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Social Media Law & Policy Report Article on Enforcing Online Promotion Terms Now Available

I wrote an article for the Bloomberg BNA Social Media Law & Policy Report entitled “How to Enforce Terms of Service for Online Social Media Promotions and Contests.”  We tried to squeeze in a few more keywords.  The full article is available at the link below.

Bloomberg BNA Social Media Law & Policy Report – WorkSite Acrobat Integration

Using Images Without Permission is No Monkey Business

Who owns the rights to a selfie taken by a monkey?  While it sounds like a law school exam, it is based on a real story as reported here by the American Bar Association.

According to the article, a monkey picked up the photographer’s unattended camera and began taking pictures.  This is one of the images captured by the monkey.

From the Wikimedia Commons website

The nature photographer claims he owns the copyright.  Meanwhile, the Wikimedia Commons website has been distributing the picture for free and has refused to take it down.

Usually, the rule is that whoever takes a photograph owns the copyright as discussed with the famous Ellen DeGeneres Oscars selfie.  Wikimedia is claiming animals can’t own copyrights unless a human adds a significant creative element to the picture. Hence, Wikimedia says there is no copyright with the picture.

Under U.S. Copyright law, to be entitled to the copyright, you have the be the “author” of the work which is normally the person who created the work and the basis for the general rule when it comes to photographs.

The U.S. Copyright Office has a rule that the work must be of “human authorship” and works created mechanically or by random selection, without any human contribution, are not eligible for a copyright.  The photographer’s claim that the picture was a result of his hard work may not succeed under U.S. law.  It’s not the amount effort that counts, it’s the inclusion of human creative originality.

The blawgosphere is offering many opinions on this.  For example, Steve Baird suggests that perhaps the monkey is the photographer’s assistant and therefore the credit for the picture goes to the photographer.  Matthew David Bozik opines that perhaps it is a joint work.  We will have to see what tactic the photographer takes.

In the meantime, what can you do to avoid the same problem short of making the animal sign a work for hire agreement?  You can do post-production work on the photograph that provides its own original creative touch to it without releasing the original.  While it may not be a selfie if you remotely take the picture, you would still be considered the one who clicked the button.  According to the articles, the photographer went through a lot of effort to make this happen – will he get the credit?

You can read more about the case herehere,  here and here.

Website Operator Not Liable for UGC; Also, Sun Rises in the East

Last month, the Sixth Circuit ruled that website operators are not liable for content provided by others (User Generated Content or UGC) because of Section 230 immunity under the Communications Decency Act in the Jones v. Dirty World Entertainment decision.

Based on the history of the CDA, that should be no surprise. However, internet lawyers were watching this case closely because a federal judge let a defamation case go to trial and this could have created a hole in the CDA defense.  Alas, the court of appeals ruled the way most experts expected and the world can return to normal.

We posted about the trial court’s decision before.  Last summer, a jury found TheDirty.com “encouraged the development of what is offensive” and was therefore liable for the defamatory posts about former Cincinnati Bengals cheerleader Sarah Jones. The jury awarded Jones $38,000 in actual damages and $300,000 in punitive damages.

As a refresher, Section 230 of the CDA provides: ”[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” Because the websites are not the publisher or speaker, the sites can’t be liable for defamation. Most courts immediately dismiss website operators from defamation suits when the claim is based on UGC.

Jones sued Dirty World Entertainment Recordings which owns TheDirty.com. The site, as expected, immediately filed a motion to dismiss the complaint because the claims were based primarily on the UGC. The trial judge denied the motion arguing the defendant purposefully seeks out and encourages defamatory content. The court wrote “the very name of the site, the manner in which it is managed, and the personal comments of defendant Richie” shows that the site “specifically encouraged development of what is offensive about the content.”

The court of appeals said the trial court erred when it held The Dirty was the “creator” or “developer” of the offensive content and when the trial court allowed a “encouragement test” that would cause a website to lose the CDA immunity.

The Sixth Circuit instead implemented the more accepted material contribution test requiring evidence the website operator was “responsible, in whole or in part, for the creation or development” of the defamatory content.  Based on this test, the appellate court found the website did not “author” the statements, pay for the content and did not require defamatory content to use the site.  The court also confirmed there was no liability for selecting the content or refusing to edit the content.

What does it mean?

The CDA has been a very effective tool for website operators.  Imagine if Facebook or YouTube could be sued for defamation.  Those sites would not exist.  With the good, comes the like of The Dirty.  There is an old saying that “bad facts make bad law.”  That almost happened in this case. TheDirty.com asks people to “submit dirt.” The submission form has entries for the “dirt,” and provides a link to upload photographs.  More reputable websites, don’t have this feature.  But, if The Dirty is protected, then you should have no worries that your more mainstream site will also be protected.  If there is going to be any changes to allow for liability for those who “encourage” defamation, the change will have to come from the state house and not the court house.

 

Facebook Demands Court Order for Local Threats – Internet Privacy Always Sounds Good In Theory

This weekend The Houston Chronicle reported Facebook did not turn over information requested by local authorities in response to death threats.  People have been criticizing social media companies for turning over data to government entities.  This time Facebook demanded a court order and now people are upset.  It shows how it is a difficult situation for online companies and sometimes they are damned if they do and damned if they don’t.

According to the article, a Facebook message said a user was “Going to kill everyone in Splendora on July 13th.”  Local officials asked Facebook for information, but the site told them to come back with a court order.  According to Facebook, the government officials never did.

A Facebook spokesperson is quoted as saying:

We promptly review and respond to all emergency requests. In this case, we reviewed the matter and asked to police to send us legal process or a court order for the requested information. The police have yet to send us any formal request.

 According to Facebook, on their Facebook and Law Enforcement page:

 We take the privacy of your information very seriously. If Facebook receives an official request for account records, we first establish the legitimacy of the request. When responding, we apply strict legal and privacy requirements. . . .

We work with law enforcement to help people on Facebook stay safe. This sometimes means providing information to law enforcement officials that will help them respond to emergencies, including those that involve the immediate risk of harm, suicide prevention and the recovery of missing children. We may also supply law enforcement with information to help prevent or respond to fraud and other illegal activity, as well as violations of the Facebook Terms.

This appears to be a Not In My Backyard situation online.  We all want Internet privacy, but when we perceive the threat is against our community, our principles get challenged.

I don’t believe the demand for a court order was out of line.  I am sure the law enforcement officials would have preferred just to be handed the information.  I stand to be corrected by those more familiar with criminal law procedure, but getting an appropriate order from a judge should not have been too onerous.  Although Facebook did not apparently turn over the information right away, I suspect this is not over and the investigation will continue.

UPDATE

A suspect has been taken into custody according to KHOU-TV11 after some unspecified cooperation from Facebook.  A 13-year-old girl is surely regretting her actions.

 

Supreme Court determines Aereo violates copyright – back to the drawing board

This morning, the U.S. Supreme Court ruled in a 6-3 decision that Aereo violates copyright law by retransmitting over-the-air programming without authorization.  This will shut down the controversial start-up or force them back to the drawing board to come up with a new system.  The sound you heard was a huge sigh of relief of all over-the-air networks, cable carriers and content creators because this would have caused everyone to re-evaluate how programming is broadcast, and more importantly, paid for.

For those not familiar with Aereo, it essentially allowed users to “rent” an antennae that would pick up a signal at a certain point.  Aereo would then take that over the air signal and send it to the user’s phone so they could stream the content from their phones.

The issue was whether this was a “public performance” of the copyrighted works.  Aereo said it was not because the users could receive the same content for free if they had antennas attached to their TV at home.  Aereo merely re-transmitted the same content to allows users to access it on their phone privately.

The networks sued Aereo almost as soon as it launched in 2012.  They argued the simultaneous broadcasts to thousands of paying customers represented an illegal retransmission of protected works — even if you called it renting an antenna.

Actually, everyone can give a sigh a relief.  Had Aereo won, the broadcast networks said they would stop providing content.  The cable companies pay the networks a lot of money to retransmit the over the air channels and this would have changed everything.

While this is a blow to Aereo and possibly innovation – at least through this specific model – the world as we knew it before Aero will continue.

 

The Law and Unpaid Interns – Repost

Originally published last year, but worth revisiting

As the summer arrives in full force, I am watching a lot of my start-up friends take advantage of the unpaid internship to help with some needed coding, design or marketing projects they haven’t gotten to.   These kids are smart, hungry, can use the experience and wouldn’t it be nice to have someone pick up coffee and donuts for you once in awhile?

As my Gray Reed colleague Michael Kelsheimer explains in a prior post on his Texas Employer Handbook blog, you have to be careful when using unpaid labor.

 

UNPAID INTERNS, VOLUNTEERS AND TRAINEES

Who, What, Why . . .
Who does it apply to: Every employer who has or intends to hire unpaid interns.
When must an intern be paid: All “employees” of a business must be paid at least minimum wage unless they are a “trainee” under the law, regardless of whether they are called an “intern.”  So, what makes a trainee? The United States Department of Labor (DOL) has established a six-factor test couched in terms of – you guessed it – training – to determine whether an unpaid intern should be considered an employee or trainee under the Fair Labor Standards Act (FLSA):
  • the training is similar to that which would be given in a vocational school (even though it includes actual operation of the facilities of the employer);
  • the training is for the benefit of the trainees;
  • the trainees do not displace regular employees, but work under their close observation;
  • the employer that provides the training derives no immediate advantage from the activities of the trainees, and on occasion operations may actually be impeded;
  • the trainees are not necessarily entitled to a job at the conclusion of the training period; and
  • the employer and the trainees understand that the trainees are not entitled to wages for the time spent training.
When can I hire an unpaid intern or volunteer: The six-factor test is primarily used in the, “for profit,” private sector. State and local government agencies and non-profit organizations can generally utilize interns or volunteers without an obligation to pay them under the FLSA. It is important, though, that the volunteers understand they are not to be paid for their time. Volunteer work at non-profit, religious, charitable, and civic organizations have specifically been cleared by the Texas Workforce Commission.
What about true student interns: Student interns are not evaluated differently by the DOL. They should easily meet the trainee test. That said, there are special rules for individuals who have completed a professional degree like physicians, attorneys, and therapists, generally allowing them to volunteer their time as they choose.
What do these factors really mean: The more an internship program can be structured around a classroom or academic type experience the better. It is better if the employer can provide the individuals with skills applicable to various employment settings, not just skills particular to the employer’s business. Essentially, the employer needs to provide the intern or volunteer with valuable training. Ideally, the training would make them more marketable in the open job market. The employer must pay any intern or volunteer that is used as a replacement for a regular employee or to reduce their workload. The intern or volunteer should receive more supervision than a regular employee.  If the employer would have to hire additional employees if the intern or volunteer were not performing certain work, the intern or volunteer would be considered an employee. Don’t rely on unpaid interns to do work of any real significance to your business. The work done by an unpaid intern should be secondary to their training. An intern that is hired by an employer on a trial basis with the expectation that they will eventually be hired full time will likely be considered an employee under the FLSA. Employers should indicate prior to the start of the internship that there is no guarantee or expectation of hiring the interns upon completing the internship. A written agreement indicating this is advisable. Employers should indicate prior to the start of the internship that there is no intention to pay the intern. A written agreement indicating that the intern will not be paid and does not expect to be paid is advisable.
What happens if I don’t follow the test: An employer violating the rule is subject to the same damages available to an employee who is not paid all of the wages they are owed. This may include minimum wage and overtime for all hours worked, plus an equal amount in liquidated damages for all interns over the past two or three years.
What about discrimination laws: It depends on whether the person in question receives “significant remuneration” for their efforts. The EEOC has stated that things like a pension, group life insurance, workers’ compensation, or access to professional certifications constitute significant remuneration. However, Courts have determined that things like academic credit, practical experience, and scholarly research do not constitute significant remuneration. Because this point is subject to interpretation, however it is best to treat all interns and volunteers as though they are employees with respect to discrimination laws.
Common Situations:
Required training: Safety First is ready to hire a new class of security guards.  The company requires that security guard trainees receive 40 hours of training prior to performing any regular work under their service contract.  According to their contract, the training is focused on “company practices, policies, and rules.” Does Safety First have to pay the trainee security guards even though they are not yet performing regular work?  Yes. These trainees would be considered employees because: (1) the employer is directly benefiting from their training, (2) the training is given to security guards who will work on contract, and (3) Safety First can only employ specifically trained guards.
Homegrown hiring: Maverick Finance hires interns each summer.  Maverick’s intern program is structured much like an academic program.  The interns do not do the work of regular employees and are heavily supervised.  The interns are not paid and are aware there is no guaranty of employment.  However, Maverick hires its first year analysts almost exclusively from the unpaid interns it has each summer. Does the FLSA require Maverick to pay these interns at least minimum wage? Probably.  Although Maverick substantially satisfies the six factor test, its practice of hiring analysts from the intern pool is likely enough to tip the balance against the company in the face of a DOL audit.
What should I do:
Good: Paying minimum wage to all interns probably is the safest bet. You avoid the risk of an audit of all your employment practices because of one dissatisfied intern that calls the DOL.  If you go the trainee route, be sure to meet all the factors.
Better: If you have true “trainees” taking into consideration all the factors, it makes sense to put that understanding in writing in a short half-page agreement outlining the factors. If you use volunteers, it makes sense to have them sign a one-paragraph agreement acknowledging their status as a volunteer without expectation of pay or other “significant remuneration” to avoid the possibility of an EEOC complaint.
Best: In addition to the items above, require that the trainees keep track of their hours so you have a record of how much they might be entitled to if the DOL audits and rules them employees. Be sure they do not work more than 40 hours to avoid increasing the risk to include overtime. Have the trainees and their supervisors keep a log of their activities so that there is no confusion regarding the type of work they did.

 

Copyrights, Fair Use and Elections

The mid-terms are coming up, so you know there will be stories of politicians getting into clashes with artists over the use of songs and other content in ads and at rallies.  In Texas, for better or worse, the real competition is often in the Republican primary and several run-offs have already brought up some copyright issues.

But it’s a fair use!

Many ads use snippets from copyrighted TV news stories or headlines from local papers often citing fair use.   Fair use is an affirmative defense to a copyright violation meaning, it is the campaign’s burden to prove the use was fair.   Fair use is a factually-specific inquiry and there is no bright line test. Courts consider these four factors:

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

(2) the nature of the copyrighted work;

(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

(4) the effect of the use upon the potential market for or value of the copyrighted work.

A Texas Showdown Example

Dan Branch is a candidate in a run-off for Texas Attorney General.  NBC-owned Dallas station KXAS is arguing the Branch campaign used too much footage from its copyrighted newscast in this letter.

Specifically, NBC says the ad features “extensive use” of the story and features the voice and likeness of their anchor.  All but two seconds of music at the beginning is the TV news story.  NBC also says the use of the footage makes it appear the anchor and the station support the candidate and creates questions of journalistic integrity.

You can see the ad here for yourself.

NBC has demanded that the campaign cease further dissemination of the ad.  As of today, the video was still up under TexansforDanBranch on YouTube.

The run-off for the Republican primary in the race for Lt. Governor has gotten more attention including this ad:

Parody is also a defense to a copyright claim.  Yes, even bad parodies can be protected. Just think what happens when the ads start focusing on the people in the other party.

Related:

The DMCA and campaigns

You’ve looked at my site and now you have waived your right to sue me. Is that legal?

I’ll admit, General Mills did not go that far.  What they did, according to The New York Times was notify customers that if they downloaded a coupon, joined a forum or entered a sweepstakes, the customer would waive their right to sue in court and would have to go through an online “informal negotiation” or arbitration.

Since the story broke, General Mills is trying to backtrack.  For example, General Mills admitted it would not apply if you interacted with the company on Facebook or simply purchased one of its products at a store, but that the company could enforce it if you interacted on the company’s website.

However, there was a pop-up notice on the company’s home page that “require[s] all disputes related to the purchase or use of any General Mills product or service to be resolved through binding arbitration.”  Consumer watchdogs were concerned General Mills was trying to escape all liability for mislabeling claims or damages related to product recalls just because you “liked” a Facebook page or purchased a product at your local grocery.

In two recent cases, the Supreme Court has held related clauses to be enforceable.  In June 2013, in American Express v. Italian College Restaurant, the Court enforced an arbitration clause between AmEx and the merchandisers.  Two years before that in AT&T Mobility vs. Concepcion, the Court upheld a class action waiver.

Yet, there is still, and always will be, the issue of consent.  When I buy Lucky Charms for my kids (I know, Dad of the Year), I am not consenting to a long list of terms of conditions.  I am buying cereal.  A court would be hard-pressed to find I consented to a long list of terms and conditions on the General Mills website.  That would not be magically delicious in the least bit.

On the other hand, if I download a coupon, or enter a sweepstakes, I would not be surprised to have a pop-up that requires me to agree to terms and conditions no one reads. I might waive my rights to file a class action or a jury trial as it relates to that particular transaction.  In fact, I would not be surprised if this practice becomes more prevalent.

There may be some issues as to whether downloading a Cheerios coupon means I agreed to waive claims against Haagen Dazs in an unrelated transaction.

Despite the fact social media and the internet have made things a little more complicated and hard to keep up with, the basics of contract law still apply.  To bind a consumer, you need to show they consented to the terms which is why a click-wrap agreement is preferred over a browse-wrap agreement.  On top of that, especially when it comes to jury and class action waivers, you need to satisfy both procedural and substantive conscionability.

 

Infographic: The Use of Images From The Web on Your Site, Newspaper or Broadcast

We created this infographic for some of our media clients to give them a one-page cheat sheet on the analysis they need to do when trying to decide whether they can use an image from the internet in a pinch.

The infographic includes all the caveats because rarely can a legal issue be discerned down to one page with so few words.  In fact, I wrote a three-part series on this very topic last year.  

To view this as a pdf, click Use of Images InfoGraphic.

 

#SMH-butnotacontestorsweepstakes – Check your online promotion hashtag or face scrutiny from the FTC

As we have reported before, the Federal Trade Commission requires the disclosure of any “material connection” offered in exchange for an online endorsement or post in their Online Endorsement Guidelines. Now, they are applying those rules to online promotions that require contestants to post, tweet or pin certain message to participate.

For those of you with short attention spans, this means that you should make all contestants post, pin, hashtag or use some method that notifies everyone that whatever content the contestants are submitting is part of a contest or sweepstakes.  It could require the use of the word “contest” or “sweepstakes” in all hashtags or posts. Otherwise, the FTC believes consumers are misled by your friend’s endorsement of a product if they don’t know you endorsed it to enter a contest or sweepstakes.

The guidance comes to us courtesy of the FTC’s recent investigation of Cole Haan. The shoe and fashion company conducted a Pinterest contest where contestants had to use the hashtag #WanderingSole. In addition, contestants had to pin five images on the board posting their favorite places to wander. Cole Haan was giving away a $1,000 shopping spree to the most creative entries.

The FTC investigated. Although the FTC decided not to act in this instance, it indicated future contest sponsors may not be so fortunate. Under Section 5 of the FTC Act, the FTC has the ability to pursue claims for “unfair or deceptive acts or practices in or affecting commerce.” By not disclosing a “material connection” between an online endorsement and anything of value the brand may be offering, the FTC suggests you may be engaging in unfair or deceptive acts.

In the Cole Haan case, The FTC determined that each “pin” was an endorsement of the brand and the opportunity to win $1,000 in exchange for the pin was a material connection that should have been disclosed. Simply requiring “#WanderingSole” was not enough to inform other consumers who may view the pins, that they were part of a contest.

Despite these findings, the FTC decided not bring an enforcement action and therefore closed the investigation. The main reason for the lack of enforcement is this was the first time the FTC addressed the issue of whether contests provide a “material connection” offered in exchange for a social media or online action. You can therefore consider this to be the FTC’s warning. If you are doing a contest that requires posting, pinning, tweeting or something similar, then make sure the hashtag includes something that tells the market, this is a contest or sweepstakes. It could be as simple as “#WanderingSoleContest” or “#WanderingSoleSweeps”.

In addition, contest and sweepstakes rules should be prominently displayed so consumers know people are being asked to submit content as part of the contest.

While this may be taking the Online Endorsement Guides a little too far, and the FTC may not prevail in an enforcement action, you are better off letting someone else fight that battle as opposed to you.  The safest course is to require contest or sweepstakes in your user generated content.

This guidance is just one more thing to consider when engaging in online marketing and contests. If you are offering anyone, anything of value (which, apparently now is the opportunity to win a prize, but was more traditionally free product) in exchange for content, then you need to consider including a disclosure of the connection.

You can find read the FTC Closing Letter here, the Online Endorsement Guidelines here, a discussion of the guidelines here, more about appropriate social media policies to address these issues here, and read more about legally compliant online promotions and contests here.