Who owns the accounts that are opened on Facebook, LinkedIn, Twitter or other social media platforms? If an employee opens up a Twitter account using the company brand, who owns the followers of the account? How much is a follower worth? As more and more businesses actively encourage their employees to use social media as a marketing tool, we are likely to see an increase in litigation over the ownership of such accounts. The following cases illustrate how some courts have addressed these issues.
Cases
Phonedog, LLC v. Noah Kravitz [Case No. 3:11-CV-03474-MEJ (N.D. Cal. 2011)]
In this case Phonedog, a website that provides mobile news and reviews of products and services of mobile phone carriers, used a variety of social media, including Twitter, Facebook and YouTube, to market and promote its services to potential users. Phonedog sued Noah Kravitz, a former employee, who continued to use a Twitter account that had been initially created for use by the company. Kravitz had used the handle @phonedog_Noah to disseminate Phonedog marketing material and reviews of mobile devices. Kravitz left Phonedog and simply changed his Twitter handle to @noahkravitz. The Kravitz Phonedog Twitter account had reached 17,000 followers. Phonedog sued Kravitz alleging that the Twitter account and its followers belonged to Phonedog. Phonedog also asserted the value of Twitter followers at $2.50 per follower per month and sought damages of $340,000. The parties reached a settlement agreement and Kravitz was allowed to retain custody of @noahkravitz as a Twitter handle.
After the settlement Kravitz issued the following statement:
If anything good has come of this, I hope it’s that other employees and employers out there can recognize the importance of social media to companies and individuals both. Good contracts and specific work agreements are important, and the responsibility for constructing them lies with both parties. Work it out ahead of time so you can focus on doing good work together — that’s the most important thing.
Unfortunately we are still waiting to find out how much a Twitter follower or a Facebook “like” is worth.
Eagle v. Morgan [Case No. 2:11-CV-4303-RB (E.D. Pa. 2011)]
In this case Dr. Linda Eagle sued her former employer for its continued use of her LinkedIn account after her employment had been terminated. She sued her former employer setting forth eleven causes of action as follows:
(1) violation of the Computer Fraud and Abuse Act (“CFAA”) 18 U.S.C § 1030(a)(5)(C);
(2) violation of the CFAA, 18 U.S.C § 1030 (a)(2)(c);
(3) violation of section 43(a) of the Lanham Act;
(4) unauthorized use of name in violation of 42
Pa. C.S. § 8316;
(5) invasion of privacy by misappropriation of
identity;
(6) misappropriation of publicity;
(7) identity theft under 42 Pa. C.S § 8315;
(8) conversion;
(9) tortious interference with contract ;
(10) civil conspiracy; and
(11) civil aiding and abetting.
The court dismissed all of the federal claims and only addressed the state claims finding in favor of the plaintiff on her claims of unauthorized use of her name, invasion of privacy by misappropriation of identity, and misappropriation of publicity. The court noted that while the company had urged employees to create LinkedIn accounts and had guidelines covering on-line content, the company had never informed employees that their LinkedIn accounts were the property of the employer. Unfortunately for Dr. Eagle, the court also determined that she had failed to put forth sufficient evidence of compensatory damages that were causally connected to defendant’s improper activity and awarded her no damages.
In the Matter of Merck KGaA, [Index No. 11113215, Supreme Court of State of New York (November 2011)]
The German pharmaceutical company Merck KGaA brought this action in the New York Supreme court seeking an order requiring Facebook to disclose the circumstances leading up to the takeover of its Facebook page by its rival in the United States Merck & Co. According to Merck KGaA, its former Facebook page was now being used by the similarly named US entity. These legal proceedings were initiated by Merck KGaA to discover how the Facebook page www.facebook.com/merck that it had established was somehow transferred by Facebook to Merck & Co. without any notice or consent from them. The action was not against Merck but against Facebook to find out how the Facebook website they thought they owned was now being used by another company.
Best Practices
• Have Written Agreements. If your employees are asked to use social media to market and promote your business’s products or services, have written agreements that make it clear that the company owns the account, including customer lists, friends, and followers and that the employee relinquishes any rights to the account when he or she leave.
• Appropriate Corporate Policies. Employers should take pre-preemptive steps to mitigate the risk of misappropriation. This can be done through appropriate corporate social media policies and individual employment agreements that delineate at a minimum that whatever the employee creates on company time or with company resources belongs to the employer. Rather than leave it up to a court to decide and mitigate disputes over social media account ownership, employers should have clear policies and written agreements with all employees that cover social media account ownership when such accounts are used for company business.
• Register Social Media Accounts in Company Name.Businesses should register social media accounts in the company name or if a personal name is required use the name of a senior marketing person. The company policy should prohibit employees from conducting business through social media using individual accounts held in their own name.
• Establish Ownership of Social Media Accounts Used By Business. Company business should only be conducted through company-owned social media accounts. Employees should be required to use company-provided account log-ins and passwords. Company ownership of social media accounts and the followers of such accounts should be clearly stated in a corporate social media policy and in written employment agreements prior to the establishment of any employer-sponsored social media account. The company can also clarify that such ownership and control is limited to the social media accounts that are used for business purposes and not the personal Facebook and other social media accounts used by individual employees for their own personal and
private purposes.
• Limit Number of Persons with Administrative Controls. Only a few key corporate employees should be given administrative rights that would allow any change in control of any website or webpage. If external providers are used for registration of domain names or social media user names, ownership and control by the business should be made clear in any agreements with the identity known of any individual granted such administrative rights.
• Consider Social Media Account Ownership in Due Diligence. When acquiring a business, do not overlook social media accounts that are used by the target business and make sure that the target business can transfer the rights to the relevant social media account.
CREDIT: The content of this post has been copied or adopted from the Minnesota Department of Employment and Economic Development’s “A Legal Guide to the Use of Social Media in the Workplace” Guidebook
