Group Blog Agreement

Bill Sjostrom —  21 January 2006

agreementHere at Truth on the Market, we’ve already broken a cardinal rule (at least a cardinal rule among transactional attorneys)—we’ve commenced a relationship (this blog) prior to finalizing the governing document. In fact, we haven’t even talked about a governing document, although I’ve given it some thought. One of the reasons for this is that as Geoff and I recruited folks to join the blog, it didn’t seem like the right time to hit them with a contract loaded with clauses like reciprocal indemnification, binding arbitration, consent to jurisdiction, perpetual royalty-free license, etc.

An initial question, of course, is whether a group blog even needs a governing document. We’re not talking about a business deal here. It’s just some law profs spouting off on various topics. Papering the relationship may be contrary to the spirit of the blogosphere (similar to putting “TM� on a blog tagline).

There are, however, a number of issues that I think should be addressed in a written contract. The biggest in my mind is copyright. Absent agreement, as a general matter each author holds the copyright to his posts. This means if we had a falling out with an author here, that author could force us to pull all his posts from the blog. This obviously would be detrimental to the blog and the remaining bloggers. Because no one knows at the front end who if anyone will be leaving the blog on bad terms, it’s generally in everyone’s best interest to address the issue now. My suggestion is that we grant each other a perpetual, royalty-free license to use one another’s posts on this or any successor blog.

Another big issue is domain name ownership. We’ve had some early success in getting other blogs to link to us. As you know, these links are important in terms of search rankings, google rating, etc. Because all the links are specific to the domain name, the domain name becomes a very important asset for the blog. Again, I think some sort of perpetual, royalty-free license is in order for the domain name.

In the next week or two, I’m planning to put together a term sheet for a group blog agreement that addresses the above and other issues. Before I launch into that, however, I want to gauge the reaction, particularly of my co-bloggers, of formalizing the relationship. I know from experience that in some situations papering a relationship is not well received, even though it may be wise from a legal perspective. In particular I’m reminded of the time I lined up a handyman to do about $500 worth of work on my house. I presented him with a “House Repair Agreement� I had drafted. Instead of signing it, he decided to take a pass on the work. So did the second guy. For the third guy, I went with a handshake.

UPDATE: Larry Ribstein, the guru of unincorporated entities (among other things), raises the issue of whether a group blog is a partnership (see here). If it is, as he points out, the copyright ownership issue is different. For reasons I’ve blogged about before (see my comments to this post), it is probably best for a group blog to avoid partnership treatment.  And due to cost and other considerations, I don’t think it makes sense to go with a corp. or LLC. Hence, my thought on handling the issue is to include an “anti-partnership” provision in the agreement, i.e., “while we are an association of more than two people, we are not carrying on a business for profit.” Any revenue we may get from selling ads will be used to cover the costs of/invest in the blog. I realize that a court could still nevertheless find we are a partnership, so the agreement would also include provisions that apply in the event a court ignores our express intent and finds we are a partnership. Thoughts on this approach Larry?

DISCLAIMER: NEITHER THE ABOVE NOR BELOW IS MEANT AS LEGAL ADVICE!

9 responses to Group Blog Agreement

  1. 

    The only profit I expect to receive from this venture is the reputational benefit of being associated with you fine folks. But I’m certainly willing to agree to any terms that will limit your personal liability for stupid things I might say (and vice-versa). Thanks Bill.

  2. 

    Bill: If and when that day comes, I will wait for my check in the mail. In the meantime, I am quite happy to work for free 🙂

  3. 

    Josh: If we ever do get to the point where we could take ads and make some real money we would re-evaluate. My thinking is at that point, if the money involved exceeds the transaction and other costs associated with forming and maintaining an LLC, we would form one, and you would get paid.

    Larry: I’ll take a look at the referenced materials. I’m not sure what you mean by the provision being awkward; how it’s drafted? or the substance? (I would draft it more artfully in the actual agreement). The bottom line is that for a variety of reasons I think it makes sense for a group blog to avoid partnership treatment, but given the cost involved (as compared to revenues of zero) it does not make sense to form an LLC. Maybe my approach isn’t perfect, but I think it is better than no agreement at all. If someone has a better idea, I’d like to hear it.

  4. 
    Larry E. Ribstein 21 January 2006 at 2:50 pm

    The suggested provision is awkward and has no case law support that I’m aware of. The relationship is what it is objectively, as many courts have pointed out. See Bromberg & Ribstein Sec.2.05. A provision that the relationship is not intended to be a partnership might have some effect and at least has some precedential support but would not be conclusive. Adding partnership-type provisions as a backup could swing the court toward partnership. (Cf. the Abercrombie case on the analogous issue of characterization of a voting agreement as a voting trust.) I would suggest that you read my Limited Liability Unlimited article, as well as Chapter 2 of Bromberg & Ribstein.

  5. 

    I thought we agreed I was the sole owner and you were all employees. Did I get that wrong?

    But I’m with Josh. I’ll sign. Just as long as I get to keep all the trademark licensing revenue.

  6. 

    Wait, you mean I’m not getting paid?

    For what it is worth, I would have no problem signing a contract to deal with any of the above mentioned issues.

Trackbacks and Pingbacks:

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