NLRB Decision Guides Administratve Law Judge's Invalidation of Social Media Policy

An NLRB Administrative Law Judge, following the lead of the NLRB and its recent decision in Costco Wholesale Inc., invalidated the social media and other employment policies of EchoStar Corp. The policies deemed improper prohibtted employees, in part, from disparaging a company on social media sites. The ALJ agreed with the NLRB General Counsel's argument that a generic clause in the employee handbook that employees were free to exercise their rights under the National Labor Relations Act was insufficient to bring the rules within compliance with the Act.

Given the Board's decision in Costco and the General Counsel's campaign against such policies, we expect more decisions at both the ALJ and the Board level invalidating employment policies limiting employee speech, regardless of the forum.

NLRB Rejects Social Media and Confidentiality Policies

This post was written by Stacy Marcus and Joel Barras.

The National Labor Relations Board’s recent decision in Costco Wholesale Inc., invalidated certain personnel policies, including social media policies, protecting the dissemination of employee health information and personal identifiers. This case marked the NLRB’s first decision involving its independent General Counsel’s interpretation of federal labor law as it applies to social media and other personnel policies. The decision (profiled here by Joel Barras) signals the NLRB’s agreement with its chief prosecutor’s attack on commonly adopted policies regarding, among other things, confidentiality of company information, and follows the series of reports issued by the NLRB General Counsel on social media.

FTC to MySpace: Watch What You Do in Consumers' Space

On Tuesday, the FTC approved a final order and consent decree settling charges that MySpace misrepresented its protection of users’ personal information. The settlement bars MySpace from future misrepresentations about its privacy practices, and requires MySpace to implement a comprehensive privacy program with regular, independent privacy assessments for the next 20 years.

For more information, please visit the Global Regulatory Enforcement Law Blog and read their Client Alert, "FTC’s Final Order with MySpace Focuses on Privacy by Design and Protection of Unique Device Identifiers" written by Paul Bond, Amy S. Mushahwar, and Christine E. Nielsen.

A Growing Trend - Employers Prohibited from Requesting Employee or Applicant Social Media Log-In Information

Earlier this year, Maryland enacted Labor and Employment Code §3-712, becoming the first state to pass a law explicitly prohibiting employers from requesting or requiring employees or applicants to disclose their usernames and passwords for their personal social media accounts. The law also prohibits an employer from discharging, disciplining, or penalizing the employee (or threatening to do so) or refusing to hire an applicant for refusal to disclose this information.

This law only applies to Maryland employers, but employers across the nation should take note as a number of other states are contemplating similar laws. Illinois’ version has already passed both legislative houses and is likely to become law within the next couple of months. California, Delaware, Michigan, Minnesota, New Jersey, New York, Ohio, South Carolina, and Washington are also contemplating their own versions of the law. The federal government has introduced similar bills in both the Senate and House as well.

While the need for such legislation has been debated, there is undeniably a growing trend among the states to introduce legislation prohibiting employers from asking employees or applicants for their social media log-in information. In response, employers should take steps now to account for this growing trend, such as reviewing and revising their internal policies and procedures so that they are consistent with the legislation. Further, employers should communicate these revised policies and procedures across the company so that hiring personnel are aware of what they can and can not ask from employees or applicants.

We will continue to monitor this arena for developments.

Facebook and Lamebook Settle Trademark Dispute

On August 25, 2011, Facebook and Lamebook, a self-described “fun humor blog” which highlights funny, absurd and “lame” things people post on Facebook, settled their trademark dispute. The dispute began in early 2010 with Facebook sending Lamebook a cease-and-desist letter to change its name and stop using the Lamebook mark. After months of discussions between the parties, Lamebook filed a lawsuit in Texas in November 2010 seeking declaratory judgment that it was not infringing the Facebook trademark or trade dress rights. Days later, Facebook filed its own suit in California claiming trademark infringement. Facebook then dismissed its case, without prejudice, after a failed attempt to have the Lamebook suit dismissed or transferred. 

The parties released a mutual statement settling the Lamebook lawsuit, stating that, “We are pleased to arrive at an agreement that protects Facebook’s brand and trademark and allows for Lamebook’s continued operation … The parties are now satisfied that users are not likely to be confused.” As part of the settlement, Lamebook agreed to add a “prominent disclaimer” to its website and won’t seek trademark protection for its name. The disclaimer that now resides on the Lamebook website states, “This is an unofficial parody and is not affiliated with or associated with, or endorsed or approved by, Facebook.”

It’s unclear whether Facebook settled because it was concerned about the possible outcome of litigating a case in Lamebook’s hometown of Austin, Texas, or whether it wanted to avoid the potential negative publicity associated with the case. Or maybe Facebook was concerned that, given Lamebook’s argument that it was a parody website, the case would have turned out similar to the prominent Louis Vuitton Malletier, S.A. v. Haute Diggity Dog, LLC case (507 F.3d 252), which found that the defendant Haute Diggity Dog did not infringe or dilute the Louis Vuitton trademark with its Chewy Vuiton line of products. Regardless of the reason, the settlement is surprising considering how protective Facebook is of its intellectual property rights. Facebook currently has unresolved disputes against other “-Book” marks, including TeachBook.com, FacebookOfSex.com, and Shagbook.com. 

Facebook Gets In Your Face

This post was written by Spencer Wein.

Facebook has rolled out a new feature that uses photo recognition technology to suggest friends’ names to tag in uploaded photos. While certainly an impressive feature, the problem is that the social network giant introduced the feature as a default setting rather than as an opt-in option. This has left privacy advocates up in arms. 

Prior to facial recognition technology, Facebook users could manually tag pictures without permission from their friends. Under the new default settings, when a Facebook user adds photos to his or her pages, facial recognition software suggests names of people in the photos to tag based on pictures in which that user’s friends have already been identified. The feature is active by default on existing users’ accounts, though Facebook does explain on its blog how users can disable the function if they don’t want their names to be automatically suggested in their friends’ photographs.

On June 10, Washington-based Electronic Privacy Information Center (“EPIC”) filed a complaint with the Federal Trade Commission regarding Facebook’s new automated tagging feature. EPIC uses strong, Orwellian language, alleging that “[u]sers could not reasonably have known that Facebook would use their photos to build a biometric database in order to implement a facial recognition technology under the control of Facebook.” EPIC further warns that “absent injunctive relief by the Commission, Facebook will likely expand the use of the facial recognition database it has covertly established for purposes over which Facebook users will be able to exercise no meaningful control.” In its request for relief, EPIC urges the FTC to force Facebook to suspend photo-recognition “pending a full investigation, the establishment of stronger privacy standards and a requirement that automated identification, based on user photos, require opt-in consent.”

Facebook, on the other hand, has downplayed the recent complaints, writing on its blog that “Tag Suggestions” had already been widely available in most countries as it had been phased in over several months. “We launched Tag Suggestions to help people add tags of their friends in photos; something that’s currently done more than 100 million times a day,” Facebook further noted in an emailed statement. “Tag suggestions are only made to people when they add new photos to the site, and only friends are suggested.”

By limiting the feature to a user’s friend list, Facebook has attempted to minimize privacy infringement. However, there is no guarantee that Facebook does not eventually extend the tag suggestions to its complete user base. A person could conceivably take a picture in a public place, and then easily learn a stranger’s identity. At worst, this could help facilitate criminal acts. At a minimum, the technology could create online reputation problems. 

Additionally, it is unclear if Facebook will make the technology available to advertisers. Though certainly not an imminent danger, it is possible that the technology will reach a point where advertisers will recognize people in physical spaces and present personally tailored ads. Further, we cannot know how Facebook will respond to subpoenas and government requests for such data. 

Regardless of the technology’s “Big Brother” potential as well as the ongoing backlash that Facebook seemingly continues to experience with the rollout of each new feature and tool, it's quite surprising this company maintains the same, standard modus operandi of making its privacy-related features and tools the "default" setting. It will be both important and interesting to monitor how Facebook and its opponents handle this latest privacy issue.

Facebook's Newest Revision to its Promotional Terms of Use

This post was written by John P. Feldman and Drew R. Boortz.

Facebook revised its promotion rules for sweepstakes and contests on the premier social networking site. These revised terms went into effect May 11, 2011.

Communication About a Promotion Still OK

Although the revised promotion guidelines define “communication” broadly, they do not add any new restrictions in this regard. Thus, as it was before, one may advertise on Facebook for a promotion that exists outside of Facebook. 

Clarifications Regarding Administration of Promotions

The real meat of the revision is in Facebook’s clarification that one cannot use Facebook functionality to administer a promotion, including the entry process, voting, or communication, with potential winners.

  • All promotions administered on Facebook must be accomplished through an application. This is not a new requirement, but it was not always clear when and where that application must reside. Now, Facebook states that all promotions must be administered within Apps on Facebook.com, either on a Canvas Page or an app on a Page Tab. 
  • As before, all promotions on Facebook must include the following:
    • A complete release of Facebook by each entrant or participant.
    • Acknowledgment that the promotion is in no way sponsored, endorsed or administered by, or associated with, Facebook.
      • These were generally required under the older guidelines but seemed to apply even when a promotion was simply communicated on Facebook. Now, it’s more clear that they apply when you are administering a promotion on Facebook
      • Plus, there is now an additional required disclosure: Disclosure that the participant is providing information to [disclose recipient(s) of information] and not to Facebook.
      • Also, Facebook has underscored its desire to distance itself from any third-party promotion by prohibiting promoters from using Facebook’s name, trademarks, trade names, copyrights, or any other intellectual property in connection with a promotion, or to mention Facebook in the rules or materials relating to the promotion.
        • This obviously creates a tension – how can a promotion-sponsor tell consumers how to participate in a promotion run on Facebook without using the word “Facebook”?
        • Furthermore, Facebook is generally liberal with third-party use of certain IP (e.g., the “Like” functionality), so this provision seems at odds with how Facebook typically operates.
        • This provision is likely to be enforced when a promotion sponsor borrows “too much” of Facebook’s IP, and makes Facebook appear to be a promotion participant or sponsor. 
  • Facebook has now restricted the use of standard Facebook features as a method of registration or entry into a promotion. The new guidelines state: “One may not use Facebook features or functionality as a promotion’s only registration or entry mechanism. For example, the act of liking a Page or checking in to a Place cannot automatically register or enter a promotion participant.” Although this provision could be interpreted as prohibiting the use of “liking” or “checking in” for any promotion, we do not think this is Facebook’s intent. Rather, when this provision is read in context with the following provision, we think it more likely that Facebook means that the use of standard Facebook functionality cannot be the only method used for entry or registration; entry or registration must still utilize an application.
    • This could mean that a promotion sponsor cannot do a simple “fan” giveaway where it distributes prizes to one or more of its “fans.” A promotion such as this would involve selection of winners from among individuals who merely utilized Facebook functionality (i.e., “Liking”). Because it does not utilize an application, the promotion would be prohibited under the Facebook guidelines.
  • The next provision states: “You must not condition registration or entry upon the user taking any action using any Facebook features or functionality other than liking a Page, checking in to a Place, or connecting to your app.  For example, you must not condition registration or entry upon the user liking a Wall post, or commenting or uploading a photo on a Wall.” This prohibition essentially says that to the extent you have built an application to administer your promotion, you can require that people download your application, Like your Page, or check into a Place as part of the entry process. But, you cannot require any other action that implicates other Facebook features or functionality, such as liking a Wall post or commenting on a photo on a Wall. 
    • Perhaps the reasoning for this stems from spamming concerns. For example, a promotion entry mechanism that requires someone to post to a Wall would typically get a post devoid of useful content (e.g., “register me,” or “entry”). 
    • This provision should not be interpreted as banning the use of photo upload contests on Facebook. The application built to administer a Facebook-based promotion should include a photo upload element; the promotion should not utilize the standard Facebook “upload to wall” functionality.
  • Facebook has added a new prohibition on the use of “Liking” as a voting mechanism. “You must not use Facebook features or functionality, such as the Like button, as a voting mechanism for a promotion.” This is perhaps the most dramatic change in the revised promotion guidelines as many promotions used “Liking” as a proxy for voting. Now, the application built to administer the promotion must include a mechanism for voting that is different from the “Liking” feature. 
    • One interesting question that is not addressed by these guidelines is the use of the “Like” functionality outside of the Facebook network. The “Like” functionality has been distributed throughout the Internet and can appear on a variety of websites not controlled by Facebook. Thus, it is possible that a promotion sponsor could build a microsite to host video uploads and allow viewers to “Like” the videos. Facebook’s system would tabulate the number of “Likes,” effectively transforming them into “votes,” but arguably would not be able to enforce these promotion guidelines as the promotion was not being run “on Facebook.”
  • Finally, Facebook clarified the old prohibition on the use of Facebook messaging systems (e.g., messages, chat, wall posts, etc.) to notify winners: “You must not notify winners through Facebook, such as through Facebook messages, chat, or posts on profiles or Pages.” This further separates Facebook from any implication of sponsorship, and means that a sponsor must be sure to obtain entrants’ contact information so that it may contact them outside of Facebook.

Doug Wood Takes on Social Media in Hollywood

Doug Wood's latest social media piece on Law.com smacks a little of Animal Farm, a little Fountainhead, and a little…well you judge for yourself. Enjoy.

A Tweet Silences the Aflac Duck - A Case Study in Celebrity Agreements

Gilbert Gottfried is looking for gainful employment, and Aflac is looking for a new voice-over man. Gottfried was terminated Monday as the voice behind Aflac’s iconic duck when he tweeted jokes and one-liners over the weekend about the recent crisis in Japan that Aflac determined to be tasteless, inappropriate and insensitive. “Gilbert's recent comments about the crisis in Japan were lacking in humor and certainly do not represent the thoughts and feelings of anyone at Aflac,” the company, which does 75 percent of its business in Japan, said in a statement.  “There is no place for anything but compassion and concern during these difficult times.”

While a celebrity getting fired for inappropriate conduct isn’t a novel concept, what makes this specific firing interesting is the social media component. Social media has the immediate effect of amplifying a conversation, and turning one twitter posting (aka, a tweet) into thousands of recycled and re-tweeted postings within seconds.1

Aflac, as expected, invoked the morals clause under Gottfried’s contract, as the basis for his termination. While morals clauses are often the most difficult and uncomfortable provisions to negotiate in celebrity talent contracts, this recent event and several others of late demonstrate their indispensability. In that spirit, advertisers should take away at least three important points:

  • Make sure your morals clause covers anything a celebrity does, says, writes or posts in any medium, including digital (it may be even be a good idea in this day and age to have a specific social media reference within the clause)
  • In addition to the usual suspects like illegal or publicly obscene or indecent acts, be sure the morals clause is broad enough that it also covers things like: (i) the celebrity conducting him/herself with due regard for public morals and decency, (ii) non-disparagement of the advertiser, (iii) behavior consistent with the advertiser’s dignity, high standards and public image, and (iv) any other events that would have a materially adverse effect on the advertiser’s reputation. Equally important, make sure that any determination as to whether or not a celebrity has violated the morals clause is left up to the advertiser in its sole (i.e., subjective) discretion, rather than applying some reasonable-person standard that will take three years to resolve in the courts.
  • Put in place a social media policy before it’s too late, and make sure to cross-reference the policy in your celebrity agreements. Without a carefully crafted and prudently enforced social media policy, advertisers will be increasingly faced with these kinds of rogue incidents, and are even more likely to be held accountable for the acts and omissions of their employees, consultants and celebrities.

The Gottfried happening may have been best summarized by John Diefenbach, Chairman of MBLM in New York, when he remarked, “The liberties that have been created by the Internet, by social media” must be balanced against “the idea that there’s an accountability and a responsibility if you’re being paid by someone to do a job.”

If you have questions or concerns about celebrity agreements or social media policies, feel free to contact Adam Snukal or the attorney within Reed Smith with whom you regularly interface.

 


1   A tweet was the basis of another high-profile termination last week, this time an agency agreement, when an account representative from New Media Strategies, the agency entrusted with managing the Twitter account for Chrysler, tweeted, “I find it ironic that Detroit is known as the #motorcity and yet no one here knows how to #*@& drive.”  The tweet was taken down, the employee was terminated, and Chrysler announced that it would not continue to use the services of New Media Strategies.

When Tweets Go Wrong

You’re a cutting edge digital agency, right? You have the capabilities to drive and manage your clients’ social media presence. Now, the question is, do you really want to? Today, Chrysler decided not to renew its contract with New Media Strategies (NMS) two days after an NMS employee tweeted from the @ChryslerAutos account: “I find it ironic that Detroit is known as the #motorcity and yet no one here knows how to [expletive] drive.” Although the tweet was quickly deleted, it had already spread to blogs, some of which criticized Chrysler’s “cold and corporate” response. Fortunately for you, NMS’ downfall can serve as a cautionary tale. First, determine who controls social media content, you or your client, who has access to the accounts, and whether or not content must be pre-approved or screened prior to posting. Second, have a plan in place regarding how to address negative posts (even accidental ones made by your own employees). Be creative, in some cases, you might be able to take a humorous spin on the screw up. Last, keep in mind that all it takes is one accidental tweet to kill a strategy. Be sure to check out the comments on the original article.

Teen COPPA?

The Federal Trade Commission testified that while teens are heavy users of the digital environment and may benefit from using the Internet to socialize with peers, learn about issues that interest them, and express themselves, it also can pose unique challenges for them. The FTC testimony to the Senate Committee on Commerce, Science, and Transportation, Subcommittee on Consumer Protection, Product Safety, and Insurance notes that the Commission will continue to use law enforcement, education, and policy tools to protect teens in the digital environment.

@SecuredTweets: Twitter settles privacy charges brought by Federal Trade Commission

Today, Twitter and the Federal Trade Commission settled charges that the micro-blogging site had engaged in unfair and deceptive trade practices because of “serious lapses in the company’s data security.” The FTC began an investigation into Twitter after hackers obtained administrative control of the service, accessed tweets that consumers had designated private, and sent out phony tweets (from then-Presidential candidate Barack Obama, Fox News, and others).

In its complaint, the FTC alleged that Twitter was vulnerable to these attacks because it failed to take certain reasonable steps to prevent unauthorized administrative control of its system. Those steps included:

  • Requiring employees to use hard-to-guess administrative passwords that are not used for other programs, websites, or networks
  • Prohibiting employees from storing administrative passwords in plain text within their personal e-mail accounts
  • Suspending or disabling administrative passwords after a reasonable number of unsuccessful login attempts
  • Providing an administrative login webpage that is made known only to authorized persons and is separate from the login page for users
  • Enforcing periodic changes of administrative passwords by, for example, setting them to expire every 90 days
  • Restricting access to administrative controls to employees whose jobs required it
  • Imposing other reasonable restrictions on administrative access, such as by restricting access to specified IP addresses

Under the settlement, the FTC will require Twitter to set up a new security program to be assessed by a third party. It will also be prohibited from what the agency described as “misleading consumers about the extent to which it maintains and protects the security, privacy, and confidentiality of nonpublic consumer information, including the measures it takes to prevent authorized access to information and honor the privacy choices made by consumers.”

According to the FTC, this marks the 30th case brought as a result of lax security procedures, and the first against a social network.

Why This Matters:  As we have known for some time now, privacy is a hot-button issue at the FTC. To avoid an FTC investigation, you must consider whether your current privacy practices live up to both: (1) what the Commission considers “standard, reasonable” security procedures; and (2) your own privacy policy, which operates as a set of promises to consumers who use your service/patronize your business. If your security procedures fall short of either mark (or worse, both), the FTC could come calling. This then begs the question, when was the last time you audited your security and privacy procedures?

@Promoted Tweets: Twitter Wades into the Ad Game

For the past few months, my colleagues and I have been giving speeches regarding the legal and practical challenges inherent in social media. One of those “practical” challenges is developing a strategy to monetize social media initiatives. While this is of importance to brands using social media services, it is certainly important to the services themselves. To highlight this point, I usually mention that Twitter, which handles approximately 50 million Tweets a day, doesn’t make money off its service, yet people like Kim Kardashian may be getting paid up to $10,000 to Tweet (which any reader of this blog will note raises concerns under the Federal Trade Commission’s Endorsement and Testimonial Guides – for analysis of those concerns, see here and here).

Now I may have to change the presentation because Twitter has announced a plan to start advertising through the use of “Promoted Tweets.” Promoted Tweets are Tweets that businesses and organizations want to highlight to a wider group of users, according to Twitter’s company blog. In fact, Twitter has already signed up companies like Best Buy, Bravo, Red Bull, Sony Pictures, Starbucks, and Virgin America to participate in Promoted Tweets.

As the program is currently described, Promoted Tweets will be rolled out in two phases. The first phase, which should launch today, will insert Promoted Tweets into Twitter search results, and will be seen by between 2 and 10 percent of Twitter users. The second phase will extend advertising practices to user-feeds both on Twitter.com and to third-party clients who access the service, including Tweetie (which was acquired by Twitter just a few days ago).

As is to be expected, the Promoted Tweets are themselves Tweets, meaning that Twitter users can “re-Tweet” the ad to share it with their followers, can make the ad a favorite, or can comment on/reply to it. Interestingly, though, Twitter has factored this ability into the metrics for Promoted Tweets, which may ultimately be used to determine how much an advertiser pays for the keyword. The key metric, at this stage, is something Twitter is calling “resonance,” which measures how Twitter users interact with a particular Promoted Tweet. If users don’t interact with a Promoted Tweet (replying to it, favoriting it, or re-Tweeting it), the Promoted Tweet will disappear. This is not the case for regular Tweets.

What does this mean for advertisers? Well, let’s say you’re a movie studio. You know that people use Twitter to search for reviews, thoughts, and criticisms of currently released and soon-to-be-released movies, often to help them decide what movie they should see tonight. You want them to see your movie, and you happen to have surprise “midnight screenings” scheduled in locations across the country. While you could use a regular Tweet to advertise those locations and generate both interest in and buzz about your movie, that Tweet would only be read by your followers. If you used Promoted Tweets, however, you could reach Twitter users who are not (currently) your followers, but who are interested in movies and are likely to engage whole groups of other similarly situated people. In short, Promoted Tweets can offer you a whole new means of reaching consumers.

Why This Matters: For users, this matters because you will soon see advertising on Twitter spaces that wasn’t there before. For advertisers, this matters because you will now be able to buy keywords to get your Tweets higher placement in search results (and ultimately, placement in user feeds, if Twitter follows its plan). This can be both good and bad – good for increasing exposure to your Tweets (as described above), but bad because your competitors will be able to do the same. Moreover, this raises interesting trademark law questions, especially regarding sales of trademarked words and phrases as Twitter keywords. Even now this is an area of law that is still evolving in the world of search engines like Google, so rest assured that the same issues will apply here.

Reed Smith Attorney Hits a Double With Social Media

Reed Smith partner John Hines recently hosted in our Chicago office a panel discussion on the topic of "Managing Social Media Risks, What your Company Needs to Know." John and some of his Reed Smith colleagues were joined by Blair Klein, Director of Emerging Communications for AT&T, and Brent Franson of Reputationdefender.com and CEO of the newly formed Online Reputation Management Association. In addition to Blair and Brent, the panel consisted Sarah Wolff, Carolyn Rosenberg and Jim Burns of Reed Smith. Sarah, Jim and Carolyn did a fantastic job in imparting their practical wisdom relating to insurance, public companies and the SEC, employment, and the new FTC guidelines. Blair spoke about some of the interesting internal social media sites that AT&T has created to capture employee ideas and creativity, and Brent fielded a series of questions and issues relative to reputation management. The feedback from the event has been very positive. 

In addition, on March 4, John Hines was a featured speaker on social media at a general session of the 2010 AT&T Legal Conference, a four-day conference in Dallas attended by 550 AT&T lawyers worldwide and other AT&T managers. John's presentation focused on "The Threat and Promise of Social Media," namely:

The Threat: it's viral, its transparent, self-correction often doesn't work (Cass Sunstein--OMB), permanence/infinite searchability; data capture and spread is, according to some, "out of control." Our personal and corporate reputations are in the hands of others; everyone is in the ratings game; etc. 

The Promise: huge opportunities to leverage good messages; power to harness collective intelligence; Rifkin new book--The Empathic Civilization: Showing Connectivity is a Basic Human Desire--social media is a model to solve really big problems like energy sharing, etc.; new IP models, crowd sourcing, open source, creative commons; wikis; virtual worlds; etc.

John has graciously provided us with a copy of his AT&T Deck. If you have any questions about the Deck or how social media may be affecting your company, please contact John Hines, Doug Wood or your local Reed Smith attorney.

PleaseRobMe.com - Highlighting the Perils of Location-Aware Social Networking

FourSquare, Loopt, Twitter, and even Google Buzz are testing the intersection between social networking online and real world, location-dependent activities. For example, you can use Loopt to see which of your friends are nearby, or you can earn points and badges on FourSquare by visiting locations around you. Even some companies are starting to specialize in helping advertisers prepare location-aware advertisements, which has created some (humorous) responses by the public

But location-aware social networking has a dark side as well. Podcaster Israel Hyman was robbed after he posted a tweet on his Twitter feed saying he had arrived safely in Kansas City. The problem was that he did not live in Kansas City. 

So it may not come as a surprise that a new site is trying to raise awareness of this problem. The site – available at PleaseRobMe.com – aggregates postings from various social media sites that involve the poster being away from home. The result is a laundry list of people who are not in their homes, and where those homes are located.

According to the sites’ operators:

The danger is publicly telling people where you are. This is because it leaves one place you’re definitely not… home. So here we are; on one end we’re leaving lights on when we’re going on a holiday, and on the other we’re telling everybody on the Internet we’re not home. It gets even worse if you have "friends" who want to colonize your house. That means they have to enter your address, to tell everyone where they are. Your address.. on the Internet.. Now you know what to do when people reach for their phone as soon as they enter your home. That’s right, slap them across the face.

As an attorney, my mind immediately jumps to what level of liability PleaseRobMe.com may face for its work. After all, it could be assisting would-be robbers with their nefarious activities, which can raise aider/ abettor liability.

Professor Rebecca Tushnet raised the interesting question of whether the Communications Decency Act (47 U.S.C. § 230) would insulate PleaseRobMe.com from liability. As discussed on this blog in the past, the CDA (as 47 U.S.C. § 230 is commonly called) immunizes interactive computer service providers from liability arising out of the speech of another. The immunity also extends to reposting speech by another (see, e.g., Barrett v. Rosenthal). 

However, reposting immunity can be lost under two exceptions. First, under the Roommates.com decision, CDA immunity can be lost if the interactive computer service provider contributed to the speech in a material way. Second, CDA immunity can be lost if the information that was reposted was illegal (see, FTC v. AccuSearch). Here, it would be hard to argue that the information being reposted by PleaseRobMe.com is illegal. But the Roommates.com material contribution exception is less clear. Does data aggregation materially contribute to the individual data points that make up the aggregate? In other words, is a fact (e.g., Drew is in the office) changed in some way if it is presented within a list of other people who are (or are not) in certain places? If so, then CDA immunity may be lost.

Certainly, this question is difficult to answer, and I anticipate that if a case is brought against PleaseRobMe.com, it will turn upon the facts at hand. One can only hope that if a case is brought against PleaseRobMe.com, it will not be a situation where bad facts make bad law.

FDA Seeks to Understand Social Media

Earlier this month, the Food and Drug Administration (FDA) held public hearings to better understand the role of, and the risks associated with, the promotion and marketing of FDA-regulated products using the Internet and social media. The last such hearing of this kind (which focused solely on the Internet) was organized by the FDA in 1996; and with a very different landscape before them, the FDA felt it was time to invite several of the industries’ players back to D.C. for another chat.

Of key concern to the FDA during the recent hearings were: (1) how can drug companies safely and effectively advertise on the Internet and via social media, and (2) how best can drug information and health side-effects be disclosed and managed in a social media context. This is no surprise, as FDA appears ready to develop a framework through which it will apply product advertising and promotional labeling statutory provisions and regulations to these communications. 

At the outset, both the FDA and its invited speakers, which included representatives from Eli Lilly, sanofi-aventis, Pharmaceutical Research and Manufacturers of America (PhRMA), Pfizer, Google, Yahoo and others, all agreed that the Internet and social media present both new opportunities and unique challenges, as compared with traditional promotional labeling and print, or broadcast advertisements. Today, drug companies have a greater ability to optimize their message and respond more quickly/more effectively to developments in the marketplace. On the other hand, everyone questioned how much control these same companies are expected to exercise over the enormous magnitude of user-generated content that is found across the Internet. As one presenter described the current landscape, “The industry’s share of voice on the Internet – especially the social media part of the Internet – is rapidly being dwarfed.” 

The prevailing view seemed to indicate a willingness and acceptance that drug companies should be responsible and held accountable for any content located on their corporate websites and on third-party sites (Facebook, Twitter, etc.) over which they exert or influence control. These same companies should not, however, be held responsible for content on third-party sites over which they have no control or influence. Along this line of thinking, online pharmaceutical-marketing expert John Mac of Pharma Marketing News, suggested that the FDA take the unprecedented step of requiring that drug manufacturers put “tags” on their Twitter posts in order to monitor and potentially censor discussions about specific products.

Another concern that was raised in the context of user-generated content across the Internet is the reliability and trustworthiness factor of information that is widely available on sites ranging from corporate websites to blogs to Wikis. PhRMA, among others, suggested the creation of an FDA-approved logo or seal of approval that could be affixed to a particular website, link, or even an information set that is presented on a third-party site. The seal would indicate that the FDA has reviewed and approved the information in question.

A focal point for the hearings was the issue of adverse events. Simply put, drug companies have a legal obligation to disclose adverse events that are brought to their attention in certain situations, even after the drug has been approved by the FDA and released to the market. Two specific issues arose on this topic:

  • Manufacturers were genuinely reluctant and hesitant to create a presence for themselves within the social media universe in order to avoid learning about potential adverse events associated with their drugs. Although the FDA has established guidelines and steps that must be followed by both consumers and health care professionals to report adverse events, there was still concern expressed that a manufacturer could suffer consequences by ignoring or refusing to investigate adverse events that it learns about through social media.
  • Both the speakers and the FDA alike uniformly acknowledged that the medium (i.e., the Internet) and its advertising vehicles (i.e., banners, paid search links, etc.) lend themselves to lesser rather than more disclosures. Hence, these same companies were concerned about how best to present and disclose these potential adverse events and other risks, and avoid running afoul of their reporting requirements, considering so little FDA guidance exists within this area at the current time.  

Thomas Abrams, Director of the FDA’s Division of Drug Marketing, Advertising and Communication, concluded the hearing by acknowledging the FDA has much work to do to further understand and institute guidelines for the promotion of FDA-regulated products on the Internet and social media sites. 

Why This Matters

If Facebook were a country, its user base would make it the fourth-largest country in the world. The number of users participating in some form of social media interaction is increasing at explosive rates day-by-day. Social media has quickly become an environment in which all manner of communication, information sharing and commerce exists. Although drug companies, large and small, are eager to embrace and engage this environment, many have largely avoided using social media out of fear that its use may result in FDA enforcement action. However, the pressure to adopt social media despite this risk continues to increase as competition grows and more consumers adopt these communication tools.

FDA’s social media hearing was a welcome relief to many. It provided industry leaders and stakeholders an opportunity to take an early lead in contributing to the FDA’s emerging policy on Internet advertising and promotional labeling. FDA is accepting public comments until Feb. 28, 2010 on specific questions it posed to the public (FDA Docket No. FDA-2009-N-0441) (74 Fed. Reg. 48083 (September 21, 2009). With the advent of these meetings, and the likelihood that FDA will begin to apply advertising standards to Internet communications in a more consistent manner – and perhaps continue to engage the industry throughout 2010 and beyond – drug companies should begin to think about and act on: (1) any FDA requests for industry input and guidance on social media and industry regulations; and (2) the creation of social media policies and procedures covering everything from employee do’s and don’ts to the management of adverse event information that surfaces through user-generated content. Companies should also be developing strategies to deal with misinformation about their drugs that they become aware of on blogs and Wiki’s. Lastly, companies must continually keep current on positions, approaches and policies taken or instituted by the FDA.

For more information on contemporary legal issues in social media, including many of the points raised above, we encourage you to download our White Paper entitled, “Network Interference: A Legal Guide to the Commercial Risks and Rewards of the Social Media Phenomenon.

For a detailed analysis of the recommendations and themes raised at FDA’s hearings, please see the Reed Smith Life Sciences Legal Update Blog.

Social Media and the Law

Reed Smith just released its White Paper on legal issues surrounding social media. You can download "Network Interference: A Legal Guide to the Commercial Risks and Rewards of the Social Media Phenomenon", a 69-page, 10-chapter White Paper positioned to be the definitive source for information about legal issues in social media. The White Paper covers a myriad of practice areas, including Advertising & Marketing, Commercial Litigation, Data Privacy and Security, Employment Practices, Government Contracts & Investigations, Litigation, Evidence & Privilege, Product Liability, Securities, and Trademarks. We will keep building the White Paper to ensure that it remains the definitive source addressing social media issues and solutions.

Facebook Catches a Big Phish

Once again, that truism that old habits die hard has been substantiated. The U.S. District Court of Northern California just awarded Facebook a $711 million judgment against the self-described “spam king,” Sandford Wallace, for violating the CAN-SPAM Act. The CAN-SPAM Act establishes the rules for sending commercial emails and bans “false and misleading” marketing emails. 

Wallace and two others were sued by Facebook in February, alleging they used various phishing sites, technologies and other means to gain unauthorized access to Facebook users’ accounts, and then used those same accounts to distribute SPAM throughout Facebook’s network. Specifically, Facebook asserted that Wallace had used the site to induce members to click on messages that appeared to be legitimate, but were actually designed to capture personal information.

Judge Jeremy Fogel wrote in his order, “The record demonstrates that Wallace willfully violated the statutes in question with blatant disregard for the rights of Facebook and the thousands of Facebook users whose accounts were compromised by his conduct.” In addition to the aforementioned monetary judgment, Wallace has been permanently prohibited from accessing or using Facebook, or from creating a Facebook account.

Along with Wallace’s violation of the CAN-SPAM Act, Judge Fogel noted that Wallace “willfully violated” a temporary restraining order and preliminary injunction issued earlier in the case against accessing Facebook. The court referred this matter to the U.S. Attorney’s Office for criminal prosecution.

You may recall Wallace’s name being mentioned in the past in the context of anti-spam and/or CAN-SPAM violations. Wallace was a defendant in a similar case in 2008 in which he was ordered to pay MySpace $234 million for similar violations. He was also the target of the FTC in a suit brought in 2006, in which he was fined $4 million after the FTC accused him of running an operation that infected computers with software that caused flurries of pop-up ads, known as “spyware.”

Why This Matters

Interestingly, this not the largest CAN-SPAM award. That honor also belongs to Facebook, who in November 2008 won an $873 million victory against Adam Guerbuez and Atlantis Blue Capital. In all earnest, Facebook realizes the likelihood of enforcing its judgment is remote at best. In fact, Facebook’s lead counsel for litigation and intellectual property remarked on a Facebook blog post: “While we don’t expect to receive the vast majority of the award, we hope that this will act as a continued deterrent against these criminals. This is another important victory in our fight against spam.”

However, this case proves, once again, that even in a dynamic and evolving landscape such as social media, fundamental legal principles, rules and regulations still apply, and have an excellent chance of being enforced by the courts around this country.

What, Me Worry? Legal Best Practices for Small Publishers An Informative Webinar Sponsored by the IAB Long Tail Alliance And Presented by Reed Smith

If you haven’t already registered for the Interactive Advertising Bureau’s education webinar, entitled “What Me Worry? Legal Best Practices for Small Publishers”, THERE IS STILL TIME! The webinar, which is scheduled for this coming Friday, October 23, 2009 from 12:00 pm – 1:00 pm (Eastern US Time), is being presented by Reed Smith and sponsored by the Long Tail Alliance Program of the Interactive Advertising Bureau (IAB). The Webinar will provide an overview of the legal issues and suggested best practices in the following areas:

Advertising Compliance          Privacy              Social Media

There will be a Q&A session as time permits at the end of the session, and a .PDF copy will be available on Legal Bytes after the seminar is over.

The webinar is open not only to IAB members and Reed Smith clients, but also to anyone who is interested - on a first-come, first-served basis. So register now. You can get more information and register right here for What, Me Worry? Legal Best Practices for Small Publishers. 

About the Long Tail Alliance Program

The IAB formed the Long Tail Alliance program in summer 2008 to encourage involvement with individuals and small business who, powered by interactive advertising, have turned their interests and passions into a media revolution. The Alliance is the beginning of something the IAB envisions as a much larger portrait of American entrepreneurs who are pursuing and achieving the American dream, even as they row hard against strong economic currents. The IAB hopes to expand its Long Tail Membership in order to encourage advocacy, training, and a coming-together of smaller publishers across America as their businesses grow, all while the dynamic of technology and media continues to change.

For more information, click here: http://iamthelongtail.com/707346

About the IAB

The Interactive Advertising Bureau is comprised of more than 375 leading media and technology companies who are responsible for selling 86 percent of online advertising in the United States. On behalf of its members, the IAB is dedicated to the growth of the interactive advertising marketplace, of interactive's share of total marketing spend, and of its members' share of total marketing spend. The IAB educates marketers, agencies, media companies and the wider business community about the value of interactive advertising. Working with its member companies, the IAB evaluates and recommends standards and practices, and fields critical research on interactive advertising. Founded in 1996, the IAB is headquartered in New York City, with a Public Policy office in Washington, D.C.

About Reed Smith

Reed Smith is a global, full-service law firm with nearly 1600 lawyers in 23 offices around the world. Joseph I. (“Joe”) Rosenbaum, a partner in the New York office, chairs the firm’s global Advertising Technology & Media law practice, is the editor and publisher of Legal Bytes, is Corporate Secretary & General Counsel to the IAB, and is an ex-officio member of the IAB Board. Adam Snukal is a senior associate who works with Joe in the Advertising Technology & Media law group and is editor of Adlaw by Request, the gold standard in advertising legal publications in the industry.

Join us for this exciting and timely IAB Long Tail Alliance webinar presented by Reed Smith. We look forward to your participation.

Don't Worry, Be Informed!

On Friday, October 23, 2009, from 12 – 1 p.m. (Eastern US Time), Joseph I. (“Joe”) Rosenbaum, Partner at Reed Smith and General Counsel of the IAB, assisted by Adam Snukal, Senior Associate at Reed Smith, will be presenting an educational webinar, sponsored by the Long Tail Alliance Program of the Interactive Advertising Bureau (IAB), entitled: What Me Worry? Legal Best Practices for Small Publishers.

During the webinar, Joe and Adam will be discussing and fielding questions in each of the following areas:

Trademarks: Buying someone else’s key words? Displaying advertising? Sponsoring or hosting contests, sweepstakes, co-branded promotions? Using social media or virtual worlds? Trademarks are everywhere. When should you worry?

Compliance: What’s new at the FTC and FCC? Industry groups want self-regulation. Privacy and consumer advocacy groups want more regulation. Congress is poised to “do something.” What you need to know about marketing to children, adults, compliance with sectoral advertising regulations, from finance and health care to product safety. The new FTC guidelines for Endorsements and Testimonials, and the slow death of diet commercials.

Privacy: Behavioral targeting has everyone up in arms. What should a small publisher do if she feels her privacy policy has been violated?

Social Media: Blogs, splogs and vlogs. Virtual worlds, avatars and pseudonyms. Profiles and networks, friends and fans. Testimonials and endorsements – from celebrities to consumers, paid and unpaid. Buzz, viral and word of mouth. Defamation, libel, copyright and personalized URLs. Sound confusing? It is. But ignorance won’t insulate you from liability. Don’t want to become a regulatory target? What you should know.

Q&A: IAB and Reed Smith to answer questions from participants.

The webinar is open to IAB members, to Reed Smith clients, and to the general public on a first-come, first-served basis. Register now. You can get more information and register right here for What Me Worry? Legal Best Practices for Small Publishers

About the Long Tail Alliance Program

The IAB formed the Long Tail Alliance program in summer 2008 to encourage involvement with individuals and small businesses who, powered by interactive advertising, have turned their interests and passions into a media revolution. The Alliance is the beginning of something the IAB envisions as a much larger portrait of American entrepreneurs who are pursuing and achieving the American dream, even as they row hard against strong economic currents. The IAB hopes to expand its Long Tail Membership in order to encourage advocacy, training, and a coming-together of smaller publishers across America as their businesses grow, all while the dynamic of technology and media continues to change.

For more information, click here.

About the IAB

The Interactive Advertising Bureau is comprised of more than 375 leading media and technology companies that are responsible for selling 86 percent of online advertising in the United States. On behalf of its members, the IAB is dedicated to the growth of the interactive advertising marketplace, of interactive's share of total marketing spend, and of its members' share of total marketing spend. The IAB educates marketers, agencies, media companies and the wider business community about the value of interactive advertising. Working with its member companies, the IAB evaluates and recommends standards and practices, and fields critical research on interactive advertising. Founded in 1996, the IAB is headquartered in New York City, with a Public Policy office in Washington, D.C.

About Reed Smith

Reed Smith is a global, full-service law firm with nearly 1600 lawyers in 23 offices around the world. Joseph I. (“Joe”) Rosenbaum, a partner in the New York office, chairs the firm’s global Advertising Technology & Media law practice; is the editor and publisher of Legal Bytes; is Corporate Secretary & General Counsel to the IAB; and is an ex-officio member of the IAB Board. Adam Snukal is a Senior Associate who works with Joe in the Advertising Technology & Media law group and is editor of Adlaw by Request, the gold standard in advertising legal publications in the industry.

Join us for this exciting and timely IAB Long Tail Alliance webinar presented by Reed Smith. We look forward to your participation.

FTC Releases Updated Guidance on Endorsements and Testimonials

An important and relevant topic that has been addressed through several articles on Adlaw by Request in the past is the FTC’s position and guidance on endorsements and testimonials in advertising. Moreover, in a digital, social media age where blogs, social networking sites and other real time digital tools have become commonplace for user and advertiser alike, the line between them can and often has become awfully blurred. This, and many other examples, are addressed in the FTC’s long-awaited revised "Guides Concerning the Use of Endorsements and Testimonials in Advertising," issued yesterday. As reported previously on Adlaw by Request, the final revisions are intended to update the FTC’s guidance, last revised in 1980, and provide advice to advertisers and agencies regarding compliance with the FTC Act.

The principle espoused and defended by the FTC that a consumer should be informed of any material connection between the advertiser and the maker of the statements is expressly set forth in the FTC Guides, even though these cases were always fact-sensitive and subject to review on a case-by-case basis.  The analysis will, as always, turn on facts that may or may not support the existence of a “material connection,” but if a company, for example, sponsors research about its products or services (or potentially about the products or services of a competitor, if the results will be used in a comparative ad), that same company must disclose its sponsorship in the ad. Similarly, although consumers may expect celebrities to be paid for appearing in commercials, if an endorsement is made outside that context – for example, on a talk show, at a book signing, at a motion picture premiere, or on Facebook, Twitter or other social media – any material relationships and connection must be disclosed.

For more information on this topic, our esteemed colleague Joe Rosenbaum presented a seminar entitled, "Trust Me, I'm a Satisfied Customer: Testimonials & Endorsements in the United States" at the University of Limerick this past July. You can go to the previous Legal Bytes blog post and download a copy of Joe’s presentation at any time.

Want to know more about the FTC Guides, or the implications to social media advertising and marketing, or traditional advertising?  Feel free to contact me or the Reed Smith attorney with whom you regularly work.

Ninth Circuit Amends Barnes v. Yahoo Decision; Resolves Split as to Application of the Communications Decency Act

In the past two weeks, I’ve twice blogged about the Ninth Circuit’s opinion in Barnes v. Yahoo. This case split the Ninth Circuit from other circuits as to how the CDA should be applied – should it support a 12(b)(6) motion to dismiss, or should it be treated as an affirmative defense? In deciding that the CDA was an affirmative defense, the Ninth Circuit created for itself a few problems. If the CDA is treated as an affirmative defense, then a court could open discovery prior to ruling on whether a defendant’s actions were immunized or not. By putting discovery into play, the cost of defending a case on CDA grounds could skyrocket. Thus, the CDA-as-an-affirmative-defense theory would create an incentive for defendants to settle cases for which they ought to receive protection, and create an incentive for plaintiffs to bring cases in the Ninth Circuit strictly for this reason. 

On June 22 (roughly six weeks after the release of the initial Barnes opinion), the Ninth Circuit issued an amended opinion in which it deleted the entire discussion of the CDA as an affirmative defense. This marks the second time in two years that the Ninth Circuit has had to go back and correct a decision about the CDA. But by making this correction, the Ninth Circuit resolves the split among the circuits as to whether the CDA can be used to support a 12(b)(6) motion. Thus, in the Ninth Circuit, the CDA can support a 12(b)(6) motion – for the moment, anyway.

If you want to read the full opinion, it can be found here

Why This Matters: Notwithstanding a future departure from the norm, the CDA can form the basis for a 12(b)(6) motion in the Ninth Circuit. This means that it is still possible to resolve a case on CDA grounds prior to the opening of discovery.

Reed Smith's Advertising, Technology, & Media Teleseminar: Facebook Personalized URLs - A Titanic Opportunity for Brands, or the Tip of an Iceberg?

Facebook announced last week the availability of a personalized Facebook URLs for individual profiles, e.g., www.facebook.com/[your name].

As discussed in our June 12 Client Alert, "Just When You Thought You Were Too Old for Facebook," this latest offering from Facebook raises serious issues—issues that are typically encountered when technology collides with traditional intellectual property laws intended to protect trademarks and brand names.

Much like the confusion and abuse that proliferated when cybersquatting became rampant over the ownership and administration of domain names, we now have social networks and service providers allowing users to generate content and offering customized http://www.thecompany.com/YOURNAMEHERE URLs within their own domains in a digital and borderless world.

Significantly, the promotional momentum created by Facebook's offer has caused every astute brand and trademark owner to ponder whether they should be in a rush to register their personalized URL on Facebook, or let it ride and deal with potential infringements when—and if—they occur!

While it can be stimulating to consider whether the intellectual property laws have kept up with the Internet, you need practical guidance and insightful approaches to these problems today. The Media & Entertainment Industry Team and the Advertising Technology & Media Law Group at Reed Smith have put together a teleseminar to help you understand the issues, formulate an approach, and make informed decisions. Join us for this informative one-hour teleseminar on Tuesday, June 23 at 12 p.m. EDT with partners Doug Wood and Joe Rosenbaum

UPDATE:  To view the seminar's PowerPoint presentation, please click here.

Just When You Thought You're Too Old for Facebook

Earlier today, you may have received numerous memos from law firms and bloggers anxious to respond to the announcement by Facebook that Facebook is allowing trademark owners to notify Facebook of their IP rights through use of a special electronic form. The purpose is to allow trademark owners to record their IP rights in advance of Facebook allowing its users to register personalized Facebook URLs. While we applaud advising clients and friends of issues, we think the matter is considerably more complicated than previous briefs and hasty reports may indicate. As is so often the case, the devil is in the detail and this memorandum provides a deeper look at the process and related issues before undertaking Facebook’s new program to record trademark.

Facebook Announcement

On Tuesday, June 9, Facebook, Inc., the popular social networking website, announced that on Saturday, June 13th at 12:01 a.m. U.S. EDT, it will allow Facebook users, subject to certain criteria and qualifications, to create personalized URLs for their pages on Facebook. By way of example, John Smith will be able to register "Facebook.com/johnsmith." Currently, a user’s Facebook URL consists of the Facebook.com URL followed by a random series of numbers, e.g., facebook.com/profiles.Php?349485).

Whenever users can register any name on the Internet, however, it raises infringement issues under federal and state trademark and related intellectual property laws, particularly for owners of well know brands. Any registration process creates fears of cybersquatting or other attempts to hijack trademarks and brand names. Sometimes these fears are real; other times they are not.

What Trademark Owners Need to Know

Facebook has responded to concerns trademark owners in several ways. Here’s what you need to know:

  • Facebook has created an online form for use by registered trademark owners (whether Facebook users or not) to record their trademarks and thereby notify Facebook of their IP rights, at least in the first instance, to prevent others from using their trademarks in their personalized URL. For example, if a company had a registered trademark for, e.g., Robert Hall for shoes, by registering the mark with Facebook, it could prevent someone else from registering Facebook.com/roberthall, although it is unclear whether a registration protects only the exact trademark as opposed to variations. While the FAQs indicate user names are not case sensitive, that does not necessarily mean every variation of a trademark is protected by recording a claim.
  • Regrettably, Facebook has given trademark owners only a couple of days to notify Facebook of their IP rights. If a trademark owner has not done so by end of day, Friday, June 12, anyone else can potentially register a personalized Facebook URL using the brand owner's trademark.
  • The new form can be found here.
  • Facebook has also provided FAQs here.
  • The notification process applies only to registered trademarks. At present, it appears that a trademark owner can only submit a registration based on a United States registration, as that number is used for the account number. While state and foreign registrations and pending applications have not been specifically addressed, presumably any registration number in the field of the form will suffice. But there must be an official registration number. Common law claims are not covered. A trademark owner must also complete a separate form for each trademark, which could prove to be a significant undertaking for a company that has a significant portfolio of trademarks. And what if other social networking sites adopt similar provisions?
  • Facebook is limiting the June 13 URL registration to individual users who already had a user profile page prior to the June 9th announcement and to Facebook Pages (these are the Facebook pages owned by businesses, public figures, brands and artists) that were live prior to May 31, 2009 that had at least 1,000 fans at that time. If your Facebook account does not meet these requirements, you have to wait until June 28th to register a personalized URL using a trademark or brand name.
  • Facebook also has a procedure and a form for notifying Facebook of alleged infringements of a non-copyright nature such as trademark infringement or rights of publicity. Presumably, this form can be used in lieu of the new form but will apply only after an infringement has occurred. This form is available at here.
  • Note that copyright infringement allegations are directed to a separate Digital Millennium Copyright Act form for users to complete.
  • Facebook users can sign up for only one username for their Facebook page and profile. Once selected, the username cannot be changed or transferred to third parties. If a user cancels an account, the associated URL will not be available as a new Facebook URL. Users will also not be permitted to register generic terms as usernames. Facebook reserves the right to remove or reclaim a username at any time and for any reason. Facebook hopes these restrictions will help to prevent the trafficking in usernames and leaves a remedy open even where a trademark owner has failed to record its claim with the new form.

The $64,000 Question

If you are a trademark owner, should you record your trademark claim through use of the new form or wait to assert claims as alleged infringements occur? This is not an easy question to answer.

By failing to record its claim, a trademark owner does not waive any rights to its intellectual property otherwise provided by law. Failing to record a claim simply means that a trademark owner may have to enforce its intellectual property rights after an infringement has occurred as opposed to preventing it prior to use.

However, it is unclear whether using the new form to notify Facebook of IP rights subjects the trademark owner to the Facebook general terms of use (referred to by Facebook as the “Statement of Rights and Responsibilities”) should the trademark owner have any issues with Facebook regarding to the processing and enforcement of its claim to a trademark.

For example, the Facebook terms of use provide that venue for any claims or disputes against Facebook are vested exclusively in the courts in Santa Clara County, California. Absent consent to such venue, a trademark owner could proceed against Facebook in virtually any jurisdiction in the United States, including the trademark owner’s home state. Whether that is an advantage or not is debatable, but it is an unresolved issue. Other provisions in Facebook's terms of use may also be problematic for some trademark owners.

Before deciding to undertake notifying Facebook of IP rights, however, a trademark owner should also consider the likelihood of someone hijacking its marks. Moreover, while the initial notification (and even later registration of a personalized URL) is free, it remains unclear whether Facebook will seek to monetize the offering in the future.

On the other hand, if a brand already has a Facebook Page (or knows that it will soon create one), then it is already (or will be) subject to the Facebook terms of use. Under such circumstances, notifying Facebook of IP rights through the new form may be the easiest means of avoiding a needless intellectual property battle that will most certainly cost more than the time spent completing a form.

The Evolution of Social Media

Facebook is adding another dimension to social networking -- allowing personalization of pages while seeking to develop mechanisms to deal with brands and brand owners. But Facebook users interact with brands as well as people. The personalized URL launch is another example of the collision of social media interaction and intellectual property protection. While Facebook’s latest offering may be the next evolutionary step forward, it may also be a passing fad. Time will tell. But one thing is certain:

If you are a brand owner with trademark registrations, you need to consider all of the issues before blindly jumping on anything that appears simple and easy but may be more costly than first meets the eye.

Ninth Circuit CDA Decision

In what is likely to be seen as a watershed moment for the application of the Communications Decency Act of 1996 (the "CDA"), the Ninth Circuit Court of Appeals has released an opinion in Barnes v. Yahoo that has the potential to dramatically increase the cost of defending social media and computer service providers.

The Barnes case centered around the posting of defamatory "fake" profiles on Yahoo's social networking pages. The profiles, which appeared to be from Ms. Barnes but were in fact created by her ex-boyfriend, included several pictures of her in the nude. Ms. Barnes asked Yahoo to remove the profiles, but Yahoo took no action until local media did a story on the events, wherein Yahoo promised to remove the fake profiles. Two months after that, the profiles still appeared on the Internet, and Ms. Barnes sued Yahoo.

Yahoo sought a motion to dismiss based on the immunity provided to it by the CDA. The dismissal was granted and Ms. Barnes appealed to the Ninth Circuit. In deciding to remand the case to the District Court, the Ninth Circuit did two things that can be problematic for the future of the CDA.

First, it held that a promissory estoppel-like claim can survive CDA immunity (at least at the motion to dismiss stage). At its core, a promissory estoppel claim requires someone to make a promise, and someone to rely upon that promise to his/her detriment. The court explained that Yahoo could be seen as having made a promise to Ms. Barnes, as part of its privacy policy and terms of service, and reiterated through local media, that it would take down profiles such as the one at issue. The making of a promise would be an activity that would fall outside of the CDA's scope. Thus, a promissory estoppel claim can survive a CDA-based motion to dismiss.

The second, and potentially more problematic, result of this decision is the treatment of the CDA as an affirmative defense, and the basis for lawsuit immunity. Although this may seem like a small detail, the proverbial devil is in the detail. If the CDA is a source of lawsuit immunity, then this supports a motion to dismiss for failure to state a claim (a 12(b)(6) motion). A 12(b)(6) motion must be dispensed with before the filing of answer, and before the opening of discovery. An affirmative defense, on the other hand, is dealt with by a motion for a judgment on the pleadings. For this type of motion, the defendant must file an answer along with the affirmative defense. The filing of an answer is where things go awry. Upon the filing of an answer, the court can open discovery. If the case was presided over by an overly cautious judge, discovery could be mandated prior to the issuance of a ruling on the summary judgment motion. Given that discovery can be expensive and time consuming, it is not difficult to imagine that the potential costs of exercising CDA immunity may have greatly increased.

Why This Matters: This case should be of great interest to purveyors of social media and those who seek to tap into the power of social networks. Not only does this provide a wake-up call as to what the consequences are of the statements in privacy and terms-of-service policies, but it also defines a way to avoid future promissory estoppel-like claims. Promissory estoppel requires a promise and reasonable reliance – if it is unreasonable to rely on the promise, then the estoppel claim may fail. It is possible that an artful drafting of a terms-of-service document can make this kind of reliance unreasonable, and social media and other interactive website purveyors should think about whether their privacy policies need revision of this type.

Notwithstanding revisions to one's policies, the case is also noteworthy because of the shift in interpretation of the CDA. If the CDA is more properly an affirmative defense than the basis for lawsuit immunity, then the potential cost of tapping into the CDA's protections may rise significantly.

Online Socializing Beneficial for Teens

Good news for parents worried about all that time their teens spend online: It turns out that that time isn't a waste-and can be beneficial, according to a new study. The MacArthur Foundation-long known for its generous funding of public television-reports that young people pick up key skills by participating in digital media.

"It might surprise parents to learn that it is not a waste of time for their teens to hang out online," said Mizuko Ito, a University of California Irvin researcher who is the lead author of the MacArthur-backed report. "There are myths about kids spending time online-that it is dangerous or making them lazy. But we found that spending time online is essential for young people to pick up the social and technical skills they need to be competent in the digital age."

The MacArthur Foundation claims its report is the most extensive U.S. study on teens and their use of digital media to date. Ito's team spent three years interviewing more than 800 young people and their parents, and spent more than 5,000 hours observing teens interacting on social networking sites, video sharing and other sites. The study was supported by the foundation's $50-million digital media and learning initiative.

Read about the report at macfound.org

Read news coverage of the report at nytimes.com.