In its first quarter 2015 earnings announcement, Facebook revealed that it has more than 1.44 billion monthly active users (up 13 percent year-over-year). Twitter claims to have over 316 million monthly active accounts as at 31 June 2015 , and in July 2015, the micro-blogging site Tumblr disclosed that it has surpassed 246.6 million blog accounts, up from 195.1 million in the previous year.
It is no wonder, then, that an online presence is universally regarded as a necessity for businesses large and small. Benefits espoused include increased brand exposure, rapid dissemination of information, cultivating customer relationships and development of a loyal fan base. For many businesses, the question now is not whether to use social media in its business, but how. And as with any new aspect of doing business, there are several potential pitfalls that a company must be aware of to avoid running into legal difficulties.
The following are some of the legal issues that a company may face as it integrates social media into its business practices and how it can deal with these issues.
Ownership and Control of Social Media Accounts
The common understanding is that a social media account will belong to the person who started it as he is the one who enters into a personal relationship with the social media platform. However, such accounts could be considered company property if the account was created in the course of employment. Also, what about personal accounts used by an employee to promote a company?
This issue is hugely important, especially for industries or companies that use social media as part of their marketing platform. Twitter followers, Facebook fans, and LinkedIn connections are customers, potential customers, or other valuable contacts, and gaining a direct line of communication to these people is the point of using social media in the first place. The time and money spent growing a following, promoting a brand, developing an industry niche or expertise, and sharing content is invaluable and cannot be recouped easily. The line between a personal and professional social media account can be blurry, so if this ownership issue is not hashed out at the beginning of employment, the employer and the employee may both believe the account is theirs.
While there has not been a case exactly on this point in Singapore, the Singapore High Court ruled in a recent case in February 2014, that Facebook Inc owns the Facebook page; the person who sets up the page will only own the page’s contents.Where such content is set up by an employee or service provider, the question of who owns that content (i.e. whether it is the employee/service provider or the company) is determined by the terms of their contract.
Practical steps can be taken by a company to mitigate the risks related to this issue and ensure protection of their social media assets. For example:
• Management should set up the accounts (using the company name in the handle or account name)
• Passwords should be controlled by management but access given to more than 1 person in case of employee departure
• It must be communicated to the employee that the company owns the accounts and the content, and that contributing content is part of the employee’s job duties. This can be done by incorporating specific language regarding these duties and the ownership of social media accounts and contacts into offer letters, job descriptions and company policies.
• The company should not rely on employees’ personal accounts to generate business, especially leads
Permitted Online Content
The Media Development Authority of Singapore (MDA) adopts a light-touch approach towards regulating the internet. Internet Content Providers are automatically class licensed under the Broadcasting (Class Licence) Notification of the Broadcasting Act (Cap. 28). Content providers are urged to exercise self-judgement in ensuring that their content complies with the Class Licence Conditions and the Internet Code of Practice.
Prohibited material under the Code is material that is objectionable on the grounds of public interest, public morality, public order, public security, national harmony, or is otherwise prohibited by applicable Singapore laws. These restrictions apply not only to proprietary content of the business, but also material uploaded by third parties with consent of the business.
Managing Content of Social Media Sites
It is important for businesses to understand that content they upload or allow to be posted on their social media sites can potentially give rise to liabilities.
1) Disclosure of Confidential Information
Often unknowingly, confidential information of a company or a client, such as trade secrets or information of an upcoming product launch or new advertising campaign, may be disclosed by an employee or other party with knowledge on popular social media websites such as Twitter, Facebook, or Instagram. Confidential information may also be disclosed via blogs, chat rooms, and anonymous blog comments. Widespread disclosure of trade secrets, in particular, can result in the loss of intellectual property rights in the confidential materials. In addition, some websites purport to claim ownership of user-posted information, such as comments to a story.
It is therefore important that employees understand their obligations not to disclose confidential or proprietary information including on social networking tools.
2) Unauthorized Use of Copyright-Protected Works
Copyright protected works, such as videos, music, photographs, quotations, and extracts from newspaper or magazine articles, are often copied from another location and used on a social media website without the authorization of the content owner. Use of copyright-protected works without authorization creates the potential for infringement liability.
Michelle Phan is one of the most popular YouTube personalities. Her makeup tutorial videos get millions of views and her channel has more than 6 million subscribers. She regularly secures endorsement deals, and reportedly made $5 million in 2013. In July 2014, Ultra Records LLC and Ultra International Music Publishing LLC sued Michelle Phan for copyright infringement, claiming that she has used about 50 of their songs without permission in her YouTube videos and on her own website. The record label and publishing company have asked for US$150,000 for each proven copyright infringement. While Michelle Phan has counter-sued claiming that she had a verbal arrangement with Ultra’s Senior New Media Manager to use the songs in return for crediting the artist and adding an iTunes link , no actual written licence or release was ever signed. This case is just one of many peppering the internet landscapes on unauthorised use of third party material on social media and underscores the need for clear written permission for use.
Established businesses are also not immune from such mistakes. In 2013, Agence France-Presse and its American distributor, Getty Images, were found by the New York Federal District Court to have willfully infringed upon the copyright of Daniel Morel in eight photographs he took of the 2010 Haiti earthquake and he was awarded $1.22 million. Daniel Morel’s photographs were originally posted on TwitPic, a website that allows users to put pictures on Twitter, by Mr. Morel hours after the earthquake on Jan. 12, 2010. Agence France-Presse took the photos from TwitPic and distributed them to clients. Getty Images distributed the photos in the United States. The photographs moved by Getty were used on NYTimes.com, The Washington Post, ABC, CBS and others who settled with Mr. Morel.
Accordingly, the best practice is to seek permission before using material that appears to be a copyright protected work. In some cases, the content owner may charge a license fee, but that fee will certainly be less costly than an infringement lawsuit. Even if Michelle Phan eventually succeeds in defending against Ultra’s claim, she would have incurred hefty legal fees and diverted valuable time and resources to deal with the suit away from her business.
Some content is available for public use without expressed permission, such as open source code or certain royalty-free music or photograph libraries. However, even that material often requires attribution to the original author or has restrictions on scope of use, so pay close attention to the terms and conditions of use.
It is important for businesses to ensure that their employees, particularly those assigned to handle social media accounts, understand these basic rules of copyright law and minimise liability of the company.
3) Unauthorized Use of Trademarks
Unauthorized use of third party trademarks on a social media site may lead to legal liability for trademark infringement, dilution or unfair competition. While, in certain circumstances, it may be a permissible “fair use” to refer to a company and its product or service in a product review, blog, or status posting, it is not permissible to use the trademarks of others to create a false impression of endorsement, affiliation or sponsorship.
In June 2014, Ikea sent a cease and desist letter to Jules Yap, the owner of website, ikeahackers.net, a site which provides ideas on how to repurpose Ikea furniture. The letter from Ikea claimed that Jules Yap’s website infringed on the company’s trademark and demanded that she transfer the rights to “Ikeahackers.net” to them or else face a lawsuit. The parties eventually came to a settlement.
4) Collection and Use of Personal Data
The Personal Data Protection Act 2012 came into force on 2 July 2014 and governs an organisation’s collection, use and disclosure of personal data. “Personal Data” is defined as data, whether true or not, about an individual who can be identified from that data; or from that data and other information to which the organisation has or is likely to have access. Photographs are considered personal data.
An organisation may collect, use or disclose personal data only with the individual’s knowledge and consent (with some exceptions) and for the purposes disclosed and consented to.
Social media can be a valuable tool for organisations, but carries with it responsibilities. While employers may be keen for employees to promote the organisation’s brand on social media, they can be liable for defamatory statements made by employees. Hence, employers need to ensure that employees do not post defamatory comments about customers, competitors, users who post comments and even colleagues. Rules have to be developed for staff use of social media. For example, employees may be required to use a disclaimer on any blogs, tweets or comments on social networking sites that the views expressed are personal and do not represent the employer.
The issues described above are of course not exhaustive. But they serve to illustrate an important point for businesses. Corporate social media is a valuable business asset and needs to be safeguarded. Employees must understand the dos and don’ts of how to manage an online presence and potential pitfalls to minimise the liabilities of the employer. It is therefore important for businesses to create a robust social media policy and educate their employees.
To find out more about identifying and overcoming key IP challenges in social media, sign up for IP Academy’s “IP Considerations when Leveraging on Social Media Platforms” seminar on 17 September 2015. More information here.
Editor-in-Chief, The IPA Beacon
Acting-Director, Graduate Studies and Thought Leadership, IP Academy
As Acting-Director, Trina leads the Graduate Studies and Thought Leadership teams at the IPA. Previously in legal practice, she specialised in matters involving the protection, management and exploitation of intellectual property rights in various industries including the media, telecommunications, internet, F&B, retail and fashion sectors. She was also at one point legal counsel with the Media Development Authority of Singapore where she drafted, reviewed and negotiated the contracts for the Authority’s range of investments in film, television, animation and game development and production.
She has conducted talks and customised workshops on intellectual property rights for various companies, organisations and institutes of higher learning. Trina co-authored the volume on Media Law published by Butterworths as the first title in the series of Singapore Precedents and Forms. During her time in legal practice, she was ranked annually since 2007 in the intellectual property industry and TMT industry by the Asia Pacific Legal 500.