Internet Defamation How To Protect Your Company's Brand in the Digital World

Transcription

1 Internet Defamation How To Protect Your Company's Brand in the Digital World Presented By: Paul B. Kerlin Jackie Ford Vorys, Sater, Seymour and Pease LLP November 11, 2014 Overview What s In A Brand: Why In-House Counsel should care about brand reputation Reputation Attacks: False and negative reviews, accusations, and other trending troubles, and how to combat them Going On Offense: Bringing defamation and other claims against online attackers 1

2 What s In A Brand? Brands are basically a promise. They tell consumers what quality to expect from a product and show off its personality. - Fortune,

3 One day in the Twitterverse, as you check your Company s twitter feed... William THE The best and safest products to improve your life. Columbus, OH 14, ,321 3,445,234 The Company s Marketeers New product out tomorrow that you can t live without! Best ever! #tbestproductever Queen Elizabeth Followed by TheTheStocksand others Follow James Followed by MoreStocks and others Follow Angry Consumer Got a sneak peak at their new best product. Product sucks and didn t work at all! Got hurt too. Calling my lawyer!!!!!! #tpieceofjunk Expand Employee Insider Ha ha! What did you expect when The Company cuts corners on safety. Cheap parts. But FYI best uses cool new nano technology. Disgruntled Retweeted Employee by William Shakespeare Don t forget they cut Quality Control and our pay. Maybe if they paid us more I d be more inclined to care about picking up the slack in QC. #bestproductever CompanyMan What would you two know!?!?!? #idiots 3

4 The tweets go viral... You investigate and discover... 4

5 Issue 1: Employee Insider The Employee Insider who tweeted about cutting corners on safety is the daughter of The Company s Senior Vice President of Research & Design. She works in the R&D department, has a Ph.D in engineering from MIT, holds six patents, and is a top-performer at The Company. She was on the team that designed the best product ever the Angry Consumer is complaining about. The referenced nano technology has never been disclosed outside the Company. Issue 2: Disgruntled Employee The Disgruntled Employee who tweeted about his pay works in Quality Control (which falls under R&D), is 64, and has recently taken a medical leave for multiple chemical sensitivity. Over the 10 years he s worked at The Company, he s known to be a complainer and a no-better-than-average performer. 5

6 Issue 3: Company Man The Company Man is an unpaid, 24-year old intern working in The Company s marketing department, specializing in social media. Yes, things can get worse... As The Company s twitter feed shows, tweets about the best product ever are still trending. 6

7 William THE The best and safest products to improve your life. Columbus, OH 157, ,325 3,966,234 Theoldcfo Board meeting. Good numbers=happy Board. Queen Elizabeth Followed by TheTheStocksand others Follow James Followed by MoreStocks and others Follow #bestproductever Angry Consumer willyshakes Selling a crappy product makes your board happy?!?!?! Hope your stock tanks! #tpieceofjunk Expand TheoldCFO WTF!? Our products are awesome. Safest ever. Better than the unsafe, overpriced stuff at OtherCompany! Screw you. Go #SuperProduct R by William Shakespeare I agree. This is our best product yet. Check out my full insider s only review on my FaceBook page. You know it s unbiased because I m not paid for my work. Disgruntled Employee You should be paid for that work, CompanyMan! Getting cheated. #unpaid interns Issue Spotting CFO Insider Trading and the SEC Customer Relations Angry Customer Customer Relations Product Liability Employee Insider Internal Company Relations Whistle Blowing Breach of Confidentiality/ Trade Secrets 7

8 Issue Spotting Disgruntled Employee NLRA (concerted activity) Discrimination/FMLA Retaliation Company Man Unpaid Internships FTC and Unfair or Deceptive Advertising Using Personal Social Media for Work-Related Purposes What To Focus On In All This Mess? Online attacks can come from all directions Tools are available to help you address them 8

9 Defamation, Other Online Reputation Attacks Come from Many Sources Real customers (usually less harmful) Competitors Disgruntled employees Investors, business partners Extortionists Bloggers Activists Defamation, Other Online Reputation Attacks Come in Many Forms False Reviews (negative, positive) Scam Report/Complaint Websites (e.g. Ripoff Report, Pissed Consumer) Blogs, Attack Websites (e.g. CompanySucks.com) Social Media websites (e.g. Twitter, Facebook) Wikipedia pages Message Boards, Online Forums 9

10 2013 Deloitte Survey Reputation is the #1 strategic risk for large businesses, according to > 300 senior top management and board members surveyed Largely due to rise of social media "The time it takes for damaging news to spread is quicker, it goes to a wider audience more easily, and the record of it is stored digitally for longer. -- Henry Ristuccia, Deloitte Global Leader, Governance, Risk and Compliance Strategies for Attorneys 10

11 Terms of Service Jurisdiction Solutions are Fact-Dependent Client s budget Search engine rankings Available legal claims Statute of Limitations Potential damage Removal Options Search engine strength Client s risk tolerance Attacker characteristics Choosing Right Approach Involves Balancing of Factors Harm Cost of Response Risk of Response Likelihood of Success 11

12 Evaluating Various Options 1. Reconcile, offer replacement/refund 2. Contact Attacker 3. Cease and Desist Letter 4. Removal: Convince poster, websites to remove 5. Court order/de-indexing from search 6. Lawsuit 7. Issue Subpoenas (anonymous/pseudonymous online posters) 8. ORM / SEO Tactics 1. Reconcile, Offer Replacement/Refund 12

13 Reconcile with Customer If the customer is unhappy with the service or product, offer to replace it This often results in them changing the review 2. Negotiating with Attacker 13

14 Negotiating Directly with Attacker Confidentiality Agreement Negotiate Settlement (May be necessary for very damaging attacks) 3. Cease and Desist Letter 14

15 Cease and Desist Letter Our recommendation is to make sure you have legal grounds for threats, or it could create a PR nightmare (Ron Gordon Watch Repair) Ask company how they would be perceived in the court of public opinion: Bully or Victim? Include draft complaint with C&D letter 4. Removal by Poster or Website 15

16 Removal is Often the Best Solution More efficient Cost-effective Damages often difficult to prove at trial Contacting Websites Contact website, ask for removal if post violates Terms of Service (likely will consider removal if adequate explanation) EXAMPLE: Yelp Yelp s Terms of Service: You may expose yourself to liability if, for example, Your Content contains material that is false, intentionally misleading, or defamatory Yelp s Content Guidelines: Don't publicize other people's private information and please don't post other people's full names unless you're referring to service providers who are commonly identified by their full names. 16

17 5. Court Order / De-indexing from Search Ripoff Report Court Order Approach Alternative removal technique Obtain C.O. against online poster that says statements are defamatory, present to search engines (fill out online form, etc.) for de-indexing links to the defamatory statements 17

18 6. Lawsuit Lawsuits Things to Consider Does reviewer have an ulterior motive? Did the client suffer damages or are damages presumed under the law? Act quickly many states have one year statutes of limitation You cannot sue the website, only the poster Are there easier methods to stop online attacks and remove the defamation? 18

19 Kinney v. Barnes Opinion from Texas Supreme Court Aug. 29, 2014 Requires authors of online posts to remove those posts from the internet, which is a new remedy Prior case law only permitted money damages But, rejected plaintiff s request for permanent injunction restricting same or similar online posts Justice Lehrmann prior restraints are heavily disfavored both under the U.S. and Texas Constitutions and could impermissibly risk[] chilling constitutionally protected speech Be Mindful of anti-slapp Statutes Many states have passed statutes to combat Strategic Lawsuits Against Public Participation (SLAPP) SLAPP lawsuits often filed in reaction to criticism, wishing to silence critics Under anti-slapp, judge may dismiss frivolous lawsuits filed against those exercising their First Amendment rights Cannot use cost, burden of defending against lawsuit to compel them to take something down; always ensure there is a legal basis for claims, have evidence prepared to survive an anti- SLAPP motion (i.e. be able to prove falsity/defamatory nature, plus damages) 19

20 7. Subpoenas Legal Subpoena Approach Before issuing a subpoena, attorney must check jurisdiction s case law to see if issue has been addressed and if there is a viable claim Many courts follow the standard from (or similar to) New Jersey s Dendrite Int l Inc v. Doe No. 3 plaintiffs must show: (1) An attempt to provide notice to the anonymous defendants that their identities are being sought, and explain how to present a defense; (2) Quote verbatim the allegedly actionable online speech; (3) Allege all elements of the cause of action; (4) Present evidence supporting the claim of violation; and (5) Prove to the court the right to identify the speaker outweighs the First Amendment right of anonymous free speech 20

21 Legal Subpoena Tips You want to pick jurisdiction where you can file, also easiest to subpoena Federal States (all states have different standards) CA: CA-licensed attorney must sign IL: Open new matter NJ: Follow rules of both states; need court approval in NJ first before subpoena to another Doe Subpoenas in 3 Steps 1. Subpoena 3 rd party website/host for personally identifying subscriber information 2. If only an IP Address is obtained, look up the Internet Service Provider (ISP) 3. Subpoena ISP for account holder information based on IP Address (specific time, date) 21

22 8. ORM and SEO ORM ORM Online Reputation Management to bury bad results on search engines Most ORM post-event do not work well if damaging site is well-optimized Cost of clean up can be very large, often in the range of $75K+ per keyword Many attacks impact multiple keywords and Google Suggests. 22

23 Use of Outside Consultants Client Law of the Instrument I suppose it is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail. Abraham Maslow (1966) 23

24 Combine Knowledge of Crisis Specialists, Cyber Investigative, Legal Experts The Problems and Solutions Will Be Rapidly Changing 24

25 Questions??? 25