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

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Lawrence W. Gallick

Social Links: If the Suit Fits

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

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

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

Social Links: Going Back to Cali

<a rel="noopener" target="_blank" href="https://www.pcmag.com/how-to/what-is-clubhouse-app">Clubhouse</a>, the <a rel="noopener" target="_blank" href="https://www.wired.com/story/clubhouse-opens-its-doors-is-anyone-rushing-to-get-in/">former invitation-only social media darling</a> that captured the attention of investors, social media early adopters, and competitors since its introduction in April 2020, now faces significant challenges as it strives to remain relevant and attract new and engaged users.Since <a href="https://www.sociallyawareblog.com/2021/03/29/who-do-you-know-contacts-access-and-data-privacy-issues-in-burgeoning-social-media-apps/">our previous report on Clubhouse in March</a> 2021, the social media app has released some significant changes and upgrades on its platform.<ul><li>Clubhouse <a rel="noopener" target="_blank" href="https://screenrant.com/clubhouse-android-app-available-worldwide-whats-next/">now is available on the Android platform</a>, but has <a rel="noopener" target="_blank" href="https://screenrant.com/clubhouse-android-app-missing-features/">yet to release all of the features that are available on the iOS version</a>.</li><li>Equally significant, <a rel="noopener" target="_blank" href="https://www.wired.com/story/clubhouse-opens-its-doors-is-anyone-rushing-to-get-in/">Clubhouse has removed its invitation-only requirement</a>.</li></ul>Based on trends from other social media apps and platforms, both changes would seem to predict a significant uptick in downloads, new users, and activity.While <a rel="noopener" target="_blank" href="https://screenrant.com/clubhouse-android-app-over-one-million-users/">Clubhouse added more than 1 million Android users within weeks of its launch in May 2021</a>, more recent numbers indicate that the app’s popularity may be declining. Wired, <a rel="noopener" target="_blank" href="https://www.wired.com/story/clubhouse-opens-its-doors-is-anyone-rushing-to-get-in/">citing a report from analytics group SensorTower, reported that Clubhouse had only 484,000 new installs globally during the five-day period between July 21-25 2021</a>, compared to the 10 million iOS downloads it received in February 2021. (To date, <a rel="noopener" target="_blank" href="https://techcrunch.com/2021/07/28/spotifys-clubhouse-rival-greenroom-tops-140k-installs-on-ios-100k-on-android/">Clubhouse has 30.2 million installations, with 18.7 million of those on the iOS platform, also according to SensorTower as reported by TechCrunch</a>.)Yet, this slowdown in installs and usage may simply be an indication of the rapid maturation and leveling off of an app that is competing for attention against a plethora of other offerings that provide similar experiences, such as Spotify. ScreenRant, the online review publication, speculated that the significant decrease in downloads could be attributed to <a rel="noopener" target="_blank" href="https://screenrant.com/clubhouse-android-app-over-one-million-users/">“the early novelty of the app wearing off, competitors offering their own takes on the curated audio rooms concept, and maybe even people leaving their homes a little more as COVID-19 restrictions are lifted.</a>”Even with those concerns, Clubhouse continues to capture the interest of investors and users. It enjoys some key advantages over larger competitors: <a rel="noopener" target="_blank" href="https://www.bloomberg.com/opinion/articles/2021-04-08/audio-wars-2021--clubhouse-versus-facebook--twitter">early mover status, a smaller size, and a more nimble model that will enable it to introduce additional features and functions</a>, such as its <a rel="noopener" target="_blank" href="https://screenrant.com/clubhouse-payments-all-iphone-ios-users-roll-out/">recent introduction of payments (for iOS users)</a> and <a rel="noopener" target="_blank" href="https://www.theverge.com/2021/7/14/22576771/clubhouse-dm-backchannel-update-message">Backchannel, its direct messaging feature</a>.These upgrades will remain crucial to its continued growth and success. Even with pressure from tech giant competitors that are considering functionality similar to Clubhouse’s, many predict that Clubhouse will remain a strong competitor.Some analysts, such as Bloomberg’s Alex Webb, <a rel="noopener" target="_blank" href="https://www.bloomberg.com/news/videos/2021-04-08/twitter-is-said-to-have-weighed-4-billion-clubhouse-bid-video">raised a critical question about Clubhouse</a> and its content monetization strategy.Webb described one model akin to the subscription based SiriusXM digital radio channel, where users would pay for content either on a broad-based plan or individual channels. Clubhouse <a rel="noopener" target="_blank" href="https://screenrant.com/clubhouse-payments-all-iphone-ios-users-roll-out/">recently rolled out its payment platform directly to other club members</a> (primarily conversation and room hosts in the form of tips), but only for iOS users. With this feature, Clubhouse will not receive any percentage of those payments, raising additional questions on its future monetization strategies. This move does, however, provide incentives for popular and influential content hosts to join Clubhouse and contribute to the app’s rising popularity.In addition, <a rel="noopener" target="_blank" href="https://www.mediapost.com/publications/article/362963/how-brands-are-unlocking-the-marketing-power-of-cl.html">brands are also catching on quickly to the potential for marketing products on the app</a>. The targeted focus that Clubhouse provides (with its moderated rooms) could help Clubhouse capitalize on brands’ desire to reach early adopter influencers.Noted author and technology analyst Nir Eyal unpacked Clubhouse’s appeal and how it follows his <a rel="noopener" target="_blank" href="https://www.nirandfar.com/how-to-manufacture-desire/">hook model</a>, described as “a way of describing a user’s interactions with a product as they pass through four phases: a trigger to begin using the product, an action to satisfy the trigger, a variable reward for the action, and some type of investment that, ultimately, makes the product more valuable to the user. As [they go] through these phases, [they build] habits in the process.” Eyal <a rel="noopener" target="_blank" href="https://onezero.medium.com/will-clubhouse-be-a-habit-or-a-has-been-6f92f946e05d">explains how Clubhouse follows this four-step cycle</a>, citing key aspects of the model that Clubhouse has clearly mastered in its early days, including <a rel="noopener" target="_blank" href="https://www.nirandfar.com/billion-dollar-mind-trick-2/">internal triggers</a>, <a rel="noopener" target="_blank" href="https://www.nirandfar.com/want-to-hook-your-users-drive-them-crazy/#:~:text=Skinner%20in%20the%201950s%2C%20called,other%20times%20nothing%20at%20all.">variable rewards</a>, <a rel="noopener" target="_blank" href="https://www.nirandfar.com/psychology-of-scarcity/">scarcity</a>, and <a rel="noopener" target="_blank" href="https://www.nirandfar.com/designing-to-reward-our-tribal-sides/">rewards of the tribe</a>.Clubhouse will continue to be a social media phenomenon, and one to watch as it moves to its next level of adoption, innovation, and investment. We’ll keep a close eye on the app’s evolution, how it continues to push boundaries, and where it may be headed in light of its competitors’ developments.

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Clubhouse faces steep challenges in spite of new features and expanded access

Clubhouse faces steep challenges in spite of new features and expanded access

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Clubhouse, the former invitation-only social media darling that captured the attention of investors, social media early adopters, and competitors since its intr

With a judgment dated April 27 and published on June 4, 2021, the German Federal Court (Bundesgerichtshof – the “Court”) declared unfair and therefore illegal and unenforceable a common way to make changes to terms and conditions (“T&Cs”) used vis-à-vis consumers in Germany.For more information, read the <a href="https://www.mofo.com/resources/insights/210614-some-things-never-change.html">full client alert</a>.

DocuSign, Inc

enercity AG

SoftBank Vision Fund

TDK and its subsidiary EPCOS

Tele Columbus

United Internet/1&1

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Kristina has more than 20 years of experience advising clients across many industries, including the software, internet, mobility, media, and consumer electronics industries, with a particular focus o

Kristina Ehle

Kristina Ehle has more than 20 years of experience advising clients across many industries, including the software, internet, mobility, media, and consumer electronics industries, with a particular focus on technology-driven and IP-heavy transactions.

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Some Things Never Change… Including, Apparently, T&Cs in Germany

Some Things Never Change… Including, Apparently, T&Cs in Germany

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With a judgment dated April 27 and published on June 4, 2021, the German Federal Court (Bundesgerichtshof – the “Court”) declared unfair and therefore illegal a

While <a href="https://www.law.cornell.edu/uscode/text/47/230" target="_blank" rel="noopener">Section 230</a> of the Communications Decency Act continues to face <a href="https://www.natlawreview.com/article/group-democratic-senators-release-latest-cda-reform-bill" target="_blank" rel="noopener">significant calls for reform or even elimination</a>, the recent <a href="https://www.courtlistener.com/recap/gov.uscourts.cand.360878/gov.uscourts.cand.360878.56.0.pdf" target="_blank" rel="noopener">Coffee v. Google</a> case illustrates that Section 230 continues to provide broad protection to online service providers.In Coffee, the Northern District of California invoked Section 230 to dismiss a putative class action against Google alleging various claims premised on the theory that video games in the Google Play store with a gaming feature called “loot boxes” constituted illegal “slot machines or devices” under California state law.To obtain these loot boxes, players must purchase virtual in-game currency through Google Play’s payment system. Players can then exchange the virtual currency for loot boxes, which give them a chance to obtain rare virtual items. Google charges a 30% commission on purchases of such virtual currency.The plaintiffs asserted that these loot boxes “entice[d] consumers, including children, to engage in gambling and similar addictive conduct.” Because Google profited from the loot boxes through commission it charged on sales of virtual currency, the plaintiffs argued that Google should be held liable under a variety of state law claims.In response, Google moved to dismiss the plaintiffs’ claims, arguing that it was immune under Section 230, which provides a safe harbor from claims that treat an online intermediary as the publisher or speaker of any information provided by another party.The court evaluated Google’s Section 230 defense using the standard three-prong test as enunciated by the Ninth Circuit in <a href="https://www.courtlistener.com/opinion/1196509/barnes-v-yahoo-inc/?" target="_blank" rel="noopener">Barnes v. Yahoo!, Inc.</a>: Immunity exists for a “(1) a provider or user of an interactive computer service (2) whom a plaintiff seeks to treat, under a state law cause of action, as a publisher or speaker (3) of information provided by another information content provider.”On the first prong—whether Google is a provider of an interactive computer service—the court determined that Google was a provider of such a service because it maintains a virtual online store where consumers can download various software applications that are generally created by other developers.On the second prong—whether the plaintiffs seek to treat Google as a publisher or speaker under a state law cause of action—the court cited <a href="https://casetext.com/case/fair-v-roommates" target="_blank" rel="noopener">Fair Hous. Council of San Fernando Valley v. Roommates.Com</a> for the proposition that publication includes “any activity that can be boiled down to deciding whether to exclude material that third parties seek to post online.” Because the plaintiffs apparently sought an order requiring Google to screen apps offered through its Google Play store for those containing the loot boxes, the court reasoned that the plaintiffs’ claims did treat Google as the publisher of the video game apps at issue.The plaintiffs argued that Section 230 only protects publishers of “speech” rather than publishers of other content such as software. But the court rejected that argument, citing <a href="https://casetext.com/case/evans-v-hewlett-packard-co-1" target="_blank" rel="noopener">Evans v. Hewlett-Packard Co.</a>, which held that the defendant enjoyed immunity under Section 230 in connection with the operation of a web-based store that distributed an app developed by a third party.The plaintiffs also argued that Section 230 did not apply because their claims did not treat Google as a publisher of another’s content but rather sought to “hold Google accountable for permitting and facilitating illegal gambling.” The plaintiffs cited Barnes for the proposition that Section 230 does not insulate interactive computer service providers from liability for their own wrongful conduct that goes beyond merely publishing another’s content.Unconvinced, the court noted that Barnes denied Section 230 immunity to Yahoo! with respect to a promise that Yahoo! had made to the plaintiff to remove certain third-party content subsequent to, and separately from, the initial publication of the content. Google had made no such promise to the plaintiff in the instant case.Finally, on the third prong—whether the information was provided by another information content provider—the plaintiffs noted the holding in Roommates that “[a] website operator is immune [under Section 230] only with respect to content created entirely by third parties.” Specifically, a provider that materially contributes to the illegality of the content at issue is not entitled to immunity under Section 230. However, the court held that the plaintiffs failed to allege any conduct by Google that would constitute a material contribution to the video games on its app store.Accordingly, the court held that Google met all three prongs of the test and was entitled to immunity under Section 230 with respect to the apps in the Google Play store. Accordingly, the court dismissed the case with leave to amend.

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

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Northern District of California Holds that Section 230 Applies to App Store

Northern District of California Holds that Section 230 Applies to App Store

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While Section 230 of the Communications Decency Act continues to face significant calls for reform or even elimination, the recent Coffee v. Google case illustr

Companies contracting with consumers have to take care to ensure their agreement terms are enforceable. In one of the first post-Brexit decisions on issues in an online consumer contract, a UK court recently showed that principles of fairness and transparency remain vital in the terms and conditions of consumer digital contracts.In Europe, drafting digital consumer contracts requires extra care and thought to be given towards incorporation, meanings, and additional regulations in comparison to B2B contracts. This is equally true in a post-Brexit world as it was <a rel="noopener" target="_blank" href="https://media2.mofo.com/v3/assets/blt5775cc69c999c255/blt265a813075d9b0ba/62731914b5ad5f2863c596a8/120614-online-businesses-are-your-terms-and-conditions-fair.pdf">back in 2012 when we reported on something similar</a>. Plus ça change, plus c’est la même chose – as no Brexiteer would ever say.Any consumer-facing company doing business online must step back and ask the question: Would this hold up in court? We’ve outlined some key takeaways from this case for organizations to consider when drafting digital consumer contracts that they apply to UK based customers.For more information, read the <a href="https://www.mofo.com/resources/insights/210604-consumer-contracts-in-europe.html">full client alert</a>.

Autodesk

HM Revenue and Customs

Home Office, Department for Communities and Local Government, Department of Health

Intel

Alistair Maughan

Click Yes to Accept: Fairness and Transparency in Consumer Contracts in Europe