UGC Usage Rights: A Strategic Guide for DTC Brands

Picture this: you’re scrolling through social media and stumble on a post where your brand was mentioned. 

The user went on and on about how helpful your product was.

Naturally, your face lights up. 

“We’re trending,” you tell a colleague with a smile on your face.

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“Sounds like we’ve found UGC ad creatives for our next marketing strategy," they reply. 

Hum okay, let’s back up a bit. 

You see, in today’s world, being tagged to a post doesn’t mean you can use it in your content marketing campaigns. 

Unless the poster consents, using it is kinda illegal. 

Shocking, right?

But does that mean you can’t use UGC content from happy customers? 

Yes, you can but only if you get the usage rights for it.

Lucky for you, that’s pretty easy to do. And we’re gonna show you how in this guide. 

But first, let’s look at what ‘usage rights’ means. 

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What Are UGC Usage Rights?

So, let’s cut to the chase. 

UGC usage rights are simply the explicit permission you get from a social media user or content creator to use their content for marketing purposes. 

When someone creates any type of content you like, say a video, song, or image, it belongs to them.

In legal terms, it’s called their ‘intellectual property’ and they have rights over it. 

“But it’s online, anyone can see and use it.” 

That’s correct. 

However, the question is did you ask the owner before using it?

To avoid any run-ins with the law, it’s good practice to ask for permission.

Here’s how Joe Sinkwitz, CEO of Intellifluence describes it:

“UGC rights, which are usually found within the terms of service of most influencer platforms, dictate how a brand is allowed to use the work produced by an influencer. The brand did not create this content but is allowed to use it commercially, hence the rights of use.”

Now when you ask, the UGC creator can decide to let you use it for free or request payment. 

For a limited or unlimited time. Exclusive or non-exclusive. 

That’s entirely up to them.

“Hold up a bit, you’re just describing copyright to me.” 

Eh, not really. 

Yes, they are very similar. But quite different at the same time. 

Aaand here’s how…

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Copyright vs. usage rights

Think of copyright as your full name. 

It’s yours by default (in a way). 

You don’t have to do a special registration for it. That’s why you can fight when someone steals your identity.

That’s similar to what copyright is. It’s an exclusive legal right someone has to edit, sell, publish, or distribute content they create. 

According to Joe Sinkwitz, “Copyrights … are a way of establishing who was the creator.” 

You get a copyright once content is created. No one else can use or claim the content without your permission. 

Content usage rights, on the other hand, are when the copyright holder grants permission to people to use their content. 

Like when your partner asks for your hand in marriage and you agree to take their surname. 

So copyright is like Batman and usage rights are its noble sidekick.

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What Are the Legal Implications of Using User-Generated Content in Marketing?

In 2020, popular singer Jennifer Lopez was sued for posting a photograph without permission from the photographer. 

Of course, the photograph was of herself. 

But that didn’t stop the copyright infringement lawsuit. 

While the content is probably not a typical UGC, the legal implication of not asking permission remains the same. 

Truth be told, using UGC for your marketing campaign can “make it rain.” But only if you follow the right steps.

If you don’t, you could be sued using any of these legal frameworks. 

• Copyright violation: Remember the creator owns the copyright to their content by default, using it without their permission is a copyright violation. They can sue for that. Even if it was from a hashtag submission campaign or similar. 
• Right of publicity: You try to use someone’s personal data or identity information for advertising purposes, you’re inviting litigation, especially if the person in question is a celebrity. You want to avoid using someone’s name, picture, etc., for promotional purposes. 
• Misappropriation of likeness: This is when you use a creator’s image for ads without permission. You’re just asking for trouble.
• Defamation: A customer gave a negative review and you kinda fired back. If you didn’t choose your words carefully, though, they could sue for defamation. 

The key takeaway from all this is that there’s a right and wrong way to go about it.

One of them could end with you handing over huge sums of money and/or seeing your name in the news. 

Let’s talk about how to go about this the right way in the next section.

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How to Get Rights to Use UGC for Your Business

It’s quite simple. 

Don’t mind the implications of getting it wrong that we just talked about. 

Those are just your incentives to get it right. 

If you want user-generated content rights for commercial purposes, here’s how to go about it:

Ask creators for permission

Sounds a bit blunt, yeah?

But if you think about it, permission is pretty much your green light, subject only to any conditions the creator attaches. So that’s what you should do first. 

Send them a DM or an email if you can find their address. 

Not sure what the content of the email should look like?

Start by introducing yourself. 

Even if you’re the CEO, you do have a name. So let them know it. 

Then, compliment their work. 

Everyone loves praise. It’s always a good icebreaker when sending a message. 

And now you ask for permission.

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The DM or email can look like this:

Hi {creators name},

My name is XXXX and I’m with {your brand name}. 

I came across a post you made about our product and it’s simply top-notch. I’d like to feature it on our social media platforms. 

Would you be open to negotiating rights?

If their answer is yes, you can proceed to drafting an agreement. 

Create a contract

Your next step is to prepare an agreement that covers: 

• How you will use the content. 
• How long you will use it for. 
• Where (platforms) you will use it. 
• How much you will pay. 

You need to be clear about things like this or the creator might be reluctant to sign. 

So generally, the contract can transfer ownership to you or serve as a licensing agreement. 

Transferring ownership can be complex. Unless you plan to use the content for a long, long time, a licensing agreement would be much better.  

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Avoid asking for exclusivity rights

Exclusivity rights mean that creators may not partner with brands other than yours for the duration of the contract. 

It can be alright to ask for this if you’ve had a long-standing partnership with the creator and people associate them with your brand. 

In cases like that, it’s okay but it could also be expensive. You’ll be their only source of income at the time. 

But if you saw a high-performing UGC and immediately asked for exclusivity, you might be doing a disservice to your brand. 

Seek legal advice

Lastly, if negotiations become complex, don’t hesitate to consult with a lawyer regarding any legal issues. 

In fact, once the UGC creator has given a positive response to your rights request, it’s good practice to let your legal team handle the content rights management process.

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Who Owns the Rights to UGC Paid For By the Brand?

Let’s say you hire a creator to produce user-generated content for your brand. 

Who owns the UGC?

The creator or your brand?

Well, the UGC is owned by the creator who produced it. 

Remember what we shared earlier? 

They’ve got the copyright by default. Yup, even though it was sponsored by your brand. 

Joe Sinkwitz puts it correctly:

“It is possible for an influencer to technically hold the copyright for a video which was created for a brand, which has UGC usage rights due to their having commissioned the video.”

So, if you want to use it, you need to get explicit consent from the creator, or they can sue you. 

A good example is the Jennifer Lopez case mentioned earlier. 

However, if you go through creator platforms like Insense, getting usage rights is pretty straightforward.

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While creators still have usage rights, they grant digital rights to the brand they collaborate with by agreeing to Insense’s terms of service.  

The way it works is that you find an influencer for content creation. They produce social media content. You approve and pay them. 

Then, you’re given digital rights to reuse, share, upload, distribute, store, modify, create derivative works of, and use the content across different digital marketing channels. 

But if you’re not using an influencer marketing platform like Insense, you’d have to follow the steps we outline above. 

• Reach out to them for usage rights. 
• Draft a contract. 
• Discuss pricing and terms of payment. 

That brings us to the end of this guide. 

Sure you learned a thing or two so far, right?

Just one more thing and you’re good to go.

Ensure Your UGC Content Is Legally Secured

“Okay, I hear you. But I don’t want to go through a lot of stress before my brand can use UGC for promotional purposes.”

Ah, right. We have just what you need. 

When you collaborate with UGC creators on Insense, you can rest assured that any piece of content you get is safe to use. 

We’ve got a streamlined system that ensures you have a smooth ride during your marketing campaigns. 

“So, how do I get started?”

Oh, that’s easy. 

Just book a demo with Insense. Someone will be waiting for you on the other side. 

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