Wednesday, June 6, 2012 Global Patent Litigation Trends and Differences: Navigating Patent Disputes Across the World

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1 Mark your calendar for the next webinar in our series: Wednesday, June 6, 2012 Global Patent Litigation Trends and Differences: Navigating Patent Disputes Across the World For more information or to register, please contact Terry Deleon at To view previous webinars visit us at:

2 2012 Intellectual Property Law Spring Webinar Series Emerging Issues in Social Media May 2, 2012 Moderator: Stephanie Vaccari Presenters: Pamela Church Lothar Determann Ute Krudewagen

3 Agenda 1. The Rise of Social Media Marketing What are the assets and how do you protect them? What are the liabilities and how can you avoid them? Endorsements, Testimonials and Consumer Protection 2. Data Privacy 3. Social Media in the Workplace

4 1 Social Media Marketing: What are the Assets?

5 Who Owns the Twitter Account? Is a Twitter account a business asset? Is a list of followers a trade secret?

6 And Who Owns The Followers? Former CNN host Rick Sanchez had more than 140,000 followers on Twitter, with the When Sanchez was fired in October 2010, a dispute arose over ownership of the Twitter account Ultimately resolved that the Twitter account belonged to Sanchez and not to his former employer, CNN, but account s name was changed so that it would no longer include CNN in the title

7 PhoneDog LLC v. Kravitz Noah Kravitz was a mobile phone reviewer for PhoneDog for over four years In 2007, Kravitz set up the Twitter and accumulated approximately 17,000 followers When Kravitz left the company in October 2010, PhoneDog asked for the account, but Kravitz refused and instead changed the handle PhoneDog sued in the Northern District of California, asserting claims for misappropriation of trade secrets and conversion, among other claims

8 PhoneDog LLC v. Kravitz (Cont d) Does the account belong to PhoneDog? Kravitz argues that PhoneDog was not involved in the development of the account, and never knew the password PhoneDog argues that all the efforts put into the account represent resources invested by PhoneDog, and are thus considered property of the company Can a follower list be considered a trade secret? Customer lists are traditionally considered trade secrets HOWEVER, the names of Twitter followers are openly available to the public on Twitter s website

9 PhoneDog LLC v. Kravitz (Cont d) How much is the account worth? PhoneDog: According to industry standards... [each of the 17,000 Twitter followers is] valued at $2.50. $42,500 for each month that Kravitz used the account Total damages claimed is $340,000 Kravitz: A list of Twitter followers are unlike traditional customer lists, because followers can subscribe or unsubscribe to the list There is no evidence that an account, with any number of followers, has any ongoing monetary value; the value comes from... efforts in posting tweets and [an] individual s interest in following... not from the account itself.

10 What do the Social Media Sites Have To Say on the Subject? Facebook says it is a violation of Facebook s Statement of Rights and Responsibilities for an employer to solicit a Facebook password from an employee

11 Managing the Use of Company Assets in Social Media-Key Questions What rights are you granting when putting content on a social media platform? Do you understand the business model of the platform and its users behavior? Is sharing part of the culture, is syndication part of the business model?

12 Some Cautionary Tales Greenpeace, in a campaign aimed at stopping deforestation as a result of farming palm oil, alleged that Nestlé was destroying the habitat of orangutans Greenpeace created an ad that showed an office worker biting an orangutan finger and parodied the KIT-KAT trademark

13 Nestlé's Response - YouTube Nestlé took down the video from YouTube based on the misuse of the KIT-KAT brand The video was quickly reposted on Vimeo and received record traffic as word about it spread Therefore, although Nestlé acted within its rights with regard to TM law and YouTube s policy, the video drew far more attention as a result of Nestlé s actions

14 Nestlé's Response - Facebook A Nestlé employee responded to comments using the KILLER logo on the Nestlé Facebook page stating that anything infringing the KIT-KAT trademark would be deleted

15 That Did Not Go Over Well

16 After an Onslaught of Negative PR for Nestlé Greenpeace Declared Victory

17 On the Other Hand Coca-Cola took a different approach to trademark infringement on Facebook

18 Seizing an Opportunity A Coca-Cola Facebook page was started by a fan named Dusty Sorg and his friend Michael Jedrzejewski when Sorg could not find a Coca-Cola page on Facebook The page soon had 3.3 million fans

19 Seizing an Opportunity Rather than shut down or take over the page, Coca-Cola executives took the opportunity to meet with the page creators to discuss the popularity of the page and how the company could assist in page operations to comply with Facebook's recent policy updates

20 The Moral of the Story Happy customers can be your best marketing tool in social media Coca-Cola now has over 30 million Facebook fans and counting

21 Direct and Indirect Disclosure of Trade Secrets and Confidential Information LinkedIn encourages employees to share their contacts This can result in the disclosure of connections between companies and individuals involved in a confidential transaction or project, from which the public can get hints of such transaction or project

22 Key Takeaways Social media marketing is different-it is conversational, less controlled. Identify potential risk scenarios and develop responses. Plan ahead! If you want ultimate control over your content, don t post it (and consider consequences before you file take-down notices). And think before you tweet! Know where you have rights, and where you don t. Understand the exposure of syndication if you want to be on the system. Consider the protection of your own IP (include in employee policies issues such as ownership of twitter accounts follower and friends lists and disclosure of usernames and passwords). Have effective policies and community guidelines on employee use of internal and external social media platforms. More on that later!

23 2 Social Media Sites: Some developments on ISP Immunity

24 VS. Is embedding an infringing video is, by itself, an act of copyright infringement? myvidster is a video bookmarking site: users save links to their favorite videos and share them with others FlavaWorks, a producer of pornographic movies, found that many of its videos were embedded on myvidster and sent DMCA takedown notices to myvidster

25 In this Corner, the MPAA (Motion Picture Association of America) Although there is nothing inherently insidious about embedded links, this technique is very commonly used to operate infringing internet video sites, the organization writes. Pirate sites can offer extensive libraries of popular copyrighted content without any hosting costs to store content, bandwidth costs to deliver the content, and of course licensing costs to legitimately acquire the content. myvidster users who posted links to infringing videos and images participated in the process by which those videos were streamed and shown to the public, which makes them direct infringers, contends the MPAA Embedding enables sites to monetize infringing content by surrounding it with ads

26 In this Corner, Google, Facebook, EFF Precedent set by Perfect 10 v. Amazon: only the server hosting the content commits direct infringement This court should make clear that, as the Copyright Act states, to perform a video publicly on the Internet means to transmit or otherwise communicate a performance... of the work... to the public, and the server transmitting the video not the server merely linking to that video is thus the one involved in its performance.

27 VS. 2008: Viacom and other video content owners brought suit against YouTube, alleging over 70,000 instances of copyright infringement on the site between 2005 and : SDNY granted summary judgment for YouTube, applying the safe harbor protections available under the DMCA Issue on appeal: whether YouTube could be deprived of the DMCA protections if it was generally aware of prevalent infringement on its site, or whether, it would only be deprived of DMCA protections if it had actual knowledge or was generally aware of specific infringing activity 2012: 2 nd Circuit held: common law doctrine of willful blindness may be applied... to demonstrate knowledge or awareness of specific instances of infringement under the DMCA, and instructed the district court to consider on remand whether there were sufficient facts to demonstrate that YouTube made a deliberate effort to avoid knowledge of specific instances of infringement

28 VS. Does this Case Weaken the DMCA? Raises questions as to the factual showing a copyright holder will have to make in order to show general awareness of specific infringing activity and to establish an inference of specific knowledge based upon the willful blindness doctrine How this question is resolved will be very important to ISP s which depend on user generated content

29 VS. Liability for UGC Under the Communications Decency Act In 2007 Quiznos held a contest encouraging its customers to make videos demonstrating why Quiznos Subs are Better than Subway s Subway sued Quiznos claiming some of the videos submitted by consumers included false claims Quiznos claimed immunity under 230 of the Communications Decency Act, as a provider of interactive computer service as it hadn t contributed to content

30 VS. The critical question is whether Quiznos merely published information provided by third parties or instead was actively responsible for the creation and development of disparaging representations about Subway contained in the contestant videos by reason of its promotion of the contest, selection of videos, etc. The court determined a jury should decide, and the parties ultimately settled

31 3 Testimonials and Endorsements in Social Media

32 Astroturfing Posting of anonymous positive or negative product reviews on an independent site Providing benefits to blogs, bloggers or customers for posting favorable product reviews- such as being paid for it or getting a free product Creating standalone websites that promote products where connection with product source is not disclosed

33 FTC s Guides for the Use of Endorsements and Testimonials in Advertising Guides require disclosure of any factors that might cause a consumer to reassess the nature of an endorsement, including employment relationship Educate employees that Guides apply to extolling or voting for company s product to drive up quality ratings Applies to advertiser as well as endorser. Including celebrity endorsers. Guides apply even if employer has no knowledge of the post Putting in place policies requiring compliance with the Guides may mitigate penalties or enforcement action Consider requiring promotional comments to be vetted by employer s marketing and legal departments before posting or prohibit online comments on social media altogether

34 AnnTaylor LOFT: A Shot Across the Bow AnnTaylor LOFT offered gift cards to bloggers who attended a preview event and then covered LOFT s Summer 2010 line of clothing on their blogs The FTC did not to recommend enforcement action because it was the only such event, only a few bloggers posted (and most disclosed the gifts) and immediately after the event, AnnTaylor adopted a written policy requiring disclosures when gifts are made to bloggers

35 Other Enforcement Examples: 2009: Lifestyle Lift paid $300,000 to settle allegations by N.Y. Attorney General s office of false advertising, deceptive commercial practices and fraudulent conduct under federal and New York commercial protection laws 2011: Legacy Learning Systems paid $250,000 to settle allegations by FTC that favorable reviews and endorsements of its instructional DVD products were posted by affiliate marketers who received a commission from Legacy for sales they generated

36 Some Issues That Have Arisen But The FTC Has Not Specifically Addressed: Anonymous bad faith edits on Wikipedia: marketers are impersonating volunteer contributors to post company endorsements; companies are editing out unfavorable contributions

37 4 Data Privacy

38 Data Privacy Social media privacy and data protection Cookies and tracking Employee monitoring (No) right to be forgotten Spam and anti-spam

39 5 Social Media Issues in the Workplace

40 Social Media Issues in Hiring Employees Social Media Issues in Managing Employees Social Media Issues in Firing Employees

41 Social Media Issues in Hiring Employees Create locally compliant guidelines for conducting background screens Monitor local law developments Harmonize the screening process with the employer's anti-discrimination policies Be aware of the long arm of the FCRA Restrict screening to HR and authorized vendors Segregate the decision maker from the investigator Establish compliance program to allow for cross-border data flows

42 Social Media Issues in Managing Employees Carefully craft a social media policy Review other policies for changes required to address social media issues Take steps to be able to monitor where permissible Develop an action plan if employees cause reputational damage to the company Promptly investigate and address any claims of discrimination, bullying or harassment Train, train, train

43 Social Media Issues in Firing Employees Consider whether protected concerted activities under U.S. federal law Address U.S. federal and state law limitations on terminations for lawful off-duty conduct Understand stringent requirements for terminations outside the U.S.

44 Thank You! Moderator: Stephanie Vaccari Presenters: Pamela Church Lothar Determann Ute Krudewagen

45 You may have in interest in also attending this upcoming webinar: Eye On China Webinar Series 2012 Thursday, June 7, 2012 Moving Core IP to China: How to Protect Key Business Assets To register visit us at: Or you may have an interest in viewing this recently held webinar: 2012 Employment Counseling & Litigation Webinar Series Wednesday, April 18, 2012 Taking Your Social Media Policy International To view webinar recording visit us at: