#280: How to LEGALLY Protect Your Channel (YouTube Lawyer Tyler Chou Explains)

Tyler Chao [00:00:00]:
Copyright strikes and community strikes are on the rise in a very big way. You can be the biggest YouTuber in the world, and YouTube will still say, I can't help you.

Jay Clouse [00:00:09]:
That's the creator's attorney, Tyler Chao. Tyler spent nearly two decades as an entertainment attorney in Hollywood with senior roles at Disney, Skydance and Buzzfeed before starting her own YouTube channel, which brought her into this world of creators. Today, she helps clients like Sam and Colby, Andy Morris and Jenny Hoyos stay on the right side of the law.

Tyler Chao [00:00:31]:
And.

Jay Clouse [00:00:31]:
And unfortunately, that's getting harder and scarier all the time.

Tyler Chao [00:00:36]:
I'm in the middle of rebranding two huge creators right now because they didn't do the trademarks properly, and it is just devastating.

Jay Clouse [00:00:44]:
But that doesn't mean you can't protect yourself. And Tyler will show you exactly how you can start doing that today. Thank you to one of ten for sponsoring this video.

Tyler Chao [00:00:53]:
The biggest reason that creators come to me is usually there is an emergency and it feels like their house is on fire. Right? Something is terribly wrong, and it usually has to do do with their YouTube channel. Typically it's copyright strikes, demonetization, or they've lost their channel altogether. And I've noticed an interesting trend in the last month or two. Copyright strikes and community strikes are on the rise in a very big way. I mean, I had a call earlier today. Last week, I had one of the biggest YouTubers in the world reach out to me because they have a copyright strike. And my first question to the big YouTuber was, well, why aren't you just talking to YouTube directly? Because I know that your client was just on stage with Neil Mohan last week at Brandcast, and they're like, yeah, YouTube does not get involved.

Tyler Chao [00:01:42]:
They say if you violate something, you have to go talk to the IP holder and you guys have to resolve the dispute yourself.

Jay Clouse [00:01:51]:
So even for somebody who has what we would perceive as like, the highest clout and influence on the platform possible, YouTube is very, very str with copyright strikes is what you're telling me.

Tyler Chao [00:02:04]:
Copyright strikes and community strikes. So they both exist, right? If you violate community guidelines, you can also get a strike or you can get a strike on the copyright side. Now, the community guidelines is more between YouTube and the creator. The copyright strike is between the IP holder and the IP violator. And in those instances, the copyright strikes, YouTube says, yes, you have to go resolve this yourself with the IP holder. And the most striking thing that I have noticed is you can be the biggest YouTuber in the world, and YouTube will still say, I can't help you, you have to go resolve this yourself.

Jay Clouse [00:02:44]:
For folks who aren't familiar with why these strikes happen, can you define these two and why they happen and what level of grace you do have in the system?

Tyler Chao [00:02:55]:
While I'm noticing the grace is quickly disappearing, there used to be a lot more grace. I have clients who tell me they come to me with a copyright strike and they say, you know, I've been making the same type of content for 10 years and it's never been an issue. I make the same type of content every week, but now it's a problem. And I think, and no one at YouTube has verified it for me. But I think with new functionalities with AI, I think there's a lot easier way for them to detect violations now compared to a year or two year or five years ago. We'll talk about the two buckets. Copyright and community guidelines, or you know, you can also call them terms of service or general like YouTube rules, right? And for copyright strikes it's pretty simple. If you use somebody's video like a B roll, reaction channels are huge for this, right? They'll take someone's videos off of TikTok or shorts and then just react to them.

Tyler Chao [00:04:01]:
You're technically still using someone else's ip, so that's B roll. Sometimes you use someone's music. You could use a game developer's music or a major record labels music and you might get a strike with the music or a claim. And those are two different things. So a claim is an IP holder. Instead of putting a strike on you, they could put a claim instead. The claim might equal 30 or 40%. And so if you make $1,000, 30 or 40% goes to the IP holder.

Tyler Chao [00:04:35]:
And often it's the record label or the music publisher. And a lot of music publishers do this because they want to make money off of these infringing videos. Because taking them off, it might be satisfying to put a strike on someone, but they actually want to make money off of their music. So this will happen a lot with music publishers. Uh, the strikes is basically a slap on the hand saying you screwed up and you're using my IP without my permission, without a license, without paying me, without giving me credit. And so the strike will sit there for 90 days. And it used to be that you could take the video off and the strikes would go away, but that's no longer the case. You can take the video off or even, you know, you go into YouTube editor and you edit out that clip, the strike still sits for 90 days.

Tyler Chao [00:05:27]:
So within the 90 days you cannot get three strikes because if you get three strikes, then you risk the chance of losing your channel. Now, it's not always automatic. I actually had someone ask me earlier today if it was automatic. And it's not. Sometimes YouTube will step in and take a look at the three strikes and say, is there some leniency here? Let's look at what actually happened. And sometimes they might reach out to the creator and give them a chance to explain. Sometimes, and you've seen this, big creators will wake up and they're like, my channel is gone. And so it's, I think the most frustrating thing and scary thing for creators is there's no direct guidelines or flowchart.

Tyler Chao [00:06:10]:
There isn't like, oh, a plus B equals C. Every time a client comes to me with a copyright strike, the fact pattern is different. And I can sort of try to give them general guidelines as to what might happen, but I can't predict it sometimes. I mean, this happened to me where a client got a strike, she went to go appeal it in the system, she tried to go put in the writing and the system just like clicked out. I said, thank you so much for submitting your appeal. She didn't even get to write anything. So then when she got a strike again, she freaked out. And then she came to me, she's like, I want you to help me with this.

Tyler Chao [00:06:48]:
So I made sure to get on the call with her. I was on a zoom, I was recording it just because I wanted to see what happened. We clicked on the little box, you know, we put the cursor in, it did it again. It just said, thank you so much for sitting, submitting your appeal. And it went away. But thankfully this time, 15 minutes later, YouTube notified her and said, your strike has been removed. I mean, it's great news, but how incredibly crazy making is that when you have no idea what's going to happen? I mean, I'm getting emails from people saying, we want to have a class action against these platforms because it's happening everywhere. It also happens on Meta.

Tyler Chao [00:07:32]:
It happens on TikTok. I will say Meta and TikTok don't care at all. You can't get anybody on the line with you. There is no automatic appeal system. You just sort of lose your channel and you just, you just lose it. At least YouTube has a whole process. There's a strike, there's a counterclaim. Now you can also have a counterclaim on a copyright strike issue where you can submit language that says, well, this isn't a proper copyright strike because of X, Y and Z? And I actually did.

Tyler Chao [00:08:00]:
I've done two of these in the last two weeks for huge creators. And then YouTube will either accept or deny your counterclaim. If they accept it, that's good news. And then the IP holder has 10 days to initiate a lawsuit. It's a very, very high bar. You have to actually go sue someone to get that copyright strike back. And so, thankfully, there is a process to this, and YouTube isn't letting people just put arbitrary strikes without some type of system to back it up.

Jay Clouse [00:08:36]:
So that suggests that sometimes these strikes are inaccurate, to put it nicely. But it almost sounds like predatory in some cases. Like if. If I get YouTube's acceptance to remove a strike, then what is it that that person was claiming that was inherently wrong? Were they just lying? Or is there some way of getting clearance that people are getting? And then the rights holder comes in and says, no, you didn't have a clearance.

Tyler Chao [00:09:06]:
It depends, right? I know that's like a statement a lot of attorneys say, but it just depends on the facts. Sometimes the IP holder will say, well, I own this ip, I own this clip, I own this music. And we will find information that actually disputes that, that they actually don't have a valid copyright with the copyright office. You know, I have a situation right now with a client where he was an employee of a big YouTube channel. He quit his job, he went and started his own YouTube channel. And his former employee is saying, well, no, we own the IP over everything you do, because you started your channel while you're still working for us. So that's not a clear cut like ip. It's the facts can be disputed back and forth.

Tyler Chao [00:09:54]:
So we were able to get YouTube to remove the strikes. And do you know what, Jay? The other side did file a lawsuit, and I was really surprised about this, but YouTube didn't actually. And they submitted the lawsuit to YouTube, and YouTube didn't actually put the strikes back, which I thought they were going to. What they did instead was they wrote us an email saying, well, we're not going to put the videos back on, but the strikes stay off the channel. And then when you have a resolution from the lawsuit, let us know what happened. So that was actually surprising because I actually thought they were automatically going to put the strikes back on. So that whole process gave me a little more comfort in realizing that YouTube does take this whole process very seriously. They might let someone put a strike pretty easily.

Tyler Chao [00:10:47]:
But in order for that strike to stay, the IP holder actually has to back it up and prove that they own the ip.

Jay Clouse [00:10:54]:
Can you explain to me, beginning to end, what the copyright process looks like both from the side of the person issuing a copyright strike and then the person receiving it? How does that happen and how do we work towards resolution?

Tyler Chao [00:11:08]:
So I'll use the example of myself, right? When I found out that someone had basically taken a bunch of my videos and started a YouTube channel. I went to YouTube's copyright strike system and I put in language that stated that and I had to do it for every single video, right? It's not just a one time thing. So there were, I believe, 11 videos from my channel that were taken. So I went and said, this is in violation of my copyright rights. I own these videos, it is me in the video and it is owned and you can see it on my YouTube channel. So what will happen is that this channel, the violator, will receive these copyright strikes and then they will have the chance to counterclaim. Now, I don't think they're going to because I don't know what they would put in there possibly as a counterclaim because they do not own these videos. It is not them.

Tyler Chao [00:12:07]:
But sometimes the dispute is not so clean. I have a client who is saying that they're a former employee of this channel and the content they're making is clean. There's a dispute. So the copyright claim language could be, this is IP owned by me, it's me in the video, this is fair use, or whatever the reasoning is that you can use in your explanation as to why the counterclaim should be accepted, you too will either accept or reject the counterclaim. If they accept it, then the IP holder has 10 days to initiate a lawsuit. So they actually have to sue, Right, they have to sue the IP violator in court. And that's not a cheap process. It's a very high bar to meet.

Tyler Chao [00:13:08]:
And then if that does happen, though, as it did with my client, the lawsuit is submitted to YouTube and it will say, well, we have initiated litigation and sometimes YouTube will put the strikes back on, sometimes they won't. And for my client, they decided to not put the strikes back on. And they said, let us know the resolution or the verdict from the court after the litigation is done. So they took the strikes off, but however, they did not allow the content to come back on the channel. The content has to stay off, but the strikes are off. Sometimes when you get one or two strikes, it's fine, you have 90 days from the time of each strike. So if you get one strike for 90 days, you better hope that you don't get two more strikes, because sometimes if you get three strikes within those 90 days, you might lose your channel. Or sometimes YouTube will step in and take a look at the situation to see what's happening.

Tyler Chao [00:14:15]:
But more and more, I'm hearing that the majority of the time the channel goes away now. It doesn't disappear forever, right? YouTube still has it. They don't just, like, delete it from the face of the earth. It sits there. And then sometimes, as you. You might have seen stories of big creators where this happened to them, they'll come back sometimes and say, I was able to get my channel back. After six months of disputes and arguing and trying to persuade YouTube to our side of the story, sometimes creators are able to get their channels back.

Jay Clouse [00:14:47]:
So if I get a copyright strike, 90 days passes and I don't get any more strikes. Am I back to zero, or do I still have one strike on my channel?

Tyler Chao [00:14:56]:
No, I think you're back to zero.

Jay Clouse [00:14:59]:
Okay, so it is kind of a rolling situation if you're saying you have.

Tyler Chao [00:15:04]:
One strike, right in 90 days. If you have two, then it's from the second. It's 90 days from the second strike.

Jay Clouse [00:15:11]:
And if 90 days passes, both of those get wiped away.

Tyler Chao [00:15:14]:
90 days from the second one. Yes.

Jay Clouse [00:15:16]:
So what can creators do? Or what should creators be thinking about to best protect themselves from this happening in the first place? Because nobody wants to deal with this rightfully or not rightfully. We just don't want to deal with it. So what is the best course of action for us as creators to move forward and hopefully avoid this headache altogether? Before we get to Tyler's answer, I want to tell you how we solve one of our biggest headaches, which is getting better at packaging videos on this channel. Getting better at ideas, titles, and thumbnails is an art form that used to take years to learn, but today's sponsor will help you level up those skills in no time at all. We've tried out a lot of YouTube tools, and most of them seem cool at first, but end up letting us down when we actually try to use them. 1 of 10 is the one that made it into our workflow in these three ways, and I'll save the best for last. Number one, it makes research so much faster and easier when we want to find video or packaging ideas. One of Ten's database and search tools help us get outside of our bubble and find amazing ideas from niches that we would have never seen on our homepage.

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Tyler Chao [00:17:29]:
I tell creators to run a clean business. And when you run a clean business, that means you do things the right way. If you're going to use someone's video, make sure you license it. Make sure you get permission, make sure you pay for it. If you're going to use someone's music, you know, I'm a big fan of companies like Epidemic Sound like actually go license music that you know is clean and cleared. That will actually avoid a lot of the headaches. I also give this advice which is not very popular, but review YouTube's community guidelines, review their terms of service. If you're going to start a YouTube channel, make sure to have separate emails.

Tyler Chao [00:18:08]:
Because I have a client who had five channels on YouTube and one of his small channels that had like 2,000 subscribers got struck because of some copyright strikes and he lost all five channels because it was created under one email address. And it is just devastating because his biggest channel has 200,000 subscribers and he's been growing this for probably over 10 years. So he reached out to me and I've been working with the YouTube execs to try to get this resolved. One of the YouTube execs said to me, he said, you know, Tyler, being on YouTube is a privilege. And yes, it's a mutual relationship where YouTube makes money. Off of creators because of advertisers. But creators also make money off of adsense, right? Some, some. As you know, some creators make millions of dollars a year on AdSense, but it's a privilege.

Tyler Chao [00:19:01]:
And we ask that creators follow our rules. So you have to follow our copyright rules, our community guidelines, our terms of service. So I do say to creators, you should probably read them at some point and know what they say. And as a creator, you have to know that sometimes the content you are going to put online could violate the guidelines and you could get a strike, you could get a community strike, or you can get a copyright strike.

Jay Clouse [00:19:29]:
So if I am trying to get permission from an IP holder and I email them and I say, hey, I want to reference one of your videos and I just want to do this little bit, is that okay? And the IP holder responded to email and says, yeah, go ahead, knock yourself out. Is that enough?

Tyler Chao [00:19:48]:
I mean, it's better than not, right? But what would be best is if you had a simple maybe one or two page licensing agreement that. And I guess to do that you probably would have to offer them some money. And these clips, I mean, could be $50, $100. I had one client who did receive three copyright strikes from this biology channel because they film a lot of animals. And he put three copyright strikes. He came to me asking for help. We reached out and asked and said, hey, we understand we used your content without your permission. What can we do to make it right? And he said, well, pay me and give me credit.

Tyler Chao [00:20:28]:
So we ended up paying him like $500 for the three clips and he removed the copyright strikes. So there are solutions here. I don't want creators to think, oh my God, like everything we're saying is doom and gloom and there's no resolution and there's no silver lining. There actually is, like there are ways to resolve this. You can go to the IP holder and say, can I pay you for this? Or even if they say, you know, you don't have to pay me, I would still sign a licensing agreement, right? And it would just say the consideration is even if it's a dollar, right? You pay them a dollar and say, would you mind assigning this licensing agreement? But having that email would be very helpful if they for some reason were to change their minds. Or maybe let's say they own the channel with a partner or with somebody else who has a different point of view and put a. Puts a copyright strike. You can say, but wait, I did get permission.

Tyler Chao [00:21:21]:
Look at this email. And that's where you can have the beginning of a resolution to that dispute.

Jay Clouse [00:21:29]:
Sometimes I hear from creators that they think they can use a very short snippet of something and credit it. And they say, well, it's fair use. Talk to me about what fair use is and how we should understand it or use it or not use it.

Tyler Chao [00:21:46]:
Fair use is one of the most misunderstood concepts on YouTube and for creators, because creators think fair use is this bulletproof shield that you could just put up. Like you can put it on screen and say, this is fair use, right? Or in your descriptions where you say it out loud and you say, this is fair use. Sometimes I just want to say fair use is not a real thing, but it is a real thing. It's a real thing that you use in litigation. So if you got sued for using someone's ip, you go to court and you can say to the judge or jury, my defense for using this clip is fair use. And it's because fair use has four factors. It's a balancing test, and it's not necessarily one or the other. But the biggest point that courts look at is, does this usage replace the original IP holder's place in the market? For instance, I used to work at Disney, and 10 years ago, at least, Disney never actively went after violators.

Tyler Chao [00:22:51]:
Because just imagine, Jay, how many millions of people they would have to employ to go after every IP violation. Because Disney owns all the IP in the world. But what they would do is if someone brought a usage to them, if it was derogatory or if it was very long, right, that was replacing them in the marketplace.

Jay Clouse [00:23:10]:
Like if they re uploaded a movie.

Tyler Chao [00:23:12]:
To YouTube, that would not be okay, right? Disney would come after you because it's replacing the consumer from going to their streaming platform or buying it from them if you use a clip. Actually, some of the studios and networks like this because it's sort of free marketing for them. But I don't want to say this phrase and for people to just go think and say, oh, I can use anybody. Because every studio, every network, every IP holder is different. There are some studios that are a little better about it. There are some studios who just don't play. Like, for instance, a lot of the game developers like Nintendo and Sony, they just strike everybody these days because they're sick of people stealing their content and using it without permission or license.

Jay Clouse [00:23:57]:
Is there a way forward to actually communicate with studios or entities that large to get permission?

Tyler Chao [00:24:05]:
There are licensing houses, right? Like there are places where you can get clips and I don't know about Disney per se. But I know that there are production houses that license their content out to be used in this way. And you can go find these clip houses, right? They are called licensing houses where you can find clips from major movies and TV shows and use it that way. But I think what's been confusing is most creators are very used to using short clips and letting it be okay. And this is not legal advice, but I do think if you use a clip that's less than five seconds, it's typically okay. But less than five seconds is very short. Right. Sometimes it's hard to like even convey the scene you're trying to show.

Tyler Chao [00:24:53]:
But personally, when I used to make content about, you know, Hollywood, when I was reacting to Hollywood news stories, I would put clips. And I know every time I went over 5 seconds, YouTube would not let me upload. Right. You know, that happens sometimes. It will just note these sections are owned by other IP holders. And so I will use YouTube editor and I'll just cut them down. And I was able to cut them down to under five seconds and they were able to go up. That's not to say that you might not get a copyright strike.

Tyler Chao [00:25:23]:
And so that's what I want everyone to understand. Whoever owns the IP has 100% right to put a copyright strike. Now you can go to them and say, look, I believe my use was fair use. Sometimes it's commentary, sometimes it's transformed in some way. Could I use this? Could you remove the strike? Could I pay you some money? Can we enter into some type of licensing deal? And sometimes the IP holder will say yes and sometimes they'll say no.

Jay Clouse [00:25:57]:
I want to get back to the four tests of fair use that you're mentioning. The first was replacing the IP holder in the market.

Tyler Chao [00:26:05]:
So there's transformation. Right. Which is what I just hinted at is does it transform it in such a way that it doesn't. It's not an exact replica of the original. Like movie reviews. Right. They use it as critique or education. Education tends to be okay as well.

Tyler Chao [00:26:24]:
One of the other factors is, are you making money from this? If you're making money from it, it typically will not fall. Fall under fair use. But like I said, this is a four part test and it's a balancing test. So if it's only one factor but the other three aren't present, then maybe it'll pass. It just depends on the facts.

Jay Clouse [00:26:46]:
And this kind of brings us to the other side of this conversation, which is sometimes we are worried about getting copyright strikes and demonetization on our channels and sometimes people take our content or take things that we have rights to. So what are some of the other obvious low hanging fruit opportunities for creators to be more legally legit?

Tyler Chao [00:27:11]:
So what I ask a lot of creators, you know, after they come to me with an emergency and I usually am able to solve it. And I will ask them, well, do you have an llc? Do you have a business bank account? Do you have insurance? Do you have general liability insurance? Do you have media insurance that covers defamation? Have you trademarked your name? I mean, I'm in the middle of rebranding two huge creators right now because they didn't do the trademarks properly and they did not think to check out in the marketplace. If they are, their name is similar to some other big name out there. And then of course, contracts. If you're working with an independent contractor like an editor or a producer or a script writer, anyone who's making IP for you, do you have a piece of paper that says that that IP is owned by you? I know of a creator right now who has an editor who has the raw footage to 20 of their videos. And he's saying, I own this content because he was also the videographer. So there is a rule, right? As a photographer and videographer, if you're actually the one taking the content, then it's owned by you. And because they don't have this piece of paper, these 20 videos are being held hostage right now.

Tyler Chao [00:28:26]:
And they had, I think a couple that they, the guy, the editor submitted to them. They put it on their YouTube channel. Do you know what this guy did, Jay? He put copyright strikes on them. Can you believe that? So you need to have pieces of paper, whether it's an employee contract, whether it's an independent contractor, and please be very careful that you don't misclassify someone. If someone's under your direction and works probably 40 hours a week for you, that's an employee. I don't care if you're like, oh no, they're just a 1099. No, like if they're under your control and they don't work for anyone else, that's an employee most of the time. 90% of all disputes in litigation for any business, including YouTube channels, has to do with employees when they leave, when they exit wrongful termination.

Tyler Chao [00:29:17]:
I mean, remember dog pack and Mr. Beast? I mean I've done so many employee contracts since then. Where in the exit agreement. I will make sure under the non disparagement provision to write the word video that they cannot Go out and make videos about having worked for my client. These are great starting points as a YouTuber to think about. I know usually the next question is, well, when, when do I need to do this right? Is it, is it on my first video? And I will say, no, not usually on the first video. It's usually when you start. You're monetized on YouTube when you start making AdSense.

Tyler Chao [00:29:58]:
I think about $2,000 to $5,000 is a good mark. Like if you're making that much, then you can afford to do an LLC or get some insurance because that's about how much it costs to do the LLC and to get the insurance in place.

Jay Clouse [00:30:13]:
You talked about the difference between an employee and a contractor. When does that become a problem?

Tyler Chao [00:30:18]:
It's usually a problem when they exit. It's usually not a problem when they're just working for you. You know, when things are good and you're in the honeymoon period, it's all great. And that's why I always say to creators, please put those independent contractors and employees or partners right when you're starting your channel with like your best friend. Do it in the beginning when things are good. Because on the tail end when they're about to exit or you need to let them go for some reason, that's when the claims of wrongful termination or harassment or issues during the workplace or misclassification comes up and they'll say, you, you know, by the way, I think I was an employee and you misclassified me, so you owe me a lot more money or I'm going to report you to the state labor department. And that's bad because those are. There are statutory violations that come when they report you to the labor department.

Jay Clouse [00:31:13]:
And if somebody is an employee, what does that mean to me as the employer that I am responsible for?

Tyler Chao [00:31:21]:
You do pay a little more when it's at a full time W2 employee, you have to pay Social Security. You have to pay for workers comp. I think it comes out to like 7 to 9% more per year. So it's a few thousand dollars depending on what the salary is. It's not insane when you think about if you get slapped with fines for miscategorizing ache an employee, the fines from the labor department is way higher than a few thousand dollars.

Jay Clouse [00:31:53]:
I want to talk about this, this partnership area because I think this is probably true for a lot of folks where they're making videos, they're collaborating heavily with other folks in the process. This is the start of their business, their little studio how do I think about partnerships and its relationship to the business? And maybe we look at it from two lenses. If YouTube is all we're doing right now, or if YouTube is part of a larger thing that somebody involved is responsible for.

Tyler Chao [00:32:21]:
I have exited nine partnerships in the past year, and they all typically start with a pair of best friends who decide to start a YouTube channel together. Maybe it's a podcast with both of them. Maybe one's the face of the channel, one's the editor. And what usually happens is there's never a piece of paper in place. And again, at the end, when someone wants to exit or there's a falling out, there's a question of, well, who owns this channel? If someone wants to leave, what happens to the channel? Who has ownership? Whose email address is on the YouTube channel? Right? Like, these are all the questions that then have to get hashed out basically during the divorce portion of this relationship, which is always really messy and really ugly.

Jay Clouse [00:33:15]:
And.

Tyler Chao [00:33:15]:
And so I always say to creators, please, when you're owning an asset, and that's what a YouTube channel is, right? It's an asset. I mean, I'm putting YouTube channels into trusts for some of my clients, for their kids. A YouTube channel is potentially more valuable than real estate these days. Imagine leaving your child a YouTube channel with half a million or a million subscribers, and you're making six or seven figures from that. Like, that's amazing, right? So you have to think about, would you buy a house without a piece of paper? No. Right? Like, of course you would have a house, you would have a deed. You would do all of these things. But why is it that we start YouTube channels and we don't have a piece of paper that says, oh, we're 50, 50% owners? Or if one person wants to exit, the other person gets to buy out their rights, or they continue on and share in the revenue until five years down the line, or 10 years, or until you hit a certain milestone.

Tyler Chao [00:34:10]:
These are all the things I put in place for my clients when they're thinking about. Usually, unfortunately, it's like at the back end, right? But I am starting to able to tell my clients to do it at the front end. Maybe they have a president or a CEO who comes in who gets 10% of their AdSense. Please have a piece of paper that says that, right? Because what happened was I had a client who started her channel, then she brought her best friend in to start editing for her. This is a big YouTuber. And I said to her, I said, because she was giving him 50% of her Adsense. And it wasn't a big deal because in the beginning, they weren't making that much money. And I said to her, I said, when you start making six figures, like, this is going to hurt and it's going to be a problem.

Tyler Chao [00:35:02]:
And sure enough, about a year later, she was making a lot more money. And she said, yeah, Tyler, I think I need to put him under an employee employment agreement. So we went to him and said, here's an employment agreement. Please sign it. And he said, oh, no, no, I own half this channel. I made you. Like, you wouldn't be where you are today if not for my editing skills. And look, he's a great editor.

Tyler Chao [00:35:29]:
I think he has since then moved to Mr. Beast's team. But my point is, it took us another eight months to try to unravel that situation, get him under that employment agreement. We still had to, like, give him 25% of Adsense. So run a clean business, have the right agreements in place. I think these are easy solves that a lot of creators aren't thinking about. But if they started thinking about it, I think it would save them a lot of money in the upfront, because litigation is very, very expensive. We're talking $50,000 to $100,000 very easily.

Tyler Chao [00:36:07]:
If someone sues you and you have to do a motion to dismiss or an answer, you go into depositions and discovery, I mean, that's $100,000 easy versus, you know, having an attorney. I mean, I have templates. I have independent contractor templates, employee templates. They're $700 each. And that will save you way a lot of headaches in the front end versus litigation on the back end.

Jay Clouse [00:36:35]:
What can you tell me about intellectual property as it relates to thumbnails? If I'm trying to pull an image into a thumbnail that I don't own, how should I go about getting permission for that? Or are there safe things that I can do? Because I've heard that there are some photography companies especially, that are especially litigious.

Tyler Chao [00:36:59]:
Yes. I actually had a client where this just happened to them. They used a photograph from a pretty famous photographer who's pretty well known for being litigious, and she likes to go after violators. And it seems like this is how she makes a living. I mean, she was a very famous photographer in the 70s. She took a bunch of photos of celebrities. And as I mentioned earlier, the photographer or the videographer who takes the content actually owns it. If you're going to use very famous photographs Definitely get a license.

Tyler Chao [00:37:37]:
You can reach out to the original photographer. And sometimes when you go to their website, it will actually say, go to this licensing house to get a license. Now, you and I have both done this. We will take a photo of a big creator, right? Or somebody, you know, maybe not like celebrity level, but just someone, you know, who's. Who's a big YouTuber. I have found that usually that's fine, but usually it's not 100% right. I have also heard of creators saying, don't use my photo, but I think when you're using creators photos, like, we tend to be a little more lenient because we understand how hard it is, you know, to be able to make content. There's also transformation, right? You can take someone's likeness and really transform it so that it looks like them, but it's not really them.

Tyler Chao [00:38:28]:
And you're like trying to convey the idea that it's somebody you know. Like, for instance, there's that guy that looks like Tom Cruise, but isn't Tom Cruise, right? Like, you can use a photo of him potentially to convey Tom Cruise, but it's not Tom Cruise. If you're going to use a very famous photograph that you know is very famous. Like, for instance, I just. This has popped up, you know, there was a photograph of a back. Of a woman's back, right? And like this photographer put like two notes on it, like to convey. It looks like a cello. That's a very famous photograph.

Tyler Chao [00:39:02]:
If you're going to go use that photograph, you better go to that photographer's estate and get a license for it. Because estates tend to be, you know, pretty protective of certain photographers work.

Jay Clouse [00:39:15]:
Yeah. I think the takeaway is photography that is a specific photographer or that's their living or a photography house or some of these houses that do, like, stock imagery.

Tyler Chao [00:39:32]:
Well, like Getty, right? Getty is very litigious. Like, do not take any Getty images without licensing it.

Jay Clouse [00:39:39]:
Tread super carefully. I think that's the takeaway because again, I mean, with all of this, everything comes with some level of risk. And you have to decide what level of risk are you comfortable with. And some of this relates to the culture of YouTube. As you said, creators tend to be a lot more lenient and forgiving. But as you also said, if you're using someone else's IP, they are 100% in the right to issue a copyright strike. So always a better path to get an official license. A piece of paper is my takeaway from you pay for it and recognize if you don't have that you're carrying some level of risk, and you'll want to decide what level of risk you're willing to bear and deal with the consequences.

Tyler Chao [00:40:25]:
I think that's a great point, Jay. And one thing I want to give to creators as a point of comfort is most of the time, you're not going to get sued. Most of the time, you're not going to get a copyright strike. I say to some of my clients, by the way, just have a litigation fund. I mean, we're talking big creators here, right? If you think of yourself as a startup, you think about Uber and Airbnb. You know, when they started their businesses, they were going fast and breaking things, and their lawyers would be running after them saying, don't do this, don't do this. But the founders would say, you know, the. The amount of profit we're going to make by going fast will cover the litigation fees.

Tyler Chao [00:41:05]:
And I had a boss who said to me, because I was the head attorney at this private equity fund, and he said, why are you so stressed out? I said, because we keep getting sued. And he gave me such a great piece of advice that changed everything for me. He said, if you're not getting sued, then you're not doing big business. And that really shifted the way I thought about litigation, because it's true when you're doing huge business, I mean, you look at OpenAI, they're breaking things, and they're creating a whole new world, and they're getting sued a lot for it. But the revenue that they're making will far outweigh all the litigation costs. I want creators to walk away from this conversation not being scared. I want them. I want creators to be empowered and really optimistic and happy about being a creator.

Tyler Chao [00:42:01]:
Because you look at the economy, you look at how many people are getting laid off, there's no better job security than having your own personal brand and your own business. Right now on YouTube, no one is going to take this away from you, right? They can't take it away from you. In the same way if you had a job, right, because you could lose your job, you could get laid off. Our YouTube channel is what we make of it. How much we put into it is how much we get out of it. And there's so much freedom and power in that. And I want creators to walk away from this conversation with that in mind, and everything is solvable. If you have a copyright strike or if something happens, it is solvable.

Tyler Chao [00:42:42]:
YouTube will work with you to try to help you. And if you need to, and it's really complicated. You can always reach out to me. It's really important for me to educate and help creators.

Jay Clouse [00:42:53]:
Besides being legally legit, I believe you should be thinking a lot about building your brand and creator economy. Legends Collin and Samir agree with me. Watch this video where we talk about how they're thinking about their brand.