Gambling Law Update -
by Lawrence Walters
Not all lawmakers are out to ax the Internet gambling industry. A small bipartisan group of lawmakers wants to let states regulate and tax Internet gambling, even as others in Congress renew efforts to ban the rapidly increasing form of wagering. Rep. John Conyers introduced legislation this past month that would pave the way to legalizing Internet gambling in states interested in licensing, overseeing and collecting taxes from the growing industry...

What is a Website Review? -
by Lawrence Walters
A substantial percentage of adult webmasters are still operating without having had their website reviewed by an attorney. Mainstream publishers have utilized attorneys for pre-publication content review for decades, and publishers of erotic print and film media are typically diligent about legal clearance; however the culture of the adult Internet community often bypasses this most basic industry standard...

18 USC 2257: Always & Forever -
Some legal thoughts, courtesy of J. D. Obenberger
There is one thing in the adult industry that remains constant. Klixxx webmasters in adult-oriented businesses must be vigilant and proactive, when it comes to legal requirements and legislation affecting e-business. I can't stress enough how much trouble one can get into for violating this criminal statute. Violations can carry penalties up to fifteen years for each image. Mr. Thomas Reedy, down in Dallas-Fort Worth was sentenced to over 1,000 years in prison...

Need a Lawyer?
First of all, I am not a lawyer and there is no legal advice here, so the obligatory disclaimer must be made: "All statements made in this article are matters of opinion only, and should not be considered legal advice. Please consult your own attorney on specific legal matters." In fact, the whole point of this article is to encourage webmasters to pay more attention to legal matters and to realize they should be consulting an attorney more often. Do you need a lawyer? Yes, you do...

High Court Strikes Down COPA - By Larry Walters
The United States Supreme Court today decided one of the last controversial cases left this term: Ashcroft v. ACLU, Case # 03-218, involving the issue of online age verification. In a stunning victory for Free Speech advocates, the High Court, in a 5/4 decision, upheld the preliminary injunction against the law that was entered by the Third Circuit Court of Appeal. The Court found several potential problems with enforcement of COPA. First, the government is required to use the least restrictive means in regulating speech-related activities. Filters are less restrictive than age verification requirements...

Supreme Court Bars Enforcement of COPA - Klixxx Staff Report
The US Supreme Court barred enforcement of the 1998 Federal COPA (Child Online Protection Act) today that was intended to keep Internet pornography away from minors. It was defeated because it was said to "likely violate" constitutional free-speech rights. According to a Reuters report, the enforcement of this law was defeated by a 5-4 vote and was sent back to federal court for a full review. Solicitor General Theodore Olson of the Justice Department defended COPA as being constitutional...

Acacia's Rob Berman: The Carrot and Stick Shtick - Interview by Ed Rampell
The out of court settlements of Acacia's lawsuit against adult Internet giants CECash, Vivid, Wicked and Hustler, for allegedly infringing Acacia's patented Digital Media Transmission Technology has suddenly made Acacia's Senior Vice President of business development and General Counsel Robert Berman very talkative. Like the lawyer he is, Berman was well prepared, wielding a legal pad full of talking points, composed like legal briefs. (In a call to this reporter, Berman asked if he could read the interview prior to publication, and was told this would be a major violation of journalistic ethics...)

A Newbie's Guide to the Legal Side of the Biz - by Kath Blackwell
Just getting started and you don't know what to do? Looking to join the adult industry as a webmaster, a content provider - or maybe a paysite or affiliate owner? The first thing you should consider before diving in with both feet is NOT what color scheme in which to build your site - but what legal obligations, requirements and pitfalls you need to know and avoid before you ever even put one picture up on that dot-com. All lawyers are different - some are humorous, others serious. But what's most important when you come right down to the nitty-gritty - is finding the lawyer that is right for you...

Survival Guide for Online Trademark Infringement -
by Dyanna Culp (Temos)
If you receive heavy traffic based on your good name, products or services, the vultures may soon look your way, if they haven't already. It's much less work to take advantage of the visibility you've built than to work on building a name for themselves. You'll find lawyers eager to take on your case. Companies are suing one another and search engines over trademark infringements, but the cost can quickly run into hundreds of thousands of dollars. I have personally seen a one month legal bill hit $200,000...

New Ways of Combating Spam - by Gary Smith
Alarm bells are ringing in the Internet community; concern about spam and the affect spam is having on the Internet has reached critical proportions. The general concern about combating the increase in e-mail abuse can be seen in the outpouring of articles on the subject on the Internet. The involvement of major players such as AOL and Microsoft and various professional working groups are also indicative of the growing seriousness of the spam concerns...

$48,000,000 In Fines Levied Against Six Online Pharmacists -
by Richard A. Chapo, Esq.
As I have been reporting for Klixxx readers, online pharmacies have come under attack from various states. As predicted, the attacks are increasing in both volume and impact. In February, the Medical Board of California levied fines totaling $48,000,000 against six doctors for filing online prescriptions. In light of these fines, Klixxx readers should seriously reconsider any involvement in sponsor programs for online pharmacies...

2003 Top 12 IRS Scams - by Richard A. Chapo, Esq.
The IRS annually publishes a list of popular tax scams that it is prosecuting. The list for 2003 was released in late February and includes a number of familiar topics. When it comes to taxes, you should always remember that if it looks to good to be true, it probably is. While a cliché, this statement is usually a good guideline to follow with taxes. Following is the IRS Scam list, as well as short commentaries by the Agency...

Tax Issues: An Interview with John Fitzgerald, CPA - by Richard A. Chapo, Esq.
The problem is that even though the IRS recognizes Limited Liability Companies, they've never taken the time to implement regulations, and Congress hasn't passed legislation to carve out special tax treatment for Limited Liability Companies. As such, they have to be treated as either corporations, partnerships or sole proprietorships. Therefore, you're forced into fitting into one of these categories in order to file your taxes. Since single owners of Limited Liability Companies can't operate as partnerships because they only have one person, they have to either be a corporation or a sole proprietorship...

Enforcement Actions Against Online Pharmacies - by Richard A. Chapo, Esq.
In a recent edition of Klixxx, I discussed new legal requirements that affect online pharmacies, and their affiliates promoting these programs. The article focused on a revision to the Controlled Substance Act in Nevada, addressing the regulation of online pharmacy sites, the beginning of what I predicted would be a trend in many states. Recently, the medical and pharmacy boards of various states have taken the predicted path of increasing enforcement of the regulations, and I expect many more prosecutions will follow...

Get Into Jail Free Cards - by Lawrence Walters
It's the oldest legal debate on the Internet: How can we protect children from inappropriate materials without compromising the rights of adults? The first misguided attempt was to criminalize all "indecent" material on the Web by adoption of the Communications Decency Act of 1996. The United States Supreme Court made quick work of that travesty of justice in a rare unanimous Opinion striking down the law as a patent violation of First Amendment rights. In doing so, however, the Court acknowledged that the government has a compelling interest in protecting minors from exposure to sexually-oriented materials on the Internet...

Legal Issues Associated with Online Pharmacies -
by Lawrence Walters & Heather R. Schwarz
As adult webmasters continue to search for new ways to generate revenue and stay competitive, opportunities arise to participate in unique affiliate programs; each filling a perceived consumer need. The latest such craze relates to the online distribution of prescription drugs. Any webmaster considering such an affiliate program should carefully consider the legal and political issues relating to this business model. Long before the days of the Internet, prescription drug distributors ran tiny advertisements in local newspapers for individuals to order medications directly from the distributors...

First Amendment Protections for Employees Involved in the Adult Industry -
by Lawrence Walters
Imagine showing up for your day job one Friday afternoon and being summoned by your boss for a "chat." When you arrive at his or her office, you are handed a stack of pictures of you downloaded from the adult Web site that nobody was supposed to know about. Your employer then hands you a pink slip, and tells you to immediately clean out your desk. Welcome to the world of workplace discrimination - but this kind of discrimination is usually not against the law...

Guilt by Extreme Association - by Lawrence Walters
The prosecution of Extreme Associates and the adult industry's response thereto is, and must be, the single most important issue for adult webmasters to presently consider. Therefore, an analysis of the contours and implications generated by this case is worthy of substantial consideration. Marybeth Buchanan, the Assistant United States Attorney heading up the prosecution against Extreme Associates, claims that even Playboy may be obscene in parts of the country. Yes, ladies and gentlemen, this is the United States, in year 2003...

Keeping Children Away from Adult Material - by Lawrence Walters
Now that the Child Online Protection Act has been declared unconstitutional again by the Third Circuit Court of Appeals, it is time to revisit the issue of age verification, children, and adult materials. While no self-respecting adult webmaster would argue that children should have a right to view erotica, opinions are mixed regarding the actions webmasters should take to accomplish this laudable goal. Plenty of free explicit material exists on the Web, even today, with the purveyors justifying such content under the theory that it is the parents' primary obligation to monitor their children's Internet usage...

Creating Adult Web Content Outside of California - by Lawrence Walters
However, should a curious webmaster trot down to the local library, or pull up his or her state's statutes online, it will not be long before some law will be found that appears, on its face, to prohibit paying people to engage in sexual activity. Most assignation, prostitution, pandering or lewdness laws are written broadly enough to literally prohibit the creation of any adult content, where money or other pecuniary gain is exchanged for a sexual performance. How can the existence of such laws be squared with the widespread availability of adult materials created all over the United States?...

20 Practical Tips for the Beginning Adult Webmaster - by Lawrence Walters
Too many beginning webmasters attempt to get into this industry without familiarizing themselves with the complicated regulatory scheme applicable to adult Web site operations. Numerous resources exist to assist you in determining whether this is the right business for your personality and risk tolerance level. Resource sites, industry trade publications, legal resources and court opinions should all be consulted before the first dime is spent on purchasing content or marketing...

The Perfect Host - by Lawrence Walters
The legal issues affecting adult webmasters have been analyzed, and over-analyzed, ad nausem. However, little has been written about the unique legal concerns of adult hosting companies. This article is intended to provide a reasonably comprehensive legal checklist, identifying the key areas of concern for hosts that accept adult Website clientele. Of critical concern to any hosting company is strict compliance with the dictates of the Digital Millennium Copyright Act ("DMCA"). While an exhaustive review of the specific requirements of the DMCA - which must be followed to the letter...