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

This post was written by Douglas J. Wood and Gregor J. Pryor.

We're pleased to make available our new edition of our Social Media White Paper with expanded chapters and new coverage of Social Media issues in Europe. Our first edition fast became one of the most downloaded documents on Reed Smith's website. Click here for the new edition and bookmark the entry to be sure to get ongoing revisions. You can also read the individual chapters here on Legal Bytes.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Introduction

Social media is a revolution in the way in which corporations communicate with consumers. This White Paper will help you to maximise the huge potential benefits of this revolution and protect against the inherent legal risks surrounding social media. In this document, you will find practical, action-oriented guidelines as to the state of law in the United States and Europe in the following areas: Advertising & Marketing; Commercial Litigation; Data Privacy & Security; Employment Practices; Food & Drug Administration, Government Contracts & Investigations; Insurance Recovery; Litigation, Evidence & Privilege; Product Liability; Securities; Copyright & Trademarks. As we continue to expand the White Paper, we will add additional chapters as well as updates.

What is Social Media and What Does it Mean to Business?

Everyone has heard of Facebook, YouTube, and MySpace. These are just the tip of the iceberg. There are thousands of social media sites with billions of participants. And it’s not just individuals. Multinational companies and their CEOs are increasingly active in the social media space via blogs, Facebook fan pages, and YouTube channels. Everyone is a user and, as with every new communication channel—billboards, radio, television, the Internet—there is huge potential, and huge potential risks.

The speed of development in social media outstrips corporate risk management capability. It took radio 38 years to reach 50 million listeners. Terrestrial TV took 13 years to reach 50 million users. The Internet took four years to reach 50 million people. In less than nine months, Facebook added 100 million users.[1] 

It’s All About the Conversation

One-way communications with advertising, press releases, labels, annual reports, and traditional print media is going the way of the dinosaur. We no longer just listen. Audiences are not static. We now engage in a conversation. What was said in the living room is now published on Facebook. What we do in public and private is now broadcast on YouTube. What employees talked about at the water cooler now appears as tweets on Twitter. All of it memorialised in discoverable form. All of it available to millions with the simple press of “post.”

Social media is about “changing the conversation”—getting people to say the right things about your company and its products and services.[2]

A Shift in Media Values

Broadcasters have now caught on to the idea that social media fundamentally affects the presentation and even the content of their product. The music industry now embraces social media, using it as a valuable promotional tool. Even the movie industry get in on the act, perhaps even earlier than intended, with the phenomenal success of the online marketing program for the “Blair Witch Project.” At the time of its release, the “Blair Witch” site was in the top 50 most-visited sites on the Internet, creating a vibrant “word-of-mouth” campaign that ultimately helped a $750,000 film gross revenues of $250 million. Social media represents a huge opportunity for media and entertainment companies. They can engage with their audience in ways that were previously impossible, and can leverage that engagement with commercial opportunity. However, with this opportunity comes a threat—YouTube allows everyone to be a broadcaster. As our chapter about copyright demonstrates, social media strikes at the very heart of the proprietorial foundation upon which traditional media campaigns are built.

Managing Reputation – The Asymmetrical Consumer Relationship

Historically, brand owners were able to determine the relationship that consumers had with their brand. Now, thanks to social media, consumers are the ones who increasingly define how the brand is perceived.

A major retailer asked a simple question on its Facebook page—”What do you think about offering our site in Spanish?” According to its Senior Director, Interactive Marketing and Emerging Media, the response “…was a landmine. There were hundreds of negative responses flowing in, people posting racist and rude comments. Our contact center was monitoring this, and they were crying, waiting for a positive comment to come in.” The racist and negative responses posted by purported “fans” were so bad that the site was shut down, with a spokesperson noting, “We have to learn how to respond when negative comments are coming in.”[3]

United Airlines broke a passenger’s guitar. They handled his complaint through traditional procedures, eventually refusing to pay for $1,200 in repairs. In response, the passenger posted a humorous music video to draw attention to United’s consumer support incompetence on YouTube. [4] To date, there have been nearly 6 million views of the video. After two other videos, and after United donating the cost of the guitar repairs to charity per the musician’s requests, United managed to lose the musician’s bags, an event that was reported to millions in the blogosphere.[5] The story was a lead story on CNN’s Situation Room, reported by anchor Wolf Blitzer.[6] As a result, United’s stock value fell considerably.[7i] To add insult to injury, the incident is impacting the law. U.S. Sen. Barbara Boxer (D-Cal.) is championing the Airline Passenger Bill of Rights Act of 2009[8], citing the United debacle.[9] We can’t help but wonder if United would have fared better if it had discarded the old way and instead engaged in the conversation using the same social media platforms that were used to attack its brand.

For at least one major company, engaging made all the difference. Two employees of Domino’s Pizza posted a disgusting video on YouTube in which they adulterated the chain’s food. In addition to reporting the video to the police, Domino’s Pizza’s CEO posted his own video, apologising for what consumers saw and assuring them that such things were neither condoned nor practiced at Domino’s. It all made the “Today Show” and other media reports.[10] Both traditional media and the blogosphere applauded his open communication and willingness to engage in a conversation about the problem.[11] Rather than seeing its brand value and reputation take a major blow, it survived the negative media.

As social media pioneer Erik Qualman puts it, “A lot of companies say we’re not going to do social because we’re concerned about letting go of the conversation, and what I argue is that’s like an ostrich putting their head in the sand. You’re not as powerful as you think. You’re not going to enable social to happen, it’s happening without you so you might as well be part of the conversation.”[12]

The New World

The key lesson is that rather than trying to control, companies must adopt an altered set of rules of engagement. Doing so while being mindful of the laws that apply in a social media context will help alleviate risk.

What You Need to Do

Every concerned party needs to take some important steps if it is going to be prepared for the new media revolution. Here are a few:

• Read this White Paper
• Surf the social media sites and read their terms and conditions
• Join Facebook and LinkedIn and perhaps other social media sites
• Audit your company’s social media programs. Find out what your company and your employees are doing. Do they have any customised pages on platforms like Twitter and Facebook? If so, make sure they’re complying with the site’s terms and conditions, as well as your corporate communications policies. Are they blogging? Are employees using social media during work hours?
• Find out what your competitors and your customers are doing
• Consider adopting a social media policy for both internal and external communications. But be careful to keep on strategy, don’t ban what you cannot stop, and keep in mind the basic rules of engage, participate, influence, and monitor.
• Bookmark websites and blogs that track legal developments in social media, including, AdLaw by Request, Legal Bytes and ReACTS.

It is not going to be business as usual. Social media has forever changed the brand/customer relationship. It challenges brand owners fundamentally to reappraise the way they market themselves. This White Paper will be an invaluable tool in helping you to do just that. Welcome to the New World.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Chapter Authors

United States

Douglas J. Wood, Partner – dwood@reedsmith.com
Stacy K. Marcus, Associate – smarcus@reedsmith.com
Anthony S. Traymore, Associate – atraymore@reedsmith.com

United Kingdom

Marina Palomba, Partner – mpalomba@reedsmith.com

Germany

Stephan K. Rippert, Partner – srippert@reedsmith.com
Katharina Weimer, Associate – kweimer@reedsmith.com

Introduction

This chapter looks at the relationship between social media and advertising and marketing practices, and how to protect brands.

As an emerging technology with nearly limitless boundaries and possibilities, social media gives consumers unprecedented engagement with a brand. Consumers are empowered. However, this brings with it risks as well as gains. Consumers aren’t just buying a product or service online, they are discussing, reviewing, endorsing, lampooning, comparing and parodying companies and their brands. They aren’t simply being targeted for advertising; in many cases, they are participants in the creation and distribution of advertising. Companies can better enable, influence, monitor, react to and, hopefully, monetise the consumer conversations taking place in social media, and can better engage and interact with the consumer directly with their brands—but it’s critical to understand and navigate the legal minefields that are both dynamic and evolving as the media evolves.

Why are advertisers and marketing professionals drawn to social media? Because more than 1.8 billion people use the Internet every day[1], and, according to Nielsen, consumer activity on social networking and blogging sites accounted for 17 percent of all time on the Internet in August 2009, up from 6 percent the previous year.[2] The Internet audience is larger than any media audience in history, and it is growing every day. It’s those eyeballs that marketers want.

In the UK alone, spending on online advertising grew by almost 5 percent in the first six months of 2009, while television spending fell by 16 percent (see IAB UK News, “Internet advertising spend grows by 4.6 per cent”). It was also reported that UK online advertising spend overtook TV advertising spend for the first time.[3] Almost two-thirds of businesses say they intend to spend more on onsite social media, while 64 percent are looking to boost search engine optimisation efforts and 56 percent want to invest more in mobile marketing. Looking forward, new global research by Econsultancy and ExactTarget has revealed that 66 percent of company marketers in the UK intend to spend more on Internet advertising this year compared with 2009. Total Internet advertising spending will surpass £3.5 billion in the UK this year, according to a forecast from eMarketer.

Morgan Stewart, director of research and strategy at ExactTarget, comments: “The shift from offline to online is in full swing as marketers look to measure direct increases in top line sales, site traffic and improve overall marketing return on investment.”

In the United States, Nielsen estimates that ad spending on social networking and blogging sites grew 119 percent, from an estimated $49 million in August 2008 to $108 million in August 2009.[4] Expressed as a percentage of total U.S. online ad spend, ad expenditures on social networking sites climbed from 7 percent in August 2008 to 15 percent in September 2009.[5] In February 2010, the COO of Kellogg’s confirmed that since 2007, the company had tripled its social media spending.[6] Where are companies spending these dollars? The possibilities are numerous.

National authors begin by examining the use of social media and the risks and gains involved. Branded channels, gadgets, widgets, promotions such as sweepstakes and contests within and even across social media platforms, are a few of the ways companies are using social media to increase brand awareness. Even companies that are not actively using social media platforms to engage consumers must monitor social media outlets for comments made about the company or its brands. Social media cannot be ignored, and this section explores the legal implications of marketing in this manner.

Next, we look at the use of social media to foster brand engagement and interaction. Many companies are moving beyond simply having a page on Facebook, MySpace or YouTube, and are encouraging consumers to interact with their brand. Companies are using social media to provide customer service and get product reviews. Marketers seek to engage the consumer in developing user-generated content (“UGC”) around their brands for advertising, and actively solicit their social networks to create buzz, viral and word-of-mouth advertising campaigns. Some even employ “street teams” of teenagers who plug and promote a brand, movie or music artist in return for relatively small rewards. Who controls and retains liability for the statements made and content provided in the social media universe? Who owns the content? Will brand owners lose control of their brands?

Finally, we explore the impact of social media on talent rights and compensation. As discussed above, increasingly, ad spend is moving online. Along with this shift, the line between “content” and “advertising” has become blurred. Celluloid is being replaced by digital files and projectors by flat screens and monitors. What once aired only on television is now being moved over to the Internet by content owners and advertisers, or is going viral thanks almost entirely to consumers with a little encouragement from advertisers. We will examine how this shift impacts talent compensation and will discuss its application to the Screen Actors Guild (“SAG”) and American Federation of Television and Radio Artists (“AFTRA”) commercials contracts.

In our review, we have covered advertising regulation in the United States, the UK and Germany. Note that the UK has a largely self-regulatory environment. This self-regulation comes in the form of codes of practice that are designed to protect consumers and create a level playing field for advertisers. The codes are the responsibility of two industry committees—the Committee of Advertising Practice (CAP) and the Broadcast Committee of Advertising Practice (BCAP), and are independently administered by the Advertising Standards Authority (ASA). Online advertising, including via social networking and the techniques referred to in this chapter, fall under the remit of the CAP Code (which is explained in more detail in Chapter 2).

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Chapter Authors

United States

John L. Hines, Jr., Partner – jhines@reedsmith.com
Janice D. Kubow, Associate – jkubow@reedsmith.com

United Kingdom

Emma Lenthall, Partner – elenthall@reedsmith.com
Louise Berg, Associate – lberg@reedsmith.com

Introduction

This chapter explores emerging exposures associated with misleading advertising and defamation in social media.

The ever-growing number of conversations in social media venues creates new opportunities for advertisers to promote their brand and corporate reputation. These same conversations, however, create new risks. Online disparagement of a corporation or its products and/or services through social media can spread virally and very quickly, making damage control difficult. Accordingly, corporations need to be aware of their rights and remedies should they fall prey to harmful speech on the Internet. An organization also needs to understand how to minimize its own exposure and liability as it leverages social media to enhance its brand and reputation.

Within the context of social media, the two greatest risks to brand and reputation are, respectively, misleading advertising and defamation. Within the realm of misleading advertising, companies need to pay attention to new risks associated with the growing phenomenon of word-of-mouth marketing.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Chapter Authors

Stephen Edwards, Partner – sedwards@reedsmith.com
Dr. Alexander R. Klett, Partner – aklett@reedsmith.com

Introduction

We have referred to copyright in several of the earlier chapters: in relation to advertising and marketing, commercial litigation, and in the chapter on trademarks, principally with reference to U.S. law and in particular the Digital Millennium Copyright Act (“DMCA”). We thought it would be helpful to pull those threads together and to add specific copyright elements, as well as a European law perspective, so as to provide an overview on the significance of copyright to social media across the continents. Copyright is, after all, at the heart of social media. This chapter will highlight some important differences between U.S. and other countries’ copyright laws that companies engaging with social media must have in mind.

In dealing with the position under U.S. law in previous chapters, we make the following points:

• In relation to branded pages, we ask rhetorically whether a company can afford not to monitor its branded page for, among other things, copyright infringement, even though the provider of the social media service takes responsibility for responding to takedown notices received pursuant to the DMCA. We explicitly answer that question when discussing user-generated content, where we suggest that companies should have procedures in place if they receive a notice of copyright infringement, not least because (unlike the social media operator) they themselves will not likely have a defence under the DMCA to an infringement claim if they use an infringing work in a commercial context.
• In discussing defamation risks and the immunity offered by the Communications Decency Act (“CDA”) in the United States, we noted that a blog operator (but effectively any company using social media) cannot assert a CDA defence to claims that are rooted in harm to the victim’s intellectual property. In consequence, if the victim asserts, as against the operator, a claim for copyright infringement based on the blogger’s uploading of protected material onto the blog, the operator has no CDA defence, and the claim must be resolved under copyright law and in particular the DMCA.
• At the end of the discussion in chapter 12 [10] of the relationship between social media and trademark protection, we advise that “it is of the utmost importance to have strategies in place in order to best protect your ownership of intellectual property. By aggressively policing your trademarks, service marks, trade names and copyrights, intellectual property owners will be in the best position to prevent a claim that they have waived their ability to enforce their ownership rights, while at the same time discouraging others from any unauthorised use of such marks and works of authorship.”

If we look at these issues from a European perspective, the same concepts hold good, although it is not the DMCA that governs but rather the E-Commerce Directive[1], as applied by national law in the Member States of the European Union and the European Economic Area. As in the United States, as a general matter, the operator of a social media service is given protection against copyright infringement claims if it operates an effective notice and takedown procedure but, as in the United States, this protection available to the operator may not be available to a company that provides a branded marketing page on which users are able to upload infringing content. Some European courts, such as the German Federal Court of Justice, consistently take the view that while in line with the E-Commerce Directive[2] constant proactive monitoring of sites cannot be expected, an operator has an obligation to prevent subsequent evident infringements by the same infringer.[3] Only in exceptional cases, according to this case law, can an operator be sued to obtain injunctive relief as a precautionary measure if infringements of intellectual property rights on the site of the operator are feared.[4] In general, European courts agree that an obligation to monitor and review content will only exist for operators of services such as social media services with respect to significant, evident infringements.[5] Companies should therefore have procedures in place to ensure that any evidently infringing material or infringing material they are made aware of by right holders can be removed as swiftly as possible.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Chapter Authors

Kathyleen A. O’Brien, Partner – kobrien@reedsmith.com
Rachel A. Rubin, Associate – rrubin@reedsmith.com

Introduction

This chapter explores the challenges to owners of copyrighted material (commercials, TV shows, films, music, lyrics, stories, articles, books, artwork, web content characters, etc.) created by social media and some strategies for dealing with such challenges.

The rise of social media and the broad reach of the Internet have created a host of new challenges for copyright owners. Digital technologies, including file sharing, MP3s, and digital photos, allow users to link to and display website content out of context while search engines, email, and social media sites enable them to disseminate copyrighted materials in an instant. While greater exposure and better communication with your company’s customers through social media can increase brand recognition and reach new markets, it also opens the door to copyright infringement on a whole new level.

The ease with which copyrighted material can be disseminated through social media presents competing considerations for copyright owners: how to adequately protect and preserve the value of your company’s creative works without squelching the public dialogue about those works or without alienating your customer base.

The following paragraphs provide an overview of key copyright issues that have arisen, or are likely to arise in connection with, three of the most popular social media sites—YouTube, Facebook and Twitter—and offer some practical pointers for copyright holders on ways to deal with them. We address real-life examples of copyright infringement in social media and how rights owners have responded, and identify key takeaways that rights owners can apply to their own works. We also look at the ways that YouTube, Facebook, and Twitter respond to copyright infringement claims and how they work—or sometimes don’t work—with rights owners. Finally, we provide a brief overview of copyright law to help you understand the legal protections that are available to your company.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Chapter Authors

United States

Mark S. Melodia, Partner –mmelodia@reedsmith.com
Paul Bond, Associate – pbond@reedsmith.com
Amy S. Mushahwar, Associate – amushahwar@reedsmith.com

United Kingdom

Cynthia O’Donoghue, Partner – codonoghue@reedsmith.com
Gregor J. Pryor, Partner – gpryor@reedsmith.com

Introduction

This chapter explores the implications in social media arising from the laws and regulations surrounding data privacy, security and information security management.

According to statistics published on Facebook,[1] there are more than 400 million active users of Facebook worldwide. Most major brands have Facebook group and/or fan pages—with commentators even doing case studies of those that have been most effective.[2] Yet, there remains reluctance by some companies and brands to use social media. Social networking sites such as Twitter, MySpace, Facebook and LinkedIn may enhance collaboration and help companies connect with customers, but they can also make it easier than ever for employees and customers to share confidential customer data, company secrets and negative product information. A major airline’s Valentine’s Day debacle exemplifies how the usefulness of social media is tempered by fear of what might be disclosed.[3] The passengers were stranded on the tarmac, some up to 11 hours, while a rapidly moving storm tore through the East Coast. Passengers were immediately using their mobile phones, and stories accompanying pictures of overflowing toilets instantaneously appeared in social media. Similarly, when a group of unfortunate passengers were stuck in the Channel Tunnel for several hours during adverse winter weather, Facebook updates told the story of their difficulties. Just as these incidents spread virally via social media, so too might the liability associated with a breach of protected personal information. In the United States, millions of dollars in claims could be made against the hosting site and cause extremely bad publicity. The prospects for further government regulation of social media in the United States. are accelerating. Prompted by the expansive new information sharing practices of social media companies, both the Federal Trade Commission (“FTC”) and the United States Department of Commerce are looking into the development of formal standards to protect the privacy of Internet users.[4] The adequacy of the traditional framework of providing notice to consumers about privacy practices and relying on the consumer’s informed choice is coming under increasing skepticism.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Chapter Authors

United States

Eugene K. Connors, Partner –econnors@reedsmith.com
Sara A. Begley, Partner – sbegley@reedsmith.com
Casey S. Ryan, Partner – cryan@reedsmith.com
Samantha M. Clancy, Associate – sclancy@reedsmith.com
Kimberly A. Craver, Associate – kcraver@reedsmith.com
Amber M. Spataro, Associate – aspataro@reedsmith.com

United Kingdom

Laurence G. Rees, Partner – lrees@reedsmith.com
Carl De Cicco, Associate – cdecicco@reedsmith.com

France

Nicolas C. Sauvage, Partner – nsauvage@reedsmith.com
Nathalie Marchand, Associate – nmarchand@reedsmith.com
Michaela L. McCormack, Legal Counsel – mmcormack@reedsmith.com

Introduction

With apologies to Will Shakespeare, quite the networker himself in Elizabethan times, to net or not to net is NOT the question. Because networking is virtually pandemic these days, the real question is not whether, but where, when and in what ways, should we net with each other to achieve networking benefits and avoid its misuses. Because most networkers are employees, the follow-up question, addressed here, is how far can and should employers go to “guide” and “monitor” employee networking “choices,” and work to prevent and reduce the broad and ever-growing scope of problems and liability arising from the use of social media in the employment context.

Recent surveys have found that approximately 60 percent of employees either do not know if their employer has a social media use policy or believe that their employer does not.[1] A Deloitte LLP study found that 74 percent of employees surveyed agree that it is easy to damage a company’s reputation on social media.[2] By June 2009, the number of employers who had terminated an employee for conduct related to his/her use of a social media site doubled to 8 percent, compared with only 4 percent in 2008.[3]

While there is currently no specific statute codifying the law regarding use of social media in the employment arena, employers should look to their current electronic use policies, as well as to the laws and guidance developed over the past several years regarding best practices for company and employee use of electronic media involving email, Internet, BlackBerry, other PDA and cell phones, and confirm that the policies in place are sufficiently broad to prevent, or at least limit, abusive use of social media by the employees. Relevant policies naturally draw from the established principles of maintaining proper workplace environment and establishing reasonable restrictions on employee behaviour. Examples include: employee privacy, both on and off site,as well as issues relating to workplace searches; adherence to anti-discrimination and harassment law protection of company trade secrets and other intellectual property tenets; and prevention of defamation, tortious interference with contractual relations or unfair trade practices. The most prudent course to protect against liability in the employment realm is to examine each policy that guides the behaviour and conduct of employees, and modify, where required, to create an organic document that broadly interprets this burgeoning form of communication and publication.

Social media may be utilized by companies in a variety of imaginative ways related to employment. As we know, social media is a powerful recruitment tool that can be used to create a buzz or intrigue about the employer and connect heavily recruited talent with the company. It is now de riguer for employers and recruiters to “online” a prospective candidate by scanning his or her LinkedIn, Plaxo, Facebook, Twitter, or other business or social networking pages. It can also be used to educate employees and the public about company advances, enhance PR, respond to negative press, and detect theft or misappropriation of trade secrets, abuse of overtime, sick leave or fraudulent medical claims by employees. As discussed below, these online resources can provide valuable information and an immediate global connection with the public, but must be used consciously and appropriately by both employers and employees to avoid legal misuse.

Misuse of social media can be devastating to a company, both legally and from a public relations perspective. Social media employee banter relating to protected traits such as race or gender may violate an employer’s anti-harassment policy and create a hostile work environment, just as it does when communicated in person by employees. An employee’s tweets about the employer’s new R&D project may result in leaking valuable proprietary and trade secret information. An online smear campaign about a competitor’s product by an employee can subject an employer to an unfair trade practices or tortious interference claim. A manager’s online gossip about an employee’s purported drinking problem that proves to be false may result in a defamation claim. Employees griping via social media about their work environment can not only impact the employer’s reputation, but also potentially provide a window for the employer into employee morale and its potential negative impact on productivity. Finally, an employer’s “inattention” to online behaviour by employees can make it legally liable, if it knew, or should have known, of the behaviour, but failed to take adequate measures to correct the situation, or to notify the appropriate authorities. These concepts should all be familiar to employers. The social media phenomenon merely adds a new, albeit infinitely expansive, arena in which employment issues can arise. Put simply, online “talk” by employees has created a hornet’s nest of new challenges for employers. The legal principles and best business practices employers should use to face these challenges remain the same as those they have used to monitor and control other technology advances that increase the speed and amount of communication among employees, such as email, texting or any other such medium.

This chapter provides companies with an overview of how social media affects the workplace and the resulting issues to consider and manage in connection with employee use of social media. We begin by examining the possible uses of social media by employers and then turn to use by employees, and end with a discussion of how a company can seek the removal of content posted by employees in social media.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Chapter Authors

Colleen T. Davies, Partner – cdavies@reedsmith.com
Areta L. Kupchyk, Partner – akupchyk@reedsmith.com
Kevin M. Madagan, Associate – kmadagan@reedsmith.com

Introduction

Social media, the now-entrenched Internet phenomenon, enables decentralized, real-time communication among small and large groups of individuals, organizations and businesses. Social media is a fast-paced, immediately gratifying interactive communication venue that allows website content to evolve and be transmitted instantaneously to an audience of anonymous, active or passive observers.

The ability to communicate so fluidly, however, renders social media communications reliably unpredictable and illusive, thus posing unique challenges for regulatory authorities as well as the companies they regulate, especially with regard to advertising. One of those regulatory authorities, the Food and Drug Administration (“FDA”), has jurisdiction over companies involved with the manufacturing of medical products, such as drugs, biologics, medical devices, and emerging biotechnology products.

This chapter explains why even though various business sectors have fervently embraced social media as a product marketing tool, the FDA-regulated industry has been slow to adopt this practice. It also explores FDA’s emerging policy on Internet marketing activities, and specifically the potential risks associated with using social media to disseminate promotional messages and scientific information about FDA-regulated prescription drugs and devices. It then provides suggestions on how to proceed now, before FDA issues a guidance document on social media and product promotion.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Chapter Authors

Andrew L Hurst, Partner – ahurst@reedsmith.com
Daniel Z. Herbst, Associate – dherbst@reedsmith.com

Introduction

This chapter looks at the relationship between social media, government contractors, and those businesses regulated by the government or subject to government investigations.

With new and developing social media platforms, government agency Facebook pages, YouTube channels, blogs and Tweeters have begun to emerge and proliferate. The General Services Administration (“GSA”), Small Business Administration (“SBA”) and Office of Management and Budget (“OMB”), Health and Human Services (“HHS”), and Centers for Disease Control and Prevention (“CDC”) have all been early pioneers of social media and micro-sites. Today, a great number of federal and state agencies utilize at least one form of social media in furtherance of their agency mission. This interaction among government and the public using social media is what is commonly referred to as “gov 2.0.” Not only are agencies themselves using social media to interact, but government employees, government contractors and their employees, and companies regulated by the government and their employees are all exchanging information using social media as well.

These new platforms provide increased ability to access and interact, but also create significant legal risks to those that have contractual or regulatory interactions with the government.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Chapter Authors

United States:

Carolyn H. Rosenberg, Partner – crosenberg@reedsmith.com

United Kingdom:

Peter Hardy, Partner – phardy@reedsmith.com [1]

Introduction

This chapter looks at the relationship between social media and insurance in two respects: first, when buying or renewing insurance, what types of policies or enhancements should be considered; and second, if a claim or potential claim arises, what you or your company should do to maximize potential insurance recovery.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Chapter Authors

United States:

Alexander “Sandy” Y. Thomas, Partner – athomas@reedsmith.com
Maureen C. Cain, Associate – mcain@reedsmith.com

United Kingdom:

Emma Lenthall, Partner – elenthall@reedsmith.com
Louise Berg, Associate – lberg@reedsmith.com

Introduction

This chapter looks at the relationship between social media and litigation practices.

Millions of employers, employees, and jurors use social media such as LinkedIn, company websites, Facebook, Twitter, MySpace, and YouTube for business and personal reasons. Users of social media are often very candid and tend to post messages and photos with little thought, in an informal, spur-of-the-moment manner, from smart phones, BlackBerrys, and personal computers. Social media postings often include details that the user would never disclose directly in a formal correspondence, and certainly not to the boss of their company or to an opposing attorney if litigation were involved. Moreover, many people using social media do not realise that such postings often become a permanent record, even if the items are removed.[1]

Lawyers have begun researching social networking sites to gain information about all aspects of a case, including the parties on the other side, how a particular business is conducted, the witnesses, and the jurors. Social media sites contain valuable information such as messages, status updates, photos, and times of every posting, all of which can be used to undermine an opponent’s case in litigation, and which can even negatively affect a company’s business and public image.

This chapter describes various real-life examples of how social media has been used to undermine an opponent’s case in litigation and to negatively affect the image and business of various individuals or entities. Specifically, this chapter discusses how social media has been used to impeach witnesses, uncover documents that would ordinarily be protected by the work-product or attorney-client privilege, expose juror misconduct, and serve legal documents. As an employer, it is important to understand and educate all employees and in-house counsel on the risks associated with social media, how it can undermine the company’s legal positions, and its ultimate effect on business operations and public relations. (See Chapter 6 – Employment)

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Chapter Authors

United States:

Antony B. Klapper, Partner – aklapper@reedsmith.com
Jesse J. Ash, Associate – jash@reedsmith.com

United Kingdom:

Paul Llewellyn, Partner – pllewellyn@reedsmith.com

Introduction

This chapter examines the relationship between social media and product liability.

Companies that develop products, such as pharmaceutical and medical device companies, utilise social media in a variety of ways, including internal and external blogs, pages on third-party sites such as Facebook, and other third-party sites that provide reviews concerning the use and safety of a company’s products. These social media sites and platforms can lead to a wealth of positives for companies. More readily available information can mean greater knowledge about the products and therefore greater sales. However, this same accessibility to information may also create problems. For product developers and manufacturers there is always a risk of legal action regarding the safety of their products. The use of social media may compound this risk by leading to (1) new legal claims and increased exposure to damages, and (2) weakened defences to claims not based directly on social media.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Chapter Authors

Michael J. Young, Partner – myoung@reedsmith.com
James Boulton, Associate – jboulton@reedsmith.com

Introduction

This section examines the law relating to securities and investments, and how that impacts on the use of social media sites on the internet. With more than 18 million households (70 percent) in the United Kingdom having access to the Internet and more than 37.4 million (76 percent) of the adult population in the UK having accessed the Internet, legislation has had to keep pace with the emergence of new technologies and new forms of communication.

Company law has enshrined the use of the electronic communications via the Internet for a decade, and legislation regulating the promotion of financial products was introduced on a media-neutral basis in order to capture new technologies.

The Financial Services Authority (the “FSA”) has also embraced the use of new technology, with a separate section of the FSA website “Moneymadeclear” providing both consumer advice on financial products and protecting against fraud such as identity theft and “boiler room” scams. Moneymadeclear also has its own Twitter feed.

We look at the dissemination of information to the public through electronic means. We also consider the financial-promotion regime in the United Kingdom and its impact on the use of social media. Finally, we examine the market-abuse regime in the United Kingdom and its relationship with the use of social media.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Chapter Authors

Amy J. Greer, Partner – agreer@reedsmith.com
William M. Krogh, Associate – wkrogh@reedsmith.com

Introduction

This chapter looks at the relationship between social media and the securities sector. Securities issuers, investors and other participants in the securities markets, as well as regulators, have always been quick to embrace new technology and forms of communication. Social media is simply the newest iteration. For example, major financial institutions have numerous Facebook
pages, and even the U.S. Securities and Exchange Commission (“SEC”) now has a Twitter feed.

We begin by examining the use of social media by issuers to disseminate information to the public. In addition, we consider how companies can use social media for advertising or promotion. Next, we look at potential liability that may arise when issuers, their employees, or business partners share information via social media. Finally, we examine how companies can be victimized
when social media is exploited to manipulate the market in a company’s stock, or to disclose misappropriated (or stolen) material non-public information (e.g., false rumor cases, market manipulation).

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Chapter Authors

United States:

Darren B. Cohen, Partner – dcohen@reedsmith.com
Meredith D. Pikser, Associate – mpikser@reedsmith.com

Germany:

Dr. Alexander R. Klett, Partner – aklett@reedsmith.com

United Kingdom:

Sachin Premnath, Associate – spremnath@reedsmith.com

Introduction

This chapter looks at the relationship between social media and trademark protection.

Social media has provided individuals and businesses alike with the ability to communicate to an infinite number of people instantly. This great advantage, however, comes with great risks, not the least of which is the appropriation of one’s intellectual property. The vigilance and policing of an owner’s intellectual property has become of the utmost importance as communication provided via social networks is both viral and perpetual. A global infringement that once took weeks, months or years to occur, will now take shape as fast as someone can hit “enter” on his or her keyboard. And, once the infringement is out there in cyberspace, there is no way of knowing if the offending material is ever truly deleted. As more and more individuals and businesses incorporate social media into the promotion of their products and services, increasing brand awareness, they are also finding that unauthorised use of their trademarks, service marks and trade names are emerging through these same channels.

First, we will examine trade mark infringement occurring on social media platforms such as Twitter and Facebook, and how their respective policies deal with infringers. Next, we will examine the issue of impersonation on Facebook and Twitter. Finally, we will discus virtual worlds and the infringement occurring therein. As this chapter will outline, protecting and leveraging intellectual property through social media is an ever-increasing demand that is fraught with legal pitfalls.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Advercasting – A term to describe advertising on a podcast or video podcast. Source: Wikipedia

Advergaming – A term to describe the act of playing an advergame, which is a computer game published by an advertiser to promote a product or service. Source: Wikipedia

Astroturfing – A term used to describe an advertising, public relations or political campaign that is planned by an organization, but designed to mask the origin and create the impression of being spontaneous, or to mask statements by third parties. Fake reviews posted on product sites would be examples of astroturfing. Source: Wikipedia

Blog – A type of website in which entries are usually made regularly by one person, containing commentary, descriptions of events, or other materials such as graphics or video. The term blog can also be used as a verb, meaning to uphold or add substance to a blog. Source: Wikipedia

Bookmark – Also known as a favorite, it is a term to describe a record of the address of a file or webpage serving as a shortcut to it, or the act of creating a bookmark to easily access it at a later time. Source: Wikipedia

Buzz Marketing – A term used to describe word-of-mouth marketing. The interaction of users of a product or service amplifies the original marketing message, creating a form of hype. Source: Wikipedia

Computer-Generated Imagery (CGI) – The application of the field of computer graphics, such as 3-D computer graphics to special effects in films, television programs, commercials, simulators and simulation generally, and printed media. Source: Wikipedia

Cybersmearing – A term describing the insulting of an individual or company online. Source: www.goliath.com

Digital Download – A method of retrieving web content, such as games, music, videos, etc., via downloading from a particular source.

Embedded Players, Widgets and Gadgets – Tools that are added and set in to a webpage. For example, a blog can have an embedded widget allowing users to follow Twitter events on their webpage. Source: Wikipedia

Interactive Gaming – An electronic game that involves interaction with a user interface and usually other users via instant messages or voice chat, such as World of Warcraft or Webkins. Source: Wikipedia

Interstitial Advertisement – A webpage of advertising that displays before the user’s expected content page. Source: Wikipedia

Keyword – A term used to locate material in a search engine or catalog. Source: Wikipedia

Meta Tag – A tool used by content-owners to communicate information about their webpage to search engines, such as a description tag with text, that is to appear in major search engine directories that describes the site or the use of a keyword tag to help push information to end-users via search engine results when they are seeking material related to those words. Source: Wikipedia

Microsode – A relatively short video of content to be viewed, usually over the Internet.

Mobisode – An episode of content that has been condensed to be viewed with a cellular phone. Source: Wiktionary

On-Demand Programming – A term to describe the systems, Video on Demand or Audio Video on Demand, which allow users to select and watch and/or listen to video or audio content at their request. Source: Wikipedia

Opt In – A term to describe when someone is given the option to receive “bulk” email. Obtaining permission before sending email is critical because without it, the email is Unsolicited Bulk Email, known as spam. Source: Wikipedia

Opt Out – A term to describe the method by which an individual can avoid receiving unsolicited product or service information. Source: Wikipedia

Podcast – A series of digital media files (either audio or video) that are released regularly and downloaded through web syndication. Special client software applications that are used to deliver the podcasts (i.e., iTunes, Zune, Juice and Winamp) are what differentiates podcasts from other ways of accessing media files over the Internet. Source: Wikipedia

Promercial – A term to describe on-air promotion spots, with brands increasingly being incorporated into these tune-in spots on many networks. Source: www.allbusiness.com

Satellite Dish – A type of antenna designed to receive microwaves from communications satellites that transmit data or broadcasts, such as satellite television or radio. Source: Wikipedia

Search Engine – A tool to search for information on the World Wide Web. Source: Wikipedia

SMS (Short Message Service) – A service for sending text messages by way of a cellular telephone, usually mobile-to-mobile. Source: Wiktionary

Social Networking – A term to describe the act of making connections and socializing with people who share interests and/or activities, or who are interested in exploring the interests and activities of others. Most social networking is done through web-based programs, which provide a multitude of ways for users to interact. Source: Wikipedia

Streaming – A method of delivering a medium, such as audio or video content, over telecommunications networks. Source: Wikipedia

Twitter-Jacking – A term describing the act of one person taking control of another person’s Twitter account, usually to post untrue or harmful material. Source: www.mashable.com

Typosquatting – Also known as URL hijacking, is a type of cybersquatting when a user accidentally enters an incorrect website address, then is led to an alternative website, usually displaying undesired materials, owned by a cybersquatter. Source: Wikipedia

Unwired or Wireless – A term to describe an electronic device being equipped with Internet or electricity, without the use of electrical conductors or wires. Source: Wikipedia

User-Generated Content – A term that refers to various kinds of publicly available media content, produced by end-users. Also known as consumer-generated media or user-created content. Source: Wikipedia

Viral Marketing – A term that describes marketing techniques that use pre-existing social networks to produce an increase in brand awareness or to achieve other marketing objectives. Source: Wikipedia

Virtual Community – A group of people who primarily interact via electronic media such as newsletter, telephone, email, Internet social network service or instant messages rather than face-to-face, for social, professional, educational or other purposes. Also known as an e-community or online community. Source: Wikipedia

Virtual Reality – A technology that allows a user to interact with a computer-simulated environment, either simulating real world or an imaginary world. Source: Wikipedia

Vlog – The shortened term for video blogging, it’s a form of blogging utilizing the video medium. Source: Wikipedia

WAP (Wireless Application Protocol) – An open international standard for network communications in a wireless-communication environment. Most of its use involves the ability to access the mobile web from a mobile phone or PDA. Source: Wikipedia

Webcast – A media file broadcasted over the Internet using streaming media technology. Source: Wikipedia

Wi-Fi – A trademark of the Wi-Fi Alliance, a global, nonprofit association of companies that promotes WLAN technology and certifies products as Wi-Fi-Certified, to ensure compatibility among products that communicate data wirelessly via the IEEE 802.11 specification. Source: Wikipedia

Wired – A term to describe an electronic device being equipped with wires, so as to connect to a power source or to other electric or electronic wires. Source: Wiktionary

Word-of-Mouth Advertising – Promotion of a product or service through oral statements by independent users or individuals authorized by a marketer.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Site Guide

Unless otherwise indicated, the definition provided below has been taken from the website of the social media tool described.

Tools

Bebo – A social networking site that combines community, self-expression and entertainment. The acronym stands for Blog Early, Blog Often.

Facebook – A social utility that connects people with friends and others who work, study and live around them. The site is used by people and businesses to connect with friends, share photos, and create personalized profiles.

Fast Pitch! – A social network for business networking professionals to market their business, press, blogs, events and networks.

Friendster – A global social network emphasizing genuine friendships and the discovery of new people through friends. Online adults, 18-and-up, choose Friendster to connect with friends, family, school, social groups, activities and interests.

Gather – A social networking site that brings people together through the things they love to do and want to talk about.

Kickapps – A site that provides brands, enterprises and web publishers with solutions that enable them to create and manage next generation web experiences that are social, interactive, dynamic, distributed, and data-informed.

LinkedIn – An interconnected network of experienced professionals from around the world. Users can find, be introduced to, and collaborate with qualified professionals who they need to work with to accomplish their goals.

MOLI – A mall of online stores, where buyers of goods and services can interact directly with the sellers in an environment built exclusively for them.

MySpace – An online community that lets users meet their friends’ friends. It is used for friends who want to talk online, singles who want to meet other singles, families who want to keep in touch, business people interested in networking, and anyone looking for long-lost friends.

Ning – A social media site built to allow users to explore interests, discover new passions, and meet new people around a shared pursuit. Allows users to create and join new social networks for their interests and passions.

Orkut – An online community designed to make the user’s social life more active and stimulating. Its social network can help users maintain existing relationships with pictures and messages, and establish new ones by reaching out to people they’ve never met before.

Plaxo – A social media site that keeps its users connected to the people they know and care about, by using “Pulse,” which is a way for the users to see what their friends are posting to other sites, such as their blog, Flickr, Twitter and Yelp. It is also used to securely host address books.

• Email This
• Print
• Comments
• Trackbacks
• Share Link