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

2024 Recap: Ten Lords A-Leaping!

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.

On April 15, 2013, the Associated Press’s Twitter account <a href="//thecaucus.blogs.nytimes.com/2013/04/23/hacked-a-p-twitter-feed-sends-erroneous-message-about-explosions-at-white-house/?partner=rss&emc=rss&smid=tw-nytimes&_r=0">reported</a> that President Obama had been injured in an explosion at the White House. Within seconds of the announcement, the Dow Jones Industrial Average plummeted more than 150 points. Fortunately, the President’s Press Secretary quickly confirmed that the President was unharmed and, soon after, the Associated Press announced that its Twitter account had been hacked. Although this was perhaps the most significant instance of a Twitter account being hacked, it was only one of many similar events—the Twitter accounts of the <a href="http://www.bbc.co.uk/news/technology-21879230">BBC</a>, the CBS News programs “<a href="http://www.mediabistro.com/tvnewser/60-minutes-twitter-account-hacked-by-syrian-government-activists_b176366">60 Minutes</a>” and “<a href="http://www.hollywoodreporter.com/news/60-minutes-48-hours-twitter-443384">48 Hours</a>” and even Burger King have all been the victims of recent hacker attacks.In late May 2013, possibly in response to <a href="http://www.huffingtonpost.com/craig-kanalley/twitter-two-step-verification_b_3140935.html?ncid=edlinkusaolp00000003">calls</a> by various news organizations and <a href="http://www.androidcentral.com/no-excuses-its-time-turn-two-step-authentication">blogs</a> to institute a more stringent authentication system, Twitter announced the launch of an optional two-factor authentication feature.In a two-factor authentication system, accessing an account requires a second level of authentication in addition to the single level of authentication that a login system typically requires. Login systems with a single level of authentication ordinarily require a user to simply enter a username and password to log in. Two-factor authentication further requires a user to provide an extra set of credentials to log in, which could consist of anything from the individual’s fingerprint or voice print, to a physical ATM card or a code provided by telephone. With Twitter’s two-factor authentication system, as a second layer of authentication, a user is required to enter a verification code that is sent to the user’s mobile phone. Therefore, in order to hack into a Twitter user’s account that has enabled two-factor authentication, a hacker would not only need to know the user’s username and password, but also would need access to the user’s mobile phone (or some other means of accessing the user’s mobile phone messages) in order to obtain the verification code.For users who wish to enable this additional level of security, Twitter has <a href="https://blog.twitter.com/2013/getting-started-login-verification">provided</a> a helpful walkthrough of the activation process. To activate two-factor authentication, a user can visit his or her account settings page, scroll down to the “Account Security” section, and select the box that reads, “Require a verification code when I sign in.” Twitter has provided an image to help users easily locate this option.After selecting this option, a user will be prompted to enter his or her phone number, after which Twitter will send the user’s mobile phone a text message that includes a one-time, six-digit verification code. Assuming the user receives that text, he or she would need to return to Twitter, click “yes” in the “Did you receive our message?” window, and enter the code from Twitter’s text message.From that point forward, each time the user attempts to log in to the Twitter site, a new six-digit code will be sent to the user’s phone, to be entered in a new window.Twitter’s decision to implement two-factor authentication is a welcome step towards greater account security in the digital world. And Twitter is hardly alone in shifting towards this system. Two-factor authentication is part of a broader trend toward heightened security that is currently being adopted by many similarly situated online service providers. Both <a href="https://www.facebook.com/note.php?note_id=10150172618258920">Facebook</a> and <a href="http://googleblog.blogspot.jp/2011/02/advanced-sign-in-security-for-your.html">Google</a> have provided their users with the option of turning on two-factor authentication since 2011, and there have been <a href="http://www.androidauthority.com/google-2-step-verification-207450/">recent reports</a> that Google may make two-factor authentication mandatory. Further, shortly after Twitter announced its implementation of two-factor authentication, LinkedIn <a href="http://blog.linkedin.com/2013/05/31/protecting-your-linkedin-account-with-two-step-verification/">announced</a> that it also had introduced an optional two-step verification feature.Twitter’s introduction of two-factor authentication following the hacking of the Associated Press’s Twitter account is just one example of how the social media world seeks to rapidly adapt to increasing threats to user security. Moreover, it clearly illustrates why companies with social media accounts should consider switching to two-factor authentication on platforms that offer it, to help mitigate the risks of potentially embarrassing or injurious online situations.

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Is Your Account Tweeting Without You Knowing It? Twitter Upgrades to Two-Factor Authentication

Is Your Account Tweeting Without You Knowing It? Twitter Upgrades to Two-Factor Authentication

On April 15, 2013, the Associated Press’s Twitter account reported that President Obama had been injured in an explosion at the White House. Within seconds of t

In 2012, we reported on a pair of district court decisions that, based on similar facts, split on whether defendant TheDirty.com, a gossip website, qualified for immunity under Section 230 of the Communications Decency Act (CDA), the 1996 law that states “[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” Courts have generally held that Section 230 precludes defamation suits against website operators for content that their users create and post.TheDirty.com—which claims 22 million monthly unique visitors—invites users to “submit dirt” about themselves or others via a submission form requesting the basics of the “dirt,” with fields for “what’s happening” and “who, what, when, where, why,” and a link for users to upload photographs. Website operator Nik Richie then reposts the content, sometimes adding his own comments. Unsurprisingly, unhappy subjects of the gossip postings have sued Richie and his company on numerous occasions.In one case, Jones v. Dirty World Entertainment Recordings, LLC in the Eastern District of Kentucky, former teacher and Cincinnati Bengals cheerleader Sarah Jones brought defamation and other state law claims related to two posts showing her photo and stating that she had sex with players and contracted sexually transmitted diseases. In 2011, Richie moved for judgment as a matter of law on grounds that Section 230 gave him immunity as the “provider of an interactive computer service” because, he argued, the defamatory content originated with a user of the site and not Richie, though he had added his own comments. The court denied the motion, citing “the very name of the site, the manner in which it is managed, and the personal comments of defendant Richie” as leading to its conclusion that Richie “specifically encouraged development of what is offensive about the content” and thereby lost immunity under Section 230. The court noted that Richie made comments addressed directly to Jones, including that he “love[d] how the Dirty Army [Richie’s term for the site’s users] ha[d] a war mentality,” a comment that the court held encouraged the posting of offensive content.After a mistrial in February 2013, Richie moved for summary judgment, asking the court to reconsider its ruling that he failed to qualify for CDA immunity. He noted that “since the CDA was first enacted in 1996, there have been approximately 300 reported decisions addressing immunity claims” (a statistic set forth in <a href="http://jolt.law.harvard.edu/digest/hill-v-stubhub">Hill v. Stubhub</a>) but that his was the only one ever to go to trial, even though, Richie argued, other cases involved worse facts and clearer damage to the plaintiff. Richie also discussed in detail the Western District of Missouri opinion we reported on last year that granted summary judgment to Richie on CDA immunity grounds, explicitly disagreeing with the Jones court’s initial ruling. The court was not convinced, denying the motion simply “for the reasons set forth in the Court’s previous opinion.”The case went to trial on July 8, 2013. The jury deliberated for more than ten hours and homed in on the key issue: in a note to the judge, the jury “request[ed] the evidence presented to the court detailing screenshots of how one submits a post to website TheDirty.com.” The jury, it seems, was asking for information to help it consider whether Richie and the site “encouraged the development of what is offensive”—the standard in the Sixth Circuit, of which the Eastern District of Kentucky is a part—about the ensuing posts about Jones. The jury awarded Jones $38,000 in actual damages and $300,000 in punitive damages.Search Engine Watch, a respected analyst of the Internet industry, predicts that “[t]he success of this lawsuit is going to open a flood of new lawsuits against The Dirty and other sites like it that host third-party content” and noted that the case was good for the online reputation management industry—companies that provide services for individuals to manage what is said about them online—because the threat of suit would make website operators more responsive to requests to remove user-generated content.From the courthouse steps, a tearful Jones said the jury got it right, and Richie’s attorney promised an immediate appeal. A few days later, Richie filed his appeal to the Sixth Circuit. We will keep you posted on the result.

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TheDirty.com Goes to Trial

In 2012, we reported on a pair of district court decisions that, based on similar facts, split on whether defendant TheDirty.com, a gossip website, qualified fo

TheDirty.com Goes to Trial

When the Securities and Exchange Commission lifted the ban on general solicitation and general advertising for private offerings of securities, can marketing blitzes on Twitter and other social media sites be far behind?It is not likely that we will see hedge funds aggressively touting investments on Twitter, or on bus shelters or milk cartons any time soon, because federal regulations will limit what issuers can say in these media.  Even then, hedge funds and other issuers will want to proceed cautiously, because they must comply with specific rules designed to prevent fraud.Lifting the ban on general solicitation.  For decades, start-ups, hedge funds and other companies seeking capital could only solicit investors in private offerings.  These issuers could only publicly offer their shares if they registered such shares with the SEC.  Further, commingled funds could only publicly offer their shares by registering with the SEC under the Investment Company Act.  In either case, registration involved significant capital, disclosure, reporting and operational restrictions that start-ups and hedge funds found prohibitive.The Jumpstart Our Business Startups Act (JOBS Act), which Congress enacted in April 2012,  ordered the SEC to relax the ban on general solicitation and general advertising in certain private offerings.  Among other things, this law required the SEC to adopt rules to allow issuers to make a general solicitation of investors, and to advertise, without registering with the SEC.On July 10, 2013, the SEC published regulations implementing the JOBS Act’s mandates to ease the ban on general solicitations.  While this development is welcome news to start-ups and small hedge funds that want new investors but can’t afford the costs of registering with the SEC, the rules come with some important catches.  Most notably, issuers relying on the new exemption can only sell shares to “accredited investors,” that is, investors that meet minimum annual income or net worth thresholds.  They must also file with the SEC “Form D,” which contains specific information about the issue and the issuer.General Advertising. The SEC proposed rules that would require issuers to disclose prominently certain warnings in “any written communication that constitutes a general solicitation or general advertising” of any offering that relies on the new exemption from registering shares with the SEC.  Social media entries and blogs fall squarely within this category, thus creating compliance challenges for issuers that want to find investors in social media.  For example, all issuers must disclose in all written communications and advertising that:<ul><li>the securities may be sold to “accredited investors;”</li><li>the securities are being offered in reliance on an exemption from the registration requirements of the federal securities laws and thus do not have to comply with those disclosure requirements;</li><li>the SEC has neither passed upon the merits nor approved the offering;</li><li>the securities are subject to legal restrictions on transfer and resale and investors should not assume they will be able to resell their securities; and</li><li>the investment involves risk.</li></ul>To be sure, it will be difficult to cram these disclosures into a 140 character tweet.Private funds.  Private funds, such as hedge funds and private equity funds, must also disclose that the offering is not subject to the protections of the Investment Company Act, which regulates investments in mutual funds, ETFs and other registered pooled investment vehicles.  Further, private funds that want to mention performance would also be required to disclose, in any written communication, that, among other things:<ul><li>performance data represents past performance;</li><li>past performance does not guarantee future results;</li><li>current performance may be lower or higher than performance data presented;</li><li>the private fund is not required by law to follow any standard methodology when calculating and representing performance data;</li><li>the performance of the private fund may not be directly comparable to the performance of other funds; and</li><li>investors can call a phone number or visit a website for more current performance data.</li></ul>The SEC believes that private funds should be subject to the same rules for advertising and written communications that apply to mutual funds, whether or not the private funds rely on the exemption from registration.The SEC is watching.  The SEC will monitor general solicitations, general advertising and social media entries posted by issuers, including private funds.  This area is fertile ground for SEC enforcement proceedings.  Accordingly, you should proceed with cautiously when discussing private offerings, especially in social media, where cramming in all required disclaimers may be difficult.Federal securities regulators have published guidance for issuers, investment advisers, broker-dealers and investment companies that use social media. You can listen to our presentation about use of social media by investment advisers, broker-dealers and investment companies by clicking here.

Private Funds on Social Media—Proceed with Caution

When the Securities and Exchange Commission lifted the ban on general solicitation and general advertising for private offerings of securities, can marketing bl

Private Funds on Social Media—Proceed with Caution

Two bills designed to facilitate the removal of minors’ personal information from social networking sites are currently under consideration in the California State Assembly, after being approved in the upper house of the state’s legislature, the Senate, in early 2013. The first of the two bills, <a href="http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201320140SB501">S.B. 501</a>, would require a “social networking Internet Web site” to remove, within 96 hours of receiving a registered user’s request, any of that user’s personal identifying information that is accessible online. The site would also be required to remove the personal identifying information of a user who is under the age of 18 upon request of the user’s parent or guardian. The second bill, <a href="http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201320140SB568">S.B. 568</a>, would require an “Internet Web site” to remove, upon request of a user under age 18, any content that user posted on the site.Web site operators, whether they consider themselves to be in the social networking space or not, should remain alert to any forthcoming guidance from state agencies on the language contained in each of these bills. For instance, S.B. 501, as currently drafted, defines a “social networking” site as one that “allows an individual to construct a public or partly public profile within a bounded system, articulate a list of other users with whom the individual shares a connection, and view and traverse his or her list of connections . . . .” On its face, this definition would include not only the likes of Facebook and Twitter, but a host of other sites that primarily offer services such as, for example, <a href="http://www.latimes.com/news/local/political/la-me-pc-internet-privacy-20130502,0,1574137.story">ecommerce, gaming or blogging</a>, and additionally provide to their users the ability to maintain profiles and interact with one another.Furthermore, those who use social networking sites should be aware that S.B. 568 is not the Internet equivalent of an “undo” function for ill-advised content uploads. The bill expressly provides that site operators need only remove a minor’s original posting, and not content that “remains visible because a third party has copied the posting or reposted the content.” Therefore, anything uploaded to sites that facilitate rapid dissemination through “sharing” or “re-tweeting” is likely there to stay.If S.B. 568 is passed by the Assembly, site operators will have until January 1, 2015, to develop the infrastructure necessary to ensure compliance. However, there is no such grace period currently written into S.B. 501, so companies may benefit from reviewing prior instances of social networking sites being required to rapidly implement new privacy policies in response to enforcement actions and changing laws. In one noteworthy episode in late 2011, Facebook was audited by Ireland’s Office of the Data Protection Commissioner (DPC) in response to complaints over the site’s retention of data that users believed they had deleted. Guided by DPC recommendations, Facebook rolled out over the next year a series of <a href="http://techcrunch.com/2011/12/21/privacy-changes-audit/">45 privacy-related policy and operational changes</a>, including changes involving whether and how long user data would be retained.Lastly, companies should understand these two bills in the context of an expanding body of online privacy laws being enacted at both the <a href="http://arstechnica.com/tech-policy/2013/01/app-developers-here-are-23-pages-of-suggestions-from-cas-new-privacy-cops/">state</a> and <a href="http://www.ftc.gov/opa/2012/12/coppa.shtm">federal</a> levels, and in key <a href="http://www.huffingtonpost.com/leslie-harris/right-to-be-forgotten-internet_b_3321469.html">foreign jurisdictions</a>. One question likely to be addressed in coming years is whether laws such as S.B. 501 and 568, as well as similar legislation passed in others states—for example, <a href="http://www.mainelegislature.org/legis/bills/bills_124th/chapters/PUBLIC230.asp">Maine’s Act to Prevent Predatory Marketing Practices against Minors</a>—are preempted by the federal Children’s Online Privacy Protection Act (COPPA), which contains broad language barring state-level imposition of liability “in connection with an activity” discussed in COPPA and that is inconsistent with COPPA’s mandates. Even if these state laws are found to be preempted, however, social networking companies should nonetheless prepare themselves to adapt to an evolving regulatory landscape in the area of privacy protection, as <a href="http://www.guardian.co.uk/technology/2013/apr/04/britain-opt-out-right-to-be-forgotten-law">negotiations proceed</a> in the European Union over a new General Data Protection Regulation that would likewise require the removal of users’ data upon request—and levy fines of up to two percent of global revenue for failure to comply.

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Youthful Indiscretions: California Bills Poised to Regulate Use of Minors’ Data on Social Networks

Youthful Indiscretions: California Bills Poised to Regulate Use of Minors’ Data on Social Networks

Two bills designed to facilitate the removal of minors’ personal information from social networking sites are currently under consideration in the California St

Last year, the Internet Corporation for Assigned Names and Numbers (ICANN) received over 1,900 applications for new generic top-level domains (gTLDs), including multiple applications for popular domains like .app, .inc, .art, .shop and .music. More than seven hundred applications have now passed an initial evaluation. If no further issues arise for those applications, ICANN anticipates that some of the new gTLDs could go live in the next few months.Although the new gTLD program will provide businesses with more opportunities to register for industry-specific Internet addresses (such as domain names ending in .search, .map, .book and .app), the gTLD expansion will also create significant opportunities for bad-faith registration of second-level domain names (e.g., [TRADEMARK].[new gTLD]). Anticipating this problem, ICANN designed “rights protection mechanisms,” discussed in further detail below, to preempt or curtail some bad-faith behavior. The immense number of new gTLDs that are expected to go live, however, creates practical complications for trademark owners—particularly companies that have a large number of trademarks. In considering whether to take advantage of the rights protection mechanisms, such companies may want to focus their efforts on protecting a smaller number of key brands.DETERRING CYBERSQUATTINGICANN has established a Trademark Clearinghouse, which plays a central role in ICANN’s rights protection mechanisms. Anyone who has protectable rights in a trademark can seek to record that trademark in the Clearinghouse for a fee of approximately $145 per trademark record per year. The Clearinghouse will verify each submission and will function as a repository of verified records. The new gTLD registries will use the verified records in the Clearinghouse in connection with two rights protection mechanisms.First, each new gTLD registry must provide an initial sunrise period for a minimum of 30 days for anyone who has a verified trademark record in the Clearinghouse and who can demonstrate use of that trademark. During this period, qualifying trademark owners may preregister for second-level domain names that match their verified trademarks (e.g., [VERIFIEDTRADEMARK].[new gTLD]). Verification in the Clearinghouse does not guarantee allocation of a second-level domain name, however, because there may be multiple qualified trademark owners. Disputes regarding sunrise registrations will be resolved according to each registry’s dispute resolution process.Second, for a minimum of 90 days immediately after a registry opens a new gTLD to the public for general registration, the registry must provide a trademark claims notice to anyone seeking to register a second-level domain name that matches a Clearinghouse record. The notice will list the owner, trademark, jurisdiction(s) and goods and/or services. The domain name applicant may proceed with the second-level domain name registration, but only after acknowledging receipt of the notice. If the domain name applicant proceeds with the registration, the trademark owner will be notified of the registration. The trademark owner will not be able to block the registration, but will be able to file a Uniform Rapid Suspension System (URS) or Uniform Domain Name Dispute Resolution Policy (UDRP) action to suspend or obtain the domain name. In such proceedings, the trademark claims notice could make it difficult for a cybersquatter to plead innocent.DECISION TIME FOR TRADEMARK OWNERSTrademark owners who want to assure maximum protection for their marks need to act now. Not only is the verification pace in the Clearinghouse expected to slow down as the volume of submissions increases, it is anticipated that some of the new gTLDs could go live as early as late summer. Trademark owners whose records have not been verified by the Clearinghouse when the first new gTLDs are launched will not be able to take advantage of the corresponding sunrise periods and will not receive notices if someone applies to register a second-level domain name that matches their trademark.

Protecting Your Trademarks as ICANN Launches New Generic Top Level Domains

Last year, the Internet Corporation for Assigned Names and Numbers (ICANN) received over 1,900 applications for new generic top-level domains (gTLDs), including

Protecting Your Trademarks as ICANN Launches New Generic Top Level Domains

FINRA, having enacted new communications rules that specifically reference electronic communications, having issued two Regulatory Notices (linked <a href="http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p120779.pdf">here</a> and <a href="http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p124186.pdf">here</a>) providing guidance to the securities industry on social media, and having made social media and electronic communications exam priorities in two of the last three years, is now taking the next logical step:  conducting a sweep of broker-dealers to determine their compliance with the communications rules. In posting a Targeted Examination Letter—otherwise known as a sweep letter—on its website, FINRA invoked Rule 2210(c)(6), which provides for periodic spot checking by FINRA of firms’ written (including electronic) communications.FINRA’s sweep letter seeks, among other things:<ul><li>An explanation of how the firm is using social media at the corporate level in the conduct of its business;</li><li>An explanation of how the firm’s brokers generally use social media in conducting the firm’s business;</li><li>The firm’s written supervisory procedures concerning production, approval and distribution of social media communications; and</li><li>An explanation of how the firm monitors compliance with the firm’s social media policies.</li></ul>If past experience is any guide, FINRA likely will review the information with an eye to both establishing a baseline of current industry adherence to the communications rules and guidance, and to developing individual informal or formal disciplinary responses to firms whose procedures are seriously deficient. The sweep letter includes a request for information about the firm’s top 20 producing brokers who used social media to interact with retail investors. FINRA probably believes that, in view of these brokers’ levels of activity, examiners are more likely to find that some of these brokers failed in some way to comply with FINRA rules—such as FINRA content standards, or approval, review, recordkeeping and filing requirements—with respect to their use of social media to communicate with customers. FINRA might well seek to develop formal disciplinary actions against some of these brokers.As the firms that received this request gather responsive information, they should take a comprehensive look at their procedures for approval and review of communications using social media, and should determine whether these procedures are adequately documented, and whether their registered representatives, associated persons and compliance officers are adequately trained to apply these procedures. MoFo’s recent Guide to Social Media and the Securities Laws, and recent related presentation, are convenient places to start.

FINRA Issues Sweep Letter Regarding Use of Social Media

FINRA, having enacted new communications rules that specifically reference electronic communications, having issued two Regulatory Notices (linked here and here

FINRA Issues Sweep Letter Regarding Use of Social Media

On May 15, 2013, in a case filed against Google by an entrepreneur selling dietary supplements and cosmetics (the “Plaintiff”), the German Federal Court of Justice in Karlsruhe (Bundesgerichtshof, the “Federal Court”) <a href="http://juris.bundesgerichtshof.de/cgi-bin/rechtsprechung/document.py?Gericht=bgh&Art=en&sid=c65f284a41f0e933ed0b3b4a205c051e&nr=64163&pos=0&anz=1">ruled</a> that Google must remove any defamatory suggestions generated by its autocomplete search function. The Federal Court overturned an earlier ruling by the Cologne Higher Regional Court (Zivilkammer des Landgerichts Köln) favoring Google.The Plaintiff claimed that, when his name is entered into Google’s German-language search field, Google’s autocomplete search function offers defamatory suggestions linking him to “Scientology” and “fraud”. The Plaintiff claimed that he is not involved with Scientology and that he has never been accused of, or investigated for, fraud. He also observed that the search results generated by the autocomplete suggestions did not present or support any such connections. The Plaintiff sought an injunction against Google to block the autocomplete suggestions, as well as monetary damages for defamation of his personality rights and business reputation.While the Cologne Higher Regional Court held that no intelligible meaning can be attached to such autocomplete suggestions, the Federal Court disagreed. The Federal Court found that the search suggestions offered by the autocomplete function implied a factual connection between the Plaintiff and the suggested terms, and stated that search engine operators are responsible for defamatory autocomplete suggestions once they become aware of or have been alerted to such violations of personality rights and reputation. Once they become aware or are alerted, search engine operators have the responsibility under German law to remove such autocomplete suggestions and prevent any further violations.The case is currently being re-examined in the Cologne Higher Regional Court on remand to determine whether the autocomplete suggestions are in fact defamatory and infringe the personality rights and the honor of the Plaintiff. This means that the Cologne court will have to determine whether the suggestions at issue are factually correct, that is, whether there are facts justifying the association of the Plaintiff with the terms suggested by Google’s autocomplete function.When a user enables Google’s autocomplete function, lists of search queries appear automatically as such user begins typing a search term. This function expedites the search process, helps to avoid spelling mistakes and allows the user to view popular searches featuring the same search term. If a user is signed into his or her Google Account and has Google’s “Web History” feature enabled, Google’s autocomplete suggestions will also incorporate the user’s own past searches. According to the information provided on Google’s <a href="https://support.google.com/websearch/answer/106230?hl=en">Inside Search Help</a>, these “useful” suggestions are “a reflection of the search activity of all web users and the content of web pages indexed by Google.” Autocomplete suggestions are generated by Google’s algorithms “based on a number of factors (including popularity of search terms) without any human intervention.” The queries presented may therefore include “silly or strange or surprising terms and phrases.” Google explains that, while it strives to “reflect the diversity of content on the web (some good, some objectionable),” it also applies “a narrow set of removal policies for pornography, violence, hate speech, and terms that are frequently used to find content that infringes copyrights.”In its decision, the Federal Court ruled that the search suggestions offered by the autocomplete function suggest a factual connection between the Plaintiff and the terms “Scientology” and “fraud.” These terms have “negative connotations.” The Federal Court characterized Scientology as a “sect” that has a negative public perception due to unflattering media coverage. As for the term “fraud,” the Federal Court observed that, while the average Internet user may not be familiar with the precise meaning of this legal term, he or she is likely to associate the term with morally reprehensible conduct.The Federal Court also noted that Google presents its autocomplete function to its users as a service that contains suggestions based on searches most often made by other users of Google’s search service. This creates the expectation that search results based on such autocomplete suggestions will be helpful to users because they reflect actual searches. Hence, the autocomplete suggestions at issue here may imply a factual connection or link between the Plaintiff and the two negatively perceived terms.The Federal Court concluded that, if the associations with the search terms were wrong, the autocomplete function would constitute an infringement of the Plaintiff’s personality rights and reputation protected under Articles 823(1) and 1004 of the German Civil Code, in conjunction with Article 7(1) of the German Telemedia Act.The Federal Court also held Google responsible for the function because the search word combinations at issue were generated by Google’s own technology. The Federal Court emphasized that search engine operators are not required to regularly police content or check whether the content generated by algorithms is free of violations. Such an obligation would render the operation of a search engine impracticable, if not impossible. While automated filters should be applied for specific areas (such as child pornography), search engines cannot prevent all possible violations of individuals’ rights via the autocomplete function. However, once an operator becomes aware of unlawful violations of such rights, then it becomes responsible for removing the objectionable terms from its automated search suggestions and for preventing such violations from occurring in the future. The Federal Court’s approach indicates that individuals now have a legal right under German law to notify Google of any defamatory autocomplete search suggestions that infringe their personality rights and demand the immediate removal of such suggestions.Although the Federal Court’s ruling may be surprising to U.S. readers, we note that this ruling is consistent with earlier decisions in Italy (Tribunale Ordinario di Milano, March 24, 2011, 10847/2011, see link to the order (unofficial source)) and France (<a href="http://www.courdecassation.fr/jurisprudence_2/premiere_chambre_civile_568/832_12_23884.html">Cour de cassation – Première chambre civile, Arrêt n° 832 du 12 juillet 2012 (11-20.358)</a>) holding search engine operators responsible for claims arising from search-related functionality.

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Clients seek Alja for her no-nonsense approach to resolving complex local legal issues efficiently while providing strong representation for their most important privacy, whistleblowing, and investigatory matters. Alja is the go-to counsel for EU whistleblowing laws and leads strategy for the firms’ advisory efforts for compliance with whistleblowing rules and procedures globally. 

Alja Poler De Zwart

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German Court Holds Google Responsible for Its Search Suggestions

German Court Holds Google Responsible for Its Search Suggestions

On May 15, 2013, in a case filed against Google by an entrepreneur selling dietary supplements and cosmetics (the “Plaintiff”), the German Federal Court of Just