Legal Bytes : Advertising & Media Lawyer & Attorney : Reed Smith Law Firm : Marketing & Intellectual Property : Legal Bytes Law Blog

Social Media in Action in Product Liability

New Claims and Increased Exposure

The pharmaceutical and medical device industries are heavily regulated, for example, through the EC Medical Devices Directive. Specific rules govern what information a company can relay to patients or doctors through warning labels, package inserts, written correspondence, or visits to a doctor’s office by a company’s sales department. [1] Any communication by a company outside these regulatory parameters may be used against the company as evidence that the company acted in violation of government regulations, leading to a potential causes-of-action under strict liability and negligence.[2] (See Chapter 7 – FDA) For example, if a company has a blog or chat room where patients and/or doctors correspond with the company, this direct communication may include off-the-cuff comments that contain language outside the parameters of information that the company is allowed to relay regarding its products.[3]

Although these problems can occur even without social media, the sheer magnitude of social media outlets and the relative informality of their content greatly increases the risk that statements will be made that may be actionable in law. Similarly, social media exchanges leave a virtual paper trail that can be reviewed for an improper communication in a way that oral communications between a sales representative and a doctor cannot.

One cause of action stemming from such improvident statements or omissions is a claim for negligent misstatement.

An effective claimant’s lawyer is always looking for documents that show a company “puffing” or over-extolling the efficacy and safety of its products. Of great assistance to a claimant’s lawyer are documents that show a company making efficacy and safety claims about its products that are not entirely consistent with the company’s “confidential” internal documents or published material. When these inconsistencies arise—particularly when a company’s marketing department is not working closely enough with legal and risk management—the claimant lawyer is not only well-positioned to advance a relevant claim, but is also able to embarrass the company by asserting that it puts the company profits over safety and misleads patients and doctors, or simply its customers.

Additional problems can arise when a company sponsors third-party websites to promote its products. If the company has editorial rights over the content of the site, claimant lawyers may be able to convince a court that a company “ghost writes” information. “Ghost writing” articles or promotion materials takes place when a company pays an author to write an article that helps the company sell more product—i.e., the article states that a product does not cause an adverse event or that a product helps to solve a medical issue. Even if the research is sound, articles “paid for” by a company tend to look underhand and less sound than objective research in the eyes of the public. Where a company sponsors a site and has the ability to change content, the claimant will advance a “ghost writing” argument if litigation ensues, in an attempt to persuade the court that the company did not have the public’s best interests in mind. Similarly, using editorial rights to silence views critical of the company’s products—or favouring a competitor—would provide further arguments for a claimant lawyer. In addition, “ghost writing” can lead to unwanted, negative media attention for any company that is accused of using ghostwritten material for its benefit.[4]

If successful at portraying a company as a bad corporate actor, the claimant lawyer inevitably has an easier time proving all elements of a product liability claim (liability and causation), and positioning him or herself to secure damages award.

Bottom Line—What You Need To Do

By its very nature, social media often begets informal dialogue that is broadcast more widely than the traditional marketing media. The more that is said publicly, the greater the risk that what is said does not square with regulatory requirements and with what is said privately in internal, confidential company documents. For this reason, a company that chooses to use social media as a marketing or information tool must involve legal and risk-management departments in reviewing marketing’s use of chat rooms, blogs, and external third-party websites (and the content in those media). Failure to do so can result in heightened exposure to legal claims, large damages, and weakened defences.

Social media implications and applications to advertising and marketing cannot be ignored; where the consumers are, and where consumers go, marketing budget ultimately follows. All companies, regardless of whether or not they elect to actively participate in the social media arena, should have policies in place to determine how to respond to negative comments made about the company and/or its brands. Companies that seek to play a more active role should have policies in place that govern marketing agency and/or employee interaction with social media, as well as the screening of User-Generated Content. It is critical, however, that companies do not simply adopt someone else’s form. Each social media policy should be carefully considered and should address the goals and strategic initiatives of the company, and should take into account industry and business specific considerations.