Congress will return later this month where the House will discuss the Stop Online Piracy Act (H.R.3261) (“SOPA”) authored by Rep. Lamar Smith (TX). This bill has sparked controversy throughout the Internet as corporations and individuals alike interpret the bill, in its current form, and point out potential areas of concern. Such controversy has sparked GoDaddy, a major domain name registrar, to remove itself from the U.S. Congressional list of SOPA supporters after social-media backlash through Reddit started a boycott of the company in December 2011.

The bill has the potential to muddle the waters for major social-media Web sites, like Reddit, that rely on user-created content to flourish. Under the bill, voluntary action by Web site owners to remove infringing content creates immunity. As such, some critics of the bill believe that Web sites will undergo extensive self-censorship of both infringing and non-infringing content in order to protect themselves from liable further down the road. In another example, the bill, in its current form, also creates potential issues for YouTube and its users by adding in criminal liability for willful infringers of copyright through streaming for commercial gain.

Another area of interest in the bill is the requirement that online service providers, Internet search engines, payment network providers, and Internet advertising services withhold services to a potentially infringing Web site or prevent access to such site upon receipt of a court order to do the same from the United States Attorney General. For online service providers, preventing access may include “prevent[ing] the domain name of the foreign infringing site (or portion thereof) from resolving to that domain name’s Internet Protocol address.” H.R.3261.IH § 102(c)(2)(A)(i).

It is unknown at this time what provisions of the bill, if any, will become law. However, corporations that rely extensively on user-created content for their business may wish to evaluate the potential implications of the bill to prepare themselves. If you are interested in learning more about SOPA, please contact info@theiceloop.com.

Internet entrepreneurs and software programmers are used to dealing with patent, trademark and copyright issues when plying their trade in cyberspace, but it’s fairly certain that few worry much about Right of Publicity Law. That may be about to change.

In a case currently proceeding in the U.S. District Court for the Northern District of California (Fraley v. Facebook Inc., N.D. Cal., No. 11-1726, 12/16/11), several Facebook users (who are seeking class action status) are alleging that Facebook created, without users’ knowledge or consent, high-value advertisements based upon users clicking a “Like” button associated with an advertiser’s Facebook page.  The District Court has ruled that the plaintiffs have alleged a sufficient injury under California’s right of publicity statute to create Article III standing to sue in federal court.

The plaintiffs are complaining about a relatively new Facebook advertising product called a “Sponsored Story,” which debuted in January 2011.  Sponsored Stories appear in a Facebook user’s news feed and are highlighted from the rest of the news feed to indicate their sponsored status.  They commonly include an indication that one of the user’s Facebook friends “likes” the advertised product, service or business.  The plaintiffs allege that Sponsored Stories are “a new form of advertising which drafted millions of [Facebook users] as unpaid and unknowing spokespersons for various products,” and they allege that they are thus entitled to compensation under California law. The plaintiffs alleged that Facebook’s practice of misappropriating their names and likenesses for commercial endorsements without their consent violated their statutory right of publicity under the California Civil Code.

The California right of publicity statute (Section 3344 of the California Civil Code) prohibits the non-consensual use of another’s name, voice, signature, photograph, or likeness for advertising, selling, or soliciting purposes, and creates a cause of action for persons injured by such actions.

According to Facebook’s Statement of Rights and Responsibilities, a Facebook user joining Facebook agrees to give Facebook “permission to use your name and [Facebook] profile picture in connection with [commercial, sponsored, or related] content, subject to the limits you place.” However, the court concluded that Facebook was not able to rely on this language because all of the plaintiffs joined Facebook prior to the launch of the Sponsored Stories advertising product.  The plaintiffs “could not have known about Sponsored Stories at the time they agreed to Facebook’s Terms of Use,” the court said, “nor did Facebook ask them to review or re-affirm the Terms of Use upon introduction of the Sponsored Story advertising feature.”

In their Motion to Dismiss, Facebook alleged that the plaintiffs had not alleged an injury sufficient to confer Article III standing to sue.  The court disagreed, ruling that the plaintiffs had alleged a discrete legal injury in the form of misappropriation of their names and likenesses for advertising purposes.

Significantly, the court additionally found that plaintiffs had also alleged a coherent theory of damages: the value that Facebook is charging for advertising featuring their names and likenesses. Thus, the court ruled that, for purposes of standing, the plaintiffs had alleged an adequate injury to maintain a lawsuit against Facebook.  The court distinguished Cohen v. Facebook, No. 10-5282 (N.D. Cal., Oct. 27, 2011), in which the same court dismissed for lack of standing a lawsuit alleging that Facebook misappropriated subscribers’ likenesses by using their photos in ads for its Friend Finder service, on the grounds that in Cohen the plaintiffs were unable to show that their names and likenesses had commercial value.

Here, the court said, the plaintiffs have plausibly alleged—in part with the statements of Facebook executives—that their names and likenesses and referrals have commercial value and that this commercial value was sold to advertisers by Facebook.  The court was referring to the fact that Facebook charges a premium for advertising built on user “Likes,” and Facebook CEO Mark Zuckerberg publicly stated that such “trusted referrals” were the “Holy Grail of advertising” and “nothing influences people more than a recommendation from a trusted friend.”

So after Fraley v. Facebook, possible implications of Rights of Publicity should be considered in situations where user-generated content is being used to select and promote products or services.  As we say at Ice Miller, It’s a complex world. Be advised.^TM

^{This post is intended for general information purposes only and does not and is not intended to constitute legal advice}

The line between an employee’s personal social media account and an employer owned account is not always clear.  Companies are increasingly relying on social media to market their business.  To do so, many companies permit their employees to promote the company’s business on their employees’ personal media accounts.  If the company does not have clear, written policies concerning who owns the accounts and the content, things can get complicated.

Last month a federal court ruled that an employee could proceed to trial on claims that her prior employer violated the Lanham Act and the Stored Communications Act by posting entries on her private Facebook and Twitter accounts, while the employee was on medical leave.  Maremont v. Susan Fredman Design Grp., Case No. 1:10-cv-07811 (December 7, 2011).

The Defendant the Susan Fredman Design Group (SFDG) is an interior design firm in Chicago.  As part of SFDG’s social media marketing campaign, it employed Jill Maremont as its Director of Marketing, Public Relations, and E-Commerce.  In that capacity Maremont created and managed Twitter and Facebook accounts for SFDG.   Maremont also maintained a personal Facebook page and a Twitter account with approximately 1,250 followers.

In September 2009, Maremont was hospitalized after being seriously injured in an automobile accident.  While she was in the hospital, SFDG began using Maremont’s personal Twitter account (and allegedly her Facebook page) to promote the company.  During the period of Maremont’s medical leave, SFDG posted 17 Tweets on her Twitter page, including links to SFDG blogs and Web site.  Maremont claims that she never gave SFDG access to her personal accounts.  She also claims that she requested that SFDG stop using her personal account and that the company refused to honor her request. 

Maremont initiated a lawsuit, in the United States District Court for the Northern District of Illinois, against SFDG for improperly using her identity to promote its services.  In her Complaint, Maremont asserted, among other claims, false endorsement under the Lanham Act, violations of the Stored Communications Act, violations of Illinois Right of Publicity Act and common law right to privacy.

Last month, the Court ruled on SFDG’s motion for summary judgment and refused to dismiss Maremont’s false endorsement claim, under the Lanham Act, 15 U.S.C. section 1125(a)(1)(A) and her Stored Communications Act claim, 18 U.S.C. section 2701 et seq. The court reasoned that “Maremont created a personal following on Twitter and Facebook for her own economic benefit and also because if she left her employment with SFDG, she would promote another employer with her Facebook and Twitter followers.”  In refusing to dismiss Maremont’s Stored Communications Act claim, the Court explained that there were questions of material fact concerning whether SFDG exceeded their authority in obtaining their access to Maremont’s personal Facebook and Twitter accounts.     The Court did, however, dismiss Maremont’s Right to Privacy Claim and common law privacy claim because SFDG did not try to impersonate Maremont when posting on her social media accounts.

While the facts of this case have not fully unfolded, they do highlight one very important lesson.  It is imperative that companies implement social media policies that address issues such as the distinction between employer and employee social media accounts, who owns the accounts and who is authorized to speak for the company online. 

If your company is using social media to promote your business, Ice Miller LLP attorneys can assist you in developing a policy that addresses these issues and may help avoid claims such as those brought by Maremont.

 This post is intended for general information purposes only and does not and is not intended to constitute legal advice.

In a case of first impression in the Seventh Circuit, the U.S. District Court for the Northern District of Indiana held that an ex-franchisee’s continued use of the franchisor’s trademarks following conclusion of the franchise agreement constituted counterfeiting, which ruling entitled the franchisor to mandatory treble damages and attorneys’ fees.  Century 21 Real Estate, LLC v. Destiny Real Estate Properties et al., Case No. 4:11-cv-00038-JD (N.D. Ind.  Dec. 19, 2011) (Judge DeGuilio).

The defendants, Destiny Real Estate Properties (Destiny) and its principal Daniel Sutton, entered into a franchise agreement with Century 21 Real Estate, LLC (Century 21) in 1999 to use Century 21’s trademarks in conjunction with real estate brokerage services.  This franchise agreement was renewed in 2007 for a ten-year term, but Mr. Sutton and Destiny ceased paying the required franchise payments.  Century 21 terminated the franchise agreement for cause on March 15, 2011.  Mr. Sutton and Destiny subsequently continued to use the Century 21 marks as if nothing had happened, including subsequent to Century 21’s filing of this trademark infringement lawsuit against them.  Because Destiny and Mr. Sutton never appeared to defend themselves, the Court was left with the claims made in Century 21’s complaint to inform its decision concerning whether the infringing acts were mere trademark infringement or whether they should be considered counterfeiting, with the significant damage award that the latter finding requires.

Citing decisions from the Sixth Circuit and the Western District of Pennsylvania on the one hand and the Ninth Circuit with some guidance from the Seventh Circuit on the other, the Court noted that there was a distinct split in authority concerning whether a hold-over franchisee’s continued use of the franchisor’s marks was considered counterfeiting.  The Sixth Circuit decision, which reversed a district court decision holding that a former franchisee’s use of the plaintiff’s marks was counterfeiting, was unfortunately rendered without explanation of the rationale for the reversal.  U.S. Structures, Inc. v. J.P. Structures, Inc., 130 F.3d 1185 (6th Cir. 1997).  The Ninth Circuit, in State of Idaho Potato Comm’n v. G & T Terminal Packaging, Inc., 425 F.3d 708 (9th Cir. 2005), found that continued use of certification marks, such as “Grown in Idaho,” was counterfeiting because the continued use of such certification marks implied that the marked products met certain quality standards, which implication was likely to confuse consumers.

In the Seventh Circuit decision that the Court considered relevant, the defendant purchased GENERAL ELECTRIC-branded boxes and sold his own tools in those boxes.  General Elec. Co. v. Speicher, 877 F.2d 531 (7th Cir. 1989).  That court found that the danger of confusion of consumers when an actual mark is used was even greater than in the case when the defendant had devised a copy of the original, since “the ‘imitation’ is not merely colorable, but perfect.”  Id. at 535.

The Western District of Pennsylvania found that a formerly licensed distributor’s use of genuine PENNZOIL marks on signs provided by Pennzoil could not be counterfeiting because the marks on the signs were genuine.  Thus, the plaintiff could not prove that the marks were “counterfeit,” even though the services rendered under them were.  Pennzoil-Quaker State Co. v. Smith, 2008 WL 4107159 (W.D. Pa. Sept. 2, 2008).  The court in Pennzoil-Quaker State Co. distinguished the Ninth Circuit’s ruling as being limited to certification marks and instead found the Sixth Circuit’s decision instructive.

 The Northern District of Indiana Court found that Destiny’s use of Century 21’s genuine marks following conclusion of the franchise agreement was counterfeiting because it could find no tenable reason why, just because the ex-franchisee did not have to hire someone to copy the genuine marks in order to continue to use them, the ex-franchisee should be allowed to walk with a lesser sanction for its willful behavior.  The Court, citing Speicher, found that the risk of confusion is greater when a genuine mark is used instead of just a colorable copy.

Apart from this important ruling, Century 21 presents useful practice pointers.  For example, Century 21’s Complaint failed to set forth precisely facts that would establish Mr. Sutton’s personal involvement in (through control or approval of the company’s acts) and liability for the actions of Destiny.  Without such detailed information in the initial pleading, the Court declined to impose personal liability for the use of Century 21’s marks on Mr. Sutton, leaving the damage award to be paid solely by Destiny.  Litigants, particularly those hoping for a default judgment, should therefore pay special attention to the allegations made against officers or owners of an entity defendant.

As well, when the Court assessed the damages to be imposed in the final judgment, it was limited to 15 U.S.C. § 1117(b) damages (treble profits or damages plus attorneys’ fees) because Century 21 did not plead in the alternative § 1117(c) statutory damages (between $1,000 and $200,000 per infringed mark per type of goods or services or, if willful, up to $2,000,000 per mark per type of goods or services).  Presumably this claim was not included since Century 21 had no clear guidance from the Seventh Circuit at the time of filing to know whether the charge of counterfeiting would stick.  However, if Century 21 had included such a claim, then perhaps it could have avoided having the measure of its damage award limited by the paltry $4,560 that it claimed as damages apart from the sizable liquidated damages that it received for breach of the franchise agreement (which liquidated damages amount the Court declined to treble).

It would be interesting to know whether Century 21 plans to take the Court’s counterfeit mark finding to the U.S. Attorney for possible pursuit of Destiny and/or Mr. Sutton under 18 U.S.C. § 2320 for trafficking in counterfeit services.  “To prove a violation of 18 U.S.C. Section 2320 (a), the government must establish that: (1) the defendant trafficked or attempted to traffic in goods or services; (2) such trafficking, or the attempt to traffic, was intentional; (3) the defendant used a counterfeit mark on or in connection with such goods or services; and (4) the defendant knew that the mark so used was counterfeit.”  U.S. v. Sultan, 43 U.S.P.Q.2d 1276, 1278 (5th Cir. 1997).  “[T]he term “traffic” means to transport, transfer, or otherwise dispose of, to another,” as consideration for anything of value, or make, “obtain control of, or possess, with intent so to transport, transfer, or otherwise dispose of. . ..”  18 U.S.C. § 2320 (e)(2).  A “counterfeit mark” is defined, in part, as a spurious mark used in connection with trafficking that is identical to a registered mark, used with services that are identical to the services with which the mark is registered for use, and the use of which is likely to confuse, cause mistake, or deceive. 18 U.S.C. § 2320 (e)(1)(A)(i)-(iv).  Although § 2320 actions are typically used to pursue sellers of counterfeit merchandise such as handbags and watches, the facts of this case could be considered to satisfy the terms of the statute.

Ice Miller has extensive experience helping trademark owners protect their valuable goodwill from encroachment by others.  For more information on how Ice Miller can help your company protect its market share from would-be competitors, contact Holiday Banta, h.banta@icemiller.com, or theiceloop@icemiller.com.

The Supreme Court of Arkansas recently issued a ruling overturning a defendant’s conviction in part because of a juror who couldn’t resist Tweeting his take on the trial as it progressed, in spite of the judge’s admonition to the contrary.

In Dimas-Martinez v. Arkansas, 2011 Ark. LEXIS 593 (Ark. Dec. 8, 2011), the Arkansas Supreme Court considered the case of a defendant who had been convicted of murder and sentenced to death. At the trial, the defendant’s counsel brought a juror’s mid-trial tweets to the trial court’s attention, but the court decided against dismissing the juror. Though the actual content of the Tweets was often innocuous—some tweets included such minutiae as “The coffee sucks here” and “Court. Day 5. Here we go again.”—the state Supreme Court held that the tweets were prejudicial because they established that the juror failed to follow the court’s specific instructions, made at the start of the trial, to not “Twitter anybody about the case.” Id.; Ark. Death Row Inmate Gets New Trial Thanks to Tweeting Juror (article found here). Additionally, not all of the tweets were entirely harmless. For instance, nearly an hour before the jury announced to the court that it had reached a verdict, the juror tweeted “It’s over,” a fact which was especially disturbing to the state Supreme Court in light of the fact that one of the juror’s Twitter followers was a reporter.

This is not the first time that a juror’s mid-trial use of social media has disrupted the legal process. In a case referenced in the Dimas-Martinez opinion, a building materials company called Stoam Holdings sought to have a $12 million verdict against it overturned after a juror tweeted “Nobody buy Stoam. Its [sic] bad mojo and they’ll probably cease to exist now that their wallet is 12m lighter,” during the trial. John Lyon, Murder Conviction Overturned Because of Tweeting, Sleeping Jurors (article found here). That verdict was ultimately affirmed on appeal. However, the Arkansas Supreme Court in Dimas-Martinez indicated its concern regarding the “wide array of possible juror misconduct that might result when jurors have unrestricted access to their mobile phones during a trial.” In light of these concerns, the court recommended that the state’s Supreme Court Committees on Criminal and Civil Practice consider “whether jurors’ access to mobile phones should be limited during a trial.” Such measures are increasingly likely to be evaluated in courts across the country as citizens’ access to, and use of, social media becomes even more pervasive.

To learn more about the challenges posed by social media in the litigation process, contact info@theiceloop.com.

Bikram’s Yoga College of India, based in California, recently sued several yoga studios for copyright and trademark violations, alleging that the defendant yoga providers have unlawfully used specific poses and movements created by Bikram Choudhury, and known commonly as “Bikram Yoga.”  Bikram Yoga, as explained by Bikram’s Yoga College of India’s web site, is a series of 26 yoga poses and two breathing exercises always performed in the same sequence, in a room heated to at least 105 degrees.

According to one lawsuit, filed against New York’s Yoga to the People, Choudhury “created an original work of authorship consisting of a series of instructions and commands that accompany, and correspond to, each posture of Bikram Yoga” that have already received protection from the U.S. Copyright Office. 

The complaint alleges that Yoga to the People’s “Traditional Hot Yoga” class “incorporates and infringes upon, among other things, Bikram’s copyrighted Asana Sequence and Dialogue” and that it is “taught in the same ambient environment as Bikram Yoga in order to give students the impression that the class offers the same experience and benefits a student would have at a Bikram Yoga studio.”  The lawsuit seeks an injunction preventing Yoga to the People from conducting hot yoga classes, and seeks damages in excess of $1 million dollars.

Yoga to the People’s owner Greg Gamucio – a former student of Bikram – replied “there are no ‘Bikram postures,’ and each and every one of the yoga postures (or ‘poses’ or ‘asanas’) used in Bikram Yoga classes were developed and recorded hundreds, if not thousands, of years ago and are in the public domain.”

While dances composed by choreographers are subject to copyright as creative works, exercises are not.  Yoga to the People recently received support from Laura Lee Fischer, acting chief of the Performing Arts Division of the U.S. Copyright Office.  Fischer explained via a December 9, 2011 email that “the Registration Program of the Copyright officer reviewed the legislative history relating to section 102(a) of the copyright law, and in conjunction with senior management, determined that exercises, including yoga exercises, do not constitute the subject matter that Congress intended to protect as choreography.”  Accordingly, the U.S. Copyright office will not register such exercises, “whether described as exercises or as selection and ordering of movement.”  Although the opinion is not binding on the U.S. District Courts, it appears more likely that yoga practitioners will be permitted to continue operating “hot yoga” classes without fear of copyright  violations.

Bikram’s Yoga College of India has filed two similar lawsuits in the United States District Court for the Central District of California, alleging copyright and trademark infringement and violation of teacher certification agreements.  The other cases filed are Bikram’s Yoga College of India L.P. v. Raiz, 11-cv-7377, and Bikram’s Yoga College of India L.P. v. Evolation Yoga LLC., 11- cv-05506.

For more information on how you can protect your intellectual property rights, contact info@theiceloop.com.

Beverly Macy, CEO of Gravity Summit LLC and the Co-Author of The Power of Real-Time Social Media Marketing, offers a sneak peak at emerging social media trends for 2012. 

 According to Macy, the next four social enterprise trends for 2012 involve the following:

1.  The Power of Real-time.  The ability to harness the chaos, as opposed to control the chaos, will be a shift in thinking for most companies.
2. The Global Social Brain. As Macy observes, the global social brain is collecting data at dizzying speeds.  More companies will need to analyze and measure social metadata in an effort to turn it into actional business intelligence.
3. Content Curation and Discovery.  Aggregation and curation will be critical going forward.
4. Social Media Education.  Companies need to take social media seriously and need to expose employees to basic social media training and education. 

Source:  Huffington Post Online

Over the past several days, the holiday shopping season has kicked into high gear.  The National Retail Federation released a survey on November 28 that indicates that sales over the Thanksgiving holiday were up 16 percent from last year’s sales.  An estimated 226 million consumers shopped in stores and online over the four day Thanksgiving weekend and the average shopper spent $398.62.  Early estimates for Cyber Monday shopping projects a record $1.2 billion will be spent during this one-day shopping event.  Overall, the National Retail Federation has forecast overall retail holiday sales to reach $465.6 billion, a 2.8 percent increase over last year.  Analysts say that this increase is due in part to social media sites.  More than ever before, retailers used social media to market holiday sales and shoppers looking for the best deals relied on social media sites, such as Facebook, Twitter and Foursquare.  According to the National Retail Federation, almost 60 percent of shoppers will find Black Friday deals on Facebook.

Many retailers rewarded their “friends” with exclusive deals and coupons.  For example, CVS pharmacy had a shopping quiz on its Facebook page that gave fans a 20 percent off coupon for completing the quiz.  Sears let customers vote online for products they wanted to see on sale throughout the holidays.  Radioshack ran a promotion asking Facebook users to upload photos of gifts gone wrong for the chance to win products.  Scott Silverman, co-founder of digital goods web site Ifeelgoods, says that “Stores count on the fact that if you get a deal or complete a quiz through Facebook, you’ll share that with your friends.”  Retailers Use Social Media to Offer Holiday Deals, Hadley Malcom, at http://www.usatoday.com/money/industries/retail/story/2011-11-22/black-friday-social-media/51356524/1 (November 23, 2011).

Analysts at Mashwork monitored 300,000 tweets made between September 26, 2011 and November 17, 2011 to determine who would be shopping on Black Friday, where they would shop and what they would buy.  The results of Mashwork’s study can be found here . According to the study, the majority of shoppers planned to buy for themselves during Black Friday.  Who’s Tweeting About Black Friday?, Christine Erickerson at http://mashable.com/2011/11/22/black-friday-twitter-infographic/ (November 23, 2011).  

This year, there were several web sites dedicated to the deals, ads and other promotions being offered by retailers.  One strategist noted that in order to encourage online shoppers, retailers released their deals earlier this year.  Many retailers “leaked” their deals ahead of Black Friday and Cyber Monday.  More than ever companies used social media to promote deals.  Jan Rezab, CEO of Socialbakers, a social media and digital analytics company, said that “savvy retailers are combining traditional banner ads and web pages dedicated to Black Friday specials with Facebook posting and Tweets about deals . . . . This enables them to interact and respond to consumers instantaneously—offering them a massive competitive advantage that converts to increased sales and loyalty at Thanksgiving.”  Walmart Tops US Retailers in Social Media Stakes for Black Friday Holiday Sales, http://www.reuters.com/article/2011/11/21/idUS149870+21-Nov-2011+PRN20111121 (November 21, 2011).  Retailers with the largest social media fan base can utilize their social network to share information on sales, special offers and holiday hours.   

If your company is interested in maximizing its utilization of social media for marketing, Ice Miller LLP attorneys can assist you in developing a plan and a policy that are specifically designed for your company.

As businesses increasingly turn to social networking sites such as Twitter and Facebook to grow their client base, and utilize their own employees to develop these networking sites, a sticky new legal question has arisen: when the employment relationship is severed, who owns the networking site account and its content? The employer or the employee?

At least one lawsuit is currently pending in an attempt to answer that question. In July 2011, a mobile review website called PhoneDog filed a lawsuit against a former employee named Noah Kravitz who left his job—and took 17,000 Twitter followers with him. Jennifer Van Grove, “The Case of the ‘Stolen’ Twitter Account,” . Kravitz’s Twitter handle while he was employed at PhoneDog was “@PhoneDog_Noah,” which he changed to “@noahkravitz” after he separated from the company. PhoneDog claims that the account followers, along with the account password, constitute trade secrets comparable to a customer list, and estimates its damages at $340,000 so far (based on a calculation of $2.50 per month per follower for each month that Kravitz has used the account since leaving his employment). Kashmir Hill, “Phonedog Sues Ex-Employee For His Twitter Account, Valuing His Followers at $2.50 Each,” .

Kravitz, on the other hand, alleges that his employer never had any involvement in his Twitter account prior to his termination. He claims that he was not asked to create the account by his employer (a point which PhoneDog disputes), and that PhoneDog did not know the account password. Although PhoneDog’s claims for intentional and negligent interference with prospective economic advantage were recently dismissed by a California federal judge, its other claims for misappropriation of trade secrets and conversion withstood Kravitz’s recent motion to dismiss for failure to state a claim. See PhoneDog v. Kravitz, 2011 U.S. Dist. LEXIS 129229 (N.D. Cal. Nov. 8, 2011).

The question of who owns social networking sites promoting a business but run by an individual employee is a largely undecided legal issue, complicated by the varying nature of such social networking arrangements. Sometimes employees may use the business’s social networking site for both personal and job-related communications, and make contacts based on both business and personal relationships. Other times, an employee who is completely anonymous to the public maintains the business’s social networking sites, which are used strictly for business development and client growth. Glenn Gabe, “Lawyers, Guns, and Twitter—Who Owns Your Twitter Account,” . The dispute between PhoneDog and Kravitz may be a first step towards resolving these murky legal issues.

Ice Miller advises its clients on maximizing the benefits of social media to help companies grow their businesses. For more information about how your company can best utilize social media, please contact Ice Miller at info@theiceloop.com.

On November 10, 2011, a federal court ruled that the government can collect the private records of three Twitter users with possible links to WikiLeaks, the whistle-blower site that has released secret U.S. diplomatic and military documents.

The Justice Department sought information about the users – Jacob Appelbaum, an American computer security expert, Rop Gonggrijp, a Dutch citizen, and Birgitta Jonsdottir, a member of Iceland’s Parliament – from Twitter pursuant to the Stored Communication Act, which sets forth a procedure by which the government may obtain access to electronic communications and information.  The government demanded that Twitter provide the Internet Protocol (IP) address of the three users, among other things.  In March, Magistrate Judge Theresa Buchannan ordered Twitter to hand over the information, rejecting arguments that such order violated freedom of speech and privacy. 

Petitioners Appelbaum, Gonggriijp, and Jonsdottir appealed that order, arguing that their IP addresses should be considered private information and that the demand was overly broad and unrelated to WikiLeaks.  In addition, they claimed that the order violated their right to free speech. 

In a 60 page opinion, available here, Judge Liam O’Grady rejected the Petitioners’ argument, explaining that Twitter users “voluntarily” hand over their IP addresses when they agree to Twitter’s terms and conditions, and thus relinquish any expectation of privacy.  The court explained:  “Petitioners knew or should have known that their IP information was subject to examination by Twitter, so they had a lessened expectation of privacy in that information, particularly in light of their apparent consent to the Twitter terms of service and privacy policy.”

The court also dismissed a petition to unseal the Justice Department’s explanation for why it sought the account information. 

The account holders continue to use the social networking site to express their disappointment in their ruling and its potential effects on online privacy issues. 

For more information on how to protect privacy rights while utilizing social media, contact info@theiceloop.com.