, standard, and premium. Fiverr describes these packages with their copyright term “Gig” which is defined as “services offered on Fiverr.”
!["When I'm going to draft for intermediary type sites like Fiverr, where stuff is being created and rights are being transferred, I always look at what the responsibility of [the intermediary] is." Rachel Brenke](https://storage.googleapis.com/lawinsider-wordpress/1/2021/08/When-Im-going-to-draft-for-1024x576.jpg)
Fiverr Wants to Be Just the Intermediary
As freelancers send their works to the buyer, they upload the logos, content, or other work to the Fiverr platform. Attorney Brenke explains that Fiverr classifies this as “User Generated Content,” which Fiverr defines as “content added by users as opposed to content created by the Site.”
Fiverr wants the content clearly defined as user-generated because they want to be just the platform. Fiverr does not want to be viewed as a publisher or creator of any of the content purchased by the buyer. Fiverr reduces its liability by making the buyer and seller responsible for this content, while Fiverr is just the intermediary with the transaction.
Fiverr’s TOS clearly states Fiverr is not responsible for the content, and they do not check the uploaded content for copyright, trademark, or other rights or violations. They state that the user uploading the content, namely the freelancer, shall be solely responsible “for it and the consequences of using it.” This allows Fiverr and other similar sites to reduce their liability.
The Problem – Who Owns What?
Creative content producers are not going to know the intricacies of intellectual property rights. But, Fiverr puts the onus on them to have the knowledge and education to not infringe any of these rights. This area of law is complicated. Many attorneys do not even know the nuances of these intellectual property issues, attorney Brenke adds.
For example, the buyer might choose to purchase commercial licensing, which sounds great, but only gives the buyer a license and no ownership.
The Stock Photo Issue
The use of stock photos can cause additional problems. If you purchase a brochure or logo that is made using a stock image from Fiverr, you do not own that image. Getty Pictures owns the photo, and you get a license to use it. This is a significant difference that many users on Fiverr do not understand, according to Brenke. You might own some of the elements, like the artwork, but you do not own the photographs and therefore do not have copyright protection for your purchase. To compound the issues, the seller can license those stock images to thousands of other businesses.
Logo Design Commercial use license |
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| When an order through the Logo Maker is completed, and subject to payment, the Seller grants the Buyer a worldwide, royalty-free, non-sublicensable, non-exclusive, irrevocable license to use the Logo Design embedded with the Buyer’s brand name for any purpose, except for any illegal, immoral or defamatory purpose. There is no warranty, express or implied, with the grant of this license, including with respect to fitness for a particular purpose. Neither the Seller nor Fiverr will be liable for any claims, or incidental, consequential or other damages arising out of this license, the Logo Design or the Buyers use of the Logo Design. For the avoidance of doubt, the Seller retains all ownership rights to the Logo Design, and no ownership or copyrights are granted to the Buyer. |
You Might Not Own Your Logo
There are two ways to sell logos through Fiverr. The freelancer can use their artistic skill and talents to create an original logo outside the Fiverr system and sell it through the Platform. Or, the freelancer can create a logo by using Fiverr’s Logo Maker software. In the second case, the buyer often unknowingly gets no ownership or copyrights of any kind.
Attorney Brenke explains that the buyer cannot protect their purchase with a trademark or copyright, and they can’t exclude anyone else from using it. In short, the buyer does not own his brand. The seller retains all ownership rights and can sell it to other buyers.
But the TOS say that the Buyer is Granted All IP Rights
Adding to the confusion of who owns what, the Ownership section states that when the work is delivered, the “Buyer is granted all intellectual property rights, unless clearly stated otherwise on the seller’s Gig page description.”
Ownership |
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| Ownership and limitations: When purchasing a Gig on Fiverr, unless clearly stated otherwise on the Seller’s Gig page/description, when the work is delivered, and subject to payment, the Buyer is granted all intellectual property rights, including but not limited to, copyright in the work delivered from the Seller, and the Seller waives any and all moral rights therein. |
This statement by itself leads the buyer into thinking that they are purchasing all the intellectual property rights. The problem is that it also says “unless clearly stated otherwise” which can create conflict and confusion.
The Confusing Confidentiality Clause
Some of Fiverr’s language even confuses attorneys. For example, while attorneys customarily use confidentiality clauses in contracts, especially intellectual property contracts, Fiverr has a few unusual and confusing terms, even for legal professionals. The TOS states that “Sellers agree to treat any information received from Buyers as highly sensitive, top-secret and classified material.” Attorney Brenke says if she were a buyer or seller, her question would be, “What does that even mean?”
Are you getting your IP rights when you buy through Fiverr’s TOS? #Contractteardown Click To Tweet
Takeaway
Buying logos, artwork, and other creative content on Fiverr can be confusing when you want to purchase, own, and be able to protect your intellectual property. Many purchasers will step into the pitfall of selecting a commercial license, believing it gives them some type of commercial permission and transfer. Fiverr could undoubtedly do more to clarify the intellectual property rights of buyers and sellers.
But from a practical point, according to Brenke, the onus is really on the buyers in these situations. Buyers need to educate themselves and know what rights they are, or are not, buying. The first question your IP attorney should ask you when you do an intellectual property audit is, “Where was this created?”
Intellectual property can become extremely valuable in the future, so your clients should know the exact rights they are purchasing. Attorney Brenke’s advice is, “You have to really advise your clients to dig in and understand it.
Show Notes
THE CONTRACT: Fiverr’s Terms of Service
THE GUEST: Rachel Brenke is passionate about helping small business owners legally protect and strategize their businesses. She hosts the Business Bites Podcast and is the mothership for her legal educational brands of TheLawTog (for photographers) and FitLegally (for fitness industry professionals).
THE HOST: Mike Whelan is the author of Lawyer Forward: Finding Your Place in the Future of Law and host of the Lawyer Forward community. Learn more about his work for attorneys at www.lawyerforward.com.
If you are interested in being a guest on Contract Teardown, please email us at community@lawinsider.com.
Transcript
Mike Whelan [00:00:01] Hey, everybody, welcome to the contract tear down show from Law Insider, I’m Mike Whalen. The contract teardown show is what it sounds like. We bring on smart friends like Rachel here and we break apart some contracts. Rachel Brenke, how are you doing today?
Rachel Brenke [00:00:16] I’m doing well. Thank you for having me. Nothing like tearing down a contract first thing in the morning.
Mike Whelan [00:00:20] It’s it’s it’s it’s got sex appeal. It’s got energy. It’s exactly what the kids want these days. These darn millennials. I don’t even know if millennials are kids anymore. I think they’re like older now. And so we’re into gen alphabeat, whatever. But whoever is the kids these days, they love these contracts. What we’re going to talk about today is speaking of kids expanding into other employment environments is the Fiverr year terms of service. Let me show people this real quick, Rachel. This is the Fiverr terms of service for September of 2020, which is when we’re recording this. It is about sixteen pages. Seventeen pages. We’ve got all kinds of terms in here and that we’re going to cover. You can see in there the highlights from Rachel. So we’re going to cover some of these big points. But if if you guys don’t know, Rachel, if you can describe what Fiverr is real quick and why this is relevant to attorneys who advise businesses.
Rachel Brenke [00:01:20] Yeah, so when Mike invited me to come on contract tear down, I’m an intellectual property attorney, so I automatically went to areas where for many contracts, lawyers don’t do. A lot of people are falling. And it’s often in like end user license agreements or things like Fiverr, which is a site where buyers can get on and hire gigs. They call it gig at Fiverr, just like upward freelancer. Those other sites you can get things like logos, marketing materials, even articles drafted for you and all of that. And for me as an IP attorney, I see a lot of issues on the back end when contracts attorneys hadn’t contemplated the intellectual property issues. And so I know this is a little different than what you guys have been doing for this series, but I figure it was kind of a good way for me to get in a stand on my IP soapbox a little bit to help you all out.
Mike Whelan [00:02:09] We like a soapbox. Yeah. Guys, this is if you advise anybody who is an entrepreneur or a freelancer or, you know, somebody who does contract work, which it’s twenty twenty and that’s just going to become more and more people. We’re in the middle of a pandemic right now and these employment relationships are precarious. So I think in the future of work, you’re going to see a lot of this. So let’s let’s get to it. I want to start with I love that they have registered the term gigs. I find that fascinating. But specifically, they point out that gigs created on Fiverr are user generated content. There’s a link on there. I assume that’s because that’s a defined term that’s going to be covered later. What’s on your mind about this section?
Rachel Brenke [00:02:53] So for user generated content, it’s interesting and we run into this a lot in IP, especially since I represent a lot of creatives and entrepreneurs that are creating of content and creative works. Is that opt in sites like this or can be alleviated of liability, whether it’s trademark or copyright by the safe harbor type provisions when there’s user generated content? So one of the things that I always look at when I’m going to draft for this intermediary type site like fiber, where we have like a buyer and seller stuff’s being created and rights are being transferred, is what is the responsibility of Fiverr here? It’s going to be in the vein of user generated content. Like I said, they have a little less liability if those parties, the buyer and seller and so forth, are infringing. But it’s definitely important because there’s very specific requirements that allows for sites like Fiverr to be protected from or reduce liability when it comes to user generated content, which, by the way, user generated content is exactly what it is. It’s the users are generating the content. Fiverr in those sites are not generating the content. They’re just the intermediary.
Rachel Brenke [00:10:50] Yeah, and what’s interesting to me too is from my understanding of Fiverr, like you’re mentioning two different ways we can create the logo. There’s there’s the logo created this using Fiverr’s, proprietary system to create it, and then there’s the logo design. So like the seller can go into their own Photoshop, whatever and create it and they have their own intellectual property. What you’re identifying is the creation of the use of the usage through Fiverr’s system. And if you notice right there, it’s not giving the buyer any rights. So what happens with that? I log on Menlyn pandemic. I want to get my business going because I was laid off or I don’t want to go back to the office, got to get my logo created for my business. But if I’m not digging through here and reading in this, then that actually connects with the summary section at the top. It talks about that the buyers will have the rights to everything that they pay for through the gigs on Fiverr. It’s not true. Like if you dig in to here, I get a logo created. I have I as the buyer might you create it through me for Fiverr. I as the buyer don’t have any rights to protect that. That creator, that seller can turn around and create that fifteen hundred times for someone else. I can’t trademark it to protect it, exclude anyone else from using the same or similar one. I can’t have copyright protections on it. I don’t own my brand. And like I mentioned before, this, unless you dig into this and really split the hairs of it, just say using this system versus this system, the end user, the buyer is not going to know that they own it or not. And this just kind of trickles down even into like as an intellectual property attorney, I do a lot of trademark work and I’ll ask my clients, do you have the rights to this? And they’ll say, yes, well, my lawyers just go, OK, that’s great. I’ll say, where did you get it created? Because I want to know and I have to split down into these hairs of because of these terms right here. So we come to be very convoluted even for the buyers to be able to use it. And it actually, for what it’s worth, I mean, we’re tearing us apart a little bit. I, I, I don’t knock their business model on this. I like the way they explain logo creation this way. Logo design this way. Here’s the rights. I just wish it was better presented to the buyer and seller so they fully understood their rights and be able to enforce and utilize it going forward.
Mike Whelan [00:13:03] Well, especially when you’ve got very freighted terms that don’t have much of a definition. So I’m I’m looking at this confidential top secret. Any information received from buyers should be treated as highly sensitive, top secret and classified. I don’t even know what that means.
Rachel Brenke [00:13:19] Well, my brain automatically went to like the nuclear codes and a big red button in Washington, DC. I’m from the DC area, but I’m just like highly classified and I’ve had a clearance and all this stuff. But I’m thinking, what what does that even mean as the buyer or the seller, especially me as the buyer? I’m maybe I’m an attorney and I’m having Fiverr create something for a client of mine. I have seen that happen on there. That’s a whole nother ethics discussion we can have. But what what are the measures that the buyers have to protect that information? You know, it doesn’t provide any guidance to the buyer. It doesn’t really tell the seller. Now, on the flip side of that, if you go over to Fiverr’s privacy policy, their privacy policy is pretty good. You know, it talks about the data that they’re tracking, how they’re collecting it, what they’re going to do with that. I wish I could see that sort of diligence in the privacy policy also here in this one section.
Mike Whelan [00:14:09] Yeah, I’m thinking top secret and classified. I mean, that sounds like lawyer level protected. But, you know, these people, you know, they’re not they’re not encrypting their emails back and forth. They’re storing everything on Dropbox. I mean, they’re being very casual with the information that comes out. There’s a long section I won’t read this on representing and warranting by uploading to or creating content on the five or platform you warrant that you’ve obtained all rights, licenses, et cetera, et cetera. What’s bugging you about this section?
Rachel Brenke [00:14:38] This, I think, is one of those measures, again, for the whole UDC safe harbor type stuff. You know, Fiverr’s trying to alleviate themselves of any liability. So it’s putting the onus on the buyer or seller because it could be either side the buyer could be providing. Some of these elements that are going like into a logo or to a marketing material or the seller is going out on the Web and is procuring ClipArt, et cetera and so forth, to create something. So this is going for both sides, buyer and seller, saying that you have a right license, consent, permissions, power, et cetera, which is all legalese. Right. But this again, it’s not it’s only serving Fiverr. It’s not serving the actual users of the site. They’re not even going to understand what this means because so many have this knowledge. Well, I can just go on Google Images, grab an image, I stick it into Fiverr. And I’m representing I have it not to say that this is a bad thing. If I was Fiverr’s attorney, I would probably draft in a very similar way, looking at it from a user standpoint. So I’m going to try to be as fair and balanced when I look at drafting these sort of terms. This isn’t going to do any good, and I think the reason I have a big rub here is because I see a lot of IP infringement occur from these neat intermediary sites like this. And it’s hard because you know that they know that this stuff’s happening. You know, they’re not taking measures to prevent it and then they’re hiding behind Safe Harbor. So I think for here is not so much that it’s necessarily wrong to have it. I would love to see an advancement in how we utilize this. We can protect Fiverr, the intermediary sites, but let’s have partner this somehow with some knowledge to the buyers and sellers, because then that’s going to also help in the end benefit these intermediary sites like Fiverr, because then they’re not going to be having to deal with a whole bunch of intellectual property claims or otherwise.
Mike Whelan [00:16:21] So just for context, it is this terms of service. This is the same document that both the hirer and the hiree on file received. So when you say this doesn’t protect the users, you’re talking about both.
Rachel Brenke [00:16:33] Both? Yeah, it’s both. It’s buyers and sellers are both the users on the site. They do have their own separate section on Fiverr. That’s kind of like a tutorial guide for buyers, for sellers. Maybe we can incorporate that with this. I didn’t really see any glaring differences of the information over there. It was more like, this is how you hire a gig. This is how you do that. So for me, this is the only thing that I found regulating both parties.
Mike Whelan [00:16:58] Interesting ownership questions. It specifically says the buyer is granted all intellectual property rights, including, but not limited to copyrights for the work delivered from the seller. And the seller waives any and all moral rights there in. What does that mean?
Rachel Brenke [00:17:15] Yeah, so this actually is how I would love to see these sites when, you know, in the United States, when you hire a freelancer, whether you do it through an intermediary series, go on Twitter and you find someone to create a logo for you by default. The freelancer, it’s a ten ninety nine independent contractor retains all rights to whatever the intellectual property is that’s created. And so for here, one of the things that I’ve seen in the past, I can’t speak to the timing, but I’ve seen with Fiverr, Upwork, and larger companies. When they first came out the gate, they didn’t have the sort of language or it was very vague and loose. And so it gave a lot of questions about who owns that podcast, ah, who owns that logo. So this statement by yourself I’m happy with to know that the buyer, when I log on to Fiverr, the buyer, all the intellectual property rights can be transferred me. I can then go and trademark and I can copyright it, I can protect my brand, et cetera. The problem is and is right before I highlighted it says unless clearly stated otherwise and there’s a little conflict later on. Fiverr also has this option for commercial licensing, but when the user goes onto the site, the buyer goes on to buy the gig again. They’re probably not digging into this ownership here or they just scroll and see they own it all. That sounds great. But once you dig into the terms, if you select the wrong option on the gig, you’re then taken out of this of owning all intellectual property rights and being put into a commercial license only, which goes back to what we talked about before. You don’t own the brand that or the buyer doesn’t own the brand. And at that point, it just becomes very convoluted. So for me, maybe from a contract drafting standpoint, I see what they’re trying to get at, you know, unless stated clearly stated otherwise on the seller’s gig page description. And it has good language of transferring the intellectual property ownership to the buyer. But there’s so much conflicting elsewhere, like we’ve already talked about the logo creator and then also the other commercial license option. They all kind of conflict with one another, one more.
Mike Whelan [00:19:07] And then I’m going to ask you to tell me what the general principle is here that we can pull from this contract, the gig commercial use license. It says by purchasing a commercial use license with your gig order, the seller grants you perpetual exclusive nontransferable worldwide license to use the purchase delivery for permitted commercial uses. For the avoidance of doubt, the seller retains all ownership rights. What’s this bit mean?
Rachel Brenke [00:19:33] Yeah, so when you when a buyer logs on, let me answer that first. That sounds good, except it’s only a license. You don’t have ownership so that seller can go and create that logo ten times over. You can’t trademark and copyright it. So it sounds good, especially if you have a buyer that doesn’t really care about owning the intellectual property, which, by the way, attorneys, if you’re drafting contracts for these business owners, entrepreneurs, they need to own their intellectual property because they think they are anyway. So on the commercial licensing, the language by itself seems fine. But from a practical standpoint, when you go through Fiverr as a buyer to hire a gig, the default, if you notice we just talked about above in the ownership section, the default is that the buyer gets it. But if you don’t necessarily know, you haven’t dug into this and you select commercial license because you see commercial, you’re actually the buyers pulling themselves out of ownership and into only this license, which on its face is fine. But from a practical implementation standpoint, it doesn’t really serve Fiverr, I don’t think, because it’s having the rights remain with the seller, it’s. Actually, not rights remaining with Fiverr at all, but it’s hurting the seller in the end. I mean, I’m sorry, it’s hurting the buyer in the end, the sellers retaining the rights with the commercial license. And but it’s hurting the buyer because if they go through and they read that summary section at the top where it says you own everything that you buy on through a gig on Fiverr, that’s actually not accurate is once you dig into here, you see these conflicts.
Mike Whelan [00:21:05] There’s a lot of good stuff in there about if I’m drafting how to not have these sections conflict and make sure that you’ve got defined terms, you know, defined. But if I’m advising the contract, if I’m advising the entrepreneur or the freelancer, they don’t have leverage to say to Fiverr, hey, change this contract. What’s the principle here? How do I advise them, honestly?
Rachel Brenke [00:21:27] I mean, it’s digging. So here’s what the hard part is, Mike. Like, we’ve sat here and we’ve identified all these different conflicts and monitor. And so they’re going to fall into that pitfall of selecting commercial license, thinking that some sort of like commercial permission and transfer. So advising them. Unfortunately, the lawyer answer would be any time you go the IP created, just shoot me the terms as your attorney so I can review it. But from a practically speaking, we’re going to need to put we have to put the onus on the buyers in these situations. They need to educate themselves as his attorneys have to put the information in front of them and walk them through. I mean, this is one of the things that when we have clients come to us, when we do a legal audit, part of that is the trademark and copyright aspect. We say, where did you get your stuff created? And we already have a running list internally of all these different sites and these highlights what the conflicts and stuff are so we can advise them. Honestly, it’s almost like you cut the head off of one. You’re going to get 10 million others that end up in these pitfalls. If like I said, if I was Fiverr’s the legal team, would I necessarily have done anything different? I think I would have just clarified it a bit more in the summary section so that it’s also stronger if I were ever has any sort of claim and wants to use the safe harbor type protections from a buyer’s standpoint. Just got to read it. You just got to really advise your clients to dig in and understand it.
Mike Whelan [00:22:47] Reading contracts the worst. Rachel, thank you. Very good information, especially about how the IP rights change with a contract that you just casually sort of push buttons through. If people want to talk to you more about the IP right transfers that come into contracts, these kinds of issues, what’s the best way to reach out to you?
Rachel Brenke [00:23:06] Yeah, I am everywhere. Rachel Brenke eat Dash. Dotcom is my law firm and yes, I’m more than happy to help help you guys find resources. I have free resources. You can also send your clients if you’re not an IP attorney. But I love talking IP stuff. So Twitter is the place. So check me out there.
Mike Whelan [00:23:22] All the cool kids do that all day. Guys, thank you for joining us in the contract teardown show. Stay tuned. We’ll have more of these. If you want to participate. All you have to do is email us at Community@Lawinsider.com will have information at lawinsider.com/resources for this episode and for future episodes. We’ll see you next time. Thanks again, Rachel.