This is the first in a series of blogs with tips for minimizing legal risks when using social media to promote your business or organization.  This blog looks at some general guidelines for promotional activity in the social media context.

Promotion of your business through social media can have significant advantages. Social media platforms provide tremendous built-in audience potential.  Facebook has some 1 billion monthly active users, and Twitter boasts more than 270 million.  Social media also helps target advertisements much more precisely and provides opportunities for obtaining mass direct endorsements (e.g., with “Likes”), and indirect endorsements by using content obtained from individual social media activity. Continue Reading Social Media Promotion: Dos And Don’ts

In a recent March 25, 2013 decision from the U.S. District Court for the District of New Jersey, Magistrate Judge Steven C. Mannion ruled that the jury could draw an adverse inference against the plaintiff for his failure to preserve his Facebook account and the intentional destruction of evidence. 

The case, Gatto v. United Air Lines, Inc., et al., Case No. 10-cv-1090-ES-SCM (D.N.J. Mar. 25, 2013), involved a personal injury claim by the plaintiff, Frank Gatto, who was allegedly injured while unloading baggage from an aircraft owned and operated by United Airlines.  According to Gatto, the injuries that he sustained “rendered him permanently disabled” and limited his physical and social activities to the extent that he was no longer able to work.  The defendants sought discovery from Gatto, including documents relating to his social media accounts.  The defendants sought these accounts, and the Facebook account in particular, because they believed the accounts contained comments and photographs that contradicted Gatto’s allegations, including his physical and social activities, trips and vacations, and evidence of online business activities. 

Gatto provided defendants with executed authorizations for the release of information from several social networking websites, but not for his Facebook account.  The Court ordered Gatto to execute the necessary authorization, and he changed his Facebook account password and provided it to defendants’ counsel so they could access his account.  After attempts were made to access Gatto’s Facebook account in early December 2011, Gatto was notified of an attempted log-in from an unfamiliar IP address, and agreed to instead download his entire Facebook account and provide it to the defendants.  However, Gatto discovered that his Facebook account had been deactivated on December 16, 2011, and that his entire Facebook account data was permanently lost as a result of his failure to timely cure the deactivation.  After defendants requested that Gatto attempt to reactivate his account, Gatto discovered that Facebook had “automatically deleted” the account fourteen days after its deactivation.

The Court analyzed whether Gatto’s failure to preserve his Facebook account constituted spoliation of evidence.  Spoliation, which consists of the failure to preserve property for another’s use as evidence in pending litigation, can carry sanctions that include dismissal of a claim, adverse inferences, and attorneys’ fees, amongst others.  Of particular concern in Gatto was the adverse inference sanction, which allows a jury to infer that a party’s destruction of a document was done out of fear that its contents would harm him in the litigation.  Four factors must be present before an adverse inference instruction can be awarded: 1) that the evidence was in the party’s control; 2) that there was an actual suppression of the evidence; 3) that the evidence in question was relevant to the claims at issue; and 4) that it was reasonably foreseeable that the evidence would be subject to discovery.

The Court, without difficulty, found that the first, third and fourth factors were satisfied, as Gatto’s Facebook account was clearly within his control, that the pictures and posts on his Facebook page were relevant to the litigation because they would support or dispute any potential damages awarded in Gatto’s favor, and that Gatto was on notice that the defendants sought access to his Facebook account, thus imposing on Gatto a duty to preserve the account.  The only issue, then, was whether Gatto actually suppressed his Facebook account through allowing it to become deactivated and then failing to reactivate it before its deletion.  While it was disputed whether Gatto “actually suppressed” the account by allowing it to become permanently deleted, it was evident that he intentionally deactivated it and purposely failed to reactivate it within the requisite time period.  The defendants were therefore prejudiced by the lost access to evidence speaking to Gatto’s alleged damages.  As a result, the Court determined that all four factors for the finding of a spoliation inference were present, and that the jury at trial would be allowed to make an adverse inference against Gatto for failure to preserve his Facebook account.

While Gatto is a fact-specific ruling, it is clear that litigants must take caution to preserve their social media accounts, including Facebook.  Failure to maintain those accounts, where relevant, discoverable information may reside, or even worse to destroy or delete those accounts, may result in a variety of sanctions against that party, including an adverse inference at trial.

In two closely-watched cases with potentially broad implications for the way businesses and individuals use the Internet, Google, Inc. suffered setbacks in the continuing battle over responsibility for intellectual property infringement.  Both cases – one copyright and the other trademark – cast clouds over Google’s practices concerning its users’ employment of third parties’ intellectual property.

In the copyright case, Viacom International, Inc. and others sued Google and its YouTube subsidiaries for infringement based on protected content uploaded by its users.  Since its founding in 2005, YouTube’s primary defense against such claims has been the “safe harbor” provisions of the Digital Millennium Copyright Act of 1998 (“DMCA”).  In Viacom International, Inc. v. YouTube, Inc., 676 F.3d 19 (2d Cir. 2012), however, the Second Circuit Court of Appeals reversed a grant of summary judgment in favor of Google/YouTube, dealing a blow to Google/YouTube’s broad interpretation of the safe harbor defense. 

The court held a jury could conclude that Google/YouTube lost safe harbor protection because it had “knowledge of specific and identifiable infringements.”  The court cited survey results indicating 60% to 80% of the material on YouTube contained copyrighted material and communications among Google/YouTube staff indicating some awareness that its service was being used for infringing activity.  The court also held that liability based on a theory of “willful blindness” or “conscious avoidance” was possible, even though safe harbor protection is generally not contingent on affirmative monitoring by a service provider.  Finally, the court suggested that Google/YouTube might have forfeited safe harbor protection because it had the “right and ability to control the infringing activity and received a financial benefit directly attributable to that activity” or because YouTube was engaged the “manual selection of copyrighted material for licensing to a third party.” 

In the trademark case, Google suffered another potential strike against its business model, this time concerning the sale of trademarks as keywords.  In Rosetta Stone Ltd. v. Google, Incorporated, 676 F.3d 144 (4th Cir. 2012), Google again had a favorable summary judgment ruling reversed, and the case was remanded for further proceedings as to whether Google infringed Rosetta Stone’s trademark by “selling” the mark as a “keyword” to third parties, resulting in non-Rosetta Stone “sponsored ads” appearing in a search for “Rosetta Stone.”  Rosetta Stone contended it had been flooded with customer complaints about counterfeit software since 2009, when Google relaxed its policy on the sale of company trademarks as keywords to third parties.

Just as the evidence in Viacom indicated that Google had some awareness of copyright infringement, the court of appeals found sufficient evidence to permit a jury to conclude that Google knew its sale of marks as keywords to third parties would cause confusion and that actual confusion had occurred.  The court was not persuaded by Google’s protestations that its policies prohibited the purchases of keywords to advertise non-genuine (i.e., counterfeit) goods. 

The Second Circuit’s decision in Viacom and the Fourth Circuit’s decision in Rosetta Stone have revived the debate over the liability of Internet service providers like Google that provide platforms for intellectual property infringement.  These rulings may have also rattled any sense of blanket security that these service providers enjoyed following the lower courts’ summary judgment rulings.  Instead, both decisions suggest a movement towards fact-sensitive analyses that will help further define the scope and applicability of intellectual property laws to  ever-changing technologies. 

In notable contrast to these recent defeats for Google in the U.S., a French court ruled on May 29, 2012 that Google did not infringe a broadcaster’s copyrights by permitting several television shows to be available on YouTube.  Reviewed in tandem with the U.S. decisions, it is clear that the ongoing struggle at the intersection of intellectual property law and the Internet will continue to evolve on a both a domestic and world-wide basis.

The development of digital technology has revolutionized the way artists create and distribute their work.  Although simplifying and streamlining the creative process, the digital age has created a myriad of legal issues that the courts must now address on a daily basis.  One such issue involves the protection of copyright information embedded in or around a digital work.  The Third Circuit Court of Appeals recently addressed this issue, finding the removal of such information a violation of Section 1202 of the Digital Millennium Copyright Act of 1998 (“DMCA”). 

Congress passed the DMCA in 1998, in part, to expand the scope of copyright protection for works created, stored and distributed via non-traditional electronic means.  Section 1202 of the DMCA prevents an individual from intentionally removing identifying copyright information, such as the name of the author of a work in digital form, without permission from the copyright owner.  More specifically, under Section 1202(b), it is unlawful for any person to remove or alter “copyright management information” (“CMI”) without permission of the copyright owner or to distribute a copyrighted work with knowledge that the CMI has been removed or altered.  Section 1202(c) defines CMI as information conveyed in connection with copies or displays of a copyrighted work such as the title of the work or the name of the artist.

In Murphy v. Millennium Radio Group LLC, 2011 WL 2315128 (3d Cir. June 14, 2011), the Third Circuit rejected a rather creative interpretation of Section 1202 that would have limited its application to information embedded in a work as part of an “automated copyright protection or management system.”  Instead, the Court found the statute to be “extremely broad, with no restriction on the context in which such information must be used.”

New Jersey Monthly Magazine (“NJM”) hired Peter Murphy, an independent photographer, to photograph two local radio hosts for its annual “Best of New Jersey” issue.  The published photograph depicted the radio hosts posing nude behind a sign displaying the station’s call numbers.  A station employee scanned the image and posted it on the station’s website.  In doing so, the employee removed the “gutter credit” identifying Murphy as the author of the photograph.  Later, the radio station held a contest in which visitors to the website could submit altered versions of the photograph for display on the website.  After the station ignored Murphy’s requests to remove the photograph, Murphy sued the radio station for violating Section 1202. 

The District Court of New Jersey rejected Murphy’s position that the gutter credit was protectable CMI.  The court relied on its holding in IQ Group, Ltd. v. Wiesner Publishing, LLC, 409 F. Supp. 2d 587 (D.N.J. 2006), where it found that “[t]o come within § 1202, the information removed must function as a component of an automated copyright protection or management system.”  According to this interpretation, the information embedded in Murphy’s photograph was “simply a photography credit in the gutter or a print magazine” rather than a “component of an automated copyright protection or management system.”  The Court reasoned that the DMCA “should not be construed to cover copyright management performed by people, . . . it should be construed to protect copyright management performed by the technological measures of automated systems.”  To hold otherwise, the court concluded, would convert “virtually all garden-variety copyright infringement claims . . . to DMCA claims, supplanting the original Copyright Act.” 

The Third Circuit reversed, finding “nothing in § 1202 . . . [that] restricts the meaning of CMI in § 1202 to information contained in ‘automated copyright protection or management systems.’”  Instead, the court interpreted the provision as “extremely broad, with no restriction on the context in which such information must be used in order to qualify as CMI.”  The court was unwilling to “rewrite § 1202 to insert a term – that is, ‘automated copyright protection or management system’ – which appears nowhere in the text of the DMCA and which lacks a clear definition.”  Although the court recognized some ambiguity in the legislative history of the DMCA, it was unable to find the “extraordinary showing of contrary intentions” that would compel the court to “disregard the plain language of the statute.” 

More generally, the court concluded that “a cause of action under § 1202 of the DMCA potentially lies whenever the types of information listed in [Section 1202] and ‘conveyed in connection with copies . . . of a work . . . including in digital form’ is falsified or removed, regardless of the form in which that information is conveyed.”  Applying this interpretation, the court held that “the mere fact that Murphy’s name appeared in a printed gutter credit near the Image rather than as data in an ‘automated copyright protection or management system’ does not prevent it from qualifying as CMI or remove it from the protection of § 1202.” 

Murphy is the first reported appellate decision considering whether CMI should be restricted to data embedded in an “automated copyright protection or management system.”  As digital technology continues to develop, so will the need to revisit the various statutory protections afforded to authors who create and disseminate their work through digital (and other electronic) mediums.  It appears, however, that so long as the present statutory regime remains in effect, the Third Circuit will interpret the language of DMCA and other intellectual property statutes in a manner that will provide maximum protection to artists whose names and other identifying information have been removed from their digital works.

Can a company use its competitor’s trademark as a “keyword” in advertising it purchases on popular search engines like “Google” and “Bing”? The answer is evolving with consumers’ – and the courts’ – sophistication in Internet use and practices and, according to at least one recent appellate decision, depends on the context in which the advertising is portrayed.

So held the Ninth Circuit Court of Appeals earlier this year in Network Automation, Inc. v. Advanced Systems Concepts, Inc. 638 F.3d 1137 (9th Cir. 2011). The case involved two competitors in the job scheduling and management software business. One competitor, Network Automation, purchased the Google AdWords service, in which advertisers pay Google to have their advertisements appear as “Sponsored Links” or “Sponsored Advertisements” in a column next to the search results when Internet users search for particular “keywords.” Network Automation chose its competitor’s trademark as one of its keywords. The competitor, Advanced Systems Concepts, Inc., objected, and litigation followed.

Arguably breaking from its own precedent, the Ninth Circuit reversed the entry of a preliminary injunction that had required Network Automation to stop using Advanced System’s mark as a keyword and permitted Network Automation to continue that use in its “Google” advertising. The court did so even though the advertisement did not clearly identify Network Automation as source of the advertisement, which had doomed similar advertisements in some earlier cases. The Court stressed how Google’s partitioned search results pages that clearly delineate the sponsored listings from the actual search engine results reduced the possibility of confusion.

Perhaps equally important to the Court’s decision was its own evolving perception of consumers’ growing sophistication in Internet use. A 1999 Ninth Circuit case had concluded that Internet users exercise a “low degree of care” in shopping of the Internet. By 2011, the Ninth Circuit concluded, consumers have become accustomed to seeing “Sponsored Links” appear when they use search engines and understand those links may not be affiliated with the company for which they were searching. The Ninth Circuit’s Network Automation case reflects the courts’ ongoing efforts to make the law reflect the ever-changing realities “on the ground” – or rather, in cyberspace. Use of another’s trademark in advertising will continue to be subject to scrutiny but through an ever more sophisticated lens.