Managing the Legal Risks of

User Generated Content

.

Maanit Zemel, Esq.

Lawyer & FounderMTZ Law Professional Corporation

Federated Press 6th Social Media Risks

Toronto, May 5 & 6, 2015

Overview

User Generated Content

Defamation risks

Intellectual property risks

Privacy risks

Advertising & marketing risks

Miscellaneous risks

What is User Generated Content (UGC)?

According to Wikipedia*, UGC is defined as:

“…any form of content such as blogs, wikis, discussion forums, posts, chats, tweets, podcasting, pins, digital images, video, audio files, and other forms of media that was created by users of an online system or service, often made available via social media websites“.

* Citing: Chua, Tat-Seng; Juanzi, Li; Moens, Marie-Francine (2014); Mining

user generated content. Chapman and Hall/CRC. p. 7

Common Examples of UGC

Blogs

Content uploaded to social media (e.g. tweets; Facebook status, comments & likes; Linkedin posts)

Videos and photos uploaded / “pinned”/ tagged on content sharing sites (e.g., YouTube, Flickr, Instagram, Pinterest etc.)

Information / content uploaded to information websites (e.g., Wikis)

Online reviews (e.g., TripAdvisor; Yelp; Amazon, etc.)

Comments posted by users / readers / customers / followers on organizations’ websites

Some Statistics* (or - how can this lecture get any more interesting?!)

Number of pieces of content shared by Facebook users per minute?

Answer: 684,478

Annual revenue of Facebook from UGC?

1.86 Billion (2010)

Annual revenue of YouTube through UGC (2010)?

$945 million

Number of monthly active Instagram users (Dec. 2014)?

300 million* Courtesy of: http://www.statista.com/topics/1716/user-generated-content/. The

author has no knowledge of, and makes no comment on, the accuracy and/or

reliability of the information

Advantages of UGC

Engaging with customers and increasing loyalty

Attracting new customers

Increasing website traffic and search engine optimization

Brand and reputation promotion through positive reviews

Creating sense of openness and transparency

Marketing and advertising (e.g., contests)

Risks / Disadvantages of UGC

Legal liability of hosts / website operators / intermediaries for:

Defamation

Copyright infringement

Trademark infringement

Privacy infringement

Criminal offences

False advertising and marketing claims Reputational / brand risks (e.g. negative review)

Liability of Website Operators for UGC

U.S.:

Section 230 of federal Communications Decency Act –grants website operators complete statutory immunity from liability for all claims, with the exception of intellectual property claims

Canada:

No statutory immunity

Liability would depend on the subject-matter of the claim

Liability may be imputed to websites operators / intermediaries – depending on circumstances

Defamation Risks

Canada: Website operator / intermediary may be held

liable for publishing online defamation Baglow v. Smith (Ont. S.C.J., 2015) Hyperlinking may be insufficient to raise

liability (Newton v. Crookes SCC) U.S.

Complete statutory immunity (s. 230) SPEEACH Act

Defamation Take Down Notices / Requests

Canada:

If website operator / intermediary receives notice and does not take content down – increases likelihood of liability

Negative reviews are not necessarily defamatory

Recommendations:

Monitor and moderate website regularly for content that is clearly defamatory or offensive

If you receive take down notice – take it down

Consult with legal counsel when in doubt

U.S.:

Compliance is voluntary

Consider how your response may impact your brand / reputation

Consider ethical / moral obligations of not taking it down

Copyright Risks

Canada (Copyright Act) & U.S. (DMCA): Online posting of copyrighted

material without consent is prohibited

Website operators / intermediaries may be liable for copyright infringement if UGC contains copyrighted material

Copyright Risks & Take Down Notices

Canada (recent amendments to Copyright Act):

“Notice and Notice” regime – if ISP receives notice in prescribed format, must forward it to the alleged infringing subscriber. If does not follow specific notice requirements – may face liability for infringement

Liability of ISP capped

Unclear whether applies to website operators

Canadian Copyright Risks (Cont’d)

Exceptions / Defences:1. “Non-Commercial User-Generated Content”

exceptionIf specific requirements are met, website operator

/ intermediary can rely on exception UGC must be used solely for non-commercial

purposes (unlikely when the host / operator / intermediary is a commercial entity)

2. “Fair Dealing” defense available when UGC is used for specific purposes

(e.g., research, news reporting, satire, parody, education etc.)

Specific legal test must be met

U.S. Copyright Risks

U.S. (DMCA):

No liability to ISP / intermediaries / website operators so long as they have no knowledge of the infringing material & receive no financial benefit (“safe harbour” provisions)

Once placed on notice - must remove or face potential liability

Specific notice and take down requirements must be followed (including notifying alleged infringer)

Copyright Risks (Cont’d)

Some Recommendations:

Include clear prohibitions against copyright infringement in terms of use

Designate a copyright / DMCA agent

Provide clear guidelines and easy access for take down notices

Promptly comply with take down requests

If website is used for non-commercial purposes –consider relying on the exception

When in doubt – consult with legal counsel

Trademark Risks

Similar to copyright. Canada and U.S. law protects registered trademark owners

The posting of a registered trademark in UGC may give rise to liability in Canada and U.S. for trademark infringement

Website operators / intermediaries may also be liable:

Recommendations:

Monitor / moderate UGC for clear trademark infringement

Consult with legal counsel upon receipt of notice

Privacy Risks

Canada: PIPEDA and other provincial statutes

Prohibition against collection, disclosure and use of personal information without knowledge & consent (e.g., name, address, email address, gender, employment, etc.)

Email harvesting prohibited (CASL)

Privacy statutes do not apply to individuals – website operators may not be liable for UGC containing personal info posted by individual (ex., personal blog)

Common law – Intrusion Upon Seclusion claim

Privacy Risks (Cont’d)

U.S.:

No comprehensive federal privacy regime

Regulates use of private information in advertising and marketing (Federal Trade Commission)

Recommendations:

Develop, implement and publish clear and detailed privacy policies

If receive notice, consult with legal counsel

Advertising & Marketing Risks

Canada (Competition Act) & U.S. (Lanham Act): Prohibitions against false / misleading online advertising &

marketing practices and representations (Competition Act) Examples in the UGC context:

False / misleading reviews / testimonials / comments Online contests (e.g., Subway v Quiznos case) Inaccurate / misleading endorsements (e.g., on Linkedin)

Recommendations: Do not post false / misleading reviews / testimonials Prohibit employees from posing as consumers to post reviews /

testimonials Set clear guidelines for reviewers / commentators / contest

participants Consult with legal counsel

Criminal / Regulatory Offences

Website Operators / Intermediaries may face criminal liability in Canada & U.S.:

Example Includes Cyberbullying laws (Canada)

Hate Speech laws (Canada)

Child pornography laws (Canada)

Criminal defamation laws (Canada)

Protection of Canada from Terrorists Act (Canada – not yet in

force)

Criminal copyright infringement (U.S.)

Illegal gaming (international)

QUESTIONS?

Maanit Zemel, MTZ Law

mzemel@casllaw.ca / @maanitzemel / www.casllaw.ca

Disclaimer: This presentation is provided as an information service and is a

summary of current legal issues. The information is not meant as legal opinion

or advice and viewers are cautioned not to act on information provided in this

publication without seeking specific legal advice with respect to their unique

circumstances.

© All rights reserved. This presentation may not be reproduced and

redistributed without the prior written consent of the author.