Legal Considerations inSOCIAL MEDIA MARKETING

Presented By

Matthew D. AsbellLadas & Parry, L.L.P

212.708.3463masbell@ladas.com

March 24, 2010

Agenda

1. Introduction to Social Media for Businesses

2. IP Issues in Social Media Marketing

3. Risks to Attorneys and Firms Using Social Media for Marketing

4. Policies and Guidelines; Best Practices

5. Putting together a Social Media Marketing Strategy

Introduction toSocial Media

For Businesses

What the Heck is"Social Media”?• SOCIAL: works by having other people see, read,

download, reply, forward, or in some way INTERACT with it -- and with you.

• MEDIA: used as an “intermediate agent” between YOU and others’ perceptions of YOU, your brand, identity, social capital, and your goods & services.

• Web 2.0

Why Web 2.0 is Important for Businesses,including Law Firms

• To find and connect with prospects• To help prospects find your business

• Quasi-Search Engine Optimization• Community outreach

• Relationship Building• Normative Expectations

• To show your expertise rather than merely advertise• To educate consumers about your brand• To provide a personal touch• To go beyond “Egocentricism” of Websites• To stimulate viral marketing

43% of attorneys were members of at least one social media platform in 2009 (vs. 15% in 2008)

Attitudes Toward Social Media• Now maybe we are all

public figures.• Options

• Ignorance• Defiance• Recklessness• Cautious Embrace

Empowerment

Good-bye Twitter.flv

Types of Social Media

• SOCIAL NETWORKING SITES• Mass Media: Facebook, LinkedIn• B2B: Biznik, Merchant Circle, Fast Pitch, Plaxo• Niche: Martindale Hubbell Connected, Legal OnRamp

• BLOGS (and Blawgs): TTABlog, PatentlyO• MICROBLOGS: Twitter• WIKIS and CLOUD COMPUTING: Wikipedia, Google

Docs• CUSTOMER REVIEW / RATING / REFERRAL SITES:

eBay, Amazon, Avvo

Social Media Around the World

• Presently Facebook holds the top spot as the main social platform being used around the world with about 350 million people.

How Consumers Access Social Media Sites

• Visiting the Website• Subscribing to an Email Newsletter• Subscribing to an RSS feed

• Aggregating in “the cloud” (Google Reader)• Using a mobile device (Viigo)

• Mobile Apps

FACEBOOK (Personal “Profiles”)

FACEBOOK (Company “Pages”)

Ownership ofFacebook Pages/Profiles

• Usernames are permanent• Company pages

• Limited utility when unassociated with a personal profile/account

• “Ownership” via association with personal profile/account is permanent

• Association with an employee profile can be problematic b/c of permanence

LINKED-IN (Groups, Companies, Answers)

Traffic Resulting from Answering Questions

TWITTER

YOUTUBE

Vehicle for promotion of goods and marks of the company

WHAT ABOUT MY INTELLECTUAL PROPERTY ?

Seems easy. Oooh,

fascinating terms of service

Intellectual Property Issues in Social Media

• TRADEMARKS and RIGHTS OF PUBLICITY

1. Infringement2. Username Squatting3. “Keyword Kaos”

• Also, COPYRIGHT (not discussed here)

TRADEMARK INFRINGEMENT

What Can Be Done AboutUsername Squatting?

• PREVENTIVE STEPS• Preemptively register the mark and potential domain names with each site • Monitor, Monitor, Monitor

• See Tiffany v eBay, No. 04-4607 (SDNY, July 14, 2008, on appeal to 2nd Cir)

• REMEDIAL STEPS• Report alleged infringements to the social networking site

• “Notice & Take-Down” modeled on DMCA• Not a binding legal requirement

• Cease & Desist letter to user• Sometimes difficult to identify or contact that user

• Cease & Desist letter to OSP• Often unpredictable standard for “confusing” or “misleading” use

• Dispute Resolution• Litigation

USURPING USERNAMES

What Can Be Done AboutUsername Squatting?

• FACEBOOK: • "Report this Person" or "Fake Account" buttons

• TWITTER: • “Clear intent to mislead”• Difficult to contact the adversary • You can't buy the name.• Options

• Almost Automated Customer Service responses to C&Ds• Request suspension for 6 months of inactivity, but does not result in transfer (yet)• Sue Twitter: Oneok, Tony LaRussa• Shaq Attaq: register a new username

• YOUTUBE: • Encourages the interested parties to work it out

• “Using someone’s TM in a username, in itself, is not necessarily infringing”• C&D Letter followed by corresponding with YouTube support• No one said it would be an efficient process

Will the real Tony LaRussa please tweet?

A SHAQ ATTAQ

KEYWORDS

Sponsored Links Based on Keywords in Social Media Profiles

GOOGLE ADWORDS in the U.S.:Google v. Rescuecom

• 2nd Circuit vacated and remanded a dismissal by S.D.N.Y. of Rescuecom’s claim that suggestion and sale of its trademark as a keyword was a trademark infringement

• It may differ in other circuits, but signals end of defense that keyword sale is not “use in commerce”

• Several subsequent class action suits filed against Google

GOOGLE ADWORDS in Europe:Google France v. Louis VuittonECJ C-236 -238/08 (March 23, 2010)

• Similar to Rescuecom, ECJ held keyword ads are “use”• But, “use” is by advertisers, not Google• Advertisers may be liable if use is misleading or vague• Google may have indirect liability under national laws if

not entitled to safe harbors of E-Commerce Directive because maybe not passive role

• Google “general Trademark complaint” policy purports to investigate use of registered marks in ad text and, in some jurisdictions, as keywords• This may permit liability by Google in Europe where owners have

advised ab initio of their registered trademark rights

METATAGS—Hidden Use of Keywords in Web-Site Programming

• Initial Interest Confusion• “When a customer is lured to a product by the similarity of the mark, even if the

customer realizes the true source of the goods before the sale is consummated”• MOVIEBUFF - Brookfield Communications, Inc. v. West Coast Entertainment

Corporation, 174 F.3d 1036 (9th Cir. 1999)• Promatek Industries, Ltd. v. Equitrac Corp., 300 F.3d 808, 812 (7th Cir. 2002)• Playboy Enterprises, Inc. v. Netscape Communications Corp., 354 F.3d 1020 (9th

Cir. 2004)• Not fair use because bad faith, bait-and-switch

• Tdata Inc. v. Aircraft Technical Publishers, 411 F. Supp.2d 901 (S.D. Ohio 2006).• Gibson Guitar Corp. v. Paul Reed Smith Guitars, LP, 423 F.3d 539, 544 n.4 (6th

Cir. 2005)• Initial interest confusion “derives from the unauthorized use of trademarks to

divert internet traffic, thereby capitalizing on a trademark holder’s goodwill.”• Australian Gold, Inc. v. Hatfield, 436 F.3d 1228 (10th Cir. 2006)

• North American Medical Corp. v. Axiom Worldwide, Inc., 522 F.3d 1211 (11th Cir. 2008)

Keywords inSocial Media Profiles

• Part of “identity creation”• Improves chances of your profile/page being found• What if you use Third-Party Trademarks as your

keywords?

• Search optimization• Similar to Adwords cases?

• Use in Commerce?• Similar to Meta-Tags?

• Trademark Use?• Is it deceptive, bad-faith?• Unfair competition/free riding?

Risks to Attorneys of Utilizing Social Media for Marketing• Regulations on Attorney Speech

• Model/State Rules of Professional Responsibility

• Employment Issues• Respondeat Superior• Employee Privacy

• Social Media Issues in Court

• Disclaimer: Although I have had some minimal exposure to Employment Law issues and I have applied the Rules of Professional Responsibility in my practice in the field of Intellectual Property Law, Employment Law and general Ethics Law are not a substantial part of my practice.

Regulations onAttorney Speech• Constitutional rights

• First Amendment: Congress may make no laws abridging freedom of speech• However, States may regulate COMMERCIAL SPEECH

• Lawyer’s newspaper ad soliciting public response on judicial selection deemed not commercial speech because did not propose commercial transaction despite intent to generate new business (Texans Against Censorship v. State Bar of Texas (1995))

• Most lawyer activity on the Internet constitutes commercial speech:• Outlining capabilities of the firm• Giving history of firm’s achievements• Discussing experience of firm’s lawyers• Firm website seeking clients constitutes “advertising”

• But providing legal information may not be commercial speech

• ABA Model Rules (& corresponding State Rules)

• Limits on Regulation• Alexander v. Cahill (2nd Cir., Mar. 12, 2010)

Constitutional Limits on Regulation ofCommercial Speech• Alexander v Cahill (March 12, 2010, 2nd. Cir.)• Four-part inquiry to determine whether regulations of commercial

speech are consistent with the First Amendment:• Is this commercial speech protected by First Amendment - does it concern

lawful activity and is it not misleading? If yes, apply Central Hudson test:• Whether asserted governmental interest is substantial• Whether regulation directly advances the governmental interest asserted• Whether restriction is narrowly drawn

• Ads portraying fictitious law firms are actually misleading; not protected by First Amendment• But the other regulations are intended to protect consumers against

potentially misleading ads• The other content-based restrictions fail Central Hudson test:

• State has substantial interest in protecting the legal profession’s reputation• Ban on certain attention-getting advertising gimmicks doesn’t further state

interest unless they are actually misleading• Measures are not narrowly tailored because they constitute “blanket bans”

on categories of advertising that are only potentially misleading.

The Rules of Professional Conduct

• ABA Model Rules• Adopted by New York (April 2009): 22 NYCPR § 1200

• Adopted by Illinois: Article VIII• Similar rules adopted by California

• ABA Commission on Ethics 20/20• “Technological advances and globalization have changed

our profession in ways not yet reflected in our ethics codes and regulatory structures”

• Generally, Public and Permanent Nature of Social Media raises ethical issues

Existing ClientsConfidentiality - Model Rule 1.6(a)

• Ensuring reasonably secure means of communication• Email generally ok (ABA Formal Op. 99-413)• Social Media probably not• “Cloud computing” e.g. Google docs• Access by the site proprietor to all information• Obligation to keep abreast of technological advances

in security• Disclosure of confidential relationship resulting

from public list of contacts• Also applies to supervised staff

Prospective ClientsModel Rule 1.18

• Confidentiality of information revealed• Tweeting about lunch with a prospective client

• Disqualification from representation of adversary• Establishing The Attorney-Client Relationship

• General Information vs. Specific Advice• “Providing legal advice … involves offering recommendations tailored to

the unique facts of a particular person’s circumstances … Lawyers wishing to avoid formation of attorney-client relationships through chat rooms should limit themselves to providing legal information”

• AZ State Ethics Op. 97-04 (1997): “lawyers should not answer specific legal questions from lay people through the internet unless…of a general nature and…advice not fact-specific”

• N.Y.C. Ethics Op. 1998-2 (1998): “Lawyer…should carefully refrain from…general solution applicable to all apparently similar individual problems since slight changes in fact situations may require a material variance in…advice”

Solicitation of Prospective ClientsModel Rule 7.3• “A lawyer shall not by in-person, live telephone or real-time electronic

contact solicit professional employment from a prospective client when a significant motive for the lawyer’s doing so is the lawyer’s pecuniary gain”• In-person solicitation prohibited

• Chat-rooms considered analogous because in real time• Comment 3: permissible communications “can be permanently recorded so

that they cannot be disputed and… shared with others…can help guard against statements…that might constitute false and misleading communications…

• Direct mail correspondence allowed• E-mail considered analogous because private and recorded

• What about a tweet? Or a status update?• Not entirely private• Not really direct• But not necessarily read in real-time• And there is a record

Unauthorized Practice of LawModel Rule 5.5

• Providing legal services in other states, except “if federal law permits”

• Disclose the state(s) in which attorney is admitted in order to avoid misperception by prospective client that attorney is licensed in his/her respective state

Information About Legal ServicesModel Rule 7.1

• Lawyers shall not use advertisements that contain statements or claims that are false, deceptive or misleading.

• Bates v. State of Arizona: State can not wholly ban attorney advertising, but can regulate false, deceptive or misleading advertisements

ReferralsModel Rule 7.2(b)

• A lawyer shall not give anything or value to a person for recommending the lawyer’s services• Beware of agreeing to trade recommendations

• Testimonials allowed if not excessive• Not suggestive of future performance, especially with

disclaimer (Alexander v Cahill) • Information posted on a “claimed” profile is an

advertisement, whether written or controlled by the attorney or not (S.C. Ethics Advisory Opinion 09-10)

• Public Relations implications• Also, FTC Guidelines on Endorsements and

Testimonials 16 CFR Part 255

Attorney AdvertisingModel Rule 7.2(a)• Attorney may advertise through written, recorded or electronic

communications including public media (including email)• Comment 2 permits public dissemination of information concerning:

• Name of attorney or firm• Address and telephone number• Kinds of services provided• Basis for fees, including prices for specific services• Payment and credit arrangements• Foreign language ability• Names of references• Names of regularly represented clients (with consent)• Other information that might invite attention of those seeking legal assistance

• Websites, blogs, social media profiles (probably) = advertising• Some states require approval, but may not be possible in this context• Periodic records recommended

LinkedIn Answers• Someone asked:

• “My nonprofit client is participating in the Hop-A-Thon® run by the Muscular Dystrophy Assn. Is it necessary to use the ® after the name of the program when referring to it on my client's website? Any way to properly avoid using ®?”

• An appropriate response:• “The ® need not be used next to every use of a

registered trademark, but may be required by contract.”

• “General information” preferable to “specific advice”

Claiming SpecializationModel Rule 7.4

• Not considered a “specialist” unless designated as such by an organization that has been approved by an appropriate state authority or that has been accredited by the [ABA]• Exception: Patent attorneys

• Avoid the use of the word “expert” • Avoid references to specialty areas• List practice areas preferably with disclaimer

The Twitter Example

• What if someone tweets “Anyone know a good entertainment lawyer?”

• Conflicts of interest with existing clients – 1.7• Confidentiality – 1.18• Referrals – 7.2• Solicitation; making real-time contact – 7.3• Claiming specialization – 7.4• Formation of attorney-client relationship – 1.18

SUGGESTED PRACTICE:• Try to email the person and take the conversation out of “real-time”

contact• If you can’t email the person, then tweet them with a link to your

website, or the website of your colleague

Conflicts of InterestModel Rule 1.7

• “Personal interest of the lawyer”• Representation may be “materially limited” by

posting a definitive legal position• However, lawyer may take opposite position in

different cases• P.R. implications where clients are contacts

DishonestyModel Rule 8.4

• Avoid Usernames that do not clearly identify you

• Pretexting• Having staff send a friend request to witness for

opposing party to obtain information from profile• Philadelphia Bar Assoc. Professional Guidance

Committee Opinion 2009-02 (Mar 2009)

Social Media Issues in CourtModel Rules 3.5, 8.2 and Others• Ex Parte Communication: Avoid connecting with adversaries, jurors,

witnesses, and judges• Social Media “friend request” violates order of protection because attempt to

contact, even if refusable (People v. Fernino, 851 N.Y.S.2d 339 (NY Crim Ct 2008))

• Appearance of Impropriety: Whether judge may agree to being a “friend” of an attorney (Fl Jud Ethics Adv Comm Op 2009-20 (Nov. 17, 2009))

• Influence: Lawyers seeking cert pursuing posts on SCOTUSblog, which received over 100 hits from a Supreme Court IP address

• Reckless statements about judge: Fine v. blog describing judge as “Evil, unfair witch”

• Candor: Judge warned of discovering falsity of atty request via Facebook• Evidence: Indiana Supreme Court upheld use of Social Media page as

evidence at trial (Clark v. State, 915 N.E.2d 126 (2009))

The Employee’s Relationship with the Firm

• Full disclosure of material connection to the firm:• 15 USC 41 (FTC Act s.5): Ban on deceptive trade practices• ABA Model Rule 7.2(c): Communications shall include the name and

office address of at least one lawyer or law firm responsible for its content.

• Respondeat Superior• Use of firm’s name on personal page may be extension of firm

• Within scope of employee’s general authority• In furtherance of employer’s business• In furtherance of objective for which employee was hired

• Liability of firm for defamation by Patent Troll Tracker Blog (Ward v Cisco (2007))

• Employers can control employee activity• First Amendment applies to Government, not private employer• EMPLOYER’S POLICIES

• grounds for termination

Employee Privacy• Can employers monitor use by employees?

o 39% look up profiles of existing employeeso 44% examine profiles of job candidates

• Common law intrusion on seclusion and wrongful discharge: may be difficult for employees to demonstrate reasonable expectation of privacy

o Too much information about employeeo Learning that employee has disability from his Facebook page

may result in claim that subsequent termination was result of discrimination in violation of Americans with Disabilities Act

o Suggested practice: COMPLIANCE MONITORo Contractually obligated not to reveal private information other

than violation of firm policies

Limits on Employer Control• Employer can control the material posted by employees

acting within scope of employment, but not outside• Employers prohibited from taking adverse action

against employees for engaging in concerted activity or discussing terms and conditions of employment (National Labor Relations Act)

• Suggested Practice• Monitor social media and employee gripe sites• Avoid reputational harm by being publicly responsive

to complaints

Employer Attitudes• Ignorance / Recklessness

• Allow unregulated use of social media in the workplace

• Defiance• Disallow use of social media in the workplace

• Cautious Embrace• Educate and allow limited use of social media with

clear Policies & Guidelines and an appropriately targeted Social Media Marketing Strategy in place

EMPOWERMENT

Policies & Guidelines

1. Provide and require a disclaimer2. Require employees to use personal id/email address3. If speaking on behalf of the firm, identify connection4. Require review and approval before any pages affiliated with the firm are

created or updated5. Restrict legal advice to reduce risk of attorney-client relationship6. Avoid giving and receiving recommendations in exchange for any benefit7. Avoid posting a definitive legal position adverse to clients’ interests8. Comply with IP laws and require authorization for use of employer IP

– Use links instead of reproducing text– Avoid using business names and logos of clients without permission– Avoid using names or images of real individuals for commercial gain

9. Require compliance with confidentiality policies10. Monitor and address third party and employee comments11. Appoint a compliance monitor

Standard Disclaimer

• This online material provides information only and is not a substitute for competent legal advice. The use of the information set out in this material should not be taken as establishing any contractual or other form of attorney-client relationship between the attorney providing the information or the firm of _____ and the reader or user of this information.

Special Disclaimers• Employee Social Media Profiles

• The owner of this profile is an attorney at the law firm of ______, and is licensed to practice in _____ {states/country(ies)}.

• Any postings associated with this profile are exclusively the views of the author and do not necessarily represent the positions, strategies, or opinions of the law firm of ____.

• The hiring of an attorney is an important decision that should not be based solely upon postings, profiles, or other social media advertisements. Before you decide, ask me to send you some free written information about my qualifications and experience.

• Any testimonials associated with this profile are not indicative of future performance. • Invitations to Connect

• By requesting or accepting a request to connect, “friend”, or otherwise establish a direct link with this profile, you acknowledge that no attorney-client relationship is established in the absence of a signed formal Engagement Letter. If you are an existing client of the owner of this profile and/or his/her firm as evidenced by a signed formal Engagement Letter, you authorize the public disclosure of any relationship that may be implied by the connection established between your profile and this profile.

• Substantive Posts• While I believe the information presented is accurate as of the date of original publication,

changes occur frequently and often the laws and regulations are complex and/or are difficult to follow and therefore I cannot guarantee the accuracy of posted information, especially as to each individual situation, or be held responsible for any errors or misstatements or for any misunderstanding.

Thank You

• Any Questions?Matthew D. Asbell, Associate

Ladas & Parry LLP212.708.3463

masbell@ladas.com

• We gratefully acknowledge the assistance of Ari Abramowitz, Caroline Camp, Ismari Cueto, and Chuck Bernstein in the preparation of this presentation.