Guide Through the Legal Jungle

Options for Responding to Negative Online Comments, Reviews, and Defamation

Someone posts online a critical comment about you or your company, and it is having a negative impact on your business. What can you do?

Reality Check. Realize that not every critical comment qualifies as a defamatory or libelous comment that merits legal action. To be defamatory, the statement must be false. The First Amendment protects our rights to express our opinions and to share (truthfully) any bad experiences we have with a business. The First Amendment even protects us if we share those opinions and experiences in a tasteless, mean way. Here is a comparison of critical statements that are defamatory versus critical statements that are non-defamatory. If you are on the other side and want to express (truthfully) your outrage about a situation, here are examples of good (and not-so-good) word choice suggestions as a guide to staying on the non-defamatory side of the line.

Outreach to Poster. If you view the poster’s complaint as having some validity; and you can remain calm and objective in your communications, it might be worthwhile to engage the poster in a constructive dialogue. Some companies view customer complaints/feedback as an opportunity to showcase their customer service prowess and uncover improvements for their products/services.

Platform Assistance. Some online platforms will work with you to remove comments that are defamatory, violate the platform’s terms of service, or are otherwise inappropriate. However, federal law insulates platforms from liability for defamatory statements made by visitors. Hence, platforms like Yelp, Amazon, Facebook, etc. have discretion in what they deem as inappropriate and whether they will remove it. Many lawsuits attempting to force social media platforms to remove material are unsuccessful.

Positive Statements. One method of diluting a negative review or comment is to seek favorable reviews. But be careful. As I will discuss further in a future posting, there are right and wrong ways to request online reviews. Doing it the wrong way can lead the Federal Trade Commission to conclude that you have violated its Guides Concerning the Use of Endorsements and Testimonials in Advertising.

Reputation Management Companies. There are companies that specialize in repairing one’s online reputation. However, if you do use such a company, be mindful that some companies in this space might use questionable tactics and provide sub-par service. Check references and use due diligence prior to selecting one with which to work.

Lawsuit. If the online statement is libelous, you can pursue a claim against the specific person who made the comment. Even if the person posts anonymously, there are methods of legally requiring the platform to reveal the name/contact info of the anonymous poster. When considering this course of action, one has to evaluate whether a lawsuit against the person is even worthwhile (e.g., what is the primary objective? If it is money, does the person have the resources to pay a monetary penalty if your lawsuit is successful?).

A Few Social Media Etiquette Guidelines

I shared social media business (and legal) etiquette tips as a panelist at a seminar offered at a JA New York jewelry industry trade event. The seminar moderator, Ashley Davis, an Associate Editor at National Jeweler, eloquently described the environment for companies building an online presence:

Social media is a new frontier for businesses, one that is essential to survival in the tough retail market, but it’s also an arena without established mores to guide proper behavior.

Here is a summary of my response to Davis’ question about ground rules for a company’s online presence. Since seminar attendees consisted primarily of retail, manufacturing and design professionals from the jewelry, my remarks focused on the jewelry industry. However, the guidelines for appropriate social media conduct apply to many industries.

You want to make sure that your online activities are legal and are not violating anyone’s rights Some of the subject areas for potential pitfalls include violating someone’s copyright, trademark, and publicity rights; and offering a promotion that violates the law. Here are a few examples of social media activities likely to land you in legal trouble.

Undisclosed Endorsements

Paying people who are influential in the jewelry industry to post pictures of themselves to social media wearing your designs without disclosing their relationship to you is illegal and can result in a contact from the Federal Trade Commission (FTC) inquiring about your failure to comply with its Guidelines concerning endorsements and testimonials.

For the same reason, running a promotion where you promise customers a 15% discount on their next purchase if they bring in a screen shot of their positive Yelp review of your store – can yield an inquiry from the FTC if the incentive for that positive review is not disclosed.

(Inaccurate) Implied Celebrity Endorsements

Let’s say Angelina Jolie or Meryl Streep or [you fill in the celebrity] visits your store and makes a purchase, you take a picture of Angelina or Meryl and post it to Twitter or Facebook with the caption “Look who’s shopping at our store” without the permission of the celebrity. That has the potential of generating a lawsuit claiming that you violated the celebrity’s publicity rights.

One high-profile 2014 example started with a paparazzi photo capturing actress Katherine Heigl leaving a New York Duane Reade drugstore and carrying bags from the store. Duane Reade posted the image online with the caption “Even @KatieHeigl can’t resist shopping #NYC’s favorite drugstore.” Heigl launched a lawsuit alleging violations of the federal Lanham Act as well as the New York civil rights statutes and seeking $6 Million in damages. Duane Reade and Heigl eventually settled.

Online Sweepstakes

You offer an online sweepstakes. Each time a customer makes a purchase at your online store, they are immediately entered into a random drawing for a complimentary day at the spa with all the treatments. If your sweepstakes does not offer a method to enter that does not require payment, it is not a sweepstakes. It is an illegal lottery because in exchange for a payment, the customer received an opportunity to win a prize where the winner of the prize is selected randomly. To change it back into a legal sweepstakes, you need to remove the required payment. You can usually accomplish that by offering a free method of entry.

In a recent blog posting, I deconstructed a real example of an illegal lottery masquerading as a legal sweepstakes and provided options for remedying the problem.

Promotional Videos with Infringing Music

You put together a short video promoting your store. To make the video more interesting, you rip a copy of your favorite song and pop it into your video as the soundtrack. As previously discussed on this blog, adding music to your company video can generate legal problems.

Suppose you post your promotional video online. If posted to YouTube, there are some YouTube specific reasons [i.e., YouTube’s Content ID System] why such posting might not be problematic. On other online platforms or when YouTube exceptions do not apply, a common scenario is the music copyright owner issuing a take-down request and removal of your video from the platform. A worst case scenario is the music copyright owner suing you for copyright infringement.

Legality of Fantasy Sports - Gambling or Not

The fantasy sports industry nearly imploded in 2015. While several factors fueled that near detonation, chief among them was a belief that fantasy sports games are actually illegal lotteries or illegal gambling games.

Since the 2015 implosion, eight states, including New York, have adopted laws legalizing (and, in most cases, heavily regulating) fantasy sports. Although daily fantasy sports remains banned or legally uncertain in about ¼ of the states, the industry seems to be recovering from its near-death experience. In fact, the fantasy sports industry’s experiences offer helpful lessons for companies and counsel in other industries.  I discuss those lessons in the article, “What In-house Counsel Can Learn From the Fantasy Sports Industry”, co-written with my colleague, Ellen Zavian, and appearing in the September 2016 issue of the Association of Corporate Counsel’s Docket Magazine.

This blog posting explains why state regulators and others viewed (or continue to view) fantasy sports as illegal.

What Are Fantasy Sports?

Fantasy sports competitions are games in which participants simulate the role of an owner or manager of a professional sports team. Other names for this type of promotion include rotisserie, roto, and owner simulation. There are fantasy sports leagues for many sports including football, baseball, basketball, hockey, NASCAR races, soccer, and golf. Currently, fantasy games based on the National Football League are by far the most popular in the United States, with games based on soccer being the most popular globally. The simulation game genre has even gone beyond sports and exists for politics, movies, and reality television programs.

In a fantasy sports competition, each participant selects a roster of athletes to play on that participant’s simulated team. The selected athletes are real people who actually belong to professional sports teams. A roster assembled by a fantasy sports team player typically consists of players from several teams. The participant gets points based on the real-life statistical performance in actual games by the athletes on his roster. The winner of the fantasy sports competition is the participant with the most points.

Fantasy sports can be divided into two broad categories: the more traditional season fantasy sports (SFS) and the newer daily fantasy sports (DFS). As the name implies, SFS games track athletes’ performance over the majority of a season. In contrast, DFS games track athletes’ performance over a single game or single week. The surge in DFS competitions sparked many of the industry’s recent woes.

Impact of Federal Unlawful Internet Gambling and Enforcement Act

In arguing their legality, fantasy sports companies relied heavily on the Unlawful Internet Gambling and Enforcement Act of 2006, 31 U.S.C. §§ 5361-5367 (UIGEA). The UIGEA is a federal law that prohibits funds transfers to businesses engaged in unlawful internet gambling. The act defines “unlawful internet gambling” as transmitting a bet or wager via the internet where the bet or wager violates the gambling laws of any state in which the bet is initiated, received, or otherwise made. The UIGEA specifically excludes from the definition of “bet” or “wager” money paid for participation in a fantasy or simulation sports game as long as the fantasy sports game satisfies the following conditions:

• The sponsor establishes the prizes to be awarded and makes all participants aware of that information prior to the start of the promotion.

• Neither the number of participants nor the amount of fees paid by participants determines the value of the prizes.

• Winning outcomes are determined predominately by accumulated statistical results of the performance of individuals (athletes in the case of sports events) in multiple real-world sporting or other events.

• No winning outcome is based on the score, point-spread, or any performance or performances of any one or more real-world teams.

• No winning outcome is based solely on any single performance of an individual athlete in any single real-world sporting or other event.

Daily fantasy sports providers inaccurately cited the UIGEA's fantasy sports exemption as authority for the legality of their business model. As state regulators highlighted, the exemption in the UIGEA for fantasy sports does not mean that fantasy sports are lawful in all states. The federal exemption means only that fantasy sports are not criminalized under the UIGEA.

Instead, whether or not a fantasy sports league comprises gambling within a particular state is state specific. It depends on the individual state’s gambling laws and how the state evaluates the structure of the particular fantasy sports game.

Impact of State Gambling Laws

For the most part, gambling is illegal in the United States. States that do allow gambling tend to regulate it heavily. In response to government scrutiny, fantasy sports companies describe their fantasy game offerings as skill-based contests, and, thus, not a gambling game or lottery.

Is a Fantasy Sports Competition a Skill-Based or Chance-Based Game?

Like many games, fantasy sports games combine elements of skill and chance. Skill comes from the fantasy sports participants’ use of their knowledge of athletes, statistics and strategy to pick a winning team. Chance exists because external factors that are beyond the fantasy sports participants’ control influence the outcome. These external factors injecting chance include the future performance, injury status, and time at play of athletes on the participants’ roster as well as the overall game plan.

The more direct impact participants have on the selection of their rosters, the more one can argue that skill rather than chance determines the game winner. The greater extent to which participants can trade, cut, and add players, and decide which players start or are benched for each game, the more opportunities participants have to use their knowledge and strategic thinking to influence the outcome of the competition.

Many state investigations into daily fantasy sports have focused on the fact that once a player places a wager and picks a lineup for a DFS promotion, those choices are locked in as soon as the real-world competition begins. This structure contrasts with that of a SFS game in which a participant can make changes to his roster over the course of a season.

How States Make the Chance-Skill Determination

The approach to a skill-chance determination is state specific. Most states apply the dominant factor doctrine or the material element test to determine whether chance or skill prevails in a game that combines elements of both. Variations in the states’ evaluations of fantasy sports illustrate the challenge to operators when offering fantasy sports competitions nationwide.

As an example, in his conclusions that DFS games such as FanDuel and DraftKings’ are illegal gambling in his state, Hawaii Attorney General Kevin Takata, applying the material element test, stated that chance is a material element for the vast majority of players and that skill made a difference in the outcome for only a tiny minority of top-performing players. The Hawaii opinion also cited sources from litigation between the State of New York and DraftKings indicating that the typical participant playing DraftKings' Major League Baseball-Fifty-Fifty game had a win ratio slightly worse than random chance (i.e., about 45%).

In a contrasting example, Rhode Island Attorney General Peter F. Kilmartin, applying the dominant factor doctrine, concluded chance does not dominate the outcome of DFS games and that therefore, DFS does not constitute a game of chance and is not an illegal gambling game or lottery in Rhode Island.

Existence of Chance Is Not the Whole Story

Some states have one set of laws for lotteries and a different set of laws for the broader category of gambling. While every lottery is a form of gambling, the converse is not true. Every gambling game is not a lottery. Offering a fantasy sports game viewed as either a gambling game or as a lottery creates problems with state regulators.

One major distinction between the two is the elements required to constitute a lottery versus the elements required to constitute gambling. With very few exceptions, each state requires a finding of prize, consideration, and chance before categorizing a game as a lottery. In contrast, as the fantasy sports industry has learned, some states designate a game as gambling even if it does not contain the element of chance.

In opining that fantasy sports is illegal in Nevada, Nevada regulators explained that “ . . . while a determination that an activity is a game of skill is relevant to determining whether that activity is a lottery, it is not relevant to determining whether that activity constitutes a gambling game”. In the Hawaii opinion letter discussed above, even had the attorney general concluded that daily fantasy sports games did not contain a material element of chance, the games would still be illegal gambling in Hawaii since they meet another prong of the Hawaii anti-gambling laws in that winning depends on future contingent events (i.e., performance by athletes in sporting events) that are outside the control of participants.

Online Snarking. Is It Libel or Free Speech? Some Libel Do’s and Don’ts for Online Speech.

With Facebook, Twitter, Yelp, online forums, and so many other digital venues in which to share our thoughts with the world, it is easier than ever to become the target or the perpetrator of libel.

Some Defamation and Libel Basics

Defamation law varies from state to state but there are several general, common principles. You defame someone when you make a false statement about the person and the statement harms the person’s reputation. The defamatory statement is libel if you write it down and share it with other people. When you simply speak the defamatory statement, that’s slander. Defamatory statements posted online are libel.

To be defamatory, the statement must be false. A truthful statement - even if unflattering - is not defamatory. Similarly, a statement of opinion is not defamatory. However, do not take this as carte blanche to make any statement you want hoping to pass it off as an opinion. Merely labeling a statement as opinion does not insulate the statement from being defamatory. “I think Mr. Jones is a dishonest person,” may be a valid non-defamatory statement of opinion. In contrast, “I think Mr. Jones is embezzling money from the company,” is likely defamatory if Mr. Jones is innocent of embezzlement.

Libel Do’s and Don’ts for Online Speech

DO understand that you are accountable for your Internet speech. Just because you present it in 140 characters or place it in a Facebook posting does not mean you are not accountable for your defamatory language.

DO realize that every online, negative comment about you or your business is not libel. The First Amendment protects a customer’s right to cybergripe, that is share online the truth about any bad experiences he has had with your business. In many cases, the disgruntled customer may even use a website name that mimics and parodies the business’ name – JonesConstructionIsAwful.com. The cybergriper steps outside legal boundaries only if his criticism includes false statements and those false statements harm the business.

DO realize there is more leeway when making comments about public figures and issues of public concern. The risk of libel decreases if the real people mentioned are public figures or other people involved in events of public concern.

DO realize the benefits of the Communications Decency Act (CDA). Thanks to this federal law, online forum operators, bloggers, and website owners are not legally re¬sponsible for libelous statements posted by visitors to their sites. This is starkly different from the offline world in which a publication like a newspaper or magazine would be liable for printing a reader’s defamatory comments.

DON’T think you can hide behind anonymity. While you have a First Amendment right to speak anonymously, the First Amendment does not make it okay to violate someone’s rights. A person you libel online may be able to uncover your identity by serving a subpoena upon your internet service provider.

DON’T think eliminating or changing names is sufficient. The person about whom you make untrue statements might still have a libel claim even if you don’t mention him by name. The person might still be identifiable through your mention of a nickname, geographic location, physical description, personality trait, or real-life events in which the person was involved. If readers can identify the person about whom you make a false and harmful statement, there is potential risk for libel.

Libel Versus First Amendment Protected Speech

To place some of these principles and do’s and don’ts into context, here are comparisons of what is libel and what is not libel.

Not Libel. “This architect lacks compassion. He doesn’t care about the needs of his customers or the community.”

Libel (if untrue). “Don’t hire him for your project. He is on illegal drugs and has been hospitalized for mental instability.”

Not Libel. Posting online a photograph or video of someone. (However, depending on the circumstances, the posting might yield copyright, privacy, or other claims.)

Libel. Posting a photograph or video after adding a misleading caption or editing it in a way that negatively misrepresents what actually happened.

Not Libel. “This firm charged $10,000 when other firms charged only $5,000. The quality of their work was not worth the extra money.”

Libel (if untrue). “After demanding full payment upfront, this firm started work two months later than promised and delivered a structure that was not up-to-code.”

An earlier version of this article was published in the American Institute of Architect’s CRAN Chronicle.

Minimizing Risk when Delegating Company Social Media Activities. Use of Images.

Train Staff and Freelancers in Basic Copyright Principles

Communicate to freelancers and staff that all company social media postings should respect others’ intellectual property rights. Ensure that individuals handling the company’s social media accounts have general awareness of copyright, fair use, and other rights clearance issues – whether you accomplish that task via an in-house training session, a third party webinar, a company handbook, or alternative means.

The copyright infringement lawsuit filed by the North Jersey Media Group (NJMG) against the Fox News Network illustrates what can go wrong when a company does not provide clear guidance to staff responsible for social media. NJMG sued Fox after Fox posted an NJMG-owned iconic 9/11 image to a Facebook page promoting the Justice with Judge Jeanine television program. After Fox's argument that the use was entitled to a fair use protection was rejected in a summary judgment motion, Fox elected to defend its use in a jury trial scheduled for early 2016. (See Note)

Here’s how the 9/11 image found its way to the Justice with Judge Jeanine Facebook page, according to the Fox-NJMG court documents:

A Fox production assistant held principal responsibility for managing and posting content to the Justice with Judge Jeanine Facebook page. She found and selected the 9/11 image for posting on Facebook after conducting an internet search on Google. The decision to post the image was hers. The production assistant, who had majored in journalism and media studies, had no copyright law training in college nor during her three-year tenure at Fox.

While the production assistant had access to the legal department and had previously consulted with it regarding the fair use of photographs and videos on the television program, she had never sought legal advice for postings on the Facebook page and did not seek the advice of the legal department or anyone else associated with the program before posting the iconic 9/11 image.

 

Encourage Staff to Use Pre-Cleared Pools of Creative Materials

Staff persons with no copyright training should not meander the internet in search of images to post to the company’s webpage and social media accounts! Read that sentence again.

Even images that appear to be rights free or come with Creative Commons licenses can still be problematic. With respect to relying on fair use, not even experienced copyright attorneys can always accurately predict which uses a court will view as a qualified fair use.

It might not be possible – or even desirable – to have a legal consultation for every image to be posted to the company’s social media accounts. One potential solution is making a bank of pre-cleared images available to staff and freelancers. There are stock image libraries of all sizes with the larger ones offering millions of images.

What’s ironic about the Fox-NJMG copyright lawsuit is that Fox may have actually had a license to post that iconic 9/11 image. Fox subscribed to the Associated Press photo bank and the 9/11 image is among the images the AP makes available to subscribers. Fox discovered this fact in the middle of the proceedings and after the deadline to amend its answer to NJMG’s complaint. The court would not allow Fox to amend its answer to add the defense of license. (North Jersey Media Group v. Pirro, No. 13 Civ. 7153 (S.D.N.Y., Mar. 2, 2015)).

The Lesson. If you have a blanket license to an image library, encourage – or, even better, restrict staff and freelancers to using images from that image library. Companies can apply similar strategies to music and footage by subscribing to stock music and stock footage collections.

Of course, even using stock images requires a modicum of guidance as there are definitely wrong ways to use stock images.

(NOTE: This posting previously incorrectly reported that NJMG and Fox settled the dispute after Fox’s failed summary judgment motion attempt. While the parties reportedly came close to settlement, those discussions ultimately proved unsuccessful.)

What the 9th Circuit Does and Does Not Tell Us about Fair Use and the DMCA. Ruling in Lenz v. Universal Music (a.k.a. Prince and the Dancing Baby Case)

Background

Everyone will be blogging about this case so I’ll keep my background description short.

On February 7, 2007, Stephanie Lenz uploaded to YouTube a 29-second home video of her two children dancing to the Prince’s song, “Let’s Go Crazy”. Universal Music Publishing, Prince’s publishing administrator at the time, issued a takedown notice under the Digital Millennium Copyright Act (DMCA) and YouTube removed the video. Lenz objected to the takedown and, with the aid of the Electronic Frontier Foundation, launched a lawsuit against Universal Music. Lenz argues that her video usage of “Let’s Go Crazy” is a fair use and that Universal Music’s issuance of the takedown notice was bad faith and constitutes misrepresentation under the DMCA.

After eight years of litigation, here is what the 9th Circuit does and does not reveal about copyright fair use and the DMCA in its opinion issued on September 14, 2015.

The 9th Circuit Does Tell Us

DMCA Takedowns Require a Fair Use Consideration. A copyright owner must consider the existence of fair use before sending a DMCA takedown notice.

A Fair Use Is a Legally Authorized Use. The DMCA unambiguously contemplates fair use as a use authorized by the law. As a result, If the online content uses the copyright owner’s material in a manner that qualifies as a fair use, the copyright owner may not send a DMCA takedown notice. This is because, under such circumstances, the copyright owner may not legitimately make the required DMCA takedown statement that the copyright owner has a “good faith belief that the use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law.”

Copyright Owner’s Fair Use Assessment Need Not Be Correct; Good Faith Is Sufficient. The copyright owner sending a DMCA takedown notice need only have a subjective good faith belief that fair use does not apply. As long as it holds such a good faith belief, the copyright owner is not liable for any DMCA misrepresentation - even if a court subsequently reaches the opposite conclusion and decides that fair use does indeed apply.

Intensive Analysis Is Not Required. In order to comply with DMCA requirements, the copyright owner’s fair use analysis need not be searching or intensive.

Computers May Perform Fair Use Analysis. Computer algorithms can be a valid mechanism for considering fair use as part of the copyright owner’s identification of content to be taken down. This is the view of the majority. The dissenting judge – who agreed with the final result but disagreed with portions of the majority’s analysis – believes that a copyright owner may rely solely on a computer algorithm only if the computer algorithm can apply the four-factor copyright test indicated in the Copyright Act. While perhaps not impossible, getting a computer to apply what is a subjective and often fickle four-factor determination seems like quite a challenge.

Willful Blindness Negates Good Faith. The willful blindness doctrine may be used to determine whether a copyright owner made a misrepresentation in its DMCA takedown request. In other words, if a copyright owner subjectively believes that there is a high probability that a particular use qualifies as a fair use and takes deliberate actions to avoid learning of the fair use, then the copyright owner’s sending a takedown notice for removal of the material is a DMCA misrepresentation.

Damages Available Even If Plaintiff Suffers No Actual Loss. A plaintiff whose material is removed as a result of a DMCA takedown notice with a misrepresentation does not need to demonstrate any actual monetary loss in order to recover damages. Such a plaintiff may seek recovery of nominal damages from the copyright owner.

The 9th Circuit Does NOT Tell Us

Is It Fair Use? The 9th Circuit does not decide whether using 29 seconds of a copyrighted song in a family video and posting that video to the internet qualifies as a fair use of the song. That determination remains for the lower court. It could be quite some time before we have a court’s answer to this underlying fair use question. Commentators indicate that the Lenz parties might seek a Supreme Court review of the DMCA misrepresentation issue.

How Does a Copyright Owner Satisfy the Good Faith Standard? While the 9th Circuit reveals that the copyright owner’s good faith belief that fair use does not apply is sufficient for the DMCA required fair use consideration, it does not provide many details on how copyright owners should get to this good faith belief.

Here’s how Universal Music handled its YouTube DMCA takedown selection process An assistant in the Universal Music legal department monitored YouTube on a daily basis. For those videos including Prince songs, the assistant evaluated whether the video made significant use of the song, whether the song was recognizable in the video, whether the song was in a significant portion of the video, and the song was the focus of the video. While none of the Universal Music video evaluation guidelines explicitly included consideration of the fair use doctrine, the assistant did not issue DMCA takedown notices for videos that used a second or less of a Prince song or in which the Prince song was distorted by a noisy environment.

The majority of the 9th Circuit did not render a decision on whether Universal Music’s process satisfied the good faith fair use determination required by the DMCA. Instead, it decided there was a factual dispute regarding whether Universal Music’s procedure satisfied the good faith requirement and left the question for the lower court. In contrast, the dissenting judge says that Universal Music’s policy did not meet the good faith standard because Universal Music did not clearly include a fair use consideration as part of its DMCA selection process.

You can view the Lenz family video on YouTube here. You can read the full 9th Circuit opinion here.

Two Social Media Activities Guaranteed to Get You Sued. And One That Really Shouldn’t.

Posting Iconic Copyrighted Images without a License

Yes, you can easily cut and paste an image you find on the Internet. However, that doesn’t mean you should. If the image is an iconic image, your posting could easily generate a lawsuit.

Consider the example of North Jersey Media Group (NJMG) which is a newspaper publisher and the copyright owner of the now-famous September 11, 2001 photograph of three firefighters raising the American flag at the ruins of the World Trade Center site (photo shown here). NJMG has sued several parties for using that image without its permission.

After a court declined to dismiss a lawsuit in Fox News Network’s favor on fair use grounds, Fox elected to defend its fair use position in a jury trial scheduled for early 2016 (See Note). The Fox outcome may have persuaded Sarah Palin and her political action committee to offer $15,000 to settle a similar ongoing lawsuit filed by NJMG after the image was posted on Palin’s website and Facebook page. Disagreements over the confidentiality provision to go into the settlement agreement have slowed down the NJMG-Palin settlement process.

Hopefully, most realize that the appearance of an image on the Internet does not place that image in the public domain and does not constitute permission to use the image in anyway one wants. Nevertheless, even some media organizations that should know better remain surprisingly clueless on this copyright principle.

Falsely Implying that a Celebrity Endorses Your Company or Product

Celebrities typically receive compensation when lending their names or images to promote a product. As a result, celebrities tend not to appreciate the unauthorized association of their persona with random products. It’s a violation of their publicity rights and such violations often lead to celebrity lawsuits against the offending company.

One high-profile 2014 example started with a paparazzi photo capturing actress Katherine Heigl leaving a New York Duane Reade drugstore and carrying bags from the store. Duane Reade posted the image online with the caption “Even @KatieHeigl can’t resist shopping #NYC’s favorite drugstore.” Heigl launched a lawsuit alleging violations of the federal Lanham Act as well as the New York civil rights statutes and seeking $6 Million in damages. Duane Reade and Heigl eventually settled.

Of course, publicity rights violations are not limited to online postings. They can result from using a famous persona in other media such as placing the celebrity’s image on a billboard, using the celebrity’s name or nickname in a magazine advertisement, or superimposing the celebrity’s head on a greeting card.

Inadvertently Liking, Re-Tweeting, or Sharing Infringing Content

It should be no surprise that much material posted online violates copyright laws. The copyright owner sometimes launches a lawsuit against the person or company that posted the infringing material. The forum – such as YouTube, Twitter, or Facebook – on which the material is posted has typically taken advantage of the safe harbor provisions offered by the Digital Millennium Copyright Act and is, therefore, insulated from any copyright infringement liability stemming from infringing material posted by its users.

But what happens if we – without realizing that the material is infringing - re-tweet, pin, like, or otherwise share infringing content? Does that action make us subject to a copyright infringement lawsuit?

It usually does not.

Potential Lawsuit Against Innocent Online Bystanders?

Some blog chatter indicated that a recent lawsuit did target such innocent online bystanders. In June 2015, photographer Dennis Flaherty filed a lawsuit against the beverage company Big Red after Big Red incorporated Flaherty’s photograph of the Alamo into Big Red’s Twitter and Facebook postings. In addition to naming Big Red as a defendant, Flaherty also named five unidentified parties as defendants – referring to them in the complaint as “Does” (i.e., as in the colloquial John Doe or Jane Doe).

Some commenters interpreted the inclusion of these “Does” to mean that Flaherty was suing people who simply visited the Big Red social media account and re-tweeted or pinned the Big Red posting containing Flaherty’s Alamo image. After looking at the Flaherty v. Big Red pleadings, I believe that’s a misinterpretation of Flaherty’s intent.

Here’s Where It Gets A Bit Complicated

There are different forms of copyright infringement. In his lawsuit against Big Red, Flaherty alleged that Big Red was liable for direct copyright infringement, vicarious copyright infringement, and contributory copyright infringement. Each type of infringement is a separate claim with distinct components. The contributory copyright infringement claim is relevant to my discussion.

To win the contributory copyright infringement component of his lawsuit, Flaherty needed to show that while Big Red did not directly engage in the infringing activity, Big Red had reason to know such infringing activity took place and Big Red materially contributed to the infringing activity. In other words, in order for Big Red to be liable for contributory infringement, a third party must have committed direct infringement.

Flaherty identifies the social media users activity of pinning or re-tweeting as the direct infringement that makes Big Red’s contributory infringement possible. According to the complaint, Big Red committed contributory copyright infringement when it posted Flaherty’s Alamo photo on Twitter and Facebook, since Big Red should have known that other social media users would share the infringing post.

Even though the social media users’ re-tweeting and pinning might technically constitute infringement, Flaherty did not sue those social media users and was not referring to such social media users with the “Doe” designation. This interpretation is supported by Flaherty’s description in the complaint of the “Does” as the “agent, affiliate, officer, director, manager, principal, partner, joint venture, alter ego, hired contractor, and/or employee of” Big Red or its corporate subsidiary.

So, at least for the moment, there appears to be no pending lawsuits against innocent online bystanders who re-tweet, like, and similarly share.  (Flaherty and Big Red did settle and the case was dismissed on August 12, 2015. )

(NOTE: This posting previously incorrectly reported that NJMG and Fox settled the dispute after Fox’s failed summary judgment motion attempt. While the parties reportedly came close to settlement, those discussions ultimately proved unsuccessful.)

Copyright Registration for Your Podcast

This blog posting uses the term podcast; however, these guidelines for copyright registration apply to any original audio recording you produce.

Submit Your Application Electronically or On a Paper Form

You can register the copyright in your podcast as a basic claim using the Copyright Office’s online registration system or using a paper application form available from the Copyright Office’s website. Online registration is less expensive and has a faster processing time.

Determine Which Elements of the Podcast You Own

Your podcast potentially consists of two separate copyrightable elements. There is a copyright in the recording and a copyright in the underlying material (assuming the underlying material qualifies for copyright protection).

For example, suppose you write and develop a seminar on woodworking and then record a podcast featuring that seminar. There is a copyright in the seminar content you developed. There is also a separate copyright in the podcast recording of the seminar.

If you are the producer of the podcast but did not create the underlying content, claim ownership only in the sound recording. If you are also the owner of the underlying material, you may claim ownership in both the sound recording and the underlying material. By registering the underlying work and sound recording together in one application, you pay one filing fee instead of two.

More Resources on Copyright Registration:

How to Copyright Protect Your Work. Part One.

How to Copyright Protect Your Work. Part Two.

Copyright Protection for Internet Content. Part One. – Some Basics

Why You Must Check the Status of Your Copyright Registration Application

The Cyber Citizen’s Guide Through the Legal Jungle includes a sample of a completed copyright registration application for a podcast with explanatory notes.

Yelp, Amazon, and Online Reviews - Can You Take Them with You?

Online reviews have become increasingly important for businesses of all sizes. So it’s understandable that business owners suffer duress when their favorable reviews disappear – which sometimes happens as a result of joint ventures and partnerships among online review site companies.

What Can A Business Do When Its Favorable Online Reviews Vanish?

A few commentators quoted in the Wall Street Journal suggest that companies copy their reviews – as a screenshot – so the company can display the reviews on its own website in the event a good review suddenly disappears from the review site. From a legal perspective, that’s not a prudent course of action.

Check the terms of service for sites like Yelp and Amazon. Those terms typically prohibit you from reproducing the site’s content. For example, here’s a loose paraphrasing of the language in Yelp’s Terms of Service:

• You own the reviews and other content you contribute to the Yelp site. You do grant Yelp a very broad non-exclusive license to use the content you contribute and allow others to use the review.

• Yelp owns everything else including the site graphics, design, compilation and arrangement of reviews, and aggregate user review ratings.

• You may not reproduce, distribute, publicly display or in any way exploit any of the content on the Yelp site (other than the content you have contributed and own) without Yelp’s permission.

That third point makes your re-posting a screen shot or unilaterally reproducing the text of a Yelp review on your site a violation of Yelp’s Terms of Service.

Option for Preserving Your Favorable Reviews

If you have contact information for the person who left the online review on the online review site, you can ask the person if you can reproduce the content of their review on your own website or blog. As mentioned above, even though the person who writes the review gives Yelp or Amazon a broad license to use the review, the review writer retains the copyright in the review.

As a result, the review writer can re-use that review as he/she pleases including giving you permission to re-print the review on your blog or website. Note that the review writer cannot grant you the right to use the design elements of the online review site so you should re-produce only the text of the review and not a screen shot.

Copyright Protection for Internet Content. Part Three. Are Tweets Copyright-Protected?

This is Part Three in the blog series, Copyright Protection for Internet Content.

As many readers know, the online social networking service called Twitter is the originator of the term, “tweet”. A tweet is a message with up to 140 characters. One can send, post, and read tweets on Twitter which refers to itself as a microblogging service.

QUESTIONS RELEVANT TO COPYRIGHT STATUS OF A TWEET

Is the Tweet Isolated or Part of a Longer Work? A single 140-character tweet is likely too short to qualify for copyright protection. However, a stream of tweets that together comprise one coherent story may qualify for copyright protection. For example, one might post in a series of consecutive tweets -

• a news story

• a lecture or a speech

• a poem

• a short work of fiction

Does the Tweet Simply State Facts? As already discussed in Part One and Part Two of this blog series, facts on their own are not copyright protected. Tweets are often factual and may not be eligible for copyright protection.

Does the Tweet Include Visual Images? A visual image included in a tweet is going to have the same copyright protections it would have if you were holding a hard-copy of the image in your hand. In other words, assume the visual image is copyright protected until you have information proving otherwise.

WHEN CAN YOU RE-USE TWEETS THAT ARE COPYRIGHT-PROTECTED

If you determine that copyright does protect the tweets you want to use, circumstances under which you can use those tweets include the following:

You Can Use Copyright-Protected Tweets If Twitter Says You Can Use Them

When a person posts to Twitter, the person does retain ownership of his/her tweets. However, via the Twitter Terms of Service, the person gives Twitter “a worldwide, non-exclusive, royalty-free license” to re-use his/her tweets in any way Twitter wants. That means Twitter can stream or share the tweets with other online and offline outlets – and it means Twitter may allow others to do the same.

Twitter, in fact, uses its license in posted tweets to encourage other outlets to re-use tweets and incorporate tweets into other media. Twitter has policies allowing others to embed tweets into blogs and websites (using the Embed Tweet command found on every Tweet) and re-use tweets in broadcast productions. You do not need to contact Twitter for permission to use tweets in this way as long as your use complies with its written policies for Embedding a Tweet on your website or blog, Guidelines for using Tweets in broadcast, or other Twitter policy relevant to your use.

Caveat about Visual Images. The permission from Twitter allows you to display any visual images included in the tweet as part of your re-use of the entire tweet. It does not allow you to strip visual images out of the tweet and use those visual images independently of the tweet. The Washington Post, Agence France and Getty Images learned this lesson the hard way when they were sued and lost a copyright infringement lawsuit for publishing and distributing photos of the Haitian earthquake uploaded to Twitter by Photojournalist Daniel Morel 2013.

You Can Use Copyright-Protected Tweets if Your Use Qualifies as a Fair Use

Depending on how and why you use the tweet(s), the fair use exception to copyright protection may apply. Unfortunately, fair use determinations are very subjective and case-specific. There is no bright line rule that tells you when something does or does not qualify as a fair use.