Social media sites are transforming not only the daily lives of consumers, but also how companies interact with consumers. Here at Morrison Foerster, across all of our practice groups, we are seeing complex, cutting-edge legal issues arising out of social media. As with the Internet boom during the mid-to-late 1990s, social media is generating new legal questions at a far faster pace than the law’s ability to provide answers to such questions. In an effort to stay on top of these emerging issues, and to keep our clients and friends informed of new developments, Morrison Foerster publishes this blog devoted to the law and business of social media.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

Social

Search

sociallyaware-abajournalweb100-1

Aaron is the chair of the firm’s Technology Transactions Group and co-chair of the Interactive + Digital Media Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals.Aaron’s practice focuses on advising both established and emerging companies in a variety of data- and technology-intensive sectors, including software, SaaS, cloud-based technology, digital media (social media, AR/VR, gaming, streaming media, AdTech), AI, healthcare, consumer electronics, e-commerce, other online business models, and mobile applications. He also maintains an active practice counseling companies on branding and marketing, trademark licensing, and content-related transactions, as well as the intellectual property aspects of mergers, acquisitions, asset spin-offs, and private equity investments.He has represented clients such as Autodesk, Meta, OpenAI, Splunk, Konami, Kaiser Permanente, SoftBank, Visa, and Yahoo, among others.Aaron has been recognized by numerous publications for his work on market-defining technology transactions. He is currently ranked by Chambers USA for “Technology Transactions.”Aaron also serves as co-editor of Socially Aware, the firm’s award-winning newsletter and blog devoted to the law and business of social media, and regularly publishes on various IP and technology-related topics. Aaron is also a sought-after speaker on new and emerging areas of law, and is a frequent presenter and panelist at conferences and legal services programs. In addition to his active practice, Aaron regularly provides pro bono assistance to various nonprofit and charitable organizations such as Common Sense Media and the Starlight Children’s Foundation. He is a member of the board of directors of California Lawyers for the Arts.While in law school at the University of California, Berkeley, Boalt Hall School of Law, Aaron served as executive editor of the California Law Review and was elected to the Order of the Coif. Following law school, Aaron served as law clerk to the Honorable William H. Orrick and the Honorable Martin J. Jenkins, both United States District Judges for the Northern District of California.

rubin_aaron_blog_150x150.png

rubin_aaron_common_640x280.jpg

rubin_aaron_heroretina_2700x1160.jpg

rubin_aaron_mobileretina_750x1040.jpg

rubin_aaron_social_600x600.jpg

Partner

Aaron is the chair of our Technology Transactions Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals. Aaron’s practice focuses on advising both established and emerging companies in a variety of data– and technology–intensive sectors, including software, SaaS, cloud computing, AR/VR, AI, gaming, healthcare, consumer electronics, social media, e–commerce, other online business models, and mobile applications. He also maintains an active practice counseling companies on the intellectual property aspects of mergers, acquisitions, asset spin–offs, and private equity investments.

Aaron P. Rubin

Lawrence Gallick is of counsel in the firm’s Austin office and a member of the Technology Transactions Group.Lawrence focuses his practice on technology transactions and licensing matters. His diverse experience includes advising on SaaS agreements, cross-licensing agreements, research and collaboration agreements, development agreements, and distribution agreements. He counsels a broad range of companies across the software, hardware, life sciences, biotech and FinTech spaces, as well as other entities including universities.He advises clients in connection with general corporate matters including contract negotiations, and leasing and technology placement agreements.Lawrence also serves as co-editor of <a href="https://www.sociallyawareblog.com/" target="_blank">Socially Aware</a>, the firm’s award-winning newsletter and blog devoted to the law and business of social media, and regularly publishes on various IP and technology-related topics.Prior to joining the firm, Lawrence was counsel at another major law firm. Before earning his law degree, Lawrence was a web consultant, project manager, and web developer in Portland, Oregon, where he managed and consulted on projects using industry methodologies and performed custom development and integration of content management systems.Lawrence was named a Super Lawyers “Rising Star” in 2015 and 2018–2022, and is licensed in both California and New York. Lawrence earned his J.D. from the University at Buffalo School of Law, where he was the electronic systems editor for the Buffalo Law Review and awarded the ABA-BNA Award for Excellence in the Study of Intellectual Property Law.

gallick_lawrence_blog_150x150.png

gallick_lawrence_common_640x280.jpg

gallick_lawrence_heroretina_2700x1160.jpg

gallick_lawrence_mobileretina_750x1040.jpg

gallick_lawrence_social_600x600.jpg

Of Counsel

Lawrence Gallick

Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster.Anthony advises clients on general commercial and transactional matters. He regularly advises companies on the IP aspects of their M&A transactions. His clients include technology, digital media and content for television and music, financial services, and communications companies with diverse intellectual property assets and issues.His practice focuses on the legal aspects of developing, licensing, and commercializing technology and intellectual property, as well as negotiating general commercial contracts, including outsourcing transactions, as well as content and data licenses. He regularly assists clients with legal issues relating to licensing and commercialization of digital media and content, digital content that is distributed over the Internet or streamed, mobile applications and social media, as well as the licensing of recorded music for distribution via digital platforms. Anthony is also experienced with issues relating to open-source software, software development, artificial intelligence and machine learning, cloud-based technology, and protection of proprietary information.Anthony has extensive experience working on matters involving disruptive technologies, such as blockchain. He has helped fintech clients with general intellectual property issues in connection with terms of service for online financial products and services.Anthony is an integral part of the outside pro bono legal team for nonprofit organizations based in New York, including advising clients on legal issues regarding entertainment, social media, privacy rights, and the negotiation of outsourcing and service agreements. Anthony received his J.D. from the University of Michigan Law School in 2009. He received his B.S. from Cornell University in 2004.

ramirez_anthony_blog_150x150.png

ramirez_anthony_common_640x280.jpg

ramirez_anthony_heroretina_2700x1160.jpg

ramirez_anthony_mobileretina_750x1040.jpg

ramirez_anthony_social_600x600.jpg

Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster. He advises clients on general commercial and transactional matters. His clients include technology, media, and communications companies with considerable intellectual property assets. His practice focuses on the legal aspects of licensing and commercializing technology and intellectual property, as well as negotiating general commercial contracts. He also regularly assists clients with legal issues relating to mobile applications and social media.

Anthony M. Ramirez

favicon.ico

favicon-16x16.png

favicon-32x32.png

apple-touch-icon.png

MoFo Favicons

Socially Aware is devoted to the law and business of social media, proactively addressing emerging issues and keeping our clients informed of new developments. We cover fields such as artificial intelligence, privacy and data security, Section 230, intellectual property, and much more.

Welcome to Socially Aware

240920-socially-aware-header.jpg

Welcome to Socially Aware

240920-socially-aware-header

Socially Aware is devoted to the law and business of social media, proactively addressing emerging issues and keeping our clients informed of new developments. We cover fields such as artificial intelligence, privacy and data security, Section 230, intellectual property, and much more.

News and Announcements

Blog - Terms of Use

Blog - Privacy Policy

Blog - Blog Disclaimer

Blog - Attorney Advertising

morrison-foerster-blog-logo.png

Provides a data-driven look at the Federal Circuit.

Federal Circuitry

Brings together legal insights and in-depth analyses on trends and complex issues shaping the global technology industry.

MoFo Tech

Mofo Tech

Equips our clients with the most up-to-date and relevant information on employment and labor law issues.

Employment Law Commentary

In-depth analysis of developments and trends impacting government contracting.

Government Contracts Insight

Government Contracts Insights

Provides insights and reports on the most current class actions lawsuits and product liability issues that affect consumer-facing companies.

Class Dismissed Blog

Class Dismissed

MoFo’s Socially Aware blog provides timely updates and analysis of the many complex and cutting-edge legal and business issues arising out of social media.

Socially Aware

  Linkedin

MoFo LinkedIN

Socially Aware Blog - RSS

Stay Connected

Never miss a post from Socially Aware. Enter your email below to stay up-to-date.

Subscribe

The Law and Business of Social Media

Morrison Foerster - Footer

On December 19, 2019, the Staff of the U.S. Securities and Exchange Commission’s Division of Corporation Finance issued guidance outlining the Staff’s views abo

Blogs -  Home Button

Home

Blog - Topics

Web Scraping

Advertising

Antitrust

Arbitration

Artificial Intelligence

Asia

Autonomous Vehicles

Bankruptcy

Big Data

Blockchain

Class Actions

Cloud Computing

Compliance

Contracts

COPPA

Copyright

Crowdsourcing

Cyberbullying

Cybersecurity

Data Security

Defamation

Digital Content

Disappearing Content

Discovery

DMCA

E-Commerce

E-Discovery

E-Personation

Electronic Contracts

Employment Law

Endorsement Guides

Ephemeral Messaging

Ethics

European Union

Event

Fair Use

FDA Regulations

Financial Institutions

First Amendment

Fraud

Free Speech

GDPR

Hacking

Influencer Marketing

Infographic

Internet of Things

Investment Management Law

JOBS Act

Labor Law

Litigation

Live streaming

Marketing

Mobile

Online Contracts

Online Endorsements

Online Promotions

Online Reviews

Patent

Privacy

Product Liability

Protected Speech

Right of Publicity

Right To Be Forgotten

Section 230 Safe Harbor

Securities Law

Social Media Policy

Statistics

Status Updates

Stored Communications Act

Supreme Court

Terms of Use

Trademark

UK High Court

User-Generated Content

Wearable Computers

Topics

Blog - Editors

Editors

Blog - About

About

Blog - Subscribe

SEC Staff Issues Guidance on Technology, Data & IP Risks in International Operations

SEC Staff Issues Guidance on Technology, Data & IP Risks in International Operations | Socially Aware

On December 19, 2019, the Staff of the U.S. Securities and Exchange Commission’s Division of Corporation Finance issued guidance outlining the Staff’s views about disclosure obligations that companies should consider with respect to technology, data and intellectual property risks that could arise when operations take place outside the United States. Companies should consider this guidance when preparing risk factor and other disclosures included in upcoming periodic reports and registration statements.BackgroundThe Staff notes that the SEC’s principles-based disclosure regime recognizes that new risks may arise over time, affecting different companies in different ways. For those companies that conduct business operations outside the United States, risks can arise for technology and intellectual property, particularly when operations take place in jurisdictions that do not provide protection that is comparable to the United States. The Staff observes that companies may be exposed to material risks of “theft of proprietary technology and other intellectual property, including technical data, business processes, data sets or other sensitive information.” Exposure to such risks can be heightened when companies conduct business in some foreign jurisdictions, house technology, data and intellectual property abroad, or license technology to joint ventures with foreign partners.The Staff notes that while there is no specific line-item requirement under the federal securities laws to disclose “information related to the compromise (or potential compromise) of technology, data or intellectual property,” the SEC’s disclosure requirements apply to a broad range of evolving business risks. The Staff indicates that disclosure about such matters may be necessary in risk factors, management’s discussion and analysis, the business section, legal proceedings, disclosure controls and procedures, and/or financial statements.Sources of RiskThe Staff notes that companies face the risk of theft of technology, data and intellectual property, which could occur through a direct intrusion by private parties or foreign actors (including those affiliated with or controlled by state actors). In this regard, a company could experience cyber intrusions, as well as physical theft through corporate espionage.  Indirect theft or compromise could also occur when a company’s products or components are “reverse engineered” by joint venture partners or other parties, resulting in infringement on the company’s patents or the theft of know-how or trade secrets. In addition, the Staff notes that companies may be required to “compromise protections or yield rights to technology, data or intellectual property in order to conduct business or access markets in a foreign jurisdiction, either through formal written agreements or due to legal or administrative requirements in the host nation.” The Staff cites examples such as:<ul><li>Patent license agreements pursuant to which a foreign licensee retains rights to improvements on the relevant technology, including the ability to sever such improvements and receive a separate patent, and the right to continued use of technology or intellectual property after the patent or license term of use expires;</li><li>Foreign ownership restrictions, such as joint venture requirements and foreign investment restrictions that can potentially compromise control over a company’s technology and proprietary information;</li><li>The use of unusual or idiosyncratic terms favoring foreign persons, including those associated with a foreign government, in technology license agreements, such as access and license provisions, as direct or indirect conditions to conducting business in the foreign jurisdiction; and</li><li>Regulatory requirements that restrict the ability of companies to conduct business, unless they agree to store data locally, use local services or technology in connection with their international operations, or comply with local licensing or administrative approvals that involve the sharing of intellectual property.</li></ul>Assessing and Disclosing RisksThe Staff encourages companies “to assess the risks related to the potential theft or compromise of their technology, data or intellectual property in connection with their international operations, as well as how the realization of these risks may impact their business, including their financial condition and results of operations, and any effects on their reputation, stock price and long-term value.” The Staff notes that when these risks are material to investment and voting decisions, the risks should be disclosed in a manner that allows investors to evaluate these risks “through the eyes of management.” The Staff states that disclosure about these risks should be specifically tailored to a company’s unique facts and circumstances, and that “hypothetical disclosure of potential risks is not sufficient to satisfy a company’s reporting obligations.”  The Staff suggests that companies consider the following questions when assessing and disclosing risks:<ul><li>Is there a heightened risk to your technology or intellectual property because you have or expect to maintain significant assets or earn a material amount of revenue abroad?</li><li>Do you operate in an industry or foreign jurisdiction that has caused, or may cause, you to be particularly susceptible to the theft of technology or intellectual property or the forced transfer of technology?  Do you believe that your products have been, or may be, subject to counterfeit and sale, including through e-commerce?</li><li>Have you directly or indirectly transferred or licensed technology or intellectual property to a foreign entity or government, such as through the creation of a joint venture with a foreign entity? Do you store technology or intellectual property locally in a foreign jurisdiction? Are you required to use equipment and services provided by a state actor, including equipment or services that could result in a reduction in protections?</li><li>Have you entered into a patent or technology license agreement with a foreign entity or government that provides such entity with rights to improvements on the underlying technology and/or rights to continued use of the technology following the licensing term, including in connection with a joint venture?</li><li>Are you subject to a requirement that foreign parties must be controlling shareholders or hold a majority of shares in a joint venture in which you are involved, or are you involved in a joint venture that is subject to foreign ownership restrictions or requirements that a foreign party retain certain ownership rights?</li><li>Have you provided access to your technology or intellectual property to a state actor or regulator in connection with foreign regulatory or licensing procedures, including but not limited to local licensing and administrative procedures?</li><li>Have you been required to yield rights to technology or intellectual property as a condition to conducting business in or accessing markets located in a foreign jurisdiction?</li><li>Are you operating in foreign jurisdictions where the ability to enforce rights over intellectual property is limited as a statutory or practical matter?</li><li>Do you conduct business in a foreign jurisdiction or through a joint venture that may be subject to state secrecy or other laws, such as those limiting or prohibiting the export of data or financial documentation? Are you able to readily produce data or other information that is housed internationally in response to regulatory requirements or inquiries?</li><li>Have conditions in a foreign jurisdiction caused you to relocate or consider relocating your operations to a different host nation? Have you considered related material costs, such as costs to train new employees, establish new facilities and supply chains, and the impact of any related gaps or lags in production, manufacture and/or export of your products?</li><li>Do you have controls and procedures in place to adequately protect technology and intellectual property from potential compromise or theft? Do these policies and procedures enable you to identify risks and incidents, analyze the impact on your business, respond expediently, appropriately and effectively when incidents occur and repair any damage caused by such incidents? Are your controls and procedures designed to detect: <ul><li>Malfeasance by employees, contractors or other insiders who may have access to your technology and intellectual property;</li><li>Industrial, corporate or other espionage events;</li><li>Unauthorized intrusions into commercial computer networks; and</li><li>Other forms of theft and cyber-theft of your technology and intellectual property?</li></ul> </li></ul><ul><li>What level of risk oversight and management does the board of directors and executive officers have with regard to the company’s data, technology and intellectual property and how these assets may be impacted by operations in foreign jurisdictions where they may be subject to additional risks? What knowledge do these individuals have about these risks and what role do they have in responding if and when an issue arises?</li></ul>Next StepsWhile the Staff’s guidance is not a new rule, regulation or statement of the U.S. Securities and Exchange Commission, it does represent an important reminder for companies preparing disclosures for upcoming periodic reports and registration statements. While the potential risks for a company’s technology, data and intellectual property are often addressed in risk factor disclosures, companies with international operations should consider whether such disclosures need to be augmented to address the particular risks of theft or compromise that can arise because of the jurisdictions in which operations occur and relationships with foreign entities. We expect that the Staff will be focused on these disclosures in their review of periodic reports and registration statements.