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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Lawrence Gallick

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

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Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster. He advises clients on general commercial and transactional matters. His clients include technology, media, and communications companies with considerable intellectual property assets. His practice focuses on the legal aspects of licensing and commercializing technology and intellectual property, as well as negotiating general commercial contracts. He also regularly assists clients with legal issues relating to mobile applications and social media.

Anthony M. Ramirez

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

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Lawrence W. Gallick

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Technology-company M&A slowed down significantly over the last year, with <a href="https://media2.mofo.com/v3/assets/blt5775cc69c999c255/blt353fe2cd2a7a4dd9/62730eb50cffdf1eb1369b98/1710-451-manda-leaders-survey.pdf" target="_blank" rel="noopener noreferrer">deal volume down by 15%</a> across the globe in Q3 of 2017 compared to Q3 of 2016, and a $37 billion decline to $119 billion in Q3 2017 tech-company deal value compared to the same quarter in 2016.“Outbidding by private equity acquirers” was the primary cause of the plunge, according to almost half (48%) of the industry decision makers who responded to the <a href="https://www.mofo.com/special-content/spotlight-ma-and-leaders-survey/" target="_blank" rel="noopener noreferrer">Tech M&A Leaders’ Survey</a> from 451 Research and Morrison & Foerster. Indeed, 2017 was the first year in history that private equity firms announced more technology mergers and acquisitions than companies listed on U.S. exchanges.In line with these trends have been the companies that fall within the tech industry’s social media subsection—defined by a spokesperson from <a href="https://index.co/top/market/social-media/acquisitions/2017" target="_blank" rel="noopener noreferrer">Index</a>, the source of the data cited here, as “companies that actually own and operate social media platforms, companies that provide services surrounding social media platforms (such as analytics and marketing automation), or companies that operate through social media.”Thus far in 2017, social media companies have been involved in only <a href="https://index.co/top/market/social-media/acquisitions/2017" target="_blank" rel="noopener noreferrer">58 deals</a>. That slowdown comes on the heels of the biggest year for social-media-company M&A yet, 2016, when there were <a href="https://index.co/top/market/social-media/acquisitions/2016" target="_blank" rel="noopener noreferrer">136 deals averaging $1.6 billion in value</a>. The biggest of those deals, Microsoft’s acquisition of LinkedIn for $26.2 billion, was also the third-biggest tech-company acquisition in 2016.Struck after LinkedIn’s trading price had <a href="https://www.forbes.com/sites/quora/2016/06/20/5-questions-about-the-linkedin-microsoft-deal-answered/#1348c2ab1e97" target="_blank" rel="noopener noreferrer">dropped</a> to just <a href="https://www.forbes.com/sites/quora/2016/06/20/5-questions-about-the-linkedin-microsoft-deal-answered/#12942e21e97a" target="_blank" rel="noopener noreferrer">a bit more than half of its $250-per-share high on the market</a>, Microsoft’s acquisition of the career-networking site might “prove to be a harbinger of what’s to come for many of those social media companies that did end up going public,” wrote Mashable’s Seth Fiegerman, observing that “many of the flashy social networks that Wall Street once fawned over—even if it didn’t understand what exactly they do—are now looking for the exit door as the mood sours.”Other industry observers <a href="http://www.investors.com/news/technology/click/bold-tech-ma-predictions-for-2017-netflix-twitter-gopro-in-play/" target="_blank" rel="noopener noreferrer">also predicted the acquisition of Twitter</a>, as well as <a href="http://www.businessinsider.com/google-offered-to-buy-snapchat-for-at-least-30-in-early-2016-insiders-say-2017-8" target="_blank" rel="noopener noreferrer">Snapchat</a> and <a href="http://www.businessinsider.com/6-tech-companies-most-likely-to-be-acquired-morgan-stanley-2016-9/#1-take-two-interactive-software-1" target="_blank" rel="noopener noreferrer">Yelp</a>. With all three of those big names yet to be purchased, those predictions obviously didn’t pan out.

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

Aaron Rubin

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Pace of M&A Deals in Social Media Industry Slows After Record Year

Pace of M&A Deals in Social Media Industry Slows After Record Year

Technology-company M&A slowed down significantly over the last year, with deal volume down by 15% across the globe in Q3 of 2017 compared to Q3 of 2016, and a $

On July 21, 2017, following last June’s announcement that the Delaware House of Representatives had passed (with near unanimity) <a href="http://www.sociallyawareblog.com/2017/03/28/delaware-paves-the-way-for-blockchain-technology/" target="_blank" rel="noopener noreferrer">blockchain-related provisions </a>proposing to amend several sections of the Delaware General Corporation Law (DGCL), the Delaware Governor officially signed the legislation into law.The newly enacted <a href="http://legis.delaware.gov/json/BillDetail/GenerateHtmlDocument?legislationId=25730&legislationTypeId=1&docTypeId=2&legislationName=SB69" target="_blank" rel="noopener noreferrer">legislation</a> provides, among other things, specific statutory authority for Delaware corporations to use “distributed electronic networks or databases,” aka distributed ledgers or blockchain technology, for the creation and maintenance of corporate records, including the corporations’ stock ledger. The Use of Blockchain Technology for the Creation and Administration of Corporate RecordsSection 219(c) of the DGCL provides that a stock ledger of a Delaware corporation is the only evidence of the identity of stockholders of the corporation who are entitled to inspect the list of stockholders and to vote at meetings.Until now, under current recordkeeping practice, the stock ledger of a corporation could only be created and maintained by a corporate secretary or a corporation’s transfer agent. Often, a stock ledger consists of a capitalization table, i.e., electronically encoded data on a computer program like Microsoft Excel, which is producible in printed form.Whenever a corporation issues new shares or whenever shares are transferred among stockholders, the individuals in charge of a corporation’s records must update the stock ledger. However, manually recording an issuance or a transfer of shares is a time-consuming task which is also, by definition, susceptible to human error and uncertainty.Section 224 of the DGCL used to authorize a corporation to “maintain” its stock ledger on, by means of, or in the form of any “information storage device” or “method” subject to specified requirements. However, Section 224 of the DGCL did not specifically allow that such information storage device or method might include the use of distributed ledgers or blockchain technology. The newly enacted legislation clarifies the statutory requirements for the form of corporate records under Delaware law.As amended, Section 219(c) defines “stock ledger” as “one or more records administered by or on behalf of the corporation in which the names of all of the corporation’s stockholders of record, the address and number of shares registered in the name of each such stockholder, and all issuances and transfers of stock of the corporation are recorded in accordance with Section 224 of the DGCL”.By expressly allowing a corporation to have its records “administered by or on [its] behalf” (rather than “maintained by the corporation,” as previously required by the statute), the newly enacted legislation recognizes that a stock ledger does not need to be administered directly by an individual, i.e., a corporate officer or a transfer agent, and therefore enables the use of blockchain technology for the creation and administration of corporate records.In addition, Section 224 of the DGCL, as amended, includes specific language recognizing the use of blockchain technology as a permissible method for creating and administering corporate records.Section 224 of the DGCL, as amended, provides that any records “administered by or on behalf of the corporation […]” may be kept on, by means of, or in the form of, any information storage device or method, “or one or more electronic networks or databases (including one or more distributed electronic networks or databases), provided that the records so kept can be converted into clearly legible paper form within a reasonable time and, with respect to the stock ledger, that the records so kept”: (i) can be used to prepare the list of stockholders specified in Sections 219 (stockholder meetings) and 220 (inspection of books and records) of the DGCL; (ii) record the information specified in Sections 156 (partly paid shares), 159 (collateral transfer), 217(a) (voting rights of fiduciaries, pledgors and joint owners of stock), and 218 (voting trusts and other voting agreements) of the DGCL; and (iii) record transfers of stock as governed by Article 8 of the Delaware Uniform Commercial Code.According to Section 224 of the DGCL, as amended, when records are kept in such manner, a clearly legible paper form “prepared” from or by means of the “information storage device”, “method, or one or more electronic networks or databases (including one or more distributed electronic networks or databases)” shall be valid and admissible in evidence, and accepted for all other purposes, to the same extent as an original paper record of the same information would have been, provided that the paper form accurately portrays the record.2. The Use of Blockchain Technology for the Electronic Transmission of Stockholders’ CommunicationsIn conjunction with the newly enacted fundamental changes in the way that Delaware corporations can create and administer their corporate records, amendments to Sections 151, 202, and 364 of the DGCL were enacted to clarify that the written notices required by those sections may be given by “electronic transmission” through the use of blockchain technology.In particular, Section 232 of the DGCL was amended to clarify that the definition of “electronic transmission” for purposes of the DGCL includes “the use of, or participation in, one or more electronic networks or databases (including one or more distributed electronic networks or databases) that creates a record that may be retained, retrieved and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.”In addition, Sections 151(f), 202(a), and 364 of the DGCL were amended to explicitly permit delivery of certain notices by electronic transmission (including via a distributed ledger) to a holder of uncertificated shares. As a result, notices by electronic transmission under Delaware law could be given by means of a distributed ledger.***The newly enacted legislation puts the State of Delaware, once again, at the forefront of corporate law by welcoming and accommodating groundbreaking and innovative technologies like blockchain, and by doing so, it may facilitate the modernization of our equity infrastructure, which is still centered on the1970s policy of share immobilization through a depository system and centralized ledgers.