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.

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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.

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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.

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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.

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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

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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.

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Lawrence W. Gallick

Social Links: If the Suit Fits

Social Links: Age Verification, X Appeal, and the Great White North

Social Links: Fake Reviews, Real Rulings, and an Epic Fail

Lawrence W. Gallick on Toth v. Everly Well, Inc.

Social Links: Going Back to Cali

Pin pain. As a primarily visual social media platform whose self-described purpose is to help users bookmark and save “<a href="https://about.pinterest.com/en/whats-pinterest" target="_blank" rel="noopener">good stuff you find anywhere around the web</a>,” Pinterest has raised copyright infringement questions since it became explosively popular in 2012. In many cases, copyright owners are happy to have their images “pinned” on the site, particularly where the copyright owner posted the image for advertising purposes in the first place. Pinned images appear in the Pinterest feeds of the pinner’s followers, and can drive traffic to the copyright owners’ own websites. But it doesn’t always work that way, says <a href="http://www.bigappetites.net/" target="_blank" rel="noopener">Christopher Boffoli</a>, a fine art photographer who is suing Pinterest. “Much of my work is pinned to Pinterest without attribution, which throws out the window the common trope about this kind of use gaining me ‘exposure’,” <a href="http://petapixel.com/2015/05/27/photographer-suing-pinterest-in-federal-court-over-repeated-copyright-infringement/" target="_blank" rel="noopener">says Boffoli, whose images have been pinned more than 5,000 times</a>. Boffoli further argues that, contrary to the platform’s <a href="https://about.pinterest.com/en/copyright" target="_blank" rel="noopener">promise</a> to “respond expeditiously to claims of copyright infringement,” the site is still riddled with his copyrighted images. The photography blog PetaPixel <a href="http://petapixel.com/2015/05/27/photographer-suing-pinterest-in-federal-court-over-repeated-copyright-infringement/" target="_blank" rel="noopener">reports</a> that a trial date for Boffoli’s suit is set for early 2016.Connecting the data deprived. A new messaging app called Jott is targeting text-message-loving teenagers who have iOS or Android mobile devices, but no data plans. And, judging by the app’s success—Jott is attracting up to 20,000 new users a day—the ranks of the data deprived are legion. Launched in March and already boasting half a million users, Jott allows users who have the app installed on their devices to text each other <a href="http://techcrunch.com/2015/06/08/messaging-app-jott-is-blowing-up-among-junior-high-and-high-schoolers/#.trzjxl:X64A" target="_blank" rel="noopener">within 100 feet</a>. Jott’s founder, Jared Allgood, started testing the app at a few schools and it took off, serving as an oasis for tech-deprived students in some of the many U.S. public <a href="http://www.theatlantic.com/education/archive/2013/11/more-than-half-of-us-public-schools-dont-have-adequate-wireless-access/281410/" target="_blank" rel="noopener">schools that are practically mobile data deserts</a>. The app eliminates the need for cell towers and Wi-Fi routers by turning users’ individual devices into “de facto cell towers,” <a href="http://www.forbes.com/sites/parmyolson/2015/06/10/chat-app-jott-teens-mesh-networks/" target="_blank" rel="noopener">Forbes explains</a>, using a technology called <a href="http://en.wikipedia.org/wiki/Wireless_mesh_network" target="_blank" rel="noopener">mesh networking</a>. Jott isn’t the first messaging app to circumvent the need for an Internet connection or data plan—FireChat, for example, <a href="http://www.theverge.com/2014/3/20/5530062/firechat-app-iphone-lets-you-text-friends-even-without-a-signal" target="_blank" rel="noopener">does that too</a> and has been used at events like <a href="http://en.wikipedia.org/wiki/Burning_Man" target="_blank" rel="noopener">Burning Man</a>. But Jott is unique in that it allows users to send direct messages to individuals rather than to whole groups.Only a social smoker? Here’s some news for those naysayers who are convinced that no good can come of society’s obsession with social media: According to a study from the University of Waterloo, <a href="http://www.sciencedaily.com/releases/2015/06/150609141734.htm" target="_blank" rel="noopener">32% of the 19- to 29-year-old Canadian smokers polled were able to stop lighting up</a> for 30 days after three months of using an app or online tool meant to help them kick the habit. <a href="http://www.columbian.com/news/2015/mar/23/apps-join-anti-smoking-arsenal/" target="_blank" rel="noopener">Experts predicted</a> the potential helpfulness of these smoking-cessation apps, whose features are varied. Some of the apps appeal to a smoker’s competitive side by pitting the user against fellow smokers who are also trying to quit, while others send signals to the smoker’s friends who can then intervene when the smoker approaches a potential trigger. Success, the experts say, may depend on finding an app that’s a good fit, so hopefuls should try several. The websites of both niche publications and <a href="http://www.mensfitness.com/life/gearandtech/five-best-quit-smoking-apps" target="_blank" rel="noopener">mainstream media periodicals</a> list and review several of the best. And, in other news, The Onion reports that smoking is fine as long as you only do it when you drink.

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 Rubin

Status Updates: Artist sues Pinterest; texting for teens without data plans; quit smoking with social media

Pin pain. As a primarily visual social media platform whose self-described purpose is to help users bookmark and save “good stuff you find anywhere around the w

Status Updates: Artist sues Pinterest; texting for teens without data plans; quit smoking with social media

As a technology law blogger and co-editor of <a href="https://www.sociallyawareblog.com/" target="_blank" rel="noopener">Socially Aware</a>, I monitor emerging developments in information technology. What’s hot in IT today? Any shortlist would have to include social media, mobile, wearable technology, the Internet of Things (IoT), cloud computing and big data.That list is all over the map, right? Or is it? On closer inspection, these technologies are far more closely intertwined than they may appear to be at first glance.So what’s the connection between, say, social media and the Internet of Things? Or wearable tech and cloud computing?Here’s my theory: These technologies all reflect the ceaseless drive by businesses to collect, store and exploit ever more data about their customers. In short, these technologies are ultimately about selling more stuff to us.With this “grand unifying theory” in mind, one sees how these seemingly disparate technologies complement one another. And the legal challenges and risks they pose become clear.Collection of DataLet’s start with the collection of consumer data. Of the six key trends identified above, four relate directly to such collection: social media, mobile, wearable technology and IoT.When we use the Internet, marketers are tracking our activities; the data generated by our online behavior is collected and then used to target ads that will be more relevant to us.If we spend time on movie sites, we’re more likely to see ads promoting new film releases. If we visit food blogs, we’re going to be served ads selling cookware.Creepy? It can be. But such tracking and targeting make it possible for many website operators to offer online content and services for free. Indeed, many believe that such tracking and targeting <a href="http://www.wsj.com/articles/SB10001424052748703748904575411530096840958" target="_blank" rel="noopener">are essential to the vibrancy of our Internet ecosystem</a>. (Although Google is reportedly experimenting with an offering <a href="http://www.fool.com/investing/general/2014/11/30/google-wants-to-know-how-much-youll-pay-for-ad-fre.aspx" target="_blank" rel="noopener">where one would pay not to see ads while surfing the Web</a>.)In the past, serious limitations existed on the ability of marketers to track and target us. We might have given our name, email and home address to a website, but not much else; now, with social media, we routinely volunteer loads of personal information—our jobs, hobbies, special skills, taste in music and movies, even our “relationship status.” And not just information about ourselves, but our families, friends and colleagues as well. As a result, social media companies have compiled huge databases about us—in Facebook’s case, nearly 1.4 billion of us.Also, not long ago, we surfed the Web from either home or office—limiting the ability to be tracked and targeted while away from those locations. The rise of Internet-connected mobile devices has changed all that, of course—now we can access the Web from anywhere, and mobile devices can pinpoint our location, even when we’re not browsing. Marketers can track our daily journey to and from home to work and back again, even serving us “just in time” discount offers as we pass a clothing store or restaurant.From a marketer’s perspective, social media and mobile are all about expanding the amount and type of customer data that can be collected. Thanks to mobile devices and apps, tracking and targeting are no longer desk-bound and can occur even if a customer is not connected to the Internet.Wearable tech? Like cell phones, wearables make tracking and targeting possible while one is away from a traditional computer or not actively using the Web. These devices can also collect information that cell phones can’t – our heart rate or body temperature, or the number of hours one slept last week.For marketers, the Internet of Things is especially exciting because it raises the possibility of being able to track and target consumers anywhere in their homes, even while they are away from their desktop computers or mobile devices.Imagine your “smart” refrigerator not only determining when you’re low on milk, but offering a 15 percent discount if you were to buy today a quart of milk at your local market. Or your Internet-connected washing machine recommending a new laundry detergent based on its monitoring of your laundry loads.Another hot technology trend – commercial drones – is relevant here. Although unmanned aerial vehicles (UAVs) have generated attention for their ability to <a href="http://www.amazon.com/b?node=8037720011" target="_blank" rel="noopener">facilitate package delivery</a> and <a href="http://www.independent.co.uk/news/world/americas/widening-the-net-facebook-drones-to-cover-world-in-wifi-9222334.html" target="_blank" rel="noopener">accommodate WiFi access</a>, they can be used to <a href="http://venturebeat.com/2015/02/23/drones-over-head-in-las-valley-are-tracking-mobile-devices-locations/" target="_blank" rel="noopener">collect data on consumers</a> when <a href="http://www.pcworld.com/article/2904692/epic-appeals-to-court-for-faa-drone-privacy-rules.html" target="_blank" rel="noopener">they’re outdoors or near a window</a>, even when they are without cell phones, wearables or other devices used to track their movement and activities.Ingestibles—“smart” pills containing sensors that are swallowed, <a href="http://blogs.gartner.com/michael-shanler/wearable-devices-ha-whats-your-appetite-for-ingestibles/" target="_blank" rel="noopener">allowing the collection of data within one’s body</a>—are a nascent technology that, as they become more widely used, may ultimately fit into this theory.Storage of DataWith social media platforms, mobile, wearable and IoT devices and UAVs collecting information on an unprecedented scale, that data needs to be stored somewhere. Enter the cloud. All of these new technologies depend heavily on the massive storage capacity made possible by cloud systems; it wouldn’t be cost effective otherwise. (Case in point: A 2013 study revealed that<a href="http://www.sciencedaily.com/releases/2013/05/130522085217.htm" target="_blank" rel="noopener"> 90% of all the data in the world had been collected over the prior two years</a>.)Exploitation of DataOnce all this data has been collected and stored in the cloud, what then?That’s where big data enters the picture. Big data is providing companies with the analytic tools for sifting through these inconceivably large databases in order to exploit the bits therein.For example, that photo you uploaded to Instagram can now be analyzed for marketing opportunities. Perhaps you were holding a bag of potato chips; using big data analytics, the chip maker could target you in its next online ad campaign. Or maybe a competing snack company wants to entice you to switch brands. Why stop there? What about the shirt that you were wearing? And that pair of jeans? (I’ve written on the application of big data analytics to the billions of photos hosted on social media sites <a href="https://www.sociallyawareblog.com/2014/08/05/picture-this-online-photos-and-big-data/" target="_blank" rel="noopener">here</a>.)Similarly, information collected from wearables, when processed by big data tools, opens up new opportunities for marketers. Your pulse rate may be of interest to the health care industry. Your jogging workouts may attract attention from retailers of athletic shoes and clothing.But the mother lode just might be all of the marketing insights to be generated by big data analytics stemming from multiple IoT devices in one’s home—the thermostat, stove, refrigerator, coffee machine, toaster, washer/dryer, humidifier, alarm clock and so on: for the first time ever, marketers will have access to real-time information regarding once-private quotidian activities.Legal ConsiderationsSo that’s my theory: The adoption of today’s hottest IT technologies is being driven in large part by the insatiable desire of businesses to collect and store ever-larger amounts of consumer data, and to then use that data to more successfully market to consumers. When these technologies are viewed in light of this theory, some key legal observations emerge.First, because these technologies all involve the collection, storage and exploitation of consumer data, privacy and data security are necessarily raised and indeed are the most important legal considerations. That’s not meant to minimize intellectual property, product liability and other legal concerns associated with these technologies; privacy and data security laws, however, are the ones specifically designed to regulate the collection, use and exploitation of consumer data.Second, these technologies are being developed and implemented far faster than the ability of legislators, regulators and courts to develop rules to govern them. It will be essential for companies embracing these technologies to self-regulate—failure to do so will result in an inevitable backlash, leading to burdensome regulations that will undermine innovation.Third, these technologies will present real challenges to the majority of companies that want to “do the right thing” by their customers. For example, consumers ideally should be provided with notice and an opportunity to consent prior to the collection, storage and exploitation of their personal information, but how can this be done through, say, a smart electric toothbrush? These issues need to be addressed early in the development cycle for next-generation products—it can’t be an afterthought. Moreover, are customers receiving real, tangible value in connection with the data being collected from them?Fourth, as our social-media pages, devices and appliances become more closely tied together, and linked to massive troves of data about us in the cloud, businesses need to be aware that it takes only one weak link to put the entire ecosystem at risk. Hackers will no longer need to bypass your computer or phone’s security to capture personal data; they may be able to access your records through, say, an Internet-enabled toaster that lacks adequate security controls.Finally, companies need to pay attention to whether they need to collect all the data that can be collected through these technologies. Ideally, they should seek to minimize the amounts of personally identifiable information they hold, in order to reduce privacy- and security-related legal risks, and liability.No doubt this last recommendation may be hard for many marketers to embrace; after all, data-gathering is in their DNA. And that same hard-wiring is in all of our DNA—the original source code for data collection, storage and exploitation. We wouldn’t be human without it.(This is an expanded, “director’s cut” version of an op-ed piece that <a href="http://www.marketwatch.com/story/heree-my-grand-unifying-theory-of-todays-tech-trends-2015-05-12?page=2" target="_blank" rel="noopener">originally appeared</a> in <a href="http://www.marketwatch.com/">MarketWatch</a>.)

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Toward a Grand Unifying Theory of Today’s Tech Trends

Toward a Grand Unifying Theory of Today’s Tech Trends

As a technology law blogger and co-editor of Socially Aware, I monitor emerging developments in information technology. What’s hot in IT today? Any shortlist wo

The explosive growth of social media has clients facing legal questions that didn’t even exist a few short years ago. Helping your clients navigate this muddled legal landscape will have them clicking “like” in no time.What’s in a Like?Not long ago, the word “like” was primarily a verb (and an interjection used by “valley girls”). You could have likes and dislikes in the sense of preferences, but you couldn’t give someone a like, claim to own a like or assert legal rights in likes. Today, however, a company’s social media pages and profiles, and the associated likes, followers and connections, are often considered valuable business assets. Courts have come to various conclusions regarding whether likes and similar social media constructs constitute property, but one thing is clear: Every company that uses social media should have in place clear policies regarding employee social media use and ownership of business-related social media accounts.Employees who manage a company’s social media accounts often insert themselves as the “voice” of the brand and establish a rapport with the company’s fans and followers. Without clear policies that address ownership of social media accounts, and clearly distinguish between the company’s accounts and employees’ personal accounts, your client may find itself in a dispute when these employees leave the company and try to take the company’s fans and followers with them.Read a more detailed description of “likes” as assets <a href="http://www.sociallyawareblog.com/2014/11/04/whats-in-a-like/" target="_blank" rel="noopener">here</a>.Dirty LaundryIt comes as no surprise that employees frequently use social media to complain about managers and coworkers, pay, work conditions and other aspects of their employment. Companies often would prefer not to air these issues publicly, so they establish policies and impose discipline when employees’ social media activity becomes problematic. Companies need to be careful, however, that their policies and disciplinary actions comply with applicable law.A number of National Labor Relations Board decisions have examined whether employees’ statements on social media constitute “concerted activity”—activity by two or more employees that provides mutual aid or protection regarding terms or conditions of employment—for purposes of the National Labor Relations Act (which, notably, applies regardless of whether the employees are unionized or not). Companies also need to be careful to comply with state statutes limiting employer access to employees’ personal social media accounts, such as California Labor Code Section 980, which prohibits an employer from asking an employee or applicant to disclose personal social media usernames or passwords, access personal social media in the presence of the employer, or divulge personal social media.Read more about the intersection of social media policies and labor law <a href="http://www.sociallyawareblog.com/2014/01/22/uncovering-a-line-in-the-sand-employee-social-media-use-and-the-nlra/" target="_blank" rel="noopener">here</a> and <a href="http://www.sociallyawareblog.com/2013/01/16/social-media-and-the-national-labor-relations-act-what-employers-need-to-know-in-drafting-and-updating-their-social-media-policies/" target="_blank" rel="noopener">here</a>.Terms of (Ab)useCompanies often consider their social media pages and profiles to be even more important than are the companies’ own websites for marketing and maintaining customer engagement. But a company’s own website has one advantage over a third party social media platform: The company sets its own terms for use of its website, while the third party social media platform is subject to terms of use imposed by the platform operator. And, in many cases, the terms imposed on users of social media platforms are onerous and make little distinction between individual users using the platform just for recreation and corporate users who depend on the platform for their businesses.Social media terms of use often grant platform operators broad licenses to content posted on the platform, impose one-sided indemnification obligations on users, and permit platform operators to terminate users’ access with or without cause. You may have little luck negotiating modifications to such online contracts for your clients, but you can at least inform your clients of the terms that govern their use of social media, so that they can weigh the costs and benefits.Read more about social media platforms’ terms of use <a href="http://www.sociallyawareblog.com/2014/10/06/implementing-and-enforcing-online-terms-of-use/" target="_blank" rel="noopener">here</a>, <a href="http://www.sociallyawareblog.com/2014/09/23/to-click-or-not-to-click-ninth-circuit-rejects-browsewrap-arbitration-clause/" target="_blank" rel="noopener">here</a>, and <a href="http://www.sociallyawareblog.com/2013/12/03/potential-limitations-placed-on-unilateral-right-to-modify-terms-of-use/" target="_blank" rel="noopener">here</a>.Same as It Ever WasWhen it comes to using social media for advertising, the media may be new but the rules are the same as ever. Companies that advertise through social media—especially by leveraging user endorsements—need to comply with Section 5 of the FTC Act, which bars “unfair or deceptive acts or practices.” Bloggers and others who endorse products must actually use the product and must disclose any “material connections” they have with the product providers (for example, a tech blogger reviewing a mobile phone that she received for free from the manufacturer should disclose that fact). Because this information is likely to affect consumers’ assessment of an endorsement, failure to disclose may be deemed deceptive. So if you have a client that uses endorsements to promote its products, make sure to brush up on the FTC “Dot Com Disclosures” and other relevant FTC guidance.Read more about endorsement disclosure obligations <a href="http://www.sociallyawareblog.com/2014/12/03/ftc-enforcement-action-confirms-that-ad-disclosure-obligations-extend-to-endorsements-made-in-social-media/" target="_blank" rel="noopener">here</a>.Good RepAs noted, a company’s social media pages, followers, etc., may constitute valuable business assets. But buyers in M&A transactions often neglect such assets when formulating the seller’s reps and warranties. Buyers should consider asking the seller to disclose all social media accounts that the target company uses and to represent and warrant that none of the target’s social media account names infringe any third party trademark or other IP rights, that all use of the accounts complies with applicable terms of service, and that the target has implemented policies providing that the company (and not any employee) owns all business-related social media accounts and imposing appropriate guidelines regarding employee use of social media.Finally, if you have clients that use social media, it’s important to be familiar with the popular social media platforms and their (ever-changing) rules and features. Learning to spot these issues isn’t going to turn you into the next Shakira—as of this writing, the most liked person on Facebook with well over 100 million likes—but your clients will surely appreciate your help as they traverse the social media maze.Read more about social media assets in M&A transactions <a href="http://www.sociallyawareblog.com/2015/01/12/good-rep-social-media-assets-in-ma-transactions/" target="_blank" rel="noopener">here</a>.<div>This piece originally appeared in The Recorder.</div><div></div>

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Five Social Media Law Issues To Discuss With Your Clients

Five Social Media Law Issues To Discuss With Your Clients

The explosive growth of social media has clients facing legal questions that didn’t even exist a few short years ago. Helping your clients navigate this muddled

Congress has taken a step toward protecting consumers’ rights to post negative reviews on websites like Ripoff Report or Yelp with the introduction, by Representative Darrell E. Issa of California, of the Consumer Review Freedom Act of 2015 (the CFRA).The CFRA follows a California law, enacted in 2014, which made it illegal for businesses to penalize their customers for posting negative reviews of their products or services online. The California law, <a href="http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201320140AB2365" target="_blank" rel="noopener">AB 2365</a>, was passed in response to a growing number of incidents where businesses have used non-disparagement clauses buried in form contracts to charge fines of several hundred to several thousand dollars. Such incidents have occurred all over the country—from a New York hotel withholding $500 from a couple’s security deposit after a member of the couple’s wedding party posted a negative review, to a Michigan-based Internet retailer charging two of its customers in Utah $3,500 after they published a review criticizing the retailer’s customer service.AB 2365 sought to put a stop to such incidents by prohibiting businesses from including in any contract for the sale or lease of consumer goods or services any provision that requires the consumer to waive his or her right “to make any statement regarding the seller or lessor or its employees or agents, or concerning the goods or services.” The statute also makes it unlawful to enforce such a provision “or to otherwise penalize a consumer for making any statement protected under” the law. This is presumably intended to address situations in which a business does not explicitly prohibit negative reviews, but instead seeks to impose a penalty on a consumer who posts a negative review, as in the Michigan case noted above.The CFRA is intended to take the California policy and expand it nationwide. Similarly to AB 2365, the CFRA prohibits businesses from including in any form contract a provision that prohibits or restricts a person from, or imposes a penalty or fee against a person for, engaging in a “written, verbal, or pictorial review, performance assessment of, or other similar analysis of, the products, services, or conduct of a business or person which is a party to the form contract.” The CFRA empowers the Attorney General to bring actions for a civil penalty of up to $16,000 for each day that the business requires the use of the penalizing contract by a distinct person.The CRFA also closes a potential loophole in AB 2365 that at least one enterprising organization <a href="http://arstechnica.com/tech-policy/2011/05/all-your-reviews-are-belong-to-us-medical-justice-vs-patient-free-speech/" target="_blank" rel="noopener">had been encouraging</a> its clients to use. <a href="http://www.medicaljustice.com/" target="_blank" rel="noopener">Medical Justice</a>, an organization that provides template form contracts to medical service providers, had included language in those contracts purporting to assign to the service provider the copyright in any review posted by a patient. If effective, this assignment would allow the service provider to issue takedown notices under the Digital Millennium Copyright Act or threaten the publishing websites with infringement actions. AB 2365 did not expressly address such assignment provisions, but the CRFA voids any provision that “transfers … to any person or business any intellectual property rights that the individual may have in any otherwise lawful [communication] about the person or the goods or services provided by the person or business.”Though it is unclear how likely the CFRA is to become law, it has bipartisan sponsorship and certain key players have publicly voiced their support. For example, Yelp has come out strongly in favor of the CFRA in a post on its official blog. The bill is currently being reviewed by the House Committee on Energy and Commerce and has been referred to a subcommittee.With a political environment that is increasingly hostile to non-disparagement clauses, businesses will now have to consider different ways of avoiding negative reviews—perhaps by providing better products and services.

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The Right to Give One-Star Reviews

Congress has taken a step toward protecting consumers’ rights to post negative reviews on websites like Ripoff Report or Yelp with the introduction, by Represen

The Right to Give One-Star Reviews

The growing use of social media has created challenges for federal securities regulators and, given the significance of social media as a preferred method of communication for a large percentage of market participants, the need to adapt Federal securities laws and the regulatory framework applicable to broker-dealers and investment advisers to social media channels has become all the more urgent.To help navigate these issues, Socially Aware contributors and Morrison & Foerster partners Jay Baris and David Lynn have just released their Guide to Social Media and Securities Law, which provides a comprehensive overview of how federal regulation of securities has evolved in the face of the growing use of social media by investors, securities issuers, broker-dealers, investment advisers and investment companies.

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The Guide to Social Media and Securities Law

The Guide to Social Media and Securities Law

The growing use of social media has created challenges for federal securities regulators and, given the significance of social media as a preferred method of co

As more users spend more time on their mobile devices, advertising dollars are following. And the compliance regime that governs interest-based advertising (IBA) (formerly referred to as online behavioral advertising or OBA) is expanding as well. (IBA is the collection of information about users’ online activities across different websites or mobile applications, over time, for the purpose of delivering online advertising to those users based on those activities.) The regime arose from a February 2009 Federal Trade Commission (FTC) report entitled Self-Regulatory Principles for Online Behavioral Advertising, which the Digital Advertising Alliance (DAA), a consortium of media and marketing associations, translated into a self-regulatory program (DAA Principles) in an effort to avoid legislation.The <a href="http://www.aboutads.info/resource/download/seven-principles-07-01-09.pdf" target="_blank" rel="noopener">DAA Principles</a> focus on providing consumers with notice of and control over how information collected from their use of online services is used for IBA purposes. To facilitate such notice and choice, the DAA provides an advertising option icon to be placed in or near an interest-based ad. The icon, when clicked, delivers consumers to a landing page that describes the data collection practices associated with the ad and provides an opt-out mechanism. The Council of Better Business Bureaus, which, along with the Direct Marketing Association, enforces the DAA Principles, has construed the principles to also require notice on any site where information is collected for IBA purposes. Such notice typically takes the form of an “Our Ads” or similarly named link in the site footer, separate from the privacy policy link, that clicks through to the same landing page as the advertising option icon, or to similar notice and choice. A dedicated industry website, <a href="http://www.aboutads.info/" target="_blank" rel="noopener">www.aboutads.info</a>, also provides consumers with the ability to exercise choice with regard to IBA.The DAA has always held that the DAA Principles apply universally; in July 2013, it <a href="http://www.aboutads.info/DAA_Mobile_Guidance.pdf" target="_blank" rel="noopener">issued guidance</a> regarding their application to the mobile environment (Mobile Guidance). The DAA has also acknowledged the challenge that screen-size, among other things, may pose to complying with the principles’ notice and choice requirements in the same fashion as in the desktop experience. In February 2015, however, the DAA announced two new measures to facilitate compliance with the requirements on mobile devices: (1) a new consumer choice page optimized for mobile (which is otherwise the same as <a href="http://www.aboutads.info/" target="_blank" rel="noopener">www.aboutads.info</a>), and (2) a downloadable app, “AppChoices,” that enables consumers to manage ad preferences for certain third party in-app ad delivery services. The Mobile Guidance explains how a company engaged in IBA should provide notice and choice—via the consumer web page and/or AppChoices app, as applicable—to its users. The DAA recently announced that the DAA Principles will be enforced in the mobile space, effective September 1, 2015. This enforcement will include not only the notice-and-choice regime but also other mobile-specific issues addressed by the DAA’s Mobile Guidance, such as the use of precise geolocation. As a result, companies should work diligently to figure out their compliance strategies for their mobile websites and applications.

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Clients seek out Julie because of her practical advice on cutting-edge issues at the intersection of privacy and consumer protection laws. She provides clients with practical solutions to compliance c

Julie O'Neill

Clients seek out Julie because of her practical advice on cutting-edge issues at the intersection of privacy and consumer protection laws. She provides clients with practical solutions to compliance challenges around a wide variety of both online and offline privacy issues, including tracking, interest-based advertising, geo-targeting and other mobile tracking, personalization, and cross-device tracking. Recognized in The Legal 500 US 2014, 2016, 2019, and 2020 and Chambers USA 2021 for her exceptional legal work, her clients praise her saying, “She is really good at giving practical, targeted advice and taking stock of what the risk profile of the client is, so that the advice is holistic.” (Chambers USA 2021).

Digital Advertising Alliance Focuses on Mobile Ads

As more users spend more time on their mobile devices, advertising dollars are following. And the compliance regime that governs interest-based advertising (IBA

Digital Advertising Alliance Focuses on Mobile Ads

On June 3, 2015, the New York Department of Financial Services (“NYDFS”) issued a final rule regarding its “BitLicense” regulatory regime (“Final Rule”). The Final Rule follows an initial proposal from July 2014 and a revised proposal from February 2015 (“Revised Proposal”). Our analysis of the July 2014 proposal is available here, and our analysis of the Revised Proposal is available here. We also reported on Superintendent Lawsky’s November 2014 remarks at the Money 20/20 conference and the NYDFS approval of the itBit trust company application.At a high level, the Final Rule requires licensing for any person that engages in “Virtual Currency Business Activity,” as defined in the Final Rule, and subjects licensees to extensive compliance obligations, capital requirements, examination, and approval requirements, among other things. The Final Rule also provides for a “conditional license” designed to reduce regulatory burden on startups and small businesses engaged in Virtual Currency Business Activities.The Final Rule contains few material differences from the Revised Proposal, with the changes primarily clarifying certain definitions in the Revised Proposal. Concurrent with the release of the Final Rule, NYDFS Superintendent Benjamin Lawsky delivered remarks at the BITS Emerging Payments forum in Washington, D.C. Superintendent Lawsky confirmed that the Final Rule “does not include the major changes we saw in the last round,” which included the provisions regarding the transitional BitLicense.The Final Rule contains few material differences from the Revised Proposal, with the changes primarily clarifying certain definitions in the Revised Proposal. Concurrent with the release of the Final Rule, NYDFS Superintendent Benjamin Lawsky delivered remarks at the BITS Emerging Payments forum in Washington, D.C. Superintendent Lawsky confirmed that the Final Rule “does not include the major changes we saw in the last round,” which included the provisions regarding the transitional BitLicense.The following bullets highlight noteworthy changes from the Revised Proposal:<ul><li>The Final Rule clarifies the prepaid card exclusion from the definition of virtual currency by amending the definition of a “prepaid card.” Specifically, the definition is clarified to cover only prepaid cards that are issued, can be reloaded and can be redeemed “in and for fiat currency.”</li><li>The Final Rule further enumerates the circumstances under which a licensee must obtain approval for a material change to the licensee’s business. Specifically, the Final Rule states that a material change, or a “materially new product, service, or activity”—a new defined term—may occur where the proposed new product, service, or activity may raise (i) “a legal or regulatory issue about the permissibility of the product, service, or activity,” or (ii) “safety and soundness or operational concerns.” Approval for products, services, or activities that are “materially different” from those described on the licensing application is still required. Notwithstanding the new circumstances under which approval is required, Superintendent Lawsky stated that “companies will not need approval for standard software or app updates,” and when considering what would constitute a materially new product, service, or activity, Superintendent Lawsky provided an example of a firm that was licensed as a wallet provider that decided to begin offering exchange services.</li><li>Superintendent Lawsky also made clear that the Final Rule applies only to financial intermediaries that are responsible for safeguarding customer funds. According to Superintendent Lawsky, software developers and other individuals who work with virtual currency from a design standpoint are exempted from the licensing requirement.</li><li>Superintendent Lawsky described the care that the NYDFS took not to impose duplicative requirements on licensees. For example, in his prepared remarks, he stated that firms will be able to apply for a BitLicense and a money transmitter license simultaneously. In addition, the Final Rule clarifies that a licensee must only file suspicious activity reports with the Superintendent if the licensee is not already submitting the reports to the Financial Crimes Enforcement Network (“FinCEN”).</li><li>Nonetheless, the Final Rule does impose additional reporting requirements for virtual currency transactions that are not currently subject to federal reporting requirements. Specifically, the Final Rule requires that a licensee notify the Superintendent within 24 hours of any virtual currency transaction or series of transactions made during a single business day that total more than $10,000. As such, the Final Rule creates a virtual currency-to-virtual currency Currency Transaction Report (“CTR”) requirement, where such a transaction may otherwise avoid the FinCEN CTR reporting requirements.</li></ul>We will continue to follow the implementation of the Final Rule, as well as the efforts of other state regulatory authorities with respect to virtual currency and provide updates as warranted.

The NYDFS Finalizes its BitLicense Proposal