Intellectual Property Concerns for Sponsors of Promotional Contests and Sweepstakes

Abstract

Marketers are always looking for more effective ways to entice consumers, with the goal to build a brand and sell more products and services. Long ago, armed with the knowledge that people enjoy winning prizes, savvy promoters began offering promotional contests and sweepstakes, which encourage consumers to participate in a marketing initiative in exchange for the chance to win certain giveaways. Winners of sweepstakes are chosen by luck of the draw, while contest prizes are typically awarded to entrants who best perform a given task. When administered effectively, these promotions can create buzz around a particular product or service, drive traffic to a storefront, produce user-generated advertising content and build marketing lists.

As time progressed, sponsors began redeploying the age-old concepts of promotional contests and sweepstakes on the Internet through the use of high-tech websites and social media platforms. However, as promotions have become more interactive and publicly accessible, sponsors become more susceptible to certain legal risks surrounding intellectual property (or “IP”) – including images, names, symbols, designs, written text, inventions and other materials. This article explores many of these IP-related legal concerns and considers some steps that sweepstakes and contest sponsors may take in an effort to minimize risk.

Keywords: intellectual property, IP, sweepstakes, promotional contests, marketing, copyright, trademark, patent, right of publicity, trade secrets, user-generated content, UGC, DMCA, Lanham Act, USPTO, Subway, Quiznos, Fifty Shades of Grey, Facebook

JEL Classification: K00, K10, K12, K20, K30, K39, M30, M31, M37, O34