Thinking about jumping on that trending hashtag? Make sure your not inadvertently committing trademark or copyright infringement.
In the modern world of trending hashtags and viral marketing, the pressure for companies to get in on whatever has momentarily captured the public’s eye can be immense. Unfortunately, a company’s rush to join in while a trend is still going strong can lead commercial actors to expose themselves to liability without thinking about it—especially if a company’s social media officer has to make decisions quickly and without prior guidance or the ability to run things by counsel. The wrong tweet can run afoul of both federal and state laws and have serious consequences for businesses big and small; just ask Walgreens subsidiary Duane Reade, which was slapped with a seven-figure lawsuit under New York’s ‘public persona’ laws after retweeting an unauthorized celebrity photograph.
The Legal Basics
There are two major IP-related risks for business users of social media—trademark infringement and copyright infringement. Legal practitioners spend years mastering the nuances of these areas,but there are some straightforward takeaways that everyone can learn and implement in their own social media lives.
The two primary ways that a company’s use of another’s trademark can expose it to liability are: (1) infringement on another’s trademark and (2) dilution of a famous mark. The basic principle of trademark infringement is that the unauthorized use of one company’s mark by another will create consumer confusion regarding the goods or services in question. Dilution is an additional protection reserved for “famous” trademarks, allowing the mark-holder to contest the use of similar marks or names that impair a famous mark’s distinctiveness (even if the use would not trigger consumer confusion under a standard infringement analysis), or recover for the “tarnishment” of the famous mark’s reputation resulting from use of a similar mark. Imagine Nike seeking to prevent a bread manufacturer from selling “Nike Bread”.
Another major social media danger is copyright infringement. Direct copyright infringement occurs when someone exercises one of the copyright holder’s exclusive rights to protected works without permission—reproduction of a copyrighted work and distribution of said work to the public are among the most common of these rights to cause infringement issues in the social media space.
Social media presents unique risks for business in both the trademark and copyright spaces. Regarding trademarks, determining whether an online communication has fallen within a trademark-owners’ geographically limited zone of control for the mark can be difficult. A clever new hashtag might unintentionally reference a competitor’s registered mark, or already be in use on the other side of the country. For a big company, this could be a real risk—and it much easier to argue that a business’ social media account meets the ‘in commerce’ requirement of the Lanham Act than it might be with respect to a private citizen
Businesses should also be particularly wary of accidentally reproducing copyrighted material online, as almost any activity generated by an account officially affiliated with a business is likely to be considered commercial activity, making it more difficult to mount a fair use defense.
But Isn’t It Fair Use?
Statutory limitations on copyright infringement protect the “fair use” of material for criticism, comment, news reporting, teaching (including multiple copies for classroom use) and scholarship or research. Basic fair use analysis starts with four non-exclusive factors: (1) the purpose and character of the use (including whether the intended use is commercial in nature) (2) the nature of the copyrighted work (3) how much of the copyrighted work is used relative to the work as a whole and (4) the effect of the use on the potential market for or the value of the work.
There is a whole body of law and scholarship on the fair use defense to copyright infringement, and one could write a hundred pages on the body of law surrounding what makes something “transformative,” but some basic risks in the social media context are that official business-affiliated accounts are very likely to always be commercial in nature. “Funny” does not necessarily equate to “parody” or “criticism,” especially if it looks like a commercial actor is taking advantage of something a competitor owns under the guise of making a joke. Likewise, it can be difficult to assess potential market effects in the social media space before a use is actually made.
What Can Be Done
For companies that are trying to create and maintain a strong social media presence, having policies in place for their social media officers to follow can be a critical risk-mitigation strategy. Especially for new businesses, the temptation to make someone the ”Director of Social Media” and then let them run wild to generate excitement can seem appealing or intuitive, but the risks can be very real. If the goal is to avoid potentially major liability (think triple damages under the Lanham Act) then it’s important for a company to have policies in place before it dips its toes (or does a cannon ball) in the social media pool, so to speak.
Training social media managers to recognize potentially problematic content is a good first line of defense, as well has instilling a ‘when in doubt, ask’ culture in those departments. Likewise, having a procedure set up beforehand for bringing in either company or outside counsel for review on a prompt basis is a smart move. If the process is already in place and everyone knows how it works, working out a system that will protect the company without unsustainably slowing it down is very feasible.