Legal Issues of Social
Media for Businesses
#awesomelegalpresentation
Tony Zana
March 11, 2014
Legal Disclaimers
These materials have been prepared solely
for educational purposes.
These materials reflect only the personal
views of the author.
The presentation does not establish any form
of attorney-client relationship.
While every attempt was made to ensure that
these materials are accurate, errors or
omissions may be contained therein, for
which any liability is disclaimed.
Outline
•
Legal Challenges for establishing TMs in Social Media
•
Using Social Media: Pitfalls and Practice Tips
•
Enforcement of your IP Rights in Social Media
Establishing a Trademark
Initial Trademark Clearance
• Old School: search USPTO for pending or
registered trademarks
• Today, the USPTO is only half of the
story— Internet and social media are
helping businesses establish broad
trademark rights quickly, long before
registration is achievable
• Competent trademark searches must consider
the broader marketplace—social media, blogs,
usernames, WHOIS
5
Trademarks Created Nearly Overnight
• The time it takes to create a recognizable and
protectable Trademark can also be far less
• Example: Grumpy Cat
In September 2012, a photo
of a grumpy cat was posted
on Reddit (user generated
news links) and soon after
“Grumpy Cat” became an
internet sensation and
trademark. Today the brand
sells t-shirts and other
merchandise.
6
Social Media and Mark Clearance
• Consider the
following sites when
seeking clearance:
– KnowEM.com searches the
“availability” of a trademark on
social media sites
– AdGooroo.com provides
traffic reports on who is
bidding on keywords that
may tie into your trademark
7
Example: Social Media and Brand Clearance
• Although the creator of internet games Farmville and Cityville did not
own federal trademark rights to the games, in 2012 it brought suit
against a French games company alleging trademark infringement for
the Facebook game ‘Pyramidville.’With a social media search,
Pyramidville likely would have identified Zynga’s common law rights
created through actual use.
8
Brand Protection That Was Too Late
9
Trademarks, Domain Names, and being Proactive
• Extensively search all online sources before
deciding to use a word or logo as a trademark
• Register Trade Marks and Service Marks
• Register Domain Names
•
•
Reserve vanity URLs—by creating official company pages, user
names, conference names and groups
Think not only about first level domain names—
.com/.net/.biz/.info
• Establish social media accounts on all new
platforms
Using Social Networking:
Pitfalls and Best Practices
The Starting Point
Threshold Question: Is social media really
necessary for your marketing?
If your business is not consumer driven, it may not
be.
And in that case, reducing your social
media footprint is a way to reduce brand
vulnerability – for most businesses, this
will not be the conclusion reached.
Social media is a must have for most
business.
12
Create a Social Media Policy
– An official, company-wide social media
policy creates guidelines for use
– Purpose—to protect the privacy,
confidentiality, and interests of your
company
– www.socialmediagovernance.com—collection of
policies from major companies; useful resource
13
Embarrassing Posts by Companies
In 2011, Kenneth Cole used
the riots in Cairo to promote
its latest collection.
Twitter users quickly
expressed their disgust of the
post by starting the hashtag
#boycottKennethCole.
The company apologized
within hours
14
Bad Employee Posts
Personal use violating Company Policy
In August 2013, Wade Good, a
Lacoste sales person in New
York, posted a picture of his paycheck on
Instagram, along with the following
commentary:
Employee violated the confidentiality
policy and Lacoste wanted pay rates kept
secret
• PRACTICE TIP: Facebook
is the first place that
litigators go to when an
individual or company is in
a lawsuit
16
Basic Elements of the Policy
– Needs to cover professional and individual use of social media
– Should be part of the employee handbook/written code of conduct
to establish repercussions
– Identify specifically what is off limits
–
–
–
–
–
Litigation
Non published financials
Unreleased product information
Anything covered by an NDA
Patents (1 year)
17
Social Media Employee Training
– A social media training program
should outline what behavior the
company expects from employees
on social media,
– Educate employees using
examples of good and bad
posts
– Detail tagging guidelines
– Address issues of attribution
– Guidance on User name
selection
18
Other Recommendations
• Install a governance committee
• Implement a formal system for management of user
names (central process and repository)
• Draft a social media brand style guide—purpose is to
define the brand personna and ensure the right voice and
approach
• Consider hashtags and keywords
• www.hashtagify.me (identifies popular hashtags)
19
Be Aware of the New FTC Guidelines
As of March 2013:
The FTC updated its rules and guidelines to specifically
address questions of legal compliance that arise when
businesses are developing or sponsoring online promotions
and advertising.
• Endorsements
• Fakes
• Disclosures
20
Endorsements
– An endorser cannot talk about his or
her experience with a product if they
haven’t actually tried it
– An endorser must represent his or her
true experience—if he/she thought the
product was terrible, he/she cannot say
the product was terrific.
– If an endorser lost 30lbs in 6 weeks on a
diet-pill, but the average is about 10lbs,
he or she cannot claim everyone will
have the same experience
– Paid endorsements must come with a
disclaimer (“Ad:” “#ad”)
21
Flogs
Flog: A fake blog, or electronic
communication appearing to
originate from a non-biased
source (advertisements, mass
emails), but is directly or
indirectly created by a
company to market a product,
service or political viewpoint.
Note: Fake reviews violate deceptive business practices and false
advertising state laws. In September 2013, the New York Attorney
General revealed a year-long undercover investigation that resulted
in 19 companies paying over $350,000 in fines for writing fake
online reviews.
22
Wal-Mart Flog
In September 2006, the blog Wal-Marting Across America was born.
The blog followed a couple, Jim and Laura, on their RV journey from Las
Vegas to Georgia while parking for free at Wal-Mart stores. The blog
highlighted employees who told stories of how much they loved to work at
Wal-mart.
It was later revealed the flog was written by three PR firm employees
working for Wal-Mart and Jim and Laura were paid by Wal-Mart
23
Samsung Fake Comments
• In October 2013, Taiwan’s Federal Trade Commission
determined that Samsung Electronics paid numerous
employees and writers to post negative comments about
HTC.
• The company was ordered to pay a $340,000 fine
24
Fake Followers
• Fake Followers can be purchased online (example
fiverr.com)
• May constitute a deceptive trade practice under
state law and violation of FTC regulations
• Violates Facebook’s Terms of Use
• At a minimum, looks tacky (followers often “expire”)
• Also avoid purchasing fake You Tube product
endorsements
New FTC Guidelines: Distractions
• Proximity and Prominance
– The extent to which items in other parts of the
advertisement might distract attention from the
disclosure
Note: Icons, abbreviations and symbols
are likely to be overwhelmed by other
distractions in an advertisement. In this
example, the letters FS are insufficient to
show Julie Brown received a free sample.
The amount of text significantly distracts
the reader from the FS, and there is no
guide to explain what FS means.
26
Disclosures
• Don’t Rely on Hyperlinks for Disclosure:
−Hyperlinks should not be used to communicate disclosures that are
an integral part of a claim, including important health and safety information
27
User Generated Content
• User-generated content includes everything from blog
posts, to website comments to videos, and more
• Great for user engagement but you can pick up
liability if the users violate the rights of a third party
• Two laws you need to know about:
Digital Millennium Copyright Act (Title II Online
Infringement Liability Act) – safeharbor for copyright
liability
Communications Decency Act – immunity for
those who publish communications of others
28
Copyright: User Generated Content
• Example: Someone posts a copyrighted work on your blog or social
media page
• The “Safe Harbor” Provisions of the Digital Millennium Copyright
Act (DMCA) can protect your company from user-generated content
liability. Originally designed to protect internet service providers,
same protection applies to blog owners.
• Provide users notice of:
1. no actual knowledge of infringement
2. written policies regarding copyright infringement,
3. reasonable takedown procedures
4. registered agent with copyright.gov
Defamation: User Generated Content
Example: In 2009, Sarah Jones, an ex-
Bengals cheerleader and former high school
teacher brought an invasion of privacy and
defamation suit against TheDirty.com for
third party’s comments alleging she had
STDs. Court found website liable as the
provider of the content
-
-
Section 230: No provider or user of an
interactive computer service shall be
treated as the publisher or speaker of any
information provided by another information
content provider.
Contrasting example: Doe v. My Space –
no liability for My Space for stalking and
resulting sexual assaults by users
30
Trademark: User-Generated Content
• Trademark related claims are not protected under
the DMCA or Section 230 of the Communications
Decency Act.
31
Contests, Sweepstakes and Lotteries
•
Contest – prize given on the
basis of skill or merit
•
Sweepstakes/Giveaways –
prize given to a person that is
randomly selected
•
Lotteries – prize, chance and
consideration
DISTINGUISHING ELEMENT IS
CONSIDERATION
Contests, Sweepstakes and Lotteries
• Contests – only requires disclosure of name of
sponsor, number of rounds/levels, criteria for
winning
• Sweepstakes/Giveaways – must have official
rules that do not change during event
•
“no purchase necessary” and “void where prohibited”
•
Keep value under $5,000 to avoid registration requirements
• Lotteries – basically illegal so avoid them
Closer call – whether the requirement to “like” your Facebook page is
consideration enough to become a sweepstake or lottery
Google AdWords
•
Issue: Can you buy AdWords
that are a competitor’s
registered Trademark?
•
Google will not prevent use of a
TM either as a keyword or in the
text of an ad
•
Google will investigate use of a TM in the ad text but not as
a keyword
•
However, a direct action may exist from the TM owner but
not usually practical
Enforcement of IP Rights
in the Social Media “Community”
Trademark Enforcement in Social Media
Traditional Trademark Infringement:
Any person who, on or in connection with any goods or services …
uses in commerce any word, term, name, symbol, or device…which
is likely to cause confusion…with another person, or his or her
goods, services, or commercial activities
Traditional Cybersquatting:
Anyone who, “with [a] bad faith intent to profit from the goodwill of
[another's] trademark, registers, traffics in, or uses a domain name”
that is identical to, or confusingly similar to, or dilutive to their mark,
without regard to the goods or services of the parties.
36
Parody not used in Commerce
37
New Forms of “Infringement”
But traditional concepts of infringement may not offer
meaningful relief for the various new types of harms that
can occur in social media:
- Brand-jacking
- Impersonation
- Bashtags
38
Trademark Enforcement in the Social Media Realm
Brand-jacking:
The act of assuming the online identity of a business
with the intent to acquire the business’ brand equity.
This is something that can usually be stopped
39
Brand-Jacking Illustrated
In 2010 after the BP oil spill, a
twitter user created the parody
account @BPGlobalPR to
promote other things
The account has nearly
double the twitter followers as
the “official” BP twitter page.
The tweets diminish the
goodwill of the company’s
trademark.
40
Impersonation
The act of impersonating another on Facebook or Twitter.
Squatting not okay under Twitter rules, but active parody use is
okay
E-Impersonation laws are proliferating that are broader than
TM laws:
• Criminal Impersonation: Assume a false identity to fraudulently gain
an economic benefit, or pretend to represent an organization or an
individual in order to fraudulently gain an economic benefit, criminal
impersonation in Alabama. Class B misdemeanor. (Code of Alabama
section 13A-9-18)
• Phishing: using email, a website or Internet solicitation to access a
person’s identifying information. Class C felony (Code of Alabama
section 13A-8-114)
41
Twitter Impersonation Illustrated
•
•
•
•
In 2009 Anthony La Russa, manager of
the St. Louis Cardinals, filed suit against
Twitter after an unknown user created the
account twitter.com/TonyLaRussa using
La Russa’s photo, and pretending to
post updates as the manager.
La Russa claimed trademark
infringement and dilution,
cybersquatting, and misappropriation
of name and likeness.
He later dropped the suit – but this
led Twitter to start the “Verified
Account” program
Pranksters had no money to satisfy a
judgment and claim against Twitter
was unlikely to succeed
42
Bashtags
Bashtag:
A hashtag that is “hijacked” for criticism or “social
media humiliation”
No property right in a hashtag; usually results in
hashtag being blocked
43
Bashtags Illustrated
• In 2012, McDonalds paid to
launch a Twitter campaign using
the hashtag #McDStories.
• Twitter users turned the hashtag
into a bashtag sharing
McDonald’s horror stories
• The company pulled the
campaign down within two hours
44
Traditional Enforcement does not Work in Social Media
• Generally “Black Letter Law” is not the best source
to resolve a social media dispute
– From an enforcement perspective, it is still the wild west
• Best place to start resolving a social media trademark-like
claim is likely with the services operator
• Each website’s specific “terms of use” polices and dispute
resolution procedures are the best place to start to look for
relief
45
Social Media Terms of Use Policies
• Facebook Terms of Use:
– If a user selects a username or similar identifier for his or her account or
page, Facebook provides the right to remove or reclaim the page if
Facebook “believes it is appropriate...”
• Twitter Terms of Use
– Twitter “may” suspend an account or give an account holder “opportunity to
clear up any potential confusion”
– BUT compare: “Using another's trademark in a way that has nothing to
do with the product or service for which the trademark was granted is not
a violation of Twitter's trademark policy.”
46
Social Media Terms of Use Policies cont.
• Facebook and Twitter—both acknowledge some steps to
protect trademarks, but their policies do not:
– outline their trademark investigation strategies
– set parameters of what would constitute as “abuse” of a mark
• Nevertheless, without a registered TM, the namespace
operators will likely not take action
47
The Best Defense is a Good Offense
• Develop a social-media oriented trademark
infringement detection strategy
– A detection strategy can help protect against
uncharacteristic activity purporting to originate from your
company or its management.
–www.topsy.com
–www.tweetdeck.com
– As trademark owners you have an obligation to
monitor and enforce your rights.
48
The Best Defense Is a Good Offense cont.
• Identify the types of abuse that are most important
to your business
• Determine the most clear-cut forms of abuse and
prioritize detection
• Question how fake Twitter pages or LinkedIn
accounts affect your brand
• Develop relationships with the social media sites
that are key to your brand to help enforce and
protect against infringement
49
Reacting to Online Problems
• Formulate a Crisis-Management Decision Tree
– Coordinate between departments within your
organization
•
•
•
•
PR
Legal
Product Development
Executives
– Assess benefit of letting it go
• Rant? Joke? Factually erroneous? Satire?
Rule No. 1: ACT QUICKLY
100
Notre Dame Decision Tree
http://onmessage.nd.edu/communications-policies-and-guidelines/social-media-decision-tree/
51
Policing Your Brand
• Just as traditional trademark law is not a panacea,
traditional enforcement approaches may backfire
– Cease and Desist letters—recognize that it will be
posted on the Internet, so tone and content are
critical
– Trademark Bullying is a widespread complaint these
days—generally directed at companies that are
perceived to overreach in their enforcement efforts
– Be aware that the backlash against patent troll
litigation has been extended to IP rights enforcement
in general
52
Policing Gone Wrong: Nutella
53
Policing Gone Wrong: Nutella cont.
• A Nutella lover created “World Nutella Day” to encourage
fans like herself to post pictures, videos and blogs
expressing their obsession with Nutella.
• Major news outlets helped grow the event from a blogger's
invention into an unofficial holiday on February 5th. The
World Nutella Day Facebook page had over 40,000 likes.
• In April 2013, the company sent the blogger a cease-anddesist letter demanding that she stop publishing anything
with the Nutella name, logo or likeness.
54
Policing Gone Wrong: Nutella cont.
• In response, fans of the page expressed outrage. “Never
bothering with Nutella…Maybe one of these days
companies will stop threatening their most passionate
customers.,” one user wrote.
• Less than a week later, the company dropped the ceaseand-desist request.
• With a detection and friendly enforcement strategy in place,
the company likely could have avoided public
embarrassment.
55
Policing Gone Wrong: Louis Vuitton
56
Policing Your Brand: Louis Vuitton cont.
• In 2012, Louis Vuitton sent a cease-and-desist letter to the
University of Pennsylvania for the use of the company’s
monogram on a flyer promoting a fashion and intellectual
property law symposium hosted by a student group.
• The letter claimed had the traditional C&D demands and also
insulted the Penn Intellectual Property Group‘s understanding
of the law
• The letter and the University’s response to the company’s
counsel went viral.
57
Policing Your Brand Creatively: Jack Daniel’s
Dissimilarly, Jack Daniel’s recently used a more creative approach (via
e-mail) after discovering the cover of an author’s book closely resembled
elements of JACK DANIEL’s trademarks, and was allegedly infringing.
58
Policing Your Brand Creatively
59
Conclusions
1. Stake your claim
2. Ask first
3. Stay current on rules
4. Use safeharbors
5. Have contest rules
6. Monitor your marks
7. Choose your battles
8. Enforce smartly
9. Set parameters with
employees
10.Use your lawyer