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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Of Counsel

Lawrence Gallick

Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster.Anthony advises clients on general commercial and transactional matters. He regularly advises companies on the IP aspects of their M&A transactions. His clients include technology, digital media and content for television and music, financial services, and communications companies with diverse intellectual property assets and issues.His practice focuses on the legal aspects of developing, licensing, and commercializing technology and intellectual property, as well as negotiating general commercial contracts, including outsourcing transactions, as well as content and data licenses. He regularly assists clients with legal issues relating to licensing and commercialization of digital media and content, digital content that is distributed over the Internet or streamed, mobile applications and social media, as well as the licensing of recorded music for distribution via digital platforms. Anthony is also experienced with issues relating to open-source software, software development, artificial intelligence and machine learning, cloud-based technology, and protection of proprietary information.Anthony has extensive experience working on matters involving disruptive technologies, such as blockchain. He has helped fintech clients with general intellectual property issues in connection with terms of service for online financial products and services.Anthony is an integral part of the outside pro bono legal team for nonprofit organizations based in New York, including advising clients on legal issues regarding entertainment, social media, privacy rights, and the negotiation of outsourcing and service agreements. Anthony received his J.D. from the University of Michigan Law School in 2009. He received his B.S. from Cornell University in 2004.

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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 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

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

In our May 30, 2012 post on the Socially Aware blog—<a href="../2012/05/30/should-we-all-be-getting-the-twitter-jitters-be-careful-what-you-say-online-particularly-in-the-united-kingdom/">“Should We All Be Getting the Twitter “Jitters”? Be Careful What You Say Online (Particularly in the United Kingdom)”</a>—we considered a variety of UK laws being used to regulate the content of tweets and other online messages. Since that post, there has been a series of legal developments affecting the regulation of social media in the UK, in particular:<ul><li>the Court of Appeal ruling in the <a href="http://www.bailii.org/ew/cases/EWCA/Civ/2013/68.html">Tamiz v. Google</a> case;</li><li>the UK’s new <a href="http://www.legislation.gov.uk/ukpga/2013/26/contents/enacted/data.htm">Defamation Act 2013</a>; and</li><li>the Crown Prosecution Service’s publication of interim guidelines for social media prosecutions.</li></ul>The following is an overview of each of these important developments.1. <a href="http://www.bailii.org/ew/cases/EWCA/Civ/2013/68.html">Tamiz v. Google</a>In February 2013, the <a href="http://www.justice.gov.uk/courts/rcj-rolls-building/court-of-appeal">Court of Appeal</a> considered the potential liability of website operators in relation to defamatory comments posted by third parties.Google Inc. (“Google”) operates the Blogger.com blogging platform (“Blogger”). In April 2011, the “London Muslim” blog used Blogger to publish an article about the claimant, Mr Tamiz. After a number of users anonymously posted comments below the article, Tamiz wrote to Google complaining that the comments were defamatory. Google did not remove the comments, however, Google passed on the complaint to the blogger, who then removed the article and the related comments.Meanwhile, Tamiz applied to the court for permission to serve libel proceedings on Google. Google contested the application, arguing that it was not a “publisher” of the allegedly defamatory statements, and in any event Google sought to rely on the available defences for a website operator under <a href="http://www.legislation.gov.uk/ukpga/1996/31/section/1">Section 1</a> of the Defamation Act 1996 and <a href="http://www.legislation.gov.uk/uksi/2002/2013/regulation/19/made">Regulation 19</a> of the E-Commerce Regulations 2002.IN FOCUS: What is the Section 1 Defence?Section 1 of the <a href="http://www.legislation.gov.uk/ukpga/1996/31">Defamation Act 1996</a> provides that a person has a defence to an action for defamation if such person: (i) is not the author, editor or publisher of the statement complained of; (ii) takes reasonable care in relation to its publication; and (iii) does not know, and has no reason to believe, that such person’s actions caused, or contributed to, the publication of a defamatory statement. For these purposes, “author” means the originator of the statement, “editor” means a person having editorial or equivalent responsibility for the content of the statement or the decision to publish it, and “publisher” means a person whose business is issuing material to the public, or a section of the public, and who issues material containing the statement in the course of that business.Under Section 1, a person will not be considered an author, editor or publisher if such person is involved only, amongst other things:<ul><li>in processing, making copies of, distributing or selling any electronic medium in or on which the statement is recorded;</li><li>as an operator or provider of a system or service by means of which a statement is made available in electronic form; or</li><li>as the operator of or provider of access to a communications system by means of which the statement is transmitted, or made available, by a person over whom he or she has no effective control.</li></ul>Regulation 19 of the <a href="http://www.legislation.gov.uk/uksi/2002/2013/contents/made">E-Commerce Regulations 2002</a> provides another defence for website operators—one that can be easier to establish than the Section 1 defence. Regulation 19 protects online service providers by providing that an entity which hosts information provided by a recipient of the online service will not have any liability arising from its storage of the information as long as it has no actual knowledge of any unlawful activity or information, and if, on obtaining actual knowledge of the unlawful information or activity, such entity acts expeditiously to remove or disable access to the material.At first instance, the court found in favour of Google on the basis that Tamiz’s notification of Google concerning the offending material did not turn Google into a publisher of that material. Google’s role was purely passive and analogous to the owner of a wall which had been covered overnight with defamatory graffiti; although the owner could acquire scaffolding and whitewash the graffiti, that did not mean that the owner should be considered a publisher in the meantime. The court also stated that in any event, if Google had been a publisher of the comments, it could have relied on the Section 1 defence because it was not a commercial publisher and it had no effective control over people using Blogger. (Although there had been a delay between Tamiz’s letter to Google and Google’s notification to the blogger, the judge found that Google had still responded within a reasonable period of time.) The judge also stated that Google would have had a defence under Regulation 19, for purposes of which Google was the information society service provider and the blogger was the recipient. The judge emphasized the importance of the term “unlawful” in Regulation 19; in order for the material to be unlawful, the operator would need to have known something of the strengths and weaknesses of the available defences. Tamiz appealed.The Court of Appeal agreed that Google was not a publisher before it was notified by Tamiz of the offending materials because it could not be said that Google either knew or ought reasonably to have known of the defamatory comments. However, the Court of Appeal departed from the earlier decision on the question of post-notification liability. Rather than a wall, the Court of Appeal likened Blogger to a large notice board, where Google had the ability to remove or block any material posted on the board that breached its rules. The court held that by failing to have the material removed until five weeks after notification, Google was arguably a publisher post-notification because, by continuing to host the blog in question, Google’s actions may have been held to contribute to the publication of the defamatory statement. Despite its ruling, ultimately the Court of Appeal rejected Tamiz’s appeal on the basis that any harm to Tamiz’s reputation was trivial—and as the appeal failed, the court did not consider the availability of the Regulation 19 defence.The Tamiz v. Google decision potentially widens the circumstances in which website operators can be liable for defamatory content posted by others. The key lesson for social media platform operators under UK law is this: remove allegedly defamatory material as swiftly as possible following notification, in order to avoid any argument that you are a publisher of that material.2. Defamation Act 2013After a difficult passage through parliament, the long-awaited <a href="http://www.legislation.gov.uk/ukpga/2013/26/enacted">Defamation Act 2013</a> (the “Act”) was introduced on April 25, 2013. The majority of its provisions will come into effect via statutory instrument later in 2013. The Act is intended to “overhaul the libel laws in England and Wales and bring them into the 21st century, creating a more balanced and fair law.” (The Act does not apply to Northern Ireland, as it was blocked by the Northern Ireland Assembly; further, only those sections which relate to scientific and academic privilege apply to Scotland, which has its own libel laws).Serious HarmSection 1 of the Act makes clear that, in order to be defamatory, a statement must cause or be likely to cause “serious harm” to a claimant’s reputation. Where a business is the claimant, it must show that the statement has caused or is likely to cause “serious financial loss” to the business in order for the “serious harm” requirement to be met. (This clarification was brought in as a last-minute amendment as a result of concerns that companies could use the fear of defamation claims to silence their critics.)General DefencesSections 2, 3 and 4 of the Act replace the previous common law defences of justification, fair comment and the <a href="http://www.bailii.org/uk/cases/UKHL/1999/45.html">Reynolds</a> defence with new statutory defences of truth, honest opinion and publication on a matter of public interest. The new provisions broadly reflect the previous common law position, with the exception that the defence of honest opinion is now not required to be on a matter of public interest.Section 5 DefenceFor website operators, one of the key provisions of the Act is the new Section 5 defence. Although the Section 1 and Regulation 19 defences referred to above remain and are not abolished by the Act, <a href="http://www.legislation.gov.uk/ukpga/2013/26/section/5/enacted">Section 5 </a>of the Act introduces a new additional defence specifically for website operators. Under Section 5, a website operator will have a defence to a defamation claim if it can show that it was not the entity that “posted the statement.” The defence will be defeated if the claimant can show the following:<ul><li>it was not possible to identify the person who posted the statement (for these purposes, “identify” means that a claimant must have sufficient information to bring proceedings against the suspected defendant);</li><li>the claimant provided a notice of complaint in relation to the statement; and</li><li>the operator failed to respond to the notice of complaint in accordance with the applicable regulations.</li></ul>Any malice by the website operator’s actions in connection with the statement concerned will defeat the defence.Importantly, given previous <a href="http://www.bailii.org/ew/cases/EWHC/QB/2010/690.html">case law</a> which had indicated that moderation of third-party content could result in an operator attracting liability as an editor or publisher, the Act makes clear that the Section 5 defence is not defeated solely by reason of the fact that the operator of the website moderates the statements posted on it by others.Section 10 Defence<a href="http://www.legislation.gov.uk/ukpga/2013/26/section/10/enacted">Section 10</a> of the Act states that a court will not have jurisdiction to hear any action for defamation brought against a person who was not the author, editor or publisher of the applicable material, unless the court is satisfied that it is not reasonably practicable for an action to be brought against the author, editor or publisher.PrivilegeIn response to lobbying from the scientific and academic communities, <a href="http://www.legislation.gov.uk/ukpga/2013/26/section/6/enacted">Section 6</a> of the Act provides protection for scientists and academics publishing in peer-reviewed journals. <a href="http://www.legislation.gov.uk/ukpga/2013/26/section/7/enacted">Section 7</a> clarifies when the defences of absolute and qualified privilege will be available.Single PublicationPreviously, each new publication of the same defamatory material would give rise to a separate cause of action. This has been of particular concern where defamatory statements have been published online. <a href="http://www.legislation.gov.uk/ukpga/2013/26/section/8/enacted">Section 8</a> of the Act provides a “single publication” rule that makes clear that the limitation period for bringing a claim will run for one year from the date of first publication.Overseas Publishers<a href="http://www.legislation.gov.uk/ukpga/2013/26/section/9/enacted">Section 9</a> of the Act has been introduced to address the contentious issue of “libel tourism.” It applies to any defendant who is not domiciled in the UK, an EU member state, or a state which is a party to the Lugano Convention (i.e., Iceland, Norway, Denmark and Switzerland). In such circumstances, the courts will not have jurisdiction to hear such claim unless the court is satisfied that England and Wales is the most appropriate place in which to bring an action.Removal of Statements<a href="http://www.legislation.gov.uk/ukpga/2013/26/section/13/enacted">Section 13</a> of the Act provides that, where a court has given judgment in favour of a claimant in an action for defamation, the court may require (i) the operator of a website on which the statement is posted to remove the statement or (ii) any person who was not the author, editor or publisher of the defamatory statement to stop distributing, selling or exhibiting material containing the statement.Although we will need to await publication of the proposed “notice and takedown” regulations envisaged by the Act and monitor how the Act is implemented in practice by the courts, the Act appears to introduce more certainty and protection for website operators in terms of liability for third-party content—particularly in light of Tamiz v. Google—and as such has been broadly welcomed.3. Interim Guidelines on Prosecution of Social Media CommunicationsAs we reported in May 2012, various UK laws are currently being used to regulate the content of tweets and other online messages, although there is no consistency as to which laws will be used to regulate which messages. The relevant laws include <a href="http://www.legislation.gov.uk/ukpga/2003/21/section/127">section 127 of the Communications Act 2003</a>, <a href="http://www.legislation.gov.uk/ukpga/1988/27/section/1">section 1 of the Malicious Communications Act 1988</a>, the <a href="http://www.legislation.gov.uk/ukpga/1981/49">Contempt of Court Act 1981</a> and the <a href="http://www.legislation.gov.uk/ukpga/2007/27/contents">Serious Crime Act 2007</a>.In December 2012, in response to a spate of high profile cases prosecuted under these laws, the Crown Prosecution Service (CPS) published interim guidelines in relation to the prosecution of cases in England and Wales that involve communications sent via social media. A public consultation was launched alongside such guidelines; at the end of the consultation, the interim guidelines will be reviewed in light of the responses received, and final guidelines will be published.The guidelines identify four categories of communications that may constitute criminal offences:<ol start="1"><li>credible threats of violence or damage to property;</li><li>communications targeting specific individuals;</li><li>breach of court orders; and</li><li>communications which are grossly offensive, indecent, obscene or false.</li></ol>In terms of category 4, the CPS acknowledged the huge number of communications made daily using social media and identified the desire to avoid unnecessary prosecutions which would have a chilling effect on free speech. A balance had to be struck between an individual’s right to freedom of expression under Article 10 of the European Convention on Human Rights and the protection of individuals. For these reasons, the CPS identified that a high threshold must be met before criminal proceedings are brought, and in many cases, a prosecution is unlikely to be in the public interest.Category 4 communications fall under section 1 of the Malicious Communications Act 1988 and section 127 of the Communications Act 2003. These provisions refer to communications which are grossly offensive, indecent, obscene, menacing or false. The interim guidelines clarify that for a prosecution to be brought under such laws, a communication must be more than:<ul><li>offensive, shocking or disturbing;</li><li>satirical, iconoclastic or rude; or</li><li>the expression of unpopular or unfashionable opinion, or banter or humour (even if distasteful to some or painful to those subjected to it).</li></ul>Furthermore, a prosecution must be in the public interest and, where a suspect has taken swift action to remove the communication or has expressed genuine remorse, or other relevant parties (such as service providers) have taken similar swift action to remove the communication in question or otherwise block access to it, the guidance emphasizes that it may not be in the public interest to prosecute. The guidelines also stress the need to take into account the instantaneous nature of social media and the fact that the audience of such social media cannot be predicted, e.g., an individual may post something privately which is then repeated and re-published to a much wider audience than originally intended.The interim guidelines have been broadly welcomed as reflecting a common sense approach, although some organizations concerned with freedom of expression, such as Justice and the <a href="http://www.openrightsgroup.org/ourwork/reports/submission-to-dpp-consultation-on-social-media-prosecutions">Open Rights Group</a>, have suggested in their consultation responses that the interim guidelines do not go far enough and have called for clarification of the underlying laws themselves. In terms of next steps, March 13, 2013 marked the deadline for consultation responses, and the CPS is expected to publish the results of the consultation later this year. Any updated guidelines will then follow.ConclusionThe UK’s laws are slowly being updated to reflect the digital age, and these latest developments should help social media platform operators and other organizations to better understand how they can stay on the right side of the law. However, as always, organizations will need to keep a close watch on how the courts interpret the new laws to ensure that they continue to operate safely online. And taking a step back, it may be the case that these new developments will motivate the public to more carefully consider their social media etiquette and how they balance their right of freedom of expression with their social obligations of courtesy and respect for others. As one <a href="http://www.guardian.co.uk/commentisfree/2012/dec/19/cps-guidelines-social-media">commentator</a> has noted, “It’s not just the law that needs to catch up with social media, but manners too and manners can’t be legislated for.”

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UK: The Latest Social Media Legal Updates

UK: The Latest Social Media Legal Updates

In our May 30, 2012 post on the Socially Aware blog—“Should We All Be Getting the Twitter “Jitters”? Be Careful What You Say Online (Particularly in the United 

Last week­—the week of May 12, 2013­—proved to be an eventful week for Aereo.On May 14, 2013, the controversial broadcast television streaming service filed a motion for summary judgment in the Southern District of New York on copyright claims brought by broadcast television networks (including ABC, NBC, CBS and Fox) that Aereo’s service directly infringes the networks’ public performance rights and directly and secondarily infringes their reproduction rights.The very next day, Aereo kicked off its plans to expand the New York City-based service to 22 additional U.S. cities by launching in Boston.This flurry of activity shortly follows the April 1, 2013 opinion of the Second Circuit Court of Appeals, which affirmed the District Court’s opinion in WNET v. Aereo, Inc. denying a motion for preliminary injunction against Aereo based on infringement of the networks’ public performance rights.In case you are not yet familiar with Aereo’s inner workings, the service transmits broadcast television programs to subscribers via the Internet by using miniature antennas. Specifically, Aereo provides each subscriber with a dedicated antenna for the period of time during which the subscriber is using the service.  When a subscriber chooses to “Watch” or “Record” a particular television program through the Aereo interface, the Aereo system makes a unique copy of the television program from the broadcast signals received by the antenna and transmits such copy to the subscriber’s Internet-connected device.To the disappointment of the broadcast television networks, the Second Circuit found that the operation of Aereo’s service does not infringe the networks’ public performance rights under the Copyright Act.  Citing the doctrine of stare decisis (which obligates judges to follow precedential court opinions), the majority of the three-judge panel found that the Second Circuit’s 2008 opinion in Cartoon Network, LP v. CSC Holdings, Inc. (commonly referred to as “Cablevision”) precluded a finding that Aereo’s transmissions are “public performances” within the meaning of the Copyright Act’s “transmit clause.”The Cablevision court held that whether a performance is made “to the public” should be determined by the potential audience of the copy of the work being performed (as opposed to the potential audience of the work being performed).  Accordingly, the Aereo court found it inconsequential to its copyright analysis that the Aereo service makes broadcast television programs available to members of the public; instead, the court looked at how each subscriber received access to a particular television program to determine whether the performance of such program was a “public performance.”  Because Aereo transmits the broadcast television programs to its subscribers using a copy unique to each individual subscriber, the court determined that Aereo’s transmissions constitute private performances for the purposes of copyright law.Circuit Judge Denny Chin dissented in the Aereo case, referring to Aereo’s system as “a sham” that has been technologically manipulated to fall within an apparent loophole created by copyright case law in the Second Circuit.  According to Judge Chin, both the plain meaning of the Copyright Act’s “transmit clause” and legislative history support a finding of copyright infringement by Aereo, as Aereo is transmitting the networks’ copyrighted works to “paying strangers” through the use of Aereo’s system.  Judge Chin also made much of the fact that Aereo does not hold a license to retransmit the broadcast television programs, unlike Cablevision had in the Cablevision case (a fact that the majority of the Aereo court found irrelevant).Judge Chin’s arguments echo those of Judge George Wu of the Central District of California, who ruled in favor of the networks in Fox Television Stations, Inc. v. BarryDriller Content Systems, PLC  (commonly referred to as “Aereokiller”) in December 2012.  Noting tension between the Second Circuit’s Cablevision decision and Ninth Circuit copyright case law, Judge Wu issued an injunction against service provider Aereokiller, a competitor of Aereo based in California that offers a streaming service technologically similar to that of Aereo.  The Aereokiller decision offers an alternative interpretation of the Copyright Act’s “transmit clause” that directs courts to look at whether a performance made via a transmission is made “to the public” (rather than whether the specific transmission is made “to the public”).  Based on this interpretation, Judge Wu found that Aereokiller’s transmissions of broadcast television programs to its subscribers using unique copies of such programs were nonetheless “public performances” under copyright law.  The Aereokiller case is currently on appeal to the Ninth Circuit.If the Ninth Circuit affirms Judge Wu’s opinion, a significant split is likely to arise between the Second and Ninth Circuits on the critical question of when an online transmission constitutes a “public performance” for purposes of the Copyright Act.  The broadcast networks have not given up in the Second Circuit, however, and have petitioned for an en banc rehearing (i.e., a rehearing before all Second Circuit judges) of the Aereo case, hoping to achieve a reversal of the three-judge panel opinion.The ultimate outcomes of the Aereo and Aereokiller cases are likely to have a big impact on how consumers access broadcast television over the coming years.  Both copyright owners and online distributors are undoubtedly staying tuned for future developments.

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The Second Circuit’s Aereo Math: One Copy + One Subscriber ≠ Public Performance

The Second Circuit’s Aereo Math: One Copy + One Subscriber ≠ Public Performance

Last week­—the week of May 12, 2013­—proved to be an eventful week for Aereo. On May 14, 2013, the controversial broadcast television streaming service filed a 

On March 28, 2013, the Court of Appeals, New York’s highest court, issued a <a href="http://law.justia.com/cases/new-york/court-of-appeals/2013/33.html">decision</a> in Overstock.com, Inc. & Amazon.com, LLC, et al., holding that New York’s “click-through nexus” statute does not violate the Commerce Clause or the Due Process Clause of the U.S. Constitution. As a result, an Internet vendor may be presumed to have nexus in New York, and be required to collect sales tax from New York customers, when a link to the vendor’s website appears on websites of New York residents who are compensated via a commission arrangement.The <a href="http://codes.lp.findlaw.com/nycode/TAX/28/I--DEFINITIONS/1101">New York law</a> was amended in 2008 to provide a presumption that the definition of a “vendor,” required to collect New York State sales tax on sales to New York customers, includes an entity that enters into an agreement with a New York resident under which the resident refers potential customers, including via a link on a website, “for a commission or other consideration.” Amazon and Overstock challenged the facial constitutionality of that presumption.The Court of Appeals found that it was rational for the state legislature to presume that New York residents who were compensated on a commission basis would seek to increase their business by soliciting New York customers, and that the ability to rebut the presumption through an annual certification “sensibly” placed the burden on the retailers to demonstrate the lack of solicitation activities.One judge dissented, finding that the placing of links on a website was no more than advertising, and that the change in compensation method for such advertising—from a flat fee to a commission—does not change its essential nature.This decision is important to all Internet vendors who have relationships with “affiliates” and other business partners, not only in New York but in other states that have enacted similar statutes. We note, however, that a lower court in Illinois has found a similar Illinois statute unconstitutional, and an appeal of that decision is pending before the Illinois Supreme Court. The U.S. Supreme Court may yet have to weigh in on this issue.

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E-Commerce Providers Take Note: New York’s Highest Court Upholds “Amazon” Sales Tax Statute

E-Commerce Providers Take Note: New York’s Highest Court Upholds “Amazon” Sales Tax Statute

On March 28, 2013, the Court of Appeals, New York’s highest court, issued a decision in Overstock.com, Inc. & Amazon.com, LLC, et al., holding that New York’s “

Digital music has come a long way since the era of widespread unauthorized sharing, with digital music sales estimated to be approaching $6 billion worldwide. As this market grows, a natural question is whether there can be a legitimate digital analog to the traditional “used music” market. One company, ReDigi, sought to create such a market and suggested that it would create “billions of dollars in wealth” by imparting resale value to lawfully obtained digital materials. In Capitol Records v. ReDigi, however, the Southern District of New York confronted the resulting “fundamental clash over culture, policy, and copyright law” and ruled that ReDigi’s service results in unlawful copying.ReDigi’s web-based service enables users to sell legally acquired digital music to other users at a “fraction” of the music’s price on iTunes or other legal sources. ReDigi’s service also requires users to run its “Media Manager” program to ensure that their computers and attached devices do not retain their own copies of the music offered for sale, but Media Manager cannot detect copies maintained in other locations. For every transaction, ReDigi retains 60% of the purchase price, which users pay other users in the form of credits that can only be used to purchase other music on ReDigi.As a defense to infringement of Capitol Records’ distribution rights, ReDigi relied on the “first sale” doctrine, codified at Section 109 of the Copyright Act, which expressly permits authorized buyers of copyrighted material to redistribute their particular copies (or “phonorecords”). The doctrine, however, applies only to distribution of copies that are “lawfully made,” so the threshold question was whether ReDigi’s service creates unauthorized copies of the music files in violation of Capitol’s exclusive reproduction rights. Given the context, this was a novel question, as previous cases have not addressed the issue of whether the transfer of digital files “where only one file exists before and after the transfer” constitutes reproduction under the Copyright Act.ReDigi argued that its service “migrates” a file as if it were a train so that the same data never exists in two places at any one time, but Capitol countered that, semantics aside, uploading a file “necessarily involves copying.” The court agreed with Capitol and saw it as “beside the point that the original phonorecord no longer exists.” What mattered was that transferring files over the Internet “moves” a file on one material object (a user’s computer) by reproducing it on another (ReDigi’s server). The court concluded that “it is therefore impossible for the user to sell her ‘particular’ phonorecord on ReDigi.” Given that ReDigi sold whole copies of commercial recordings that would harm the primary market for those recordings, the court also made quick work of ReDigi’s argument that the reproductions were “fair use” under Section 107 of the Copyright Act. Because the reproductions themselves were not lawful, ReDigi could not avail itself of the first sale doctrine and, therefore, was liable for infringement.While giving credit to ReDigi for taking steps to prevent users from retaining an extra copy of the music sold via its service, commentators generally note that the court’s decision was predictable and aligns with the intrinsic difference between non-digital and digital goods, which are extremely easy to duplicate and mass distribute. This case demonstrates that there is no “digital first sale doctrine,” which, as one commentator pointed out, means that “digital files are intrinsically worth less over their lifetimes” than are physical media like CDs and DVDs.Other reactions to the ruling included that it will “profoundly affect the economics of any digital re-sale marketplace,” not just music, and confirmed the rights of online distributors to control whether customers can resell or transfer digital goods. This does not mean, however, that there can be no resale markets, and there has been much public speculation regarding plans by existing retailers to create digital resale models.

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Federal Court Says No to “Used” Digital Music Marketplace

Federal Court Says No to “Used” Digital Music Marketplace

Digital music has come a long way since the era of widespread unauthorized sharing, with digital music sales estimated to be approaching $6 billion worldwide. A

A March 23, 2013 decision from the U.S. District Court for the District of New Jersey serves as a cautionary tale for litigants. As a result of some arguably poor decisions by the plaintiff and likely miscommunication between the parties regarding access to the plaintiff’s Facebook account, the Court sanctioned the plaintiff for causing his account to be deleted.In Gatto v. United Air Lines, Inc., plaintiff Frank Gatto, a ground operations supervisor at JFK International Airport, sued defendants United Air Lines and Allied Aviation Services. Gatto claimed that a United aircraft caused a set of fueler stairs operated by Allied to crash into him. Gatto claimed the accident left him permanently disabled, limiting his physical and social activities and rendering him unable to work.Defendants sought discovery of Gatto’s social networking sites and other online services. Although the parties clearly agreed that Gatto would change his account password and provide it to defense counsel, Gatto apparently claimed that the parties had not agreed that defense counsel could directly access his Facebook account. In any event, defense counsel logged into Gatto’s account, purportedly to confirm that the password had been changed, and printed out portions of Gatto’s Facebook page. Defense counsel also sent a signed authorization to Facebook to access Gatto’s account, but Facebook objected and recommended that defense counsel have Gatto download his own account information.After defense counsel logged into his account, Facebook notified Gatto that his account had been accessed from an unfamiliar IP address. Explaining later that his account had previously been hacked during an acrimonious divorce, Gatto deactivated his account. At some point after deactivation, the account contents were deleted and could no longer be retrieved. Claiming that the printed-out portions of Gatto’s account showed him engaged in physical and social activities inconsistent with his claimed injuries, the defendants brought a motion for spoliation sanctions. Specifically, the defendants sought an adverse inference instruction and expenses, including fees, incurred in filing the motion.To issue sanctions, the court held that it needed to find four factors: (1) the evidence was within Gatto’s control; (2) the evidence was actually suppressed or withheld by Gatto; (3) the destroyed evidence was relevant to claims or defenses in the case; and (4) Gatto should have reasonably foreseen that the evidence would be discoverable. The court found that the first, third and fourth factors were clearly present.With respect to the second factor, Gatto argued that he did not intentionally destroy anything. Gatto claimed he reasonably deactivated his account because of his prior experience with it being hacked. Gatto claimed that he had no idea that defense counsel had accessed his account. He also claimed that he had later tried to reactivate his account but that he had not acted quickly enough to save the data from being deleted.The court found Gatto’s arguments unavailing, noting that the purpose of an adverse inference instruction is to “level[] the playing field” when one party has been prejudiced by the destruction, thus rendering the issue of an alleged spoliator’s culpability “largely irrelevant.” Gatto’s actions clearly prejudiced the defendants. This alone merited sanctions against Gatto. The court, however, found these sanctions sufficient and denied fees and costs.There are two main takeaways from the Gatto case. First, as we have previously noted, commentators disagree about whether providing direct account access to an opposing party in discovery is wise. Gatto illustrates some of what can go wrong from providing such direct access. At least <a href="http://blog.ericgoldman.org/archives/2013/03/facebook_passwo_1.htm">one commentator</a> has called the “password exchange” a “terrible solution to Facebook discovery issues.” Nor, as we have previously reported, was a subpoena to Facebook necessarily the right approach, as Facebook objected in Gatto to providing certain information due to its concerns about violating the Stored Communications Act. Facebook recommended that Gatto download the contents of his account to obtain the information, an approach that at least <a href="http://www.theemployerhandbook.com/2013/04/facebook-explains-how-to-get-d.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+employmentlaw-blog%2FimGSCom+%28Employment+Law+Blog%29">one commentator</a> has approved.The second lesson is simple. If you are involved in litigation where social media evidence within your control may be relevant, don’t delete the data or deactivate the account, which could lead to deletion. This is not the first time a party has been sanctioned for spoliation of social media-related evidence, and it won’t be the last.

Spoliation of Social Media Evidence: New Jersey Court Cracks Down