Canada: Website User-Generated Content: Avoiding the Pitfalls

With the availability and popularity of Web 2.0 functionality, corporations are increasingly encouraging their website visitors to participate in the overall web experience by uploading user-generated content (UGC). UGC exists in a variety of forms, such as photographs, videos, podcasts, articles and blogs. Through UGC, users can provide their input and express their creativity in a number of exciting ways.

The incorporation of UGC into corporate websites can produce many benefits to its hosts (e.g., boosting website traffic, attracting new customers, generating brand awareness and increasing customer loyalty). At the same time, companies seeking to use UGC should be aware of the potential risks associated with such activities and take all the necessary steps to limit their exposure. These risks include loss of brand image; claims of false advertising; and liability for infringement of intellectual property (IP), defamation and invasion of privacy.

Loss of Brand Image

When a company allows customers and website visitors to develop and contribute web content, it risks losing control of the company brand image. Although many customers may genuinely love a particular company or product at the core of a website, others may delight in the opportunity to disparage the company or product. A company that intends to include UGC in its website should consider the merits of including both automated and manual moderation services to screen uploaded material. In addition, the company should make significant efforts to articulate the website's terms of use, clearly defining acceptable and prohibited content and conduct.

Claims of False Advertising

UGC, by its very nature, has the capacity to blur the distinction between commercial content (i.e., advertisements) and non-commercial content (i.e., entertainment and commentary). A recent example relates to a contest launched by Quiznos, the toasted-sandwich chain. It invited the public to submit home-produced videos depicting Quiznos' sandwiches as superior to Subway's. Subway, which is Quiznos' top competitor, has since sued Quiznos in the Connecticut Federal District Court, alleging that the home-produced videos made false and misleading claims and depicted Subway's brand in a derogatory way.

While disputes over advertisements are not new, the video contest raises a novel legal question: should Quiznos, because it ran the contest, be liable for content it did not create? Since any decision rendered in this case could have significant implications for the use of UGC on company websites, this case bears close scrutiny.

Liability for Infringement of IP, Invasion of Privacy and Defamation

By providing customers with the opportunity to post UGC on its website, a company must be diligent in limiting its liability for IP infringement, privacy violations and defamation. One way to reduce exposure is to ensure that the website's terms of use:

  • instruct contributors to restrict their submissions to material for which they own all rights;
  • provide guidelines for use of trade-marks, names and likenesses of other people, and copyrighted materials owned by third parties;
  • prohibit users from posting any material that violates these provisions;
  • permit the company to remove any material that violates the terms of use; and
  • include language indemnifying the company for all posted UGC.

Companies should also consider implementing a program to moderate content and take down any materials that that are identified as IP infringements, violations of an individual's right to privacy, or instances of defamation of character — particularly since, in the event of a claim, an indemnity from an individual content creator may not provide much in the way of protection.

The US Digital Millennium Copyright Act is another tool to protect companies interested in using UGC. This Act insulates an online service provider in the US from copyright liability if the service provider adheres to certain prescribed safe harbour guidelines and promptly blocks access to allegedly infringing material (or removes such material from its website) upon notification of infringement from a copyright holder or the copyright holder's agent.

Companies should also ensure that they obtain broad rights from the contributor to use the UGC. One way to do this is for the company to receive a license from the contributor at the time of submission giving the company the right to "use, copy, edit, publish and distribute the material, in any media, forever, as well as the right to use the contributor's name, likeness and performance."

Through this license, the contributor will retain ownership in the UGC but the company will have the ability to use the content to fulfill its website objectives. This approach is generally more palatable to contributors and less open to legal challenge than the alternative approach of requiring contributors to assign ownership of their UGC to the company.


Encouraging website visitors to submit original content can be an effective way to attract new customers and develop consumer loyalty, but incorporating UGC can be disastrous if companies have not addressed the issues involved. Companies that wish to fully exploit this trend must consider employing all of these protective measures: carefully wording your site's terms of use, monitoring and removing offending materials, and obtaining sufficient rights from the creator to use the UGC.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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