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

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

More

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

In a closely watched case, the U.S. Supreme Court ruled today in a 6-3 decision that Aereo’s Internet streaming service engages in unauthorized public performances of broadcast television programs in violation of the Copyright Act, reversing the Second Circuit’s decision in American Broadcasting Companies, Inc. v. Aereo, Inc. (No. 13-461).In ruling against Aereo, the Court sought to limit its decision to Aereo’s service—which the Court considered to be “equivalent” to that of a traditional cable company—and noted that it was not addressing the legality of cloud storage lockers, remote-storage DVRs and other emerging technologies.  But the Court’s interpretation of the public performance right in the context of Aereo’s technology will nevertheless influence future decisions on whether the transmission of content using other technology constitutes copyright infringement.BackgroundAereo provides broadcast television streaming and recording services to its subscribers, who can watch selected programming on various Internet-connected devices, including smart televisions, computers, mobile phones and tablets.  Aereo provides its service through individual, “dime-sized” antennas that pick up local television broadcast signals and transmit those signals to an Aereo server where individual copies of programs embedded in such signals are created and saved to the directories of those subscribers who want to view such programs.  A subscriber can then watch the selected program nearly live (subject to a brief time delay from the recording) or later from the recording.  No two users share the same antenna at the same time, nor do any users share access to the same stored copy of a program.In 2012, various broadcasting companies sued Aereo for copyright infringement in the Southern District of New York, claiming, among other things, that Aereo’s transmission of the plaintiffs’ copyrighted content to Aereo’s subscribers violated the copyright owners’ exclusive right to publicly perform those works.  That public performance right, codified in the 1976 Copyright Act, includes (1) any performance at a place open to the public or any gathering with a substantial number of people outside the “normal circle of family and social acquaintances,” and (2) the transmission of a performance to the public, whether or not those members of the public receive it in the same location and at the same time.  This latter provision, commonly referred to as the “Transmit Clause,” was added to the Copyright Act by Congress in part to overturn earlier Supreme Court decisions that had allowed cable companies to retransmit broadcast television signals without compensating copyright owners.The district court denied the broadcast companies’ preliminary injunction requests, finding that, based on Second Circuit precedent, Aereo’s transmissions were unlikely to constitute public performances.  The Second Circuit affirmed the decision, relying on that court’s earlier decision in Cartoon Network LP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008) (“Cablevision”), which found that a cable company’s remote-storage DVR system did not run afoul of the public performance right because each transmission emanated from a unique copy of a program that was sent only to an individual user.  The Second Circuit held that Aereo does not engage in public performances because, as in Cablevision, Aereo’s system makes unique copies of every recording, and each transmission of a program to a customer is generated from that customer’s unique copy.  The Supreme Court’s RulingThe Supreme Court addressed two questions regarding the public performance right: (1) Does Aereo “perform” a copyrighted work? (2) Is that performance “public”?  The answer to both questions, according to the Court, is yes.PerformanceThe Court held that Aereo’s service does “perform” audiovisual works under the Copyright Act’s definition of that term, which is to “show [the audiovisual work’s] images in any sequence or make the sounds accompanying it audible.”  According to the Court, under this definition, “both the broadcaster and the viewer of a television program ‘perform.’”  (Op. at 7.)  The Court (contrary to the Second Circuit and the dissent) disagreed with Aereo’s argument that it was simply a supplier of equipment that allows users to perform content, and that it did not itself perform such content.  Instead, the Court determined that Aereo was essentially no different in substance than a traditional cable company, to which Congress expressly intended to have the public performance right apply.The technological difference between Aereo and traditional cable systems at issue when the Transmit Clause was enacted—that the latter systems transmitted content constantly while Aereo’s system remains inert until a subscriber indicates that she wants to watch a program—was insignificant to the Court.  “Given Aereo’s overwhelming likeness to the cable companies targeted by the 1976 amendments, this sole technological difference between Aereo and traditional cable companies does not make a critical difference here. . . . [T]he many similarities between Aereo and cable companies, considered in light of Congress’ basic purposes in amending the Copyright Act, convince us that this difference is not critical here.  We conclude that Aereo is not just an equipment supplier and that Aereo ‘perform[s].’”  (Op. at 10.)PublicThe Court also held that Aereo transmits its performance of the copyrighted works to the public.  An entity transmits a performance if it “communicate[s] by any device or process whereby images or sounds are received beyond the place from which they are sent.”  (Op. at 11.)  Although initially only an assumed definition for the purposes of evaluating Aereo’s argument, the Court appeared to accept the definition that transmitting an audiovisual performance requires communicating “contemporaneously perceptible images and sounds of a work.”  Because Aereo’s service satisfied this definition, the Court went on to note that the Transmit Clause of the Copyright Act contemplates that an entity can transmit a performance “through one or several transmissions, where the performance is of the same work.”  Accordingly, the Court concluded that “when an entity communicates the same contemporaneously perceptible images and sounds to multiple people, it transmits a performance to them regardless of the number of discrete communications it makes.”  (Op. at 14.)That transmission is also public because Aereo communicates “the same contemporaneously perceptible images and sounds to a large number of people who are unrelated and unknown to each other.”  (Op. at 14.)  Although not cited in the Court’s opinion, a similar circumstance involving transmission of content to people who were “unrelated and unknown to each other” was found to be a public performance in On Command Video Corp. v. Columbia Pictures Industries, 777 F. Supp. 787 (N.D. Cal. 1991), which established that electronic delivery of a movie video tape signal to a single hotel room, pursuant to a system consisting of a computer program, a sophisticated electronic switch and a bank of video cassette players, was a public performance under the Copyright Act.The fact that the Aereo service involves individual recordings for each subscriber that plays each recording only to its designated subscriber is, according to the Court, just the “behind-the-scenes way in which Aereo delivers television programming to its viewers’ screens” but “do not render Aereo’s commercial objectives any different from that of cable companies” or “significantly alter the viewing experience of Aereo’s subscribers.”  (Op. at 12.)Again the Court explained that Aereo was conceptually no different than a cable company.  “In terms of the Act’s purposes, these differences do not distinguish Aereo’s system from cable systems, which do perform ‘publicly.’  Viewed in terms of Congress’ regulatory objectives, why should any of these technological differences matter?”  (Op. at 12.)The Court ultimately held that:  “Insofar as there are differences, those differences concern not the nature of the service that Aereo provides so much as the technological manner in which it provides the service.  We conclude that those differences are not adequate to place Aereo’s activities outside the scope of the Act.”  (Op. at 17.)Attempts to Avoid the CloudThe Court expressly dismissed concerns over how its decision will affect other areas of technology, and stated that it did not see this dispute as a cloud or remote storage case, but rather, a cable company “equivalent” situation.  (Op. at 16.)Indeed, the Court specifically stated that it did not believe its “limited holding” would “discourage” or “control the emergence or use of different kinds of technologies.”  The Court even laid out areas that its decision did not reach, including “whether different kinds of providers in different contexts also ‘perform’” and “whether the public performance right is infringed when the user of a service pays primarily for something other than the transmission of copyright works, such as the remote storage of content,” and encouraged entities concerned about these areas to “seek action from Congress.”  (Op. at 16-17.)  Notably, however, the Court did hold that “an entity that transmits a performance to individuals in their capacities as owners or possessors does not perform to ‘the public’”—a seeming nod to the validity of cloud locker services (at least where users are storing authorized copies of works in their lockers).  (Op. at 15.)  Moreover, the Court stated that “[a]n entity does not transmit to the public if it does not transmit to a substantial number of people outside of a family and its social circle.”  (Op. at 15-16.)Regardless, any evaluation of whether the transmission of content—whether by new or existing technology—violates the public performance right will have to be viewed under the language of the Aereo decision.  For example, while the Second Circuit’s Cablevision decision is not expressly overruled or even examined in the Aereo decision, any future determination as whether remote-storage DVR technology violates the public performance right would likely first be analyzed under Aereo—not Cablevision, at least outside of the Second Circuit.  And, within the Second Circuit, one envisions a lively, ongoing debate as to what extent Cablevision dealt with transmissions to individuals in their capacities as owners or possessors of the products at issue, which, as noted above, the Supreme Court viewed as a situation left unaffected by its Aereo ruling.Finally, while Aereo’s service was likened to a cable system, Aereo—and perhaps other technology comparable to Aereo’s—is not a cable system under any other definition, including Section 111 of the Copyright Act governing secondary transmissions of broadcast programming by cable systems.  Therefore, an open issue is what effect the Aereo decision will have on the future of these types of cable-esque services, such as Aereo, assuming they want to continue to operate, and particularly whether they will attempt to license from the copyright owners the content that these services seek to distribute.

3-b-1024x1024-1.jpg

Supreme Court Stifles Aereo, but Tries to Keep the Cloud Away

Supreme Court Stifles Aereo, but Tries to Keep the Cloud Away

In a closely watched case, the U.S. Supreme Court ruled today in a 6-3 decision that Aereo’s Internet streaming service engages in unauthorized public performan

The safe harbor provisions in <a href="http://www.law.cornell.edu/uscode/text/17/512" target="_blank" rel="noopener">§ 512(c) of the Digital Millennium Copyright Act (DMCA)</a> provide a mechanism that insulates online service providers from monetary damages for infringing materials posted or stored by their users.  To receive this protection, service providers must designate an agent to receive notice of claims of infringement with the Copyright Office and publicly post the agent’s contact information on the website.  A recent case in the Northern District of California, Oppenheimer v. Allvoices, Inc., examined whether service providers can avail themselves of the § 512(c) safe harbor for infringing acts that precede designation of such an agent.<a href="http://www.allvoices.com/" target="_blank" rel="noopener">Allvoices</a> is an online service provider that maintains a community-driven platform for the exchange of ideas as well as graphical, written, and audio content.  Allvoices provides users with financial incentives to upload content to the site, and treats such users as “citizen journalists” and independent contractors.  While it began providing access to contributor content in 2008, Allvoices did not designate its DMCA agent until March 2011.The plaintiff, <a href="http://www.performanceimpressions.com/" target="_blank" rel="noopener">David Oppenheimer</a>, is a professional photographer whose photographs were posted on Allvoices’s website by contributors in January 2011.  Oppenheimer learned that his photographs had been posted on the Allvoices website in February 2011, prior to Allvoices’s DMCA agent designation.  Oppenheimer sent a cease and desist letter to Allvoices in August 2011, several months after Allvoices designated its DMCA agent.  While Allvoices eventually removed the photographs, Oppenheimer alleged that Allvoices failed to reply to his cease and desist letter and failed to terminate the accounts of repeat infringers, as required by the DMCA. Allvoices argued that it was entitled to the protection of the § 512(c) safe harbor for all alleged infringements, not just infringement occurring after it had designated its DMCA agent.  Allvoices did not cite any authority for this position, but maintained that, because the DMCA does not expressly carve out or preserve liability for pre-designation infringement, Congress had intended for the safe harbor to apply to such infringement.The court rejected Allvoices’s argument and held that, under the plain language of the DMCA, an online service provider may invoke the § 512(c) safe harbor only if it has registered a DMCA agent with the Copyright Office.  According to the court, designation of an agent is a “predicate, express condition” for application of the safe harbors, so Allvoices could not avail itself of the safe harbors with respect to infringement that occurred prior to designation.  The court cited two previous Northern District of California cases that came to similar conclusions, Louis Vuitton Malletier, S.A. v. Akanoc Solutions, Inc. and Nat’l Photo Group, LLC v. Allvoices, Inc. (note that Allvoices was also a defendant in the latter case).  On the merits, the court held that Oppenheimer sufficiently alleged claims of direct, contributory, and vicarious infringement to overcome Allvoices’s motion to dismiss those claims.A question remains regarding the period of time during which Allvoices may be liable for infringement of Oppenheimer’s photographs.  Specifically, the court did not address whether Allvoices’s potential liability is limited to the period during which the photographs were posted on Allvoices’s website prior to the date that Allvoices designated its DMCA agent with the Copyright Office.  Regardless, the message is clear: online service providers should designate a DMCA agent with the Copyright Office as early as possible in order to obtain the protection of the applicable DMCA safe harbors.

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

20-bn-300x289-1.jpg

Court Holds That DMCA Safe Harbor Does Not Extend to Infringement Prior to Designation of Agent

Court Holds That DMCA Safe Harbor Does Not Extend to Infringement Prior to Designation of Agent

The safe harbor provisions in § 512(c) of the Digital Millennium Copyright Act (DMCA) provide a mechanism that insulates online service providers from monetary 

From our sister blog, MoFo Tech:The Bitcoin “Cryptocurrency” has gained momentum in the market, and some businesses, including Overstock. com and TigerDirect.com, now accept bitcoins as payment. Many others are wondering if Bitcoin is a good fit for them—and they should factor regulatory uncertainty into their calculations.In the U.S., certain companies exchanging bitcoins and real currency must register with the Financial Crimes Enforcement Network and are subject to Bank Secrecy Act regulation, says Jeremy Mandell, an associate in the Financial Services Practice Group at Morrison & Foerster. Such companies may also be subject to state licensing requirements, which can be burdensome for start-ups and smaller firms.Other concerns include the potential for illicit use and fraud—Bitcoin has been the currency of choice for some online black markets. And there have been major incidents of theft: in December, some $5 million worth of bitcoins was drained from accounts on Sheep Marketplace, one of those black markets. When such problems occur, there’s little recourse for victims. “There are no consumer protections like those we see in more traditional payment mechanisms; there are limited dispute resolution rights, no deposit insurance for virtual currency holders, and account access can be restricted,” says Mandell. “But the market is evolving to address these consumer exposures.”As virtual currencies become more widespread, regulators will continue to scrutinize them. The IRS ruled recently that bitcoins are property, and some states are also moving forward. The New York State Department of Financial Services announced that it will propose a virtual currency regulatory framework by late 2014. “Other states are taking about these issues too,” says Mandell, “so we are likely to see more regulation of virtual currency— sooner rather than later.”

istock_000040833154large-1024x1024-1.jpg

Bitcoins, Big Headaches? Hazards Abound for Companies Seeking to Accept Bitcoin

Bitcoins, Big Headaches? Hazards Abound for Companies Seeking to Accept Bitcoin

From our sister blog, MoFo Tech: The Bitcoin “Cryptocurrency” has gained momentum in the market, and some businesses, including Overstock. com and TigerDirect.c

First we had social media platforms, but recently a variety of “anti-social” media platforms have emerged—well, anti-social in a sense. For years, social media platforms have encouraged (or even, in some cases, required) us to use our real identities, with the aim of building friendships and networks in the online world. But these new social media apps (such as “Secret,” “<a href="http://whisper.sh/">Whisper</a>,” “Yik Yak”) are designed specifically to enable users to share posts anonymously. The types of “secrets” disclosed on these apps vary enormously—from teenage angst, fantasies and gossip, to the experiences of soldiers and survivors of abuse.With these apps, one might say that we have gone full circle back to the early days of the Internet when anonymous posts on message boards were standard. Even Mark Zuckerberg, <a href="http://www.cnet.com/news/why-no-one-cares-about-privacy-anymore/">who in 2010 stated that he believed the social norms on privacy had changed</a>, now apparently sees some merit in anonymity. In January 2014, when discussing certain new Facebook apps that can be accessed with anonymous sign-in, he stated, “If you’re always under the pressure of real identity, I think that is somewhat of a burden.”People sometimes complain that much of social media is fake, with users presenting themselves in the best possible light. Some argue that these apps are different because they encourage authenticity by allowing people to say what they really think without worrying about damage to their digital reputation or posts coming back to haunt them. Fans of the apps also talk of their voyeuristic and addictive nature. And media outlets have even started <a href="http://www.cnet.com/news/nike-fires-fuelband-engineers-will-stop-making-wearable-hardware/">using anonymous posts as news sources</a> (sometimes to their dismay when the posts turn out to be false).Whether these apps have longevity or are just a short-term fad remains to be seen. It is clear, however, that users should not be lulled into a false sense of security simply because these apps purport to be anonymous. Such apps present risks similar to any other social media platform. Indeed, these purportedly anonymous platforms may even be riskier than traditional social media platforms because anonymity may create an environment where users feel free to behave recklessly.The truth is that “anonymous” doesn’t necessarily mean anonymous. Even if users are not required to provide any form of contact details to use an anonymous app, the app is very likely to collect certain information that will help identify the user (e.g., the unique digital ID of the user’s phone, location information, etc.). Therefore, it may not be very difficult to trace a user if required (e.g., by subpoena/court order). Indeed Secret’s Terms of Service state, “We may share information about you … in response to a request for information if we believe disclosure is in accordance with any applicable law, regulation or legal process, or as otherwise required by any applicable law, regulation or legal process.” Also, it is worth noting that the extent to which a user can maintain anonymity from other users will depend on how the app works. With Secret, a user’s posts are shown to the user’s network of phone contacts, and so, depending on what information a user posts, it may not take much for those contacts to figure out who posted a particular secret.Accordingly, users of anonymous apps need to think carefully about what they post just as they would when using any social media platform. For example, users should be careful to avoid posting:<ul><li>Information that could cause them to breach a court order or be in contempt of court</li><li>Information that could breach regulatory rules, e.g., in terms of insider trading or market abuse</li><li>Information that is classed as confidential or a trade secret</li><li>Information that breaches a third party’s intellectual property rights</li><li>Defamatory statements</li><li>Statements that could be considered threatening, abusive, discriminatory or in breach of applicable laws</li><li>Information that would be a breach of their terms of employment or otherwise constitute misconduct</li><li>Anything that violates the app’s terms of use</li></ul>Using anonymous apps as a vehicle for whistleblowing is particularly problematic. Whisper’s editor-in-chief, Neetzan Zimmerman, has publicly advocated such use of Whisper, stating, “<a href="http://www.adweek.com/video/technology/king-web-traffic-neetzan-zimmerman-explains-his-plans-whisper-155064">We’re talking about whistleblowing, exposing secrets at corporations … on the government level</a>.” But many countries, including the U.K. and U.S., have specific whistleblower laws in place to protect employees, and companies may also have formal whistleblowing policies that prescribe how employees should report issues. An employee who blows the whistle using an anonymous app rather than through the proper channels may not be able to take advantage of the protection provided by such laws and policies if a disciplinary action is brought against the employee based on such action.Companies will need to consider these new types of apps when formulating social media policies and educating their employees on social media use. But it’s not just an employee issue. As with other social media platforms, organizations need to be aware of the risks to the company of any criticism or attack via such an app (e.g., from a disgruntled user or competitor) and put in place appropriate monitoring and crisis management procedures to deal with such events.That said, anonymous apps pose opportunities as well as risks, particularly in terms of targeting consumers who don’t use the more traditional social networks. Indeed, in February 2014, Gap Inc. claimed to be behind the first marketing post on Secret. Gap’s post asking, “This is the first Fortune 500 company to post on Secret. Guess who?” drew a lot of attention … and a few correct guesses.

“Do You Want to Know a Secret?” The Risks Posed by Anonymous Social Apps

First we had social media platforms, but recently a variety of “anti-social” media platforms have emerged—well, anti-social in a sense. For years, social media 

“Do You Want to Know a Secret?” The Risks Posed by Anonymous Social Apps

In recent weeks, numerous businesses have received letters asserting that their websites are not accessible to persons with disabilities, in violation of the Americans with Disabilities Act and California’s Unruh Act. These letters threaten litigation and warn of large penalty claims under the Unruh Act.  What these letters do not report is that California courts have repeatedly rejected claims that the ADA and Unruh require accessible websites, including a recent dismissal order from Judge David Carter of the Central District of California.In Jancik v. Redbox, plaintiff claimed that Redbox Digital’s online streaming video service violated the law by not being accessible to deaf consumers. The court rejected the claim, finding that “Redbox Digital’s website, which offers Redbox Instant, is not a ‘place of public accommodation.’ (Jancik, Slip Op. at p. 11.) The court followed up by holding that Jancik’s Unruh Act claims cannot proceed separately from his ADA claim. (Id. at p. 12.) This decision followed an earlier decision in Cullen v. Netflix dismissing ADA and Unruh Act claims on identical grounds.In light of these decisions, website operators need not fall prey to demand letters threatening action without immediate payment of penalties and attorney’s fees. Existing law does not support the claims.While Ninth Circuit law does not presently allow a claim, website accessibility remains a hot topic among governmental regulators, disability access advocates, and plaintiffs’ counsel. Just recently, the Department of Justice announced that long-delayed regulations phasing in standards for websites would be delayed until, at least, next March. Those delays, however, have not prevented the law from evolving rapidly and applicable standards may be different outside California and the Ninth Circuit. Understanding where the law is and where it is likely to move will allow companies to make better decisions about their investments in websites and mobile applications. As one of the leaders in understanding and addressing accessibility issues in the digital world, we can help guide you through the complex and evolving landscape.

Websites Hit With Demand Letters on Accessibility Issues Despite Courts’ Rejection of Claim

In recent weeks, numerous businesses have received letters asserting that their websites are not accessible to persons with disabilities, in violation of the Am

Websites Hit With Demand Letters on Accessibility Issues Despite Courts’ Rejection of Claim

Are you a JD who is tuned into and excited about the legal landscape of social media? Ready for the opportunity to write full time? Morrison & Foerster’s Technology Transactions group in New York is recruiting for a Business Development Writer to craft articles, blogs, and presentations on leading social media-related topics with appeal to a wide range of audiences and clients. You’ll work directly with our lawyers to develop our marketing strategy and take our award-winning newsletter and blog, Socially Aware, to the next level. JD required; marketing and journalism background a plus.

Join the Socially Aware Team

Are you a JD who is tuned into and excited about the legal landscape of social media? Ready for the opportunity to write full time? Morrison & Foerster’s Techno

Join the Socially Aware Team

California Attorney General Kamala Harris released a long-awaited report entitled <a href="http://oag.ca.gov/sites/all/files/agweb/pdfs/cybersecurity/making_your_privacy_practices_public.pdf">Making Your Privacy Practices Public</a> (Report) on May 21, 2014. The Report recommends “best practices” for compliance with the California Online Privacy Protection Act (CalOPPA). It was originally intended to answer critical questions about exactly what website, online service, and mobile application operators (collectively, “site operators”) must do to comply with CalOPPA’s new do not track (DNT) disclosure obligations, which took effect on January 1, 2014. It does not accomplish that goal. Unfortunately, the Report leaves important questions unanswered and raises new questions.The Report explains that “its recommendations . . . which in some places offer greater privacy protection than required by existing law, are not regulations, mandates or legal opinions.” It fails, however, to clarify what the law actually requires, and we expect that trade associations will continue to seek guidance on important compliance issues. In the meantime, site operators may wish to comply with at least some of the Report’s recommendations to the extent possible because such “recommendations” tend to harden into regulatory “expectations” over time.DISCLOSURE OF CROSS-SITE TRACKING AND RESPONSES TO DNT CHOICE MECHANISMSIn order to assess the Report’s recommendations, it is important to first understand CalOPPA’s DNT disclosure obligations. As amended by AB 370, the law requires a site operator to make disclosures with respect to:<ol><li>Its collection of personally identifiable information (PII) about its users’ activities over time and across third-party sites or online services, if it engages in such cross-site tracking. (We note that the California Attorney General appears to broadly define PII to include not only names, physical addresses, email addresses, phone numbers and social security numbers, but also device identifiers and geo-location data.)</li><li>Any “other party’s” tracking of the site operator’s users over time and across third-party sites or services.</li></ol>The law applies to cross-site tracking for any purpose, including, for example, analytics and advertising.We discuss each of these obligations, as well as questions that the Report raises with respect to them, in turn as follows.A. Disclosures relating to a site operator’s own cross-site tracking.The law requires that a site operator disclose how it responds to browser DNT signals or other tracking choice mechanisms, if it engages in cross-site tracking. As the Report notes, “[t]he new provisions do not . . . depend on a standard for how an operator should respond to a DNT browser signal or to any mechanism that automatically communicates a consumer’s choice not to be tracked.” The law requires only disclosure, not substantive practices, and it can be breached by a failure to disclose, or to disclose accurately, the required information.What does this mean in practice and in light of the Report? And what questions does the Report raise?<ul><li>If a site operator engages in cross-site tracking, it must disclose how it responds to either browser DNT signals or another tracking choice mechanism. <ul><li>If a site operator engages in cross-site tracking and honors DNT signals, it should explain precisely what it does in response to a DNT:1 header. Note that it may be a mistake to represent simply that a site operator “honors” DNT signals, as that representation could be interpreted to mean more than the operator’s actions warrant.For example, there is not yet consensus among stakeholders across the spectrum of industry, academics, and advocates on whether honoring an opt-out means that the site operator ceases the online tracking or merely ceases using the information collected through such tracking.</li><li>If a site operator engages in cross-site tracking and honors some other means for users to express choice with respect to the tracking, it should say so. The law permits a site operator to satisfy the DNT disclosure requirement by “providing a clear and conspicuous hyperlink in the operator’s privacy policy to an online location containing a description, including the effects, of any program or protocol the operator follows that offers the consumer that choice.” The Report makes it clear that a site operator may disclose either how it responds to a browser’s DNT signal or link to another program or protocol that provides choice. The Report notes, however, that “[d]escribing your response in your privacy policy statement is preferable to simply providing a link to a related ‘program or protocol’ . . . because it provides greater transparency to consumers.” It also recommends that site operators “[p]rovide the link in addition to identifying the program with a brief, general description of what it does.” While following these recommendations would promote transparency, both go beyond the law’s requirement of providing a link.</li></ul></li></ul>The Report further recommends that a site operator consider whether “the page to which you link contain[s] a clear statement about the program’s effects on the consumer . . . [and] what a consumer must do to exercise the choice offered by the program.”This begs a couple of questions about linking to third-party choice programs:<ol><li>Must the link bring users directly to the program’s opt-out page, or is a link to the program’s website sufficient? The Report does not make this clear and, again, may go beyond the law, which requires only a link to “an online location containing a description, including the effects, of any program or protocol the operator follows that offers the consumer that choice.”</li><li>The Report is silent as to which, if any, external choice programs are adequate. In our judgment, industry self-regulatory programs such as those run by the Digital Advertising Alliance (DAA) and Network Advertising Initiative (NAI) should meet the law’s requirements. But this is unsettled, and the AG has expressed concerns about whether either program meets the definition. We expect the NAI and DAA will seek further clarification on this point.</li></ol><ul><li>If a site operator engages in cross-site tracking but does not honor browser DNT signals or any other choice mechanism, it should say that it does not honor browser DNT signals. With respect to such site operators, the Report recommends that “[i]f you do continue to collect personally identifiable information about consumers with a DNT signal as they move across other sites or services, describe your uses of the information.” While such a disclosure may be prudent—as a failure to make it could conceivably be deemed a material omission and thus deceptive under Federal Trade Commission law where such use may be unexpected by an ordinary user under the circumstances—the disclosure is not required by CalOPPA.</li></ul><li>If a site operator does not engage in cross-site tracking, no disclosure obligation is triggered. </li>B. Disclosures relating to another party’s cross-site tracking.CalOPPA requires that a site operator disclose “whether other parties may collect personally identifiable information about an individual consumer’s online activities over time and across different Web sites when a consumer uses the operator’s Web site or service.” The law does not require the operator to make any disclosure regarding such “other party’s” response to a DNT mechanism.What does this mean in practice and in light of the Report? And what questions does the Report raise?<ul><li>Is a service provider an “other party”? Because neither the law nor the Report clarify the meaning of the term “other party,” it is not completely clear whether it includes a site operator’s service provider or whether, on the other hand, a service provider stands in the site operator’s shoes for purposes of the law. During a December 10, 2013 call with industry representatives, consumer advocates, and other interested parties, a representative of the AG’s office suggested that a service provider is not the same as a site operator but instead should be treated as an “other party” for purposes of the law. This position is consistent with the law’s definition of an “operator,” which appears to exclude service providers. In our judgment, it follows that a site operator does not have to disclose a DNT response or choice mechanism with respect to the cross-site tracking activities of its service providers, but it does have to disclose whether any service provider or other third party is engaged in the cross-site tracking of the site operator’s users. As a practical matter, this distinction may be of no consequence: a site operator that uses a service provider for cross-site tracking (e.g., for analytics or behavioral advertising services) is typically contractually required by the service provider to both disclose the tracking and tell its users how they can opt out of it, such as through the DAA or NAI.</li><li>The Report recommends that a site operator explain how a third party’s practices may diverge from the site operator’s DNT policy. This recommendation goes beyond the law’s requirements. As discussed above, the law requires only that a site operator disclose whether third parties engage in cross-site tracking. It does not impose any requirement to address the third party’s response to DNT signals or other choice mechanisms. The recommendation, however, raises the question of whether the AG believes there is a duty under the law for a site operator to vet the practices of third-party trackers on its site and to disclose whether such practices diverge from the site operator’s own.</li></ul>OPPORTUNITY TO CURE?The Report acknowledges that CalOPPA includes a 30-day notice and cure period for noncompliance, but it does not squarely address whether that 30-day period applies to companies that have posted a privacy policy that fails to include required DNT disclosures but otherwise complies with the law. In a December 2013 call with interested stakeholders, a representative of the AG’s office stated that the 30-day period does not apply in this situation, and this interpretation seems to be supported in the Report, which notes that “[t]he law provides an operator with a 30-day period to post a policy after being notified of failure to do so. An operator subject to the law is in violation for failing to comply with the legal requirements for the policy or with the provisions of its policy either knowingly and willfully or negligently and materially.” The AG’s apparent interpretation is that the notice and cure provision applies only if there is no policy whatsoever, but that if there is any policy—even one that is almost completely compliant—then no notice and cure period is required. As a matter of public policy, this position makes no sense: the operator who did nothing should not be entitled to greater protection than the operator who tried hard and just missed the mark.ONLINE TRANSPARENCY “BEST PRACTICES”Finally, the Report recommends other “best practices” aimed at ensuring that a site operator’s privacy policy is transparent to its users. While many of these go beyond the law’s requirements, it is worthwhile to consider them, as “best practices” tend over time to harden into regulatory expectations. They include the recommendations to:<ul><li>Prominently label the section of your policy regarding online tracking. For example: “California Do Not Track Disclosures.”</li><li>Disclose whether third parties collect PII from your users.</li><li>Explain your uses of PII beyond what is necessary for fulfilling a customer transaction or for the basic functionality of the website or app.</li><li>Describe what PII you collect from users, how you use it, and how long you retain it.</li><li>Describe the choices a consumer has regarding the collection, use, and sharing of his or her PII.</li><li>Use plain, straightforward language that avoids legal jargon, and use a format—such as a layered approach—that makes the policy readable. Use graphics or icons instead of text.</li></ul>CONCLUSIONWhen it comes to compliance with the new CalOPPA DNT disclosure requirements, the Report raises more questions than it answers. It acknowledges that its recommendations are not necessarily legal requirements, but, in so doing, fails to clarify what the law itself requires. In light of this uncertainty, a site operator may wish to implement the Report’s recommendations to the extent possible.

oneill_julie_blog_150x150.png

oneill_julie_common_640x280.jpg

oneill_julie_heroretina_2700x1160.jpg

oneill_julie_mobileretina_750x1040.jpg

oneill_julie_social_600x600.jpg

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).

California AG Offers Best Practices for Do Not Track Disclosures; Crucial Compliance Questions Left Unanswered

California AG Offers Best Practices for Do Not Track Disclosures; Crucial Compliance Questions Left Unanswered