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?
- 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.
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.
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.
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.
A frequent question we get is what can we do about the online posting about me? Often times, the answer is not much. Lawyers can only help when the online conduct crosses the line into a cognizable cause of action. Figuring that out is the hard part.
The Threatening or Harassing Post
Is there an ex spewing hate against you on Facebook? Is a disgruntled fan or customer telling the world what they would like to do you? Many times, the First Amendment will protect their conduct. Sometimes, however, the law can help.
Take for example, a “fan” of the New York Knicks who suggested the owner of the team needed to die with posts that included naked pictures of the poster with a gun. The police arrested him.
Sports often bring out the worst. I’ve seen some of it with my own sports teams with the Michael Sam story and the question of whether the Houston Texans will use the first pick on Johnny Football.
Most fan rants are protected by the First Amendment, but threats of immenint harm or immediate calls to illegal actions are not. Jack Greiner of the Graydon Head Out of the Box Blog blog breaks down the law on threats versus free speech in this case here. The oversimplification is that if a reasonable person would believe the speaker has an intent to cause actual harm, then it can become a threat and not mere protected speech. Moreover, when the target of the threat is a sport figure or politician, it may not be realistic to think the person would actually act it out, but there are enough crazy people out there for law enforcement to take a close look at some of these cases.
In addition to threats, may states, like Texas, have online harassment laws. Perhaps, your ex knows better than to make a physical threat, but continuously harasses you. In Texas, a person commits an offense if the person “uses the name or persona of another person to create a web page on or to post one or more messages on a commercial social networking site: (1) without obtaining the other person’s consent; and (2) with the intent to harm, defraud, intimidate, or threaten any person.”
It is also crime to: “send an electronic mail, instant message, text message, or similar communication that references a name, domain address, phone number, or other item of identifying information belonging to any person: (1) without obtaining the other person’s consent; (2) with the intent to cause a recipient of the communication to reasonably believe that the other person authorized or transmitted the communication; and (3) with the intent to harm or defraud any person.”
The American Bar Association recently wrote an excellent article on revenge porn you can read here. For the uninitiated, revenge porn is when the ex publishes what were supposed to be private nude pictures for the world to see often including full names, addresses, phone numbers and links to social media profiles. There is a whole cottage industry bubbling up of websites who encourage posters to provide this information.
As a victim, you can bring civil claims like invasion of privacy, intentional infliction of emotional distress and copyright claims if you took a selfie because the copyright usually belongs to the photographer and not the subject. But, these claims are expensive to bring and there are no guaranties because a lot of people blame the victim for having nude pictures in the first place.
Meanwhile, it is hard to sue the websites where these pictures are downloaded because Section 230 of the Communications Decency Act gives immunity to websites based on claims related to user generated content.
California passed a law last month that seeks to punish “Any person who photographs or records by any means the image of the intimate body part or parts of another identifiable person, under circumstances where the parties agree or understand that the image shall remain private, and the person subsequently distributes the image taken, with the intent to cause serious emotional distress, and the depicted person suffers serious emotional distress.”
Professor Goldman on his Technology and Marketing Law Blog points out the faults of the law which include: (i) it does not apply to selfies; (ii) it does not apply to redistribution or websites which could have Section 230 issues; and (iii) the difficulty in proving beyond a reasonable doubt the parties’ expectations of privacy or the intent of the accused.
While there are some class action lawsuits against some of the sites that encourage this behavior that we will keep an eye on, one of the best weapons may be to shine the light on the scum who engage in revenge porn using the same social media tools and the let the markets take care of the websites.
Most of the examples so far deal with criminal complaints. To do that, you need to get the D.A.’s attention. What about a civil lawsuit? What can you do if the police or the D.A. won’t act?
You can follow the lead of a woman who is suing Sprint for invasion of privacy, infliction of emotional distress and identity theft after a Sprint employee posted explicit pictures of the customer who turned in a phone for an upgrade. You can read more about the case here.
Intentional infliction of emotional distress can be a tough case to prove and the invasion of privacy of laws differ in each state.
Parents are also taking to the civil courts to address cyberbullying.
For tips on handling consumer reviews, go here and here.
Open source software sounds like a good idea. Your create some code and then put it out there for the public to use and let people build on it and improve. The only condition is that if someone improves on it and build from it, they often have to share their improvements with the world. Everyone wins right? Everyone except anyone trying to sell software or a company with proprietary customized software.
Great for inhouse customization
There is much more open source, also known as General Public License or copyleft software, than you may imagine. According to a 2010 PC Magazine survey, 98% of companies use open source software. Often times, companies customize the the open source software to fit their needs with in house programmers building from the publicly-available code. These improvements are often valuable to the company. Under most general public licenses, you don’t have to share the code when you are only using it in house.
Now we are selling, so do we have to show everyone our code?
But, what happens when there is a sale? Under most general public licenses, once the improved code is used by anyone else other than the creator, it has to be shared with the public. For private companies who go through major transactions, you can see the problem — disclosing what is a valuable proprietary asset to the world. In most large transactions, there is going to be a code audit that will reveal the code subject to GPL’s.
What to do?
So, what do you do about this? The best practice is to be proactive. If you are working on a commercial proprietary customization, many GPL’s allow for dual licensing. You can buy the commercial license of the GPL that gives you greater rights including the ability to keep your improvements secret. You need to review the GPL and the dual license carefully.
You can try and keep the proprietary part separate from the open source software. This is an extremely technical issue along with an analysis as to what is a modification versus an aggregation. You need to have the development team work with legal if you plan on going this route.
I wish I called you back when I started.
What if it is too late? You are probably not surprised that we get that a lot. If you have been using software in house but now need to transfer it, what do you do when you discover it has GPL code?
You can go back and try and get the dual license from the last creator of the open source software. Under the right circumstances, that will prevent you from having to disclose your improvements to the world.
You can also do a reversion. That means going back to the software before the introduction of the open source software and then rebuilding it. This, sometimes, is the only option.
When private companies are involved, you can see why some refer to open source software as a cancer. Its innocent inclusion on a basic building block of software can destroy all the commercial value of what you have spent years building.
Because copyleft is relatively new, there are few cases interpreting these licenses. You can read about a recent case here. You need to think about these issues while building software and certainly when you are in the acquisition stage.
I was a recent guest on the Content Marketing Podcast with Resonance Content Marketing’s Rachel Parker. It is always entertaining and refreshing to visit with the people in the trenches and find out what is on their mind. We covered privacy, intellectual property, employee relations, and much more. You should listen to the whole thing, but the interview starts at 6:56.
There has not been much activity on the blog because we have been engaged in a long copyright and misappropriation of trade secrets trial. So, we share with you some of the articles we have been reading, but just haven’t had time to write about:
Bloggers entitled to same protections as journalists under the First Amendment. The Ninth Circuit recently applied libel defense protections normally reserved to the “institutional press” to bloggers reasoning the First Amendment applies to all citizens and there has been a blurring of the lines between who and who is not a journalist. You can read more about this important decision here.
We have our first Twibel verdict – no defamation in 140 characters. In three hours, the jury returned a defense verdict saying Courtney Love did not libel her lawyers with a tweet that suggested her prior lawyers had been “bought off.” The bad news is that during the trial Love stayed off of Twitter, and now, she is apparently back. More here.
Yelp ordered to disclose identity of reviewers. A court ordered Yelp to review the identify of seven “anonymous” reviewers who criticized a dry cleaning business in Virginia. The business claimed the reviews are fakes and do not match any of their records. This is another example of how courts are trying to balance the interests of anonymous speech and a plaintiff’s right to combat defamatory speech. More here.
Parents take to the court to combat cyberbullying. Locally, there has been a lot of attention about a lawsuit filed by one set of parents against seven minors and their parents for libel and negligence. More here.
Will there be more transparency regarding government requests for online data? The Justice Department is relaxing the rules for technology companies like Google and Microsoft to disclose, in broad terms, the number of requests these companies receive from the government and the amount of data provided. Tech companies have long reported the number or requests from state and non-national security related requests from the federal government, but this will be the first time they can release general information related to national security letters. If the numbers are surprising, this could lead to even more push back against the government surveillance programs. More here.
Supreme Court to consider online re-broadcasting case. The U.S. Supreme Court will weigh in on the rights to re-transmit broadcast programs via the internet. Aereo receives over the air broadcasts the old fashion way in a warehouse and then sends them to paid subscribers devices. The broadcasters are arguing that Aereo is violating the “public performance” copyrights to the programming. Aereo says what they are no different than the users receiving the digital signals on their own devices. Both sides wanted guidance from the high court and this is one worth watching. More here.