Sookman law society IP in social media

McCarthy Tétrault Advance™
Building Capabilities for Growth

Old Rules for New Issues With New Media:
Is There a Gap in Intellectual Property Law?
Law Society Special Lectures 2012:
Employment Law and the New Workplace
in the Social Media Age

Barry B. Sookman
bsookman@mccarthy.ca
416-601-7949 April 25, 2012
McCarthy Tétrault LLP / mccarthy.ca / 11395265 1

What is social media?
¬ “Social media includes web-based and mobile technologies used to
turn communication into interactive dialogue between organizations,
communities, and individuals. Andreas Kaplan and Michael Haenlein define
social media as "a group of Internet-based applications that build on the
ideological and technological foundations of Web 2.0, and that allow the
creation and exchange of user-generated content." Social media is
ubiquitously accessible, and enabled by scalable communication techniques.”
Wikipedia.
¬ Microblogging (Twitter)
¬ Wikis, (Wikipedia)
¬ Content communities (YouTube, Flickr, Pinterest)
¬ Social networking sites (Facebook, LinkedIn)


IP issues in employment context
¬ Intellectual property
¬ Copyrights
¬ Patents
¬ Trade-secrets and confidential information
¬ Trade-marks
¬ Industrial designs
¬ Other intangible property rights
¬ Issues:
¬ Ownership
¬ IP risks


Ownership issues
¬ Who owns Twitter handle, LinkedIn or Facebook account, or YouTube
channel, names of blogs
¬ Who owns “followers”, “connections” or “friends”
¬ Who owns content e,g, tweets, profiles, postings, mentions, photographs,
videos
¬ Can these be owned?
¬ Who owns them: the site, employer or employee?


Can accounts be owned
¬ Eagle v Edcomm, Inc et al 2011 WL 6739448 (E.D.Pa. Dec 22, 2011)
¬ Linda Eagle had LinkedIn account.
¬ When dismissed her password was changed by her employer who
accessed account and changed her profile to display a different name and
photograph, but retaining her honors, awards, recommendations and
connections.
¬ Eagle regained control of the LinkedIn account.
¬ Edcomm claims Eagle's LinkedIn account was used for Edcomm
business and Edcomm personnel developed and maintained all
connections and much of the content on her account.
¬ Eagle sued, inter alia, for conversion of LinkedIn account.
¬ Edcomm drops conversion claim based on law suggesting that the
account was not property.


¬ `Pennsylvania courts continue to hold that only tangible property, or
intangible property rights which have merged with, or are otherwise
connected to, a document, are subject to conversion.”…
Apparel Bus. Sys., LLC v. Tom James Co., No. Civ.A.06
–1092, 2008 WL 858754, at *18 (E.D.Pa. Mar.28, 2008) (“Courts in the
Eastern District of Pennsylvania have found that domain names and
satellite signals are not subject to conversion because they are not types
of intangible property that merge with particular documents.”). Defendant
concedes these principles and states that, as a result, it “will not pursue
conversion claims” with respect to the cell phone number and LinkedIn
account.


¬ Tucows.Com Co v Lojas Renner 2011 ONCA 548
¬ Issue: is a domain name (renner.com) personal property located in Ontario
within the meaning of Rule 17.02(a)
¬ The bundle of rights associated with the domain name <renner.com> that Tucows
has (as purchaser and registrant) satisfies the attributes of property...in that at
present Tucows can enforce those rights against all others...
¬ Tucows derives income from being the holder of the rights in the domain
name <renner.com>… The registered owner of the domain name has the right to
exclusively direct traffic to the domain name’s corresponding website and to
exclude anyone else from using the same name...
¬ While the decisions in Kremner, Saulnier, and Bouckhuyt and the academic
commentators all emphasize exclusivity of a right as an essential aspect of
property, other judicial decisions...hold that other requirements must also be
met...“[b]efore a right or an interest can be admitted into the category of property,
or of a right affecting property, it must be definable, identifiable by third parties,
capable in its nature of assumption by third parties, and have some degree of
permanence or stability.” A domain name also satisfies this definition of property.


¬ Tucows.Com Co v Lojas Renner 2011 ONCA 54.
¬ [A property model] best accords with the way market participants relate to domain
names. Even though a domain name is a form of contractual license from a
registrar to a registrant, it results in a valuable asset that is freely traded on the
open market and that is occasionally stolen by a bad faith actor. Even though a
transfer of a domain name is, in reality, a de-registration from the original
registrant and re-registration to the new registrant, it is now treated routinely as a
seamless transfer, as if the name was being handed directly from the original
registrant to the new registrant. Further, the acceptance of a property rights
rationale for regulating generic domain names could take advantage of existing
property-based laws such as theft and conversion, and simply extend them
judicially to virtual property. Quoting from Jacqueline D. Lipton “Bad Faith in
Cyberspace: Grounding Domain Name Theory in Trademark,
Property, and Restitution” (2010) 23 Harv. J.L. & Tech. 447


Who owns accounts

¬ Phonedog v Noah Kravitz Case 3:11 CV-03474 (N.D.Cal.Jan 30, 2012)
¬ Who owns Twitter account and followers
¬ Phonedog sued ex editor for ownership of Twitter account names
Phonedog_Noah that had 17k followers
¬ Claim is for $2.50/month for each Twitter follower, based on decrease in
traffic to the Phonedog website from the account which decreased the
number of website pageviews and discouraged advertisers from paying
for ad inventory
¬ Claim based on “misappropriation of trade secrets”, intentional
interference with prospective economic advantage”, negligent interference
with prospective economic advantage” and conversion.


Who owns content

¬ What body of law will provide the answer
¬ Copyright
¬ Trade secret
¬ Employment contracts, implied contracts, course of conduct


Who owns content

¬ Is content capable of being protected
¬ Twitter: profiles, photos, tweets, direct messages, mentions, followers,
who following
¬ LinkedIn: profiles, photos, connections, messages, posts
¬ Facebook: profile, info, wall information, photos, notes, friends,
¬ Flickr, Pinterest: photos,
¬ YouTube: videos


Who owns content
¬ Copyright: must be protected subject matter and for works be original
¬ Protects literary, artistic, dramatic and musical works and other subject
matters such as sound recordings.
¬ Can protect, text, profiles, photos, messages, videos, compilations of
information, other user generated content (UGC)
¬ Originality requires ‘skill and judgment’. CCH
Canadian Ltd. v. Law Society of Upper Canada, 2004 SCC 13
¬ Tweets, short messages, followers, compilation of tweets or messages?


Who owns content
¬ A “trade secret”...should be understood as being a plan or process, tool,
mechanism or compound which possesses the following characteristics:
¬ (1) the information must be secret in an absolute or relative sense (is known
only by one or a relatively small number of persons);
¬ (2) the possessor of the information must demonstrate that he has acted with
the intention to treat the information as secret;
¬ (3) the information must be capable of industrial or commercial application;
¬ (4) the possessor must have an interest (e.g. an economic interest) worthy of
legal protection. Merck Frosst Canada Ltd. v. Canada (Health), 2012 SCC 3
¬ A trade secret is a subset of confidential commercial information.
¬ The test for whether there has been a breach of confidence involves establishing
three elements: (1) that the information conveyed was confidential; (2) that it was
communicated in confidence; and (3) that it was misused by the party to whom it
was communicated. Lac minerals ltd. v. International corona resources ltd., [1989]
2 SCR 574


Who owns content
¬ Edcomm also claimed that Eagle misappropriated Edcomm’s trade secrets and
confidential information by continuing to use the connections on LinkedIn account
e.g. using account information, customer contacts, instructor identities and
contacts. (No claim for copyright infringement)
¬ Eagle conceded that identity of its customers publicly disclosed on its website
could not be a trade secret.
¬ Claim for misappropriation of trade secret in LinkedIn connections failed as they
were public:
¬ In the present case, to the extent Defendant alleges misappropriation of a
trade secret, its claim must necessarily fail. As set forth above, neither the
telephone number nor the LinkedIn account connections qualify as trade
secrets, as both are either generally known in the wider business community
or capable of being easily derived from public information.


Who owns content
¬ Sasqua Group, Inc. v Courtney 2010 WL 3613855 (E.D.N.Y. Aug. 2, 2010), adopted
2010 WL370468 (S.D.N.Y. Sep. 7, 2010)
¬ Sasqua brought trade secret misappropriation claim against former consultant in
executive search business.
¬ Claim was that defendant used database that contained needs of clients,
preferences, hiring practices and business strategies.
¬ Claim dismissed as database was not a trade secret given easy public availability
on internet and social networks like Facebook and LinkedIn.
¬ In sum, Plaintiffs have failed to prove a physical appropriation or copying of
confidential information or wrongful disclosure or use of a trade secret... The
information in Sasqua's database concerning the needs of its clients, their
preferences, hiring practices, and business strategies, as well as Sasqua's
acquaintance with key decision-makers at those firms may well have been a
protectable trade secret in the early years of Sasqua's existence when greater
time, energy and resources may have been necessary to acquire the level of
detailed information to build and retain the business relationships at issue
here. However, for good or bad, the exponential proliferation of information
made available through full-blown use of the Internet and the powerful tools it
provides to access such information in 2010 is a very different story.


Who owns content
¬ Twitter
¬ You retain your rights to any Content you submit, post or display on or
through the Services. By submitting, posting or displaying Content on or
through the Services, you grant us a worldwide, non-exclusive, royalty-
free license (with the right to sublicense) to use, copy, reproduce,
process, adapt, modify, publish, transmit, display and distribute such
Content in any and all media or distribution methods (now known or later
developed).
¬ Tip This license is you authorizing us to make your Tweets available to
the rest of the world and to let others do the same.


Who owns content
¬ LinkedIn
¬ You own the information you provide LinkedIn under this Agreement, and
may request its deletion at any time, unless you have shared information
or content with others and they have not deleted it, or it was copied or
stored by other users. Additionally, you grant LinkedIn a nonexclusive,
irrevocable, worldwide, perpetual, unlimited, assignable, sublicenseable,
fully paid up and royalty-free right to us to copy, prepare derivative works
of, improve, distribute, publish, remove, retain, add, process, analyze, use
and commercialize, in any way now known or in the future discovered,
any information you provide, directly or indirectly to LinkedIn, including,
but not limited to, any user generated content, ideas, concepts,
techniques or data to the services, you submit to LinkedIn, without any
further consent, notice and/or compensation to you or to any third parties.


Who owns content
¬ Copyright – will be owned by employer where:
¬ work was created by an employee e.g. a person under a contract of
service not a contract for services; see 671122 Ontario Ltd. v. Sagaz
Industries Canada Inc [2001] 2 S.C.R. 983
¬ work was made in the course of employment; and
¬ there is no employment or other agreement to the contrary.
¬ How to determine if social media site content was created in the course of
employment. See generally,
University of British Columbia v. University of British Columbia Faculty Associatio
, 2006 CanLII 6155 (BC LRB)
¬ Trade secrets and confidential information – implied terms or constructive
trusts may apply.


IP Risks - Patent problems
¬ Public disclosure of inventions
¬ The subject matter defined by a claim in a patent application for a patent
in Canada must not have been disclosed more than 1 year before the
applicant’s filing date in such a manner that the subject-matter became
available to the public in Canada or elsewhere. Patent Act s. 28.2
¬ Public disclosures can occur by a picture or enabling disclosure on
¬ Blogs
¬ Social networking site e.g. Facebook note
¬ Photo site


IP Risks - Copyright problems
¬ Use of content which is not owned or licensed could result in infringement
claims
¬ Unauthorized use of photos of earthquake in Haiti uploaded to Twitpic
and used by Agence France Presse (AFP). Agency France Presse
v Morel, 769 F.Supp.2d 295 (S.D.N.Y. 2011)
¬ Creation of user generated content
¬ Webcasts, live tweeting
¬ Removal of author attribution or modification of content could result in moral
rights claims for violation of paternity or integrity rights
¬ See, Google Inc v Copiepresse et al, Brussels Court of Appeal
(9th Chamber) May 5, 2011
¬ The Google News service infringed the right of paternity because the
authors’ names were not mentioned in the search results.
¬ The right of integrity was infringed because only extracts of articles
were reproduced and the works had been modified.


Copyright problems
¬ Publishing content without use restrictions
¬ Implied licenses to users to reproduce documents on websites? Guillot v.
Istek Corp. (2001), 14 C.P.R. (4th) 67 (Fed. T.D.).
¬ Implied licenses to search engines to reproduce, cache and link to content?
Field v. Google, Inc 412 F.Supp.e2d 1106 (D. Nev. 2006).
¬ Statutory copyright exceptions e.g. Bill C-11 creates exception for educational
institutions to copy materials made publically available over the Internet.
¬ Account suspension risks
¬ YouTube
¬ “YouTube takes copyright infringement very seriously. If you receive
three copyright strikes, your account and all videos uploaded to that
account will be removed. In order to prevent this from happening, you
should refrain from uploading videos that infringe the copyright of
others.”


International Risk
¬ Shropshire v Canning Case 10-CV-01941-LHK (N.D.Cal. Aug. 22, 2011)
¬ Canning, Ontario resident, creates x-mas video synced with Irish Rovers
singing “Grandma Got Run Over by a Reindeer” and posts it on YouTube.
Canning is sued for copyright infringement in California.
¬ The Court finds that in this case, the alleged act of direct copyright
infringement — uploading a video from Canada to YouTube's servers
in California for display within the United States — constitutes an act
of infringement that is not "wholly extraterritorial" to the United
States… The allegedly infringing act in this case began in Canada,
where Defendant created his Grandma song video. Had Defendant
stopped there, there is no doubt that the strict presumption against
extraterritoriality would apply and Plaintiff would not have a claim.
¬ The problem is that Defendant did not stop at the mere creation of the
Grandma song video in Canada, but instead allegedly uploaded it to
YouTube's California servers for display in the United States after
agreeing to YouTube's Terms of Service agreement.


International Risk
¬ Shropshire v Canning Case 10-CV-01941-LHK (N.D.Cal. Aug. 22, 2011)
¬ Defendant's intent has no bearing on whether Plaintiff has stated a viable
claim for relief under the Copyright Act. Thus, even if true, Defendant's
protest that he did not know that YouTube's servers were in California and
simply tried to upload his video only to youtube.ca, YouTube's Canadian
web address, is of no moment to the issue of liability. Id. at 584
("[defendant] contends that any allegedly infringing activity in the United
States was unintended and unavoidable. Even if true, however, this is no
defense to an infringement of copyright. Direct infringement does not
require intent or any particular state of mind. See 3 Melville B. Nimmer &
David Nimmer, Nimmer on Copyright § 13.08 (1996) (`in actions for
statutory copyright infringement, the innocent intent of the defendant will
not constitute a defense to a finding of liability')."


Trade-mark and brand problems
¬ Trade-mark infringement or passing off claims
¬ For names of blogs, accounts
¬ For domain names
¬ Account suspension risks
¬ Twitter Trademark Policy
¬ Using a company or business name, logo, or other trademark-
protected materials in a manner that may mislead or confuse others
with regard to its brand or business affiliation may be considered a
trademark policy violation.
¬ When there is a clear intent to mislead others through the
unauthorized use of a trademark, Twitter will suspend the account
and notify the account holder.


¬ Impersonation
¬ YouTube: Impersonating another user by copying their channel layout,
using a similar username, or posing as them in comments, emails or
videos is considered harassment and is a violation of our
Community Guidelines.
¬ Username squatting
¬ YouTube: In general, users are expected to be active members within the
YouTube community. If an account is found to be overly inactive, the
account may be reclaimed by YouTube without notice.... In cases of
username squatting, YouTube may release usernames in cases of a valid
trademark complaint.
¬ Twittter: In cases of username squatting, YouTube may release
usernames in cases of a valid trademark complaint.


¬ Disparaging comments against employer
¬ Lougheed imports Ltd (cob West Coast Mazda) 2010, B.C.L.R.B.D. No.
190
¬ The comments made by the Complainants on Facebook were
damaging comments about the Employer’s business such as don’t
spend your money at West CoastMazda as they are crooks out to
hose you and the shop ripped off a bunch of people I know.
¬ The comment was very egregious in that it named the
Employer and attempted to encourage people not to spend money at
the Employer's business...I agree and find that there is proper cause
for the termination of A.P


Trade-secret problems
¬ Disclosing trade secret or confidential information
¬ Disclosure of customers, contacts, connections over LinkedIn
¬ Tweet of product announcement or product trade-mark before launch
¬ Blog disclosing technical information about a product or process
¬ Blog containing photos and information
¬ Chatham-Kent (Municipality) v National Automobile. Aerospace, Transportati
159 L.A.C (4th) 321 (employee terminated for posting photos and
information about residents in home for the aged in violation of her
NDA).


Trade-secret problems
¬ Trade secret misappropriation
¬ Re-tweets or other re-dissemination of confidential information
¬ Not all Facebook, LinkedIn posts, or tweets are automatically in public
domain.
¬ See, DVD Control Association, Inc. v. Bunner 4 Cal.Rptr.3d 69 (2003)
¬ That is not to say that a trade secret is automatically lost any time it is
posted on the Internet. Amici Curiae Intellectual Property Law
Professors et alia argue, for example, that information posted on an
obscure Internet site and detected quickly should not lose trade secret
status. This position is consistent with case law holding that minor
disclosures of a trade secret followed by a brief delay in withdrawing it
from the public domain do not cause trade secret status to be lost.


Concluding remarks


Slides available @
barrysookman.com and
mccarthy.ca

* Translations of French language cases were created using Google Translate.
Some translations were altered for clarification.


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