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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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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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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In this election season, we hear a lot of complaints about laws stifling business innovation. And there is no doubt that some laws have this effect.But what about laws that spur innovation, that result in the creation of revolutionary new business models?<a href="https://www.law.cornell.edu/uscode/text/17/512" target="_blank" rel="noopener">Section 512(c) of the Digital Millennium Copyright Act</a> (the DMCA) is one such law. Passed by Congress and signed by President Bill Clinton in 1998, Section 512(c) has played an enormous role in the success of YouTube, Facebook and other social media platforms that host user-generated content, by shielding such platforms from monetary damages from copyright infringement claims in connection with such content.Absent this safe harbor, it is difficult to imagine a company like YouTube thriving as a business. For example, in 2014 alone, YouTube removed <a href="http://www.pcworld.com/article/2891852/google-scores-a-win-in-sopatinged-mississippi-case.html" target="_blank" rel="noopener">over 180 million videos</a> from its platform due to “policy violations,” the vast majority of which likely stemmed from alleged copyright infringement; yet, absent the Section 512(c) safe harbor, YouTube could have been exposed to staggering monetary damages in connection with those videos.The DMCA’s protection from liability is expansive, but it is not automatic. To qualify, online service providers must affirmatively comply with a number of requirements imposed by the law. While most of those requirements may seem straightforward, a recent case in the Southern District of New York illustrates how even seemingly routine paperwork can pose problems for websites that host user-generated content.For companies seeking protection under the DMCA, the typical starting point is designating an agent to receive “takedown” notices from copyright owners. If a company is sued for copyright infringement relating to its website, that company will want to show that it has designated a DMCA agent. But what if the designation paperwork was handled by another entity within the defendant’s organizational structure, such as a corporate parent? That was the situation faced by one of the defendants in <a href="http://business.cch.com/ipld/BWPMediaUSAIncHollywoodFanSitesLLC.pdf" target="_blank" rel="noopener">BWP Media USA Inc., et al. v. Hollywood Fan Sites LLC, et al. (S.D.N.Y. 2015)</a>—and the court held that the defendant was out of luck.Although the defendant’s corporate parent had filed a registration form with the U.S. Copyright Office under the parent’s name, nothing on the form mentioned the defendant or made any general reference to affiliates. Under those circumstances, the court concluded that the defendant was ineligible for the safe harbor because it had “no presence at all” in the Copyright Office’s <a href="http://copyright.gov/onlinesp/list/a_agents.html" target="_blank" rel="noopener">directory of DMCA agents</a>. The court reasoned that those searching the Copyright Office directory should not be “expected to have independent knowledge of the corporate structure of a particular service provider.”Despite lacking a Copyright Office registration, the defendant argued that it did actually post the agent’s information on its own website, and that one of the plaintiffs had successfully used such information to send a takedown notice resulting in removal of the allegedly infringing material. The court found those assertions “irrelevant,” because they did nothing to address the Copyright Office registration requirement. As the court noted, the DMCA requires each service provider to post the agent’s name and contact information on the provider’s website, and submit such information to the Copyright Office.Would the defendant’s DMCA eligibility have turned out differently if the parent had included the affiliate’s name on the form, or at least made a general reference to the existence of affiliates? The court’s opinion leaves those questions unaddressed, but the <a href="http://copyright.gov/fedreg/1998/63fr59233.html" target="_blank" rel="noopener">preamble to the Copyright Office regulations</a>—cited in passing by the court—appears to reject such an approach. According to the preamble, each designation “may be filed only on behalf of a single service provider[, and] related companies (e.g., parents and subsidiaries) are considered separate service providers who would file separate [designations].”Following the Hollywood Fan Sites decision, we expect that many companies that host user-generated content will be checking to make sure that all of their legal names are indeed listed in the Copyright Office directory—and, in light of the Copyright Office’s position on this subject, many such companies may also decide to file separate designations for each legal entity within a corporate family. While this process may be cumbersome, it seems a small price to pay for the generous safe harbor benefits offered by the DMCA, especially for companies with business models that depend on user-generated content.

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.











Anthony Ramirez

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New Court Decision Highlights Potential Headache for Companies Hosting User-Generated Content

New Court Decision Highlights Potential Headache for Companies Hosting User-Generated Content

In this election season, we hear a lot of complaints about laws stifling business innovation. And there is no doubt that some laws have this effect. But what ab

In an age of <a href="http://www.adweek.com/socialtimes/the-growth-of-social-media-from-trend-to-obsession-infographic/142323" target="_blank" rel="noopener">explosive growth for social media</a> and <a href="http://www.businessinsider.com/tv-ratings-decline-2015-9" target="_blank" rel="noopener">declining TV viewership numbers</a>, companies are partnering with so-called “influencers” to help the companies grow their brands. Popular users of Instagram, Vine, YouTube and other social media sites have <a href="http://variety.com/2014/digital/news/survey-youtube-stars-more-popular-than-mainstream-celebs-among-u-s-teens-1201275245/" target="_blank" rel="noopener">gained celebrity status</a>, generating millions of views, impressions and “likes” with every upload.Capitalizing on the shift from traditional media to online platforms, advertisers have begun to engage influencers in marketing campaigns. In a May 2015 study, 84% of marketers said they expect to launch at least one influencer marketing campaign in the next 12 months. Of those who had already done so, 81% said influencer engagement was effective. In a <a href="http://www.adweek.com/socialtimes/survey-tomoson-influence-marketing-budgets/617753" target="_blank" rel="noopener">separate study</a>, 22% of marketers rated influencer marketing as the fastest-growing online customer-acquisition method.So what is an influencer, anyway? By its broadest definition, an influencer is any person who has influence over the ideas and behaviors of others. When it comes to social media, an influencer could be someone with millions of followers or a user with just a few loyal subscribers. One thing that all influencers seem to have in common is that their audiences trust them. As such, influencers can be powerful advocates, lending credibility, increasing engagement and ultimately driving consumer actions.Influencer marketing can be an effective tool, but it’s important to do right. As recent Federal Trade Commission (FTC) and Food and Drug Administration (FDA) investigations demonstrate, online advertising is an area of relatively active enforcement, and influencer marketing presents a number of potential legal issues. The following tips can help companies lead successful influencer marketing campaigns while lessening the risk of liability.<h3>Disclosure Is Key</h3>In September, the <a href="https://www.ftc.gov/news-events/press-releases/2015/09/xbox-one-promoter-settles-ftc-charges-it-deceived-consumers" target="_blank" rel="noopener">FTC settled a case with Machinima</a>, a company that paid popular video bloggers to promote Microsoft’s Xbox One system through YouTube. Despite the hefty sums paid out to the gamers (one of whom pocketed $30,000), Machinima did not require them to make any disclosures. The FTC alleged that the failure to disclose the relationship between Machinima and the gamers was deceptive, in violation of Section 5 of the FTC Act. In its <a href="https://www.ftc.gov/sites/default/files/attachments/press-releases/ftc-publishes-final-guides-governing-endorsements-testimonials/091005revisedendorsementguides.pdf" target="_blank" rel="noopener">Endorsement Guides</a>, the FTC has taken the position that a failure to disclose unexpected material connections between companies and the individuals who endorse them is deceptive.This case raises two important questions: (1) when is a disclosure required and (2) what constitutes adequate disclosure?Both of these questions were addressed in the FTC’s comments in its 2014 investigation of Cole Haan. The investigation involved a Pinterest marketing campaign in which the company encouraged users to create boards that included five Cole Haan shoe images as well as five images of the contestants’ “favorite places to wander.” Contestants were instructed to use the hashtag “#WanderingSole” in each pin description. The contestant with the most creative entry would receive a $1,000 shopping spree. The FTC alleged that the contest violated Section 5 of the FTC Act for failure to disclose contestants’ connection to Cole Haan.While the FTC ultimately decided not to pursue enforcement action, the agency explained in a <a href="https://www.ftc.gov/system/files/documents/closing_letters/cole-haan-inc./140320colehaanclosingletter.pdf" target="_blank" rel="noopener">closing letter</a> that entry into a contest to receive a significant prize constituted a “material connection” giving rise to a disclosure requirement. According to the <a href="https://www.ftc.gov/tips-advice/business-center/guidance/ftcs-endorsement-guides-what-people-are-asking" target="_blank" rel="noopener">FTC Endorsement Guides</a>, a disclosure is needed whenever an endorser is given an incentive (financial or otherwise), and where knowledge of that incentive would affect the weight or credibility that audiences give to the endorser’s statements or actions. Companies that work with influencers to promote the companies’ brands need to make sure that audiences are aware of the relationship between the company and influencer.As to what makes a disclosure adequate, there are, unfortunately, no magical words. The FTC Endorsement Guides state that disclosures should be clear and unambiguous; consumers should be able to find them easily and should not have to look for them. In the Cole Haan case, the FTC did not believe that the #WanderingSole hashtag adequately communicated the financial incentive between the contestants and Cole Haan. According to the Endorsement Guides, hashtags like #Promotion, #Contest or #Sweepstakes probably would have done the trick.<h3>Find the Right Influencer</h3>Identifying the right influencer for a marketing campaign might seem like a business decision, rather than a legal one. From a return-on-investment perspective, it’s certainly important that the influencer’s personality and image align with the brand, and that the influencer’s audience comprises a viable customer base.Business concerns aside, finding the “right” influencer also has legal implications. According to the FTC Endorsement Guides, “You can’t talk about your experience with a product if you haven’t tried it.” Further, “if you were paid to try a product and you thought it was terrible, you can’t say it’s terrific.” Thus, it’s important for companies to remember that influencers must be bona fide users of the products they endorse and, if they provide a positive review, must have actually had a positive experience with those products.<h3>The Truth Will Set You Free</h3>Influencers—and the companies they work with—can also get themselves into trouble for making false or misleading statements while endorsing a brand or product. In August 2015, the <a href="http://www.wsj.com/articles/fda-sends-warning-letter-after-kim-kardashian-touts-morning-sickness-drug-1439401985" target="_blank" rel="noopener">FDA took issue with an Instagram post by Kim Kardashian</a> about a prescription drug for treating morning sickness. The post, which was sponsored by the drug manufacturer, promoted the medicine without mentioning its risks, a practice strictly forbidden by the FDA. The agency sent a warning letter alleging that post was “false or misleading in that it presents efficacy claims for [the drug], but fails to communicate any risk information associated with its use and it omits material facts.” The post was taken down in response.Companies should keep in mind that their influencers should not make any statements that their sponsoring companies can’t themselves make—in other words, no false, misleading or unsubstantiated claims.<h3>The Importance of Monitoring</h3>In recent actions, the FTC has repeatedly emphasized the importance of monitoring regimes. Cole Haan avoided enforcement action partly because it had a social media policy in place that adequately addressed issues like those described above. Likewise, <a href="http://www.sociallyawareblog.com/2015/09/17/ftc-continues-enforcing-ad-disclosure-obligations-in-new-media-and-issues-a-warning-to-advertisers/" target="_blank" rel="noopener">Microsoft narrowly avoided being swept up in the Machinima case</a> because Microsoft had a robust compliance program.Ideally, companies working with influencers should have programs in place to train and monitor the influencers. It may not be enough to have the influencer sign an agreement about what he or she can and can’t do. According to the Endorsement Guides, sponsoring companies must instruct influencers on their responsibilities, explain the kinds of statements they can and can’t make, periodically monitor influencers’ behavior and follow up if they are not playing by the rules.<h3>Know Your Intellectual Property Rights</h3>Finally, companies should keep in mind the host of intellectual property and related issues that could arise in influencer marketing, including trademark, copyright, privacy and publicity concerns. For example, companies may give influencers the rights to use corporate logos, branded materials or other company-owned content, but these rights should be limited to intended uses in connection with particular marketing campaigns. Further, if companies wish to own or use any influencer-generated content, those rights would ideally be documented in an assignment or license to the company.In sum, influencer marketing can be a powerful tool, but it is important to be cognizant of potential legal concerns. Advertisers who keep these issues in mind will be in a better position to make the most of this exciting new marketing strategy.

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

Julie O'Neill

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

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Influencer Marketing: Tips for a Successful (and Legal) Advertising Campaign

Influencer Marketing: Tips for a Successful (and Legal) Advertising Campaign

In an age of explosive growth for social media and declining TV viewership numbers, companies are partnering with so-called “influencers” to help the companies 

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

Aaron is the chair of the firm’s Technology Transactions Group and co-chair of the Interactive + Digital Media Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals.

Aaron Rubin

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

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

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

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

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Five Social Media Law Issues To Discuss With Your Clients

Five Social Media Law Issues To Discuss With Your Clients

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

Boxing fans eagerly awaited the May 2, 2015, championship match between boxers Floyd Mayweather, Jr. and Manny Pacquiao. But the fight also drew the interest of those following online video apps Meerkat and Periscope. Launched at the end of February 2015, <a href="http://time.com/3742746/meerkat/" target="_blank" rel="noopener">Meerkat</a> is a livestreaming iPhone app that allows Twitter users to stream videos from their phones to their Twitter accounts in real time. The Periscope app, which <a href="http://www.usatoday.com/story/tech/columnist/baig/2015/03/26/twitter-periscope-poses-livestreaming-challenge-to-meerkat/70469808/" target="_blank" rel="noopener">Twitter acquired in January for a reported $100 million</a>, provides similar livestreaming functionality, though Periscope’s streams remain online for playback for an additional 24 hours, while Meerkat’s streams can only be watched live or saved to users’ individual camera rolls.As joint producers of the Mayweather-Pacquiao fight, premium networks HBO and Showtime had exclusive rights to transmit the event live. Unless you had a ticket to the MGM Grand in Las Vegas, the only authorized way to view the fight was on pay-per-view at a cost of up to $100. Some fans, however, avoided the pay-per-view fee by watching livestreams of the event through Meerkat and Periscope. A number of Meerkat and Periscope users streamed the fight either from their seats at the arena or, more commonly, simply by pointing their phones at their television screens. Although a livestream of a TV screen may not provide great quality, it was apparently <a href="http://marketingland.com/meerkat-periscope-pirate-pacquiao-mayweather-fight-127356" target="_blank" rel="noopener">good enough for viewers to figure out what was happening in the fight</a>. At least <a href="http://marketingland.com/meerkat-periscope-pirate-pacquiao-mayweather-fight-127356" target="_blank" rel="noopener">one stream was reported to have over 6,000 people</a> watching at one point. Assuming a pay-per-view charge of $100 per viewer, that meant $600,000 of pay-per-view fees not being paid to HBO and Showtime.Prior to the fight, HBO and Showtime had already taken steps to prevent piracy from eating into their pay-per-view revenues. Five days before the fight, <a href="http://www.hollywoodreporter.com/thr-esq/showtime-hbo-have-sued-streaming-792132" target="_blank" rel="noopener">Showtime and HBO filed a complaint</a> in the Central District of California against nine websites advertising that they would stream the fight for free. In the complaint, the plaintiffs, as the copyright owners of the coverage to be filmed by the single authorized camera crew, alleged direct, contributory and vicarious copyright infringement and asked for an injunction prohibiting defendants from “hosting, linking to, distributing, reproducing, performing, selling, offering for sale, making available for download, streaming or making any other use of the [c]overage.” The plaintiffs also asked for damages and attorneys’ fees. On April 28, 2015, the court granted plaintiffs’ request for a temporary restraining order and ordered the defendants to show cause why the terms of the temporary restraining order should not be entered as a preliminary injunction.But HBO and Showtime were unable to take similar preventive action against piracy by individual users of Meerkat and Periscope. However, after the streams began appearing, they did issue takedown requests to Periscope under the <a href="http://www.copyright.gov/onlinesp/" target="_blank" rel="noopener">notice and takedown procedures</a> of the Digital Millennium Copyright Act (DMCA). <a href="http://marketingland.com/twitter-periscope-piracy-127444" target="_blank" rel="noopener">According to a Twitter spokesperson</a>, Periscope, which operates independently of Twitter, received 66 takedown requests and took action against 30 broadcasts in response to the requests; the remaining Periscope streams had already ended or were no longer available. Compared to Periscope, Meerkat presents even greater challenges for broadcasters when it comes to policing piracy, because everything on Meerkat is live and there is no storage of streams for future viewing. As such, the policing of Meerkat streams requires real-time vigilance and action (indeed, it is unclear to what extent if any the DMCA’s notice and takedown procedures would apply to Meerkat’s current business model). <a href="http://www.bbc.com/news/technology-32584454?ocid=socialflow_twitter" target="_blank" rel="noopener">According to Meerkat chief executive Ben Rubin</a>, however, “[Meerkat] worked closely with the content owners and contacted users they alerted us about.”The Mayweather-Pacquiao fight was not HBO’s first time in the ring with Periscope on piracy issues. In mid-April 2015, HBO sent takedown notices to Periscope after Periscope users livestreamed episodes of the HBO show Games of Thrones. Periscope reportedly took action against the infringing account holders.All of this sparring between content owners and users of livestreaming apps highlights the tension between the legitimate interests of content providers in preventing piracy and the equally valid interests of technology companies (and the general public) in encouraging the growth of this new technology. For its part, HBO has <a href="http://www.bbc.com/news/technology-32315442" target="_blank" rel="noopener">suggested</a> that DMCA takedown notices may not be sufficient and that app developers should “have tools which proactively prevent mass copyright infringement from occurring on their apps and not be solely reliant upon notifications.” Others have <a href="http://variety.com/2015/digital/opinion/periscope-piracy-sets-up-grudge-match-hollywood-vs-twitter-1201486298/" target="_blank" rel="noopener">opined</a> that livestreaming apps should develop tools like Google’s Content ID system, which automatically scans videos uploaded to YouTube against a database of files submitted by verified content owners and gives the owners the option of muting, blocking, monetizing or tracking the content.It should also be noted that, depending on the circumstances and content being streamed, users of livestreaming apps may also be able to assert a fair use defense under <a href="https://www.law.cornell.edu/uscode/text/17/107" target="_blank" rel="noopener">Section 107 of the US Copyright Act</a>. For example, it would not be difficult to imagine a case similar to <a href="http://scholar.google.com/scholar_case?case=2209471029398314909&q=Lenz+v.+Universal&hl=en&as_sdt=2006&as_vis=1" target="_blank" rel="noopener">Lenz v. Universal</a> arising in the livestreaming context. In Lenz, Universal Music Publishing Group objected to a YouTube video uploaded by Stephanie Lenz that showed her children dancing along to the Prince song “Let’s Go Crazy.” Universal issued a DMCA takedown notice to YouTube and Ms. Lenz sent a counter-notice claiming fair use. Eventually YouTube restored the video, and the litigation between Ms. Lenz and Universal continues to this day. The difference, of course, is that issues of fair use (and takedown notices and counter-notices) will quickly become moot in the livestreaming context due to the ephemeral nature of the medium.Only time will tell how long and how violent the fight between content owners and users of livestreaming apps like Periscope and Meerkat will be. At least for the moment, however, it does not seem that the content owners within the mainstream entertainment industry are immune to the commercial and promotional opportunities that livestreaming apps offer. In an ironic twist, <a href="http://variety.com/2015/digital/opinion/periscope-piracy-sets-up-grudge-match-hollywood-vs-twitter-1201486298/" target="_blank" rel="noopener">HBO itself used Periscope as part of its pre-fight hype</a>, streaming content to its Twitter feed from Manny Pacquiao’s dressing room.

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Rolling With the Punches: The Fight Over Livestreaming

Rolling With the Punches: The Fight Over Livestreaming

Boxing fans eagerly awaited the May 2, 2015, championship match between boxers Floyd Mayweather, Jr. and Manny Pacquiao. But the fight also drew the interest of

How Does the European Court of Justice Decision on Exhaustion of the Distribution Right upon First Sale Impact the Resale of Digital Copies?The European Court of Justice (ECJ) has decided that the rule of exhaustion of the distribution right upon first sale (in the U.S. known as the “first sale” doctrine) does not apply to post first-sale alterations to the physical medium embodying the work if such alterations constitute a new reproduction of the work (here: the transfer of a painting from paper poster onto a canvas). Consequently, such subsequent alterations require the consent of the owner of the reproduction right to the work.The ECJ expressly states that exhaustion of the distribution right upon first sale under the EU Copyright Directive applies to the tangible object into which a protected work is incorporated. Thus, the first sale of intangible digital copies of works will likely not exhaust the distribution right to such copies. This means that the resale of digital music, film, and e-book files duly purchased by way of download from the Internet will likely be considered as copyright infringement if not authorized by the copyright holders.WHAT DOES EXHAUSTION OF THE DISTRIBUTION RIGHT MEAN?When buying a video on a DVD, a hardcover book or an art painting in the EU that was first sold in the EU with the consent of the copyright holder of such work, one can resell such DVD, book, or painting to any other person in the EU later on. The reseller does not need the copyright holder’s consent for such resale. This is possible because Art. 4 (2) of the EU Copyright Directive sets forth that the first sale in the EU of a copy, or of the original, of a copyrighted work by the copyright holder or with his/her consent causes exhaustion of the distribution right of the copyright holder. The copyright holder can neither prohibit such resale nor ask the reseller or purchaser to pay additional compensation.THE CASEIn the case, Allposters, a Dutch company, bought art posters depicting copyrighted paintings of famous artists that were sold in the EU with the consent of the respective copyright holders. Allposters transferred the image of the painting from the purchased paper poster onto a canvas by a chemical process so that the image no longer appeared on the paper poster but only on the canvas. Thus, there was still only one reproduction of the painting – only that it was on a canvas medium instead of on the original paper poster. The image of the painting itself was not altered. The canvases looked much better and bore a much closer resemblance to the original painting than the paper posters did, and Allposters offered such canvases for sale on its websites. Allposters argued that (i) alterations made to a sold copy after the distribution right to such copy was exhausted had no impact on the previous exhaustion and (ii) the transfer of the image from paper to canvas did not constitute a reproduction of the work, as the image was not duplicated.THE JUDGMENTIn its decision of January, 22, 2015, the EJC states that the exhaustion of the distribution right applies to the physical medium in which the work is embodied (here: the paper poster) and that alterations of the physical medium which result in a new object (here: the replacement of a paper poster by a canvas) constitutes a new reproduction of the work – which requires the authorization of the holder of the reproduction right. The ECJ therefore decides that “the rule of exhaustion of the distribution right… does not apply in a situation where a reproduction of a protected work, after having been marketed in the European Union with the copyright holder’s consent, has undergone an alteration of its medium, such as the transfer of that reproduction from a paper poster onto a canvas, and is placed on the market again in its new form.” (<a href="http://curia.europa.eu/juris/document" target="_blank" rel="noopener">http://curia.europa.eu/juris/document</a>)EFFECT ON THE RESALE OF DOWNLOADED COPIES?The, perhaps, even more interesting aspect of this ECJ judgment is its likely impact on the resale of digital copies of copyrighted works purchased by way of download from the Internet:In the UsedSoft Judgment of July 3, 2012 (see <a href="http://curia.europa.eu/juris/document" target="_blank" rel="noopener">http://curia.europa.eu/juris/document</a>), the ECJ decided that the first sale of an intangible copy of a computer program by way of download from the Internet onto a buyer’s device with the copyright holder’s consent causes exhaustion of the distribution right to such copy. As a consequence, the buyer of such intangible copy can resell such “used” copy to third parties without the copyright holder’s consent. However, this judgment was based on the interpretation of the EU Directive on the protection of computer programs (Directive 2009/24/EC) and not on the Copyright Directive.In the Allposters decision, the ECJ clearly states that “exhaustion of the distribution right applies to the tangible object into which a protected work or its copy is incorporated.” For this purpose, it explicitly relies on (i) the wording of recital 28 of the Copyright Directive, according to which copyright “protection under this Directive includes the exclusive right to control distribution of the work incorporated in a tangible article” and (ii) the agreed statement concerning Articles 6 and 7 of the WIPO Copyright Treaty (1996), according to which “the expressions ‘copies’ and ‘original and copies’ being subject to the right of distribution … refer exclusively to fixed copies that can be put into circulation as tangible objects.” In the Allposters case, the ECJ applies precisely those arguments that it had previously rejected as not being applicable in the UsedSoft case. Considering this argumentation, it would appear to be difficult for the ECJ in future cases to turn around and decide that exhaustion of the distribution right under the Copyright Directive also applies to the first sale of intangible digital copies.Therefore, the underlying arguments of the ECJ in the Allposters case are a strong indication that with regard to literary and artistic works other than software (e.g., music, literature, film, art), the ECJ will likely not apply the rule of exhaustion of the distribution right to the first sale of intangible digital copies of such works by way of download from the Internet (e.g., music, film and e-book files). This would mean that, except for the resale of downloaded software copies, the resale of downloaded copies of such works will continue to require the consent of the copyright holder in each case.WHAT ABOUT ALTERATIONS THAT ARE NOT NEW REPRODUCTIONS?The ECJ did not rule on the impact of subsequent alterations of sold physical copies of a work which did not qualify as new reproductions of that work. As regards alterations of a copyrighted work itself, one has to look at the applicable national copyright law of the EU countries, because the exclusive right of authors to authorize adaptations, arrangements and other alterations of their works is not granted by the EU Copyright Directive, but by Article 12 of the Berne Convention as implemented into national law of those countries which are party to this multilateral copyright treaty (including all EU Member States). This alteration right to the work is not impacted by the exhaustion of the distribution right upon first sale. This means that subsequent alterations of the sold work itself require the copyright holder’s consent (e.g. changing a painting of an artist after purchase). However, depending on the national copyright law of the respective country, the mere alteration of the sold physical medium embodying the work can also be qualified as an alteration of the work itself, if such alteration puts the work into a different context, e.g., if the purchaser of a painting changes its frame to a very different frame containing patterns or images that modifies the context of the work (so decided by the <a href="http://juris.bundesgerichtshof.de/cgi-bin/rechtsprechung/document.py?Gericht=bgh&Art=en&sid=a8ab19f97be4bd282ff1d75b1fec4fc4&nr=22538&pos=0&anz=1&Blank=1.pdf" target="_blank" rel="noopener">German Federal Supreme Court in 2002, I ZR 304/99</a>)

EU Copyright: No Resale of Digital Content Except for Software?