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

Social Links: If the Suit Fits

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Social Links: Going Back to Cali

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We’re in the midst of a seismic shift in how companies interact with user-generated content (UGC).For years, companies were happy simply to host UGC on their websites, blogs and social media pages and reap the resulting boost to their traffic numbers. And U.S. law—in the form of <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> (DMCA)—accommodated this passive use of UGC by creating a safe harbor from copyright damages for websites, blogs and social media platform operators that hosted UGC posted without the authorization of the owners of the copyrights in such UGC, so long as such operators complied with the requirements of the safe harbor.Increasingly, companies are no longer satisfied with passively hosting UGC. Rather, they now want to find creative ways to commercialize such content—by incorporating it into ads (including print, TV and other offline ads), creating new works based on such content and even selling such content. Yet, in moving beyond mere hosting to proactive exploitation of UGC, companies risk losing the benefit of the DMCA Section 512(c) safe harbor, which could result in potentially significant copyright liability exposure.For example, if a company finds that users are posting potentially valuable UGC to the company’s Facebook page, or on Twitter in connection with one of the company’s hashtags, that company may want to make such UGC available on its own website. The DMCA Section 512(c) safe harbor, however, is unlikely to protect the company in copying such UGC from the Facebook or Twitter platform to its own website.The reality is that any company seeking to monetize or otherwise exploit UGC needs to proceed with extreme caution. This is true for several reasons:<ul><li>UGC can implicate a wide range of rights . . . As with any content, UGC is almost certainly subject to copyright protection, although certain Tweets and other short, text-only posts could potentially be exempt from copyright protection if they qualify as “short phrases” under the Copyright Act. If any individuals are identifiable in UGC, then rights of publicity and rights of privacy may also be relevant. In addition, UGC may contain visible third-party trademarks or comments that defame or invade the privacy of third parties.</li></ul><ul><li>. . . and a wide range of rightsholders. Notably, many of the rights necessary to exploit UGC are likely to be held by individuals and corporations other than the posting user. For example, unless a photo is a “selfie,” the photographer and the subject of the photo will be different individuals, with each holding different rights—copyright, for the photographer, and the rights of publicity and privacy, for the subject—that could be relevant to the exploitation of the photo. Moreover, any trademarks, logos and other images contained in a photo could potentially implicate third-party rightsholders, including third-party corporations. Videos also raise the possibility of unauthorized clips or embedded music.</li></ul><ul><li>If the UGC is hosted by a third-party social network, it may have Terms of Service that help—or hurt—efforts to exploit the UGC. Most social media networks collect broad rights to UGC from their users, although they differ substantially when it comes to passing those rights along to third parties interested in exploiting the content. For example, if a company uses <a href="https://dev.twitter.com/overview/api" target="_blank" rel="noopener">Twitter’s Application Programming Interface (API)</a> to identify and access Tweets that it would like to republish, then Twitter <a href="https://dev.twitter.com/overview/terms/agreement-and-policy" target="_blank" rel="noopener">grants to that company a license</a> to “copy a reasonable amount of and display” the Tweets on the company’s own services, subject to certain limitations. (For example, Twitter currently prohibits any display of Tweets that could imply an endorsement of a product or service, absent separate permission from the user.) Instagram also has an API that provides access to UGC, but, in contrast to Twitter, <a href="https://www.instagram.com/about/legal/terms/api/" target="_blank" rel="noopener">Instagram’s API terms</a> do not appear to grant any license to the UGC and affirmatively require companies to “comply with any requirements or restrictions” imposed by Instagram users on their UGC.</li></ul>With these risks in mind, we note several emerging best practices for a company to consider if it has decided to exploit UGC in ways that may fall outside the scope of DMCA Section 512(c) and other online safe harbors. Although legal risk can never be eliminated in dealing with UGC, these strategies may help to reduce such risk:<ul><li>Carefully review the Social Media Platform Terms. If the item of UGC at issue has been posted to a social media platform, determine whether the Terms of Service for such platform grants any rights to use such posted UGC off of the platform or imposes any restrictions on such content. Note, however, that any license to UGC granted by a social media platform almost certainly will not include any representations, warranties or indemnities, and so it may not offer any protection against third-party claims arising from the UGC at issue.</li></ul><ul><li>Seek Permission. If the social media platform’s governing terms don’t provide you with all of the rights needed to exploit the UGC item at issue (or even if they do), seek permission directly from the user who posted the item. Sophisticated brands will often approach a user via the commenting or private messaging features of the applicable social media platform, and will present him or her with a link to a short, user-friendly license agreement. Often, the user will be delighted by the brand’s interest in using his or her content. Of course, be aware that the party posting the content may not be the party that can authorize use of that content, <a href="http://www.sociallyawareblog.com/2013/02/15/thinking-about-using-pictures-pulled-from-twitter-think-again-new-york-court-warns/" target="_blank" rel="noopener">as Agence France Presse learned the hard way in using photos taken from Twitter</a>.</li></ul><ul><li>Make Available Terms and Conditions for “Promotional” Hashtags. If a company promotes a particular hashtag to its customers, and would like to use content that is posted in conjunction with the hashtag, the company could consider making available a short set of terms alongside its promotion of that hashtag. For example, in any communications promoting the existence of the hashtag and associated marketing campaign, the company could inform customers that their use of the hashtag will constitute permission for the company to use any content posted together with the hashtag. Such an approach could face significant enforceability issues—after all, it is essentially a form of <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">“browsewrap” agreement</a>—but it could provide the company with a potential defense in the event of a subsequent dispute.</li></ul><ul><li>Adopt a Curation Process. Adopt an internal curation process to identify items of UGC that are especially high risk, which could include videos, photos of celebrities, photos of children, professional-quality content, any content containing copyright notices, watermarks and so forth, and any content containing potentially defamatory, fraudulent or otherwise illegal content. Ensure that the curators are trained and equipped with checklists and other materials approved by the company’s legal department or outside counsel. Ideally, any high-risk content should be subject to the company’s most stringent approach to obtaining permission and clearing rights—or perhaps avoided altogether.</li></ul><ul><li>Adjust the Approach for High-Risk Uses. Consider the way in which the UGC at issue is expected to be used, and whether the company’s risk tolerance should be adjusted accordingly. For example, if an item of UGC will be used in a high-profile advertisement, the company may want to undertake independent diligence on any questionable aspects of the UGC, even after obtaining the posting user’s permission—or perhaps avoid any questionable UGC altogether.</li></ul>In a social media age that <a href="http://www.huffingtonpost.com/matthew-tyson/millennials-want-brands-t_b_9032718.html" target="_blank" rel="noopener">values authenticity</a>, more and more companies—even big, risk-adverse Fortune 100 companies—are interested in finding ways to leverage UGC relevant to their business, products or services. Yet the shift from merely hosting UGC to actively exploiting it raises very real legal hurdles for companies. The tips above are not a substitute for working closely with experienced social media counsel, but they collectively provide a framework for addressing legal risks in connection with a company’s efforts to commercialize UGC.*          *        *For more on the issues related to user-generated content, see <a href="http://www.sociallyawareblog.com/2016/01/14/new-court-decision-highlights-potential-headache-for-companies-hosting-user-generated-content/" target="_blank" rel="noopener">New Court Decision Highlights Potential Headache for Companies Hosting User-Generated Content</a>; <a href="http://www.sociallyawareblog.com/2014/06/24/court-holds-that-dmca-safe-harbors-do-not-extend-to-infringement-prior-to-designation-of-agent/" target="_blank" rel="noopener">Court Holds That DMCA Safe Harbor Does Not Extend to Infringement Prior to Designation of Agent</a>; and <a href="http://www.sociallyawareblog.com/2013/02/15/thinking-about-using-pictures-pulled-from-twitter-think-again-new-york-court-warns/" target="_blank" rel="noopener">Thinking About Using Pictures Pulled From Twitter? Think Again, New York Court Warns</a>.

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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Commercializing User-Generated Content: Five Risk Reduction Strategies

Commercializing User-Generated Content: Five Risk Reduction Strategies

We’re in the midst of a seismic shift in how companies interact with user-generated content (UGC). For years, companies were happy simply to host UGC on their w

If your company is involved in selling products or services to consumers in New Jersey over the web or through mobile apps, you’ll want to read this blog post.In what amounts to a feeding frenzy, plaintiffs’ lawyers are working overtime bringing class action suits against e-commerce companies, alleging that their online terms and conditions violate New Jersey’s unusual <a href="http://www.gannlaw.com/OnlineApp/dtSearch-Data/TextFiles/Condominium/App-32.pdf" target="_blank" rel="noopener">Truth-in-Consumer Contract, Warranty and Notice Act</a> (“TCCWNA”). Some of the online retailers to have been sued include Victoria’s Secret, <a href="https://topclassactions.com/lawsuit-settlements/lawsuit-news/332489-toys-r-us-bed-bath-beyond-class-actions-filed-over-website-terms/" target="_blank" rel="noopener">Bed Bath & Beyond and TOYS ‘R’ US</a>, with more suits being filed every day.Unlike most consumer protection laws, the TCCWNA focuses specifically on the contractual terms governing certain transactions with consumers, imposing limitations on such terms even if such contractual terms are governed by the law of a state other than New Jersey—creating a potential gotcha for e-tailers who are based outside of New Jersey and who traditionally have their online terms and conditions reviewed only by lawyers admitted to practice in the state whose laws govern such terms and conditions.Although the TCCWNA was enacted in 1981, it has only recently achieved notoriety, as more and more plaintiffs’ lawyers have embraced the statute due to its broad scope and its statutory penalty of not less than $100 per violation without the need to prove actual harm.Overview of the TCCWNA New Jersey adopted the TCCWNA over 30 years ago not to create new rights for consumers, but rather <a href="http://law.justia.com/cases/federal/appellate-courts/ca3/13-1359/13-1359-2014-11-07.html" target="_blank" rel="noopener">to “bolster[] rights and responsibilities established by other laws</a>,” particularly those established by New Jersey’s Consumer Fraud Act (“CFA”). <a href="http://legalnewsline.com/stories/510704501-hertz-class-action-among-latest-in-rising-number-of-new-jersey-tccwna-cases" target="_blank" rel="noopener">Observers have noted</a> that the number of TCCWNA cases has been increasing in the last few years, particularly since 2013 when the Supreme Court of New Jersey in <a href="http://caselaw.findlaw.com/nj-supreme-court/1638020.html" target="_blank" rel="noopener">Shelton v. Restaurant.com, Inc.</a> found that online certificates or coupons were subject to TCCWNA rules and opened the door to TCCWNA class actions stemming from e-commerce.The TCCWNA applies where a company is a “seller, lessor, creditor, lender or bailee,” offering its services to a “consumer” or “prospective consumer” in New Jersey. A “consumer,” under the TCCWNA, is defined as “any individual who buys, leases, borrows, or bails any money, property or service which is primarily for personal, family or household purposes.” Indeed, <a href="http://caselaw.findlaw.com/nj-supreme-court/1638020.html" target="_blank" rel="noopener">courts</a> have emphasized that the TCCWNA is inapplicable unless the plaintiffs are consumers.The text of the TCCWNA prohibits three types of provisions in consumer contracts, warranties, notices and signs.First, it prohibits provisions violating “clearly established” legal rights of a consumer or responsibilities of a seller, lessor, creditor, lender or bailee. These rights and responsibilities may arise from federal or state law. For example, one court found that provisions restricting limitations periods for initiating lawsuits, asserting counterclaims or raising affirmative defenses violate consumers’ rights under federal and New Jersey procedural rules.Second, the TCCWNA prohibits provisions waiving a consumer’s rights under the TCCWNA. In <a href="http://law.justia.com/cases/federal/district-courts/new-jersey/njdce/1:2012cv00079/268859/25/" target="_blank" rel="noopener">Johnson v. Wynn’s Extended Care, Inc.</a>, for example, the U.S Court of Appeals for the Third Circuit held that a provision in a service contract that prevented the recovery of attorneys’ fees and costs constituted a waiver of a consumer’s rights under the TCCWNA, and was therefore prohibited.Note, however, that at least two cases have found that a claim under the TCCWNA cannot be based merely upon an omission. As <a href="http://law.justia.com/cases/federal/district-courts/new-jersey/njdce/2:2016cv01506/330981/11/" target="_blank" rel="noopener">one court</a> noted, the statute’s use of the term “includes” suggests that only a statement affirmatively “included” in the consumer contract, warranty, notice or sign should give rise to liability; in addition, the legislative history does not include any examples of an omission triggering liability.Third, the TCCWNA prohibits blanket “inapplicable in some jurisdictions” savings clauses (e.g., phrased “void where prohibited”)—though, notably, it does not prohibit such savings clauses in any warranty. In order for a savings clause to be acceptable under the TCCWNA, the statute requires the clause to specify which provisions, if any, are unenforceable in New Jersey.In one recent case, Martinez-Santiago v. Public Storage, the following language was found to be in violation of the TCCWNA’s prohibition against overly broad savings clauses: “If any provision of this [agreement] shall be invalid or prohibited under [the law of the state where the applicable premises are located], such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions.”Certain courts, however, have refused to find such a violation of the TCCWNA when the consumer contract, notice or sign is <a href="http://law.justia.com/cases/federal/district-courts/new-jersey/njdce/1:2014cv06446/310478/24/" target="_blank" rel="noopener">only available within New Jersey</a>, or when the clause uses the alternative “to the extent permitted by law” phrasing, as discussed below.TCCWNA’s Potential Danger to Online CompaniesThe TCCWNA is potentially dangerous for companies operating online for at least three reasons.First, plaintiffs’ lawyers are pushing for an extremely broad application of the statute. They argue that the TCCWNA applies to almost every company providing consumer products online that are available to New Jersey residents, and to any “written consumer contract” and “written consumer warranty, notice or sign” made available to these residents—presumably encompassing nearly all material displayed or offered by a company online.Second, as noted above, the TCCWNA may expose companies located outside of New Jersey (but whose online websites can be accessed within the state) to claims stemming from any applicable “clearly established” federal or New Jersey state right or responsibility, effectively requiring companies based outside of New Jersey to develop expertise on all potentially applicable New Jersey laws (even if their website terms of use purport to be governed by another state’s laws and have been carefully drafted and reviewed by lawyers admitted to practice in such state).Think about it: If every state had a law similar to the TCCWNA, every e-tailer would need to have its online Terms of Use reviewed by as many as 50 different lawyers. The result would essentially be a full employment act for attorneys across the country.Third, the TCCWNA is potentially dangerous for companies because it provides an “aggrieved consumer” with the option to seek recovery of a civil penalty of not less than $100. This means the penalties in class actions—especially the penalties in class actions over online terms and conditions—could add up quickly. The text of the statute also allows for actual damages, reasonable attorneys’ fees and court costs in addition to the civil penalty, and further states that such remedies are cumulative and do not preclude recovery available under other laws.Some Guidance for Online Companies From Emerging TCCWNA Case LawBecause claims arguing that online terms and conditions violate the TCCWNA have been filed only recently, there is only sparse guidance from the courts on how online companies selling into New Jersey can protect against these lawsuits.Moreover, any such company, if it has not already done so, should promptly contact New Jersey counsel for advice on how to ensure its online terms and conditions are compliant with the TCCWNA.With those important caveats in mind, recent court decisions applying the TCCWNA do highlight some potential precautionary measures for website operators.For example, as a first line of defense, it may be prudent for companies to include, and seek to bolster the enforceability of, an arbitration provision and a related class action waiver clause in their online terms and conditions. As an example, <a href="http://caselaw.findlaw.com/nj-supreme-court/1678725.html" target="_blank" rel="noopener">in one TCCWNA case</a>, the Supreme Court of New Jersey indicated that an arbitration provision would have been enforceable if it had clearly and unambiguously notified the consumer that she was waiving her statutory right to seek relief in the court of law. While there is no prescribed wording for a valid arbitration provision, <a href="https://www.courtlistener.com/opinion/1545878/griffin-v-burlington-volkswagen/" target="_blank" rel="noopener">one New Jersey court</a> found the following arbitration notice to be acceptable:The parties to this agreement agree to arbitrate any claim, dispute, or controversy, including all statutory claims and any state or federal claims, that may arise out of or relating to the [subject matter of the agreement]. By agreeing to arbitration, the parties understand and agree that they are waiving their rights to maintain other available resolution processes, such as a court action or administrative proceeding, to settle their disputes.As a second line of defense, it may be prudent for companies, working with New Jersey counsel, to review and potentially revise their online contracts, warranties and notices in light of TCCWNA cases to date. One approach suggested by existing TCCWNA case law is that businesses can avoid violating the TCCWNA’s prohibition on blanket “inapplicable in some jurisdictions” savings clauses by using different language in their savings clauses to achieve the same result. As noted above, the text of the TCCWNA prohibits savings clauses that state that certain terms “may be void, unenforceable or inapplicable in some jurisdictions” if such clauses do not identify which terms are or are not void, unenforceable or inapplicable in New Jersey. In <a href="http://law.justia.com/cases/federal/district-courts/new-jersey/njdce/3:2015cv06098/323286/28/" target="_blank" rel="noopener">Kendall v. CubeSmart L.P.</a>, however, the United States District Court for the District of New Jersey found that companies could use savings clauses that “attempt…to conform to New Jersey law.” Citing several cases, it held that the phrases “to the extent permitted by law,” “in the manner permitted by applicable law,” “allowed by applicable law” and “or as otherwise permitted by applicable law” were acceptable in savings clauses under the TCCWNA.Even if companies adjust their savings clauses as suggested by TCCWNA case law, it may still be prudent to pay particular attention to any language in their online contracts, warranties and notices that may violate “clearly established” legal rights, with particular attention to language that:<ul><li>Waives a consumer’s right to recover attorneys’ fees or requires litigation costs to be split. Current TCCWNA case law indicates that companies should be careful of clauses that explicitly waive a consumer’s right to recover his or her attorneys’ fees, or state that “<a href="http://law.justia.com/cases/federal/district-courts/new-jersey/njdce/1:2012cv00079/268859/25/" target="_blank" rel="noopener">[e]ach party shall pay the fees of its own attorneys</a>.”</li><li>Limits liability of the company for personal injuries or property damage. The enforceability of such limitations will vary based on the situation, including variance from industry to industry. For example, on one hand, <a href="http://law.justia.com/cases/federal/district-courts/new-jersey/njdce/1:2014cv06446/310478/24/" target="_blank" rel="noopener">a limitation of liability in a rental agreement for storage space</a>, which released the storage company from liability “for any personal injuries or property damage sustained by Customer and/or Customer’s guests while on” the company’s property, was found by a court to violate the TCCWNA because, under applicable New Jersey law, storage companies are under a duty to maintain their premises for consumers. On the other hand, a similar limitation of liability in a gym membership agreement was found by a court not to violate the TCCWNA because, the court reasoned, consumers are deemed to have assumed certain risks for personal injury on gym premises under New Jersey law.</li><li>Indemnifies the company against losses resulting from the company’s own negligence. <a href="http://law.justia.com/cases/federal/district-courts/new-jersey/njdce/1:2014cv06446/310478/24/" target="_blank" rel="noopener">For example</a>, a rental agreement offered by a storage company that included consumer indemnification of the company for “any and all manner of claims for damages or lost property or personal injury” was found by a court to violate the TCCWNA.</li><li>Restricts claim limitation periods. <a href="http://law.justia.com/cases/federal/district-courts/new-jersey/njdce/2:2013cv00929/285237/66/" target="_blank" rel="noopener">At least one court</a> has reasoned that the Federal Rules of Civil Procedure and New Jersey Court Rules dictate statutes of limitation on claims, from which companies cannot derogate, and therefore any attempt to shorten a consumer’s claim limitation period would violate the TCCWNA.</li><li>In addition to the above, current TCCWNA case law suggests that companies should present disclaimers and limitations of liability, in particular, conspicuously to consumers (e.g., use capital letters).</li></ul>The Spokeo, Inc. v. Robins Decision and Its Potential Impact on TCCWNA LitigationAlthough, as noted, the TCCWNA allows aggrieved consumers to elect a $100 civil remedy instead of their actual damages, the recent U.S. Supreme Court decision in <a href="https://supreme.justia.com/cases/federal/us/578/13-1339/" target="_blank" rel="noopener">Spokeo, Inc. v. Robins</a> may make it more difficult for plaintiffs to maintain TCCWNA class actions in federal court where concrete and particularized harm has not been established.The Spokeo case arose out of a claim by Robins that Spokeo, an operator of a “people search engine” that gathers and provides personal information about individuals to users, sold inaccurate information in violation of the Fair Credit Reporting Act. The U.S. Supreme Court held that standing to sue in federal court, even in the context of a statutory violation, requires proof of “concrete and particularized” harm inflicted on each individual plaintiff. It also held that “particularized” harm means “personal and individualized”—a relatively high threshold for class action plaintiffs claiming statutory violations. In fact, the First Circuit recently held in <a href="http://law.justia.com/cases/federal/appellate-courts/ca1/15-1446/15-1446-2016-05-23.html" target="_blank" rel="noopener">Hochendoner v. Genzyme Corp.</a> that plaintiffs did not satisfy the “particularized harm” requirement because the plaintiffs’ alleged injuries due to a shortage of a drug could not be linked to any specific plaintiff, and therefore the class actions were dismissed. At least one company has even submitted the Spokeo decision in support of its motion to dismiss in a case filed by a New Jersey consumer in federal court alleging that the company’s online terms and conditions were in violation of the TCCWNA.As it is too soon to definitively conclude how Spokeo will affect TCCWNA class actions, e-commerce companies will want to closely monitor TCCWNA developments, including any legislative initiatives that may result from recent <a href="http://legalnewsline.com/stories/510723798-new-jersey-civil-justice-institute-concerned-about-consumer-lawsuit-spike" target="_blank" rel="noopener">lobbying efforts</a>. In the meantime, companies would be well advised to review their online terms and conditions carefully with qualified counsel—indeed, the sharp increase in TCCWNA cases presents an opportunity for all website operators and mobile app developers to take a look at their terms and conditions and make sure that they are up to date.

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Controversial New Jersey Consumer Protection Law Creates a Potential “Gotcha” for E-Commerce Companies

Controversial New Jersey Consumer Protection Law Creates a Potential “Gotcha” for E-Commerce Companies

If your company is involved in selling products or services to consumers in New Jersey over the web or through mobile apps, you’ll want to read this blog post. 

As we have <a href="https://www.sociallyawareblog.com/2016/04/27/website-terms-of-use-check-that-box/" target="_blank" rel="noopener">noted before</a>, if you want to increase the likelihood that your website terms of use are enforceable against users, you need to do two things. First, you need to display the terms to users in a conspicuous way, and second, you need to require users to affirmatively accept the terms. <a href="https://caselaw.findlaw.com/us-7th-circuit/1730191.html" target="_blank" rel="noopener">Sgouros v. Transunion Corporation</a>, a recent Seventh Circuit case, demonstrates that half measures won’t cut it.Gary Sgouros, the plaintiff in Sgouros, alleged that Transunion had sold him an inaccurate credit report through Transunion’s website. Transunion filed a motion to compel arbitration based on an arbitration provision contained in the website’s terms of use. In discussing whether that arbitration provision was enforceable against Sgouros, the court goes into considerable detail regarding the ordering process on Transunion’s site.Specifically, to complete his purchase of a credit report on Transunion’s site, Sgouros was required to complete several steps:<ol><li>Click on a large “Click Here” button on the website’s homepage under the heading “Get Your Credit Score & Report.”</li><li>Furnish identifying information, and click “yes” or “no” to Transunion’s offer to send offers from its “trusted partners,” and then click a large orange button labeled “Submit & Continue to Step 2.”</li><li>Create a user account name and password, input credit card information and click a “yes” or “no” bubble in answer to a question about whether the user’s billing information is the same as his or her home address.</li><li>Click a button stating: “You understand that by clicking on the ‘I Accept & Continue to Step 3’ button below, you are . . . authorizing TransUnion Interactive, Inc. to obtain information from your personal credit profile . . .”</li></ol>That was all Sgouros needed to do to purchase the credit report—at no point was he required to review or expressly accept the website’s terms of use.The “I Accept & Continue to Step 3” button was, however, located below a rectangular scroll window with the words “Service Agreement” at the top, and the small hyperlinked words “Printable Version” appeared beneath the scroll box. The 10-page printable version of the Service Agreement in the scroll box did mention the arbitration provision on its first page and did include that arbitration provision in full on its eighth page. But the scroll window allowed Sgouros to view only three lines of text at a time, and no mention of the arbitration provision appeared in the immediately visible text.Most significantly, the “I Accept & Continue to Step 3” button did not require Sgouros to first click on the scroll box or to scroll down to view its complete contents, nor did it call Sgouros’s attention to the arbitration provision in any way. The court detailed the shortcomings of Transunion’s implementation as follows:[T]he web pages on which Sgouros completed his purchase contained no clear statement that his purchase was subject to any terms and conditions of sale. The scroll box contained the visible words “Service Agreement” but said nothing about what the agreement regulated. The hyperlinked version of the Service Agreement was not labeled “Terms of Use” or “Purchase” or “Service Agreement,” but rather just “Printable Version.” And . . . the visible words “This Service Agreement . . . contains the terms and . . . conditions upon which you . . . may access and use . . . ” fall short of providing notice that the purchase of a consumer credit score is subject to the agreement.<div>On these facts, the Seventh Circuit held that Sgouros’s click on the “I Accept & Continue to Step 3” button did not bind Sgouros to the arbitration provision in the terms of use because “this type of electronic ‘click’ can suffice to signify the acceptance of a contract” only “as long as the layout and language of the site give the user reasonable notice that a click will manifest assent to an agreement.” The opinion also notes that “[n]o court has suggested that the presence of a scrollable window containing buried terms and conditions of purchase or use is, in itself, sufficient for the creation of a binding contract.”Sgouros is <a href="https://www.sociallyawareblog.com/2015/10/06/three-steps-to-help-ensure-the-enforceability-of-your-websites-terms-of-use/">not the first case</a> to demonstrate how crucial it is to implement website terms of use in a way that clearly connects the user’s affirmative actions to acceptance of the terms. The user must know exactly what he or she is doing by clicking the button or checking the box. Transunion had a terms of use, and Transunion required the user to click a button. But Transunion’s implementation failed to clearly connect those two things:[W]hat cinches the case for Sgouros is the fact that TransUnion’s site actively misleads the customer. The block of bold text below the scroll box told the user that clicking on the box constituted his authorization for TransUnion to obtain his personal information. It says nothing about contractual terms. No reasonable person would think that hidden within that disclosure was also the message that the same click constituted acceptance of the Service Agreement.Accordingly, the court denied Transunion’s motion to compel arbitration, adding one more entry to the list of companies that have lost the protection of their carefully crafted terms of use solely due to a poorly-implemented website checkout process.</div><div></div><div style="text-align: justify;padding-left: 60px;"></div>*      *      *For more on website Terms of Use, please see the following Socially Aware posts:<a href="https://www.sociallyawareblog.com/2015/10/06/three-steps-to-help-ensure-the-enforceability-of-your-websites-terms-of-use/" target="_blank" rel="noopener">Three Steps to Help Ensure the Enforceability of Your Website’s Terms of Use</a><a href="https://www.sociallyawareblog.com/2014/10/06/implementing-and-enforcing-online-terms-of-use/" target="_blank" rel="noopener">Implementing and Enforcing Online Terms of Use</a>Please also check out Aaron Rubin’s video series regarding online Terms of Use:<a href="https://www.sociallyawareblog.com/2016/04/25/website-terms-of-use-are-they-really-necessary/" target="_blank" rel="noopener">Website Terms of Use: Are They Really Necessary?</a><a href="https://www.sociallyawareblog.com/2016/04/27/website-terms-of-use-check-that-box/" target="_blank" rel="noopener">Website Terms of Use: Check That Box!</a><a href="https://www.sociallyawareblog.com/2016/05/02/website-terms-of-use-out-with-the-old/" target="_blank" rel="noopener">Website Terms of Use: Out With the Old</a>

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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Terms and Conditions Buried in Easily Ignored Scroll Box Don’t Cut It, the Seventh Circuit Holds

Terms and Conditions Buried in Easily Ignored Scroll Box Don’t Cut It, the Seventh Circuit Holds

As we have noted before, if you want to increase the likelihood that your website terms of use are enforceable against users, you need to do two things. First, 

In this final portion of my video on website terms of use, I offer practical tips on best practices for updating and modifying online agreements.<iframe loading="lazy" align="center" src="https://www.youtube-nocookie.com/embed/VxGrh_dE6rs" width="770" height="450" frameborder="0" scrolling="no" style="width: 770%; height: 450;" title="iframe"></iframe><div class="videoWrapper">For more information on this subject, see my earlier video post on <a href="https://www.sociallyawareblog.com/2016/04/27/website-terms-of-use-check-that-box/" target="_blank" rel="noopener">Website Terms of Use: Check That Box! </a></div>To stay abreast of social media-related legal developments, please subscribe to our <a href="mailto:sociallyaware@mofo.com?subject=Please%20Sign%20Me%20Up%20for%20the%20Socially%20Aware%20Newsletter">free newsletter</a>.

Website Terms of Use: Out With the Old

In this final portion of my video on website terms of use, I offer practical tips on best practices for updating and modifying online agreements. For more infor

Website Terms of Use: Out With the Old

Many of my clients ask how they can best ensure that their websites’ terms of use are enforceable. Is it really necessary to require the website’s users to check a box or click a button manifesting affirmative assent? In this portion of my video on website terms of use, I explain what the courts have had to say about that.<iframe loading="lazy" align="center" src="https://www.youtube-nocookie.com/embed/jLFShF_pfjc" width="770" height="450" frameborder="0" scrolling="no" style="width: 770%; height: 450;" title="iframe"></iframe>For more information on this subject, see my earlier video post on <a href="https://www.sociallyawareblog.com/2016/04/25/website-terms-of-use-are-they-really-necessary/">Website Terms of Use: Are They Really Necessary?</a>To stay abreast of social media-related legal developments, please subscribe to our <a href="mailto:sociallyaware@mofo.com?subject=Please%20Sign%20Me%20Up%20for%20the%20Socially%20Aware%20Newsletter">free newsletter</a>.

Website Terms of Use: Check That Box!

Many of my clients ask how they can best ensure that their websites’ terms of use are enforceable. Is it really necessary to require the website’s users to chec

Website Terms of Use: Check That Box!

As a social media lawyer, I work closely with website operators and other clients to help reduce the risk of liability that can arise from doing business online. One of the key ways to minimize online legal risks is to use a carefully drafted online Terms of Use agreement. In my new video below, I discuss how website operators use terms of use to mitigate risk and liability, and explain the difference between “clickwrap” and “browsewrap” terms of use.<iframe loading="lazy" align="center" src="https://www.youtube-nocookie.com/embed/TZlGL3BzA60" width="770" height="450" frameborder="0" scrolling="no" style="width: 770%; height: 450;" title="iframe"></iframe>To stay abreast of social media-related legal developments, please subscribe to our <a href="mailto:sociallyaware@mofo.com?subject=Please%20Sign%20Me%20Up%20for%20the%20Socially%20Aware%20Newsletter">free newsletter</a>.

Website Terms of Use: Are They Really Necessary?

As a social media lawyer, I work closely with website operators and other clients to help reduce the risk of liability that can arise from doing business online

Website Terms of Use: Are They Really Necessary?

Today’s companies compete not only for dollars but also for likes, followers, views, tweets, comments and shares. “Social currency,” as <a href="http://vivaldipartners.com/vpsocialcurrency/about" target="_blank" rel="noopener">some researchers call it</a>, is becoming increasingly important and companies are <a href="http://www.bizjournals.com/triangle/news/2015/02/18/duke-fuqua-business-cmo-survey-social-media-budget.html" target="_blank" rel="noopener">investing heavily</a> in building their social media fan bases. In some cases, this commitment of time, money and resources has resulted in staggering success. Coca-Cola, for example, has <a href="https://www.facebook.com/cocacola" target="_blank" rel="noopener">amassed over 96 million likes</a> on its Facebook page and LEGO’s YouTube videos have been <a href="https://www.youtube.com/user/LEGO/about" target="_blank" rel="noopener">played over 2 billion times</a>.With such impressive statistics, there is no question that a company’s social media presence and the associated pages and profiles can be highly valuable business assets, providing an important means for disseminating content and connecting with customers. But how much control does a company really have over these social media assets? What recourse would be available if a social media platform decided to delete a company’s page or migrate its fans to another page?The answer may be not very much. Over the past few years, courts have repeatedly found in favor of social media platforms in a number of cases challenging the platforms’ ability to delete or suspend accounts and to remove or relocate user content.Legal Show-Downs on Social Media Take-DownsIn a recent California case, <a href="http://www.bloomberglaw.com/public/desktop/document/Lewis_v_YouTube_LLC_No_H041127_2015_BL_428281_Cal_App_6th_Dist_De?1456536437" target="_blank" rel="noopener">Lewis v. YouTube, LLC</a>, the plaintiff Jan Lewis’s account was removed by YouTube due to allegations that she artificially inflated view counts in violation of YouTube’s Terms of Service. YouTube eventually restored Lewis’s account and videos but not the view counts or comments that her videos had generated prior to the account’s suspension.Lewis sued YouTube for breach of contract, alleging that YouTube had deprived her of her reasonable expectations under the Terms of Service that her channel would be maintained and would continue to reflect the same number of views and comments. She sought damages as well as specific performance to compel YouTube to restore her account to its original condition.The court first held that Lewis could not show damages due to the fact that the YouTube Terms of Service contained a limitation of liability provision that disclaimed liability for any omissions relating to content. The court also held that Lewis was not entitled to specific performance because there was nothing in the Terms of Service that required YouTube to maintain particular content or to display view counts or comments. Accordingly, the court affirmed dismissal of Lewis’s complaint.In a similar case, <a href="https://docs.justia.com/cases/federal/district-courts/california/candce/5:2015cv03221/289340/27" target="_blank" rel="noopener">Darnaa LLC v. Google, Inc.</a>, Darnaa, a singer, posted a music video on YouTube. Again, due to allegations of view count inflation, YouTube removed and relocated the video to a different URL, disclosing on the original page that the video had been removed for violating its Terms of Service. Darnaa sued for breach of the covenant of good faith and fair dealing, interference with prospective economic advantage and defamation. In an email submitted with the complaint, Darnaa’s agent explained that she had launched several large campaigns (each costing $250,000 to $300,000) to promote the video and that the original link was already embedded in thousands of websites and blogs. Darnaa sought damages as well as an injunction to prevent YouTube from removing the video or changing its URL.The court dismissed all of Darnaa’s claims because YouTube’s Terms of Service require lawsuits to be filed within one year and Darnaa had filed her case too late. In its discussion, however, the court made several interesting points. In considering whether YouTube’s Terms of Service were unconscionable, the court held that, although the terms are by nature a “contract of adhesion,” the level of procedural unconscionability was slight, since the plaintiff could have publicized her videos on a different website. Further, in ruling that the terms were not substantively unconscionable, the court pointed out that “[b]ecause YouTube offers its hosting services free of charge, it is reasonable for YouTube to retain broad discretion over [its] services.”Although the court ultimately dismissed Darnaa’s claims based on the failure to timely file the suit, the decision was not a complete victory for YouTube. The court granted leave to amend to give Darnaa the opportunity to plead facts showing that she was entitled to equitable tolling of the contractual limitations period. Therefore, the court went on to consider whether Darnaa’s allegations were sufficient to state a claim. Among other things, the court held that YouTube’s Terms of Service were ambiguous regarding the platform’s rights to remove and relocate user videos in its sole discretion. Thus, the court further held that if Darnaa were able to amend the complaint to avoid the consequences of the failure to timely file, then the complaint would be sufficient to state a claim for breach of the contractual covenant of good faith and fair dealing.By contrast, the court found no such ambiguity in <a href="https://casetext.com/case/song-fi-inc-v-google-inc" target="_blank" rel="noopener">Song Fi v. Google Inc.</a>, a case with facts similar to those in Darnaa. In Song Fi, the plaintiff asserted claims for, among other things, breach of contract and breach of the implied covenant of good faith and fair dealing. YouTube raised a defense under the <a href="https://www.law.cornell.edu/uscode/text/47/230" target="_blank" rel="noopener">Communications Decency Act (CDA) Section 230(c)(2)(A)</a> which states that no provider of an interactive computer service is liable for removing content that it considers to be obscene, violent, harassing or “otherwise objectionable.”The Song Fi court, interpreting this provision narrowly, found that although videos with inflated view counts could be a problem for YouTube, they are not “otherwise objectionable” within the meaning of Section 230(c)(2)(A), and thus YouTube did not have immunity under that provision. Specifically, the court concluded that, in light of the CDA’s history and purpose, the phrase “otherwise objectionable” relates to “potentially offensive material, not simply any materials undesirable to a content provider or user.” Further, the requirement that the service provider subjectively finds the blocked or screened material objectionable “does not mean anything or everything YouTube finds subjectively objectionable is within the scope of Section 230(c).” Therefore, the court held that videos with inflated view counts fell outside the statutory safe harbor granted by Section 230(c)(2).Despite finding Section 230(c)(2) inapplicable, the court ultimately dismissed all of Song Fi’s claims. Notably, the court dismissed the contract-based claims with prejudice, holding that, although YouTube’s Terms of Service were “inartfully drafted,” they “unambiguously” reserved to the right for YouTube to remove content in its sole discretion and to discontinue any aspect of its service without liability. Therefore, the court held, the Terms of Service “unambiguously foreclose[d]” Song Fi’s claims for breach of contract and breach of the implied covenant of good faith and fair dealing.Facebook had more luck than did Google in asserting a CDA Section 230 defense in <a href="http://digitalcommons.law.scu.edu/cgi/viewcontent.cgi?article=2089&context=historical" target="_blank" rel="noopener">Sikhs For Justice “SFJ”, Inc. v. Facebook, Inc.</a>, a case brought by a human rights group advocating for Sikh independence in the Indian state of Punjab. Sikhs for Justice (SFJ) alleged that Facebook had blocked its page in India at the behest of the Indian government. SFJ sued in the Northern District of California, asserting several causes of action including race discrimination, and sought damages and injunctive relief.The Sikhs for Justice court ruled in favor of Facebook, citing CDA Section 230(c)(1), which states that “no provider of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”  Based on this statutory language, Section 230(c)(1) has been interpreted to provide a broad immunity for website operators against liability arising from user generated content. In dismissing the suit, the Sikhs for Justice court explained that the content at issue was provided by SFJ, not by Facebook, and that Facebook’s refusal to publish the SFJ page in India was “clearly publisher conduct” that is immunized by Section 230(c)(1).Notably, the court did not mention the Section 230(c)(2) safe harbor for blocking user content, which YouTube had asserted in SongFi as discussed above. <a href="http://blog.ericgoldman.org/archives/2015/11/facebook-can-legally-block-pages-without-any-explanation-sikhs-for-justice-v-facebook-forbes-cross-post.htm" target="_blank" rel="noopener">According to some commentators, </a> the Sikhs for Justice court’s failure to discuss Section 230(c)(2) “highlights its weakness as a safe harbor.”In another case against Facebook, <a href="http://blog.ericgoldman.org/archives/2010/11/facebook_not_li_2.htm" target="_blank" rel="noopener">Young v. Facebook, Inc.</a>, the plaintiff, Karen Beth Young, found herself suddenly banned from Facebook after sending friend requests to strangers. She sued for breach of the implied covenant of good faith and fair dealing as well as several other claims. In contrast to some of the cases discussed above, the Young court found that “it is at least conceivable that arbitrary or bad faith termination of user accounts … with no explanation at all could implicate the implied covenant of good faith and fair dealing,” particularly since Facebook had provided in its Statement of Rights and Responsibilities that users’ accounts should not be terminated for reasons other than those described in the Statement. Nonetheless, the court dismissed Young’s suit because her complaint did not sufficiently allege that the account termination was undertaken in bad faith or violated Facebook’s contractual obligations.The cases above illustrate how difficult it is for social media users to object to deletion or suspension of accounts or to removal or relocation of content based on a platform’s contractual obligations under the applicable terms of service. Users have met with similar obstacles in asserting a property right in social media content.For example, <a href="https://www.docketalarm.com/cases/Florida_Southern_District_Court/0--13-cv-61582/Mattocks_v._Black_Entertainment_Television_LLC/101/" target="_blank" rel="noopener">Mattocks v. Black Entertainment Television LLC</a> (which we have <a href="http://www.sociallyawareblog.com/2014/11/04/whats-in-a-like/" target="_blank" rel="noopener">discussed previously</a>) involved a dispute between BET and Stacey Mattocks, whom BET had hired to help manage the unofficial Facebook fan page for one of its shows. When Mattocks restricted BET’s access to the fan page, BET asked Facebook to “migrate” the fans to another official page that BET had created and Facebook granted the request. Mattocks sued BET for conversion of her business interest in the Facebook fan page. The court, holding that Mattocks failed to establish that she owned a property interest in the page’s likes, granted BET’s motion for summary judgment. “If anyone can be deemed to own the ‘likes’ on a Facebook page,” the court stated, “it is the individual users responsible for them.” While the Mattocks case did not directly target the social media platform itself, it does demonstrate how difficult it can be for a plaintiff to challenge social media platforms’ decisions to remove or relocate content based on purported ownership of that content.Safeguarding Your Social Media CurrencyUltimately, the cases discussed above show that social media platforms have significant control over what is (or isn’t) published on their websites, regardless of the amount of time and effort that users have spent building up their individual pages and profiles. With all of this in mind, what can individuals and companies do to protect their social media currency? How can you help ensure that your hard-earned fans, likes, comments and views do not suddenly disappear?A good tip is to read the applicable terms of service carefully to understand the platform’s rules and the reasons for which a platform may delete or suspend accounts or remove or relocate content. Make sure to comply with the platform’s rules, including those regarding contests, collection and use of user information and content guidelines. Users should err on the side of caution, and avoid posting anything that could be deemed offensive or obscene or that might infringe upon other parties’ intellectual property rights. And it goes without saying that users should avoid fraudulent practices, such as artificially driving up view counts or posting fake comments.Most of all, businesses and individuals should keep in mind that social media platforms have broad discretion when it comes to decisions about what to publish and where. As such, consider spreading your company’s social media marketing efforts across a number of different platforms to minimize the impact of sudden content removals or relocations on any one platform. At the end of the day, every social media account—even those with millions of likes or views—is controlled not by the user that created the account but by the platform that hosts it.

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How to Protect Your Company’s Social Media Currency

How to Protect Your Company’s Social Media Currency

Today’s companies compete not only for dollars but also for likes, followers, views, tweets, comments and shares. “Social currency,” as some researchers call it

Courts have generally categorized online agreements into two types: “clickwrap” agreements and “browsewrap” agreements.Clickwrap agreements—which require a user to check a box or click an icon to signify agreement with the terms—are <a href="http://www.sociallyawareblog.com/2015/10/06/three-steps-to-help-ensure-the-enforceability-of-your-websites-terms-of-use/" target="_blank" rel="noopener">usually enforceable </a>under U.S. law, even where the terms appear in a separate hyperlinked webpage but where language accompanying the box or icon indicates that checking the box or clicking the icon indicates assent to such terms.On the other hand, browsewrap agreements—where the terms are passively presented to users in a hyperlink somewhere on a webpage, often at the very bottom of the page in small font—are often unenforceable because it often cannot be proved the user knew the terms existed or even was aware of the hyperlink.A New Jersey court recently faced a type of online agreement that did not fit nicely into either category. Where a contract, sent electronically but signed in hard copy, contains a hyperlink to a separate terms and conditions page, are those separate terms incorporated into the agreement? In <a href="http://cases.justia.com/federal/district-courts/new-jersey/njdce/1:2014cv06115/309882/8/0.pdf?ts=1437567894" target="_blank" rel="noopener">Holdbrook Pediatric Dental, LLC, v. Pro Computer Service, LLC</a>, the New Jersey court said no. A requirement to arbitrate disputes buried in the online terms and conditions page was not incorporated into a contract where the contract merely stated “Download Terms and Conditions” near the signature line.Again, the signed contract did not itself contain an arbitration clause. Rather, on the last page of the contract, directly above the signature line, the following appeared in small text: “&lt;a href=“http://www.helpmepcs.com/site_media/terms.conditions.pdf”&gt;Download Terms and Conditions &lt;/a&gt;”, which, if viewed in HTML, would instead appear as “Download Terms and Conditions”. Holdbrook’s office manager, Nancy McStay, received the contract in electronic form where the hyperlink was clickable, but then printed and signed a hard copy. PCS argued that because McStay signed the contract, one could assume that she read and agreed to the entire agreement, including the hyperlinked terms and conditions. Holdbrook disagreed. They argued that the contract did not incorporate the terms and conditions for several reasons.First, the online terms and conditions contained a separate signature block, suggesting that it required additional acceptance, and Holdbrook never signed onto those terms.Second, Holdbrook claimed that McStay had no idea that additional terms were being incorporated, given the garbled coding of the hyperlink in the printed copy and the fact that the contract contained no clause specifically pointing to the separate terms and conditions.Applying New Jersey contract law, the court held that “a separate document may be incorporated through a hyperlink, but the traditional standard nonetheless applies: the party to be bound must have had reasonable notice of and manifested assent to the additional terms.”After describing clickwrap and browsewrap agreements, the New Jersey court examined two key cases in this area, <a href="https://scholar.google.com/scholar_case?case=12279872483928107605&hl=en&as_sdt=6&as_vis=1&oi=scholarr" target="_blank" rel="noopener">Fteja v. Facebook, Inc.</a> (which we’ve <a href="http://www.sociallyawareblog.com/2014/10/06/implementing-and-enforcing-online-terms-of-use/" target="_blank" rel="noopener">discussed</a> previously) and <a href="https://scholar.google.com/scholar_case?case=8017790823527790710&hl=en&as_sdt=6&as_vis=1&oi=scholarr" target="_blank" rel="noopener">Swift v. Zynga Game Network, Inc.</a> In Fteja, a New York court found that a user had sufficient notice of Facebook’s terms of service even though the terms were only visible to the user during sign-up via hyperlink (like a browsewrap). A notice above the “Sign Up” button stated that “By clicking Sign Up, you are indicating that you have read and agree to the Terms of Service” (like a clickwrap).Similarly, in Swift, a California court found that a hyperlink to the terms of services that appeared right below an “Accept” button—along with a statement that clicking “Accept” meant the user accepted the terms—was sufficient to prove the user agreed to those terms.The New Jersey court explained that the fact that this case involved “mixed media” did not matter. The contract was “much like the ‘clickwrap’ agreements in Fjeta [sic] and Swift, where the ‘Terms and Conditions’ were contained in a hyperlink immediately next to a mechanism for accepting the agreement. In place of an ‘I Accept’ icon to be clicked, a Holdbrook representative was required to sign the agreement on paper.”However, the New Jersey court found one crucial component to be missing. In Fteja, Swift and other clickwrap cases, a statement draws “the user’s attention to the hyperlink” that is “sufficient to provide reasonable notice that assent to the contract included assent to the additional terms.” The New Jersey court noted that there was no such statement in this case, nor instructions to sign the contract only if Holdbrook also consented to the additional terms. The hyperlink, standing alone, was insufficient to show that Holdbrook had “reasonable knowledge” that the terms and conditions were part of the contract.“Further complicating matters” was the fact that the contract was sent in electronic form but could not be accepted in electronic form. It had to be printed and signed. This made it even less clear that the hyperlink contained additional terms.The New Jersey court noted that discovery might show that Holdbrook actually reviewed the contract electronically, noticed the hyperlink and agreed to its terms. In fact, after conducting some limited discovery, PCS has filed a new motion to compel arbitration, which, as of the date of this post, is currently pending before the court.Like the courts in Fteja, Swift and other clickwrap cases, the New Jersey court took careful note of the language that surrounded the hyperlink to the terms and conditions to determine whether Holdbrook reasonably understood those additional terms were included in the contract. It seems that, for the court, PCS’s “Download Terms and Conditions” was just a little too similar to a “browsewrap” agreement to be found enforceable without further inquiry into whether Holdbrook in fact was aware of and agreed to the terms.PCS could have likely avoided the issue entirely by simply including the following language in the signed agreement: “By signing the agreement, you also accept the Terms and Conditions on the PCS website.”When it comes to clickwrap versus browsewrap agreements, a few words can go a long way.

Clickwrap, Browsewrap and Mixed Media Contracts: A Few Words Can Go a Long Way