Presentation at ALI ABA Seminar:Blogging in the Workplace

Introduction to and Overview of the Major Corporate Blog Legal Issues

Lawrence SavellCounselChadbourne & Parke LLPJanuary 30, 2008lsavell@chadbourne.com(212) 408-5343

Copyright © 2008 Lawrence Savell

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Outline of Presentation Introduction Use of Disclaimers Affirmative Considerations Defamation Issues Limitations of Editorial Discretion Allowing Posts by Others Copyright Issues Trademark Issues Domain Name Issues Terms of Use Provisions Appropriation/Use of Name or Likeness Obscenity Issues Linking Issues Right to Refuse Advertising Violation of Advertising Laws Liability for Legal/Business/Professional Advice Other Issues/Considerations Conclusion

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Introduction

Blogs vs. other means of communication How are they the same? How do they differ?

Immediacy? More likely in defamation context to be construed as protected

“opinion”? More likely in copyright or trademark context to be construed as “fair

use”?

Traditional communications law principles Do they apply? In what manner? Are bloggers journalists?

Status affects applicability of both privileges and responsibilities

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Contexts

Client/business blogs How should you advise your client? How should you as a business set up and operate your blog?

What level of risk are you and/or your client willing to accept?

Podcasts Need to make sure that podcasts are "podsafe" -- that the

audio content offered does not infringe the rights of others (e.g., background music)

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Corporate Blogs

Benefit: A corporate blog can certainly help your company “get the word out” in an effective and efficient manner

But that valuable online presence may carry with it substantial legal risks

Increasing your sensitivity to potential claims can help reduce your company’s liability exposure I will be providing some guidelines.

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Corporate Blogs - Employees

Recognize the risks of employee blogging Companies are generally held responsible for actions

their employees perform within the scope of their employment

Employers should remind employee bloggers that corporate policies may apply to their blog postings These may include policies regarding:

Proprietary or confidential information of the business and its clients Applicable governmental requirements such as securities laws regarding

disclosures

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Affirmative Considerations

Most of presentation deals with reducing liability of corporation against claims by others relating to corporate blog

But there are obviously situations where it is the corporation that has been wronged Defamation by others of the corporation and/or its executives

If poster anonymous, some bring “John Doe” lawsuits seeking to have ISP or operator remove posting and/or identify poster

Posting of corporation’s trade secrets by others May seek an injunction requiring removal

May involve interplay between First Amendment rights of the others vs. property/reputation rights of the corporation

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Affirmative Considerations (cont’d) Anonymous speech has historically often been protected in

certain contexts to certain degrees under the First Amendment But defamatory speech basically has no First Amendment

protection (although developments like NYT v. Sullivan have increased proof required)

“John Doe” defamation/confidential information cases Plaintiff seeks order requiring ISP to turn over the identity and other

information it has on the defendants ISP moves to quash

Different courts apply different standards in determining whether and when to unmask anonymous online speakers Plaintiff-oriented: Some look at whether plaintiff had a “legitimate, good faith

basis” to allege cause of action against the defendants Defendant-oriented: Others examine whether plaintiffs defamation claims

could be successful (for example, ruling against plaintiff where statements were “opinion-centered” under “totality of the circumstances”)

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Affirmative Considerations (cont’d) Dendrite (NJ Super 2001): Specific procedure

Plaintiff must notify anonymous poster that poster is the subject of a subpoena or an application for an order to disclose identity so defendant will have a reasonable opportunity to fight such a subpoena

Plaintiff must identify the exact statements believed to be actionable Plaintiff must "produce sufficient evidence supporting each element of its

cause of action, on a prima facie basis, prior to a court ordering the disclosure of the identity of the unnamed defendant.“

Court must then balance the necessity of disclosure: Strength of the prima facie case presented by the plaintiff First Amendment right of the defendant to speak anonymously

Doe v. Cahill (Del. 2005): Modified Dendrite approach Plaintiff must notify the anonymous poster that poster is subject to

subpoena and must present a prima facie cause of action “[B]efore a defamation plaintiff can obtain the identity of an anonymous

defendant through the compulsory discovery process[,] he must support his defamation claim with facts sufficient to defeat a summary judgment motion.”

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Preview: Use of Disclaimers

You may be able to disclaim or deny liability to a degree through properly worded statements posted on your blog

Benefits Some greater level of comfort and protection

Limitations Not perfect protection

Practical considerations Turn off users Inhibit contributions you may want Crying wolf

Will close presentation with a review of language some have designed to address various issues

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Defamation/Libel

Consider whether your content may defame a person, business or product.

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Defamation Issues

Elements of a defamation claim Defamation Publication "Fault" Harm/injury

Privileges/defenses Truth Fair reports privilege Opinion/rhetorical hyperbole

Corrections/clarifications

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Defamation - What is a Defamatory Statement? False and defamatory statement about another which causes

injury to reputation (or in some cases causes emotional distress) Communication which exposes persons to hatred, ridicule, or

contempt, lowers them in the esteem of others, causes them to be shunned, or injures them in their business or calling

Classifications of libelous words Esteem or social standing (e.g., crime/immorality) Ridicule (more than simple joke or satire/exaggeration) Disease or mental illness (present time) Incompetence in trade, occupation, office, or profession

General professional competency – not a single instance of error Corporation's integrity, credit, or ability to carry on business

Including dishonesty or unethical behavior

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Defamation - Identification of Plaintiff Plaintiff must prove that statement referred to plaintiff --

was "of and concerning" plaintiff Need not be by name

Can be by description or circumstances tending to identify him or her

Defamation of a group or class One who publishes defamatory matter concerning a group

or class of persons is subject to liability to an individual member of it if, but only if: The group or class is so small that the matter can reasonably be

understood to refer to the member, or The circumstances of publication reasonably give rise to the conclusion

that there is particular reference to the member

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Defamation - “Publication”

Unprivileged dissemination to third party Circulation of statement in any form to at least one other

person Not an issue in blog context

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Defamation – “Fault” Responsibility at least at level of negligence Level that plaintiff must prove depends on status of

plaintiff New York Times v. Sullivan (1964) and progeny: Public officials

(later public figures) have to prove high standard of "actual malice“ "Actual malice" means that a libel is published with:

Knowledge of its falsity, or Reckless disregard of whether it is false or not

Private persons have easier standard (negligence) Have to prove that defamation published negligently or

without due care that average person of ordinary sensibilities would have used

Problem: Classification of public official/figure unclear

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Defamation – Privileges/Defenses

Truth Fair reports privilege Opinion/rhetorical hyperbole

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Defamation – Truth

Truth is a complete defense “Substantial truth”/”gist” usually sufficient,

even if minor details off No liability if false aspects inconsequential

But it’s still a good idea to reduce risks by incorporating less-than-absolute words like “may” or “might” or terms like “alleged” or “reported”

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Defamation – Fair Reports Privilege

Protects fair and accurate reports of judicial, legislative or executive proceedings and records

Verify that particular proceeding/record included Official source must be identified Report must be "fair and accurate“

New York: substantial accuracy test Report should reflect entire record/proceeding

Denials of civil complaint should be summarized

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Defamation – “Opinion” Used to be the case that "opinion" was virtually completely protected from

being the basis for libel liability Traditional view: Abusive words arising in agitated, heated controversies

may be treated as statements of opinion or rhetorical hyperbole (exaggeration) and as such are not libelous

Scope of exception narrowed by recent court decisions May be protected if truly opinion and not capable of being proven either true

or false May be actionable to extent it implies a false assertion of fact Calling something an opinion does not make it so

Words like “I think” or “I believe” do not necessarily assure protection for what follows

If statement presents defamatory facts masked as opinion, there may be liability

If statement hints that there are unreported defamatory facts, there may be liability

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Defamation – Corrections If you determine that a defamatory statement was posted on your

blog, a prompt removal and correction or clarification should help reduce potential damages

Benefits Reduction in potential damages Provision of accurate information to your readers

If so, how should that technically be done? Ability to edit your prior posts Posting a separate notice

What about posts by others you have allowed?

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Limits of Editorial Discretion While editors certainly have and have traditionally

enjoyed the right to make reasonable edits, the bounds of editorial discretion are not limitless

In extreme cases, an editor and his or her publication may possibly be found liable for damages to an author Deletions of content Typographical errors Could possibly be basis for a claim of

Defamation Trademark infringement “Moral rights” (some countries recognize the right of a creator to have

his or her work attributed to the creator in the form in which it was created)

Address in blog terms of use Affirmatively specify broad power to edit/change item

May be safer just to delete post

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Should You Allow Posts/Comments By Others?

If you want to minimize legal liability, do not allow posts/comments by others Again, that can have practical upsides and downsides One of many examples of conflict/tradeoff between maximizing

legal protections vs. business/image considerations

Impact of § 230 of Communications Decency Act of 1996 Provides broad protection for providers and users of interactive

computer services against liability for defamation and other content-based claims when a third-party provides the information “No provider or user of an interactive computer service shall be treated

as the publisher or speaker of any information provided by another information content provider."

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Should You Allow Posts/Comments By Others? (cont’d)

Also permits providers and users of interactive computer services to exercise some editorial control while still avoiding legal liability

Immunizes them from liability for attempting to restrict access to objectionable material

No provider or user of an ICS shall be held liable for any action taken in good faith to restrict access to obscene material

Policies: Help industry flourish and encourage screening

However, some courts have stated that, at some point, such editing may transform the provider or user of the ICS into an information content provider and thus deprive them of § 230 immunity

Not clear where that point is

CDA preempts state law “No cause of action may be brought and no liability may be imposed under any

State or local law that is inconsistent with this section.” Recent example cases

Dimeo v. Max (3d. Cir. 2007): Affirmed dismissal of complaint regarding posting by third party on defendant’s website

Doe v. MySpace (W.D. Tx. 2007): Dismissed negligence and gross negligence claims, noting immunity not limited to defamation and defamation-related claims; covers assertions of liability for publication of, or harms flowing from dissemination of, third-party content

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Copyright Don’t use another party’s copyrighted material without permission

Be sure you incorporate only material that you own or that you have permission or the right to use

Exception: “Fair use” allows other parties besides the copyright owner to use copyrighted material in a reasonable manner without the owner’s consent in certain circumstances Balance of Interests

The purpose and character of the use The nature of the copyrighted work The proportion that was "taken," and The economic impact of the taking (the extent to which the use may diminish the

value of the original work) Purpose/character examples

Education Parody Criticism Commentary News reporting

But you should credit the author

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Copyright - Who Owns The Rights to The Content?

Take care when drafting contracts with outside providers of corporate blog content

If you use an outside person or entity to create content for your blog, be sure your agreement with that provider gives you the rights you need

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Copyright - Who Owns The Rights to The Content? (cont’d) Created by you Joint creators (joint ownership) Created by another for you

Employee Under the Copyright Act, if a work is created by an employee within the

scope of his or her employment, the employer automatically owns all rights in the work

In such circumstances, no specific grant of rights is necessary

Freelancer Structure the arrangement with the author as a "work made for hire"

under the Copyright Act (express agreement between the parties; copyright belongs to party commissioning the work), or

Have an agreement with the freelance writer which specifically grants "all rights" to you

Submissions by unrelated third parties You probably have a license

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Digital Millennium Copyright Act (1998) As noted earlier, beware of allowing posts or comments

by third parties These can present significant risks that can be avoided

by simply not allowing them Your business model may encourage third-party

contributions to your corporate blog, however In that case, notify posters that they are representing that they

have the right to post the content in exchange for your giving them the opportunity to post

This may reduce your liability somewhat, but if a poster plagiarizes material, you may still be found responsible if the true owner sues

The Digital Millennium Copyright Act may provide some insulation if applicable and if you remove infringing content once alerted

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Digital Millennium Copyright Act (1998) (cont’d) The DMCA contains a provision entitled the Online Copyright Infringement

Liability Limitation Act (section 512), which provides a “safe harbor” to ISPs from claims of copyright infringement that result from the conduct of their customers In order to obtain immunity, an ISP (operator) must first satisfy two

threshold requirements; it must (1) "[adopt] and reasonably [implement] ... a policy that provides for the

termination in appropriate circumstances of [users] ... who are repeat infringers“ and

(2) "accommodate[] and ... not interfere with standard technical measures" that copyright holders rely on in protecting their works online

Blog/website operators Once it receives a notice of copyright infringement, it must:

(1) act expeditiously to remove, or disable access to the allegedly infringing materials (2) notify the alleged infringer that the material has been removed (3) forward any counter-notices from the alleged infringer to the complainant, and (4) replace the allegedly infringing material if the complainant has not filed a lawsuit within

ten to fourteen days after the operator has received the counter-notice

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Trademark

Be careful when using the trademarks of others Make sure that you have permission to use any other

individual’s or company’s brand names or trademarks that you display

Trademark issues can also include the registration of domain names that allegedly infringe on existing trademarks and the use of trademarks of others in metatags An example of the latter: Company A inserts the trademarked

name of Company B in Company A’s metatags This is a no-no because it might confuse people who are looking for

Company B’s blog but are directed by a search engine to Company A’s blog

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Trademark Issues

Context Name of blog Use of trademarks in blog Affirmatively asserting the blog’s trademark

Litigation A plaintiff has to prove two things in a trademark

infringement case Its mark is entitled to protection, and More importantly, that the defendant's use of its mark will

likely cause consumers to confuse it with the plaintiff's mark

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Trademark - Likelihood of Confusion

Factors to consider The "strength" of the plaintiff's mark The degree of similarity between the marks Whether the products compete The likelihood that the plaintiff may enter the defendant's

market The sophistication of consumers The quality of the defendant's product The existence of actual confusion, and The defendant's "bad faith" in adopting the mark

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Trademark - Suggestions Register your blog’s name and possibly also a variety of similar

names as domain names to protect yourself from others who may try to divert traffic from your blog

Search the Internet on a regular basis for illegal uses of your domain name, brand name, trademark or similar names on a regular basis

If you find others using your name or trademark, determine whether the other uses are legitimate, and if they are not, contact such users, tell them it is yours, and ask them to stop using it

Make sure that you have permission to use any other individual’s or company’s brand names or trademarks that you display on your site

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Domain Name Issues

May parallel trademark analysis Need to check/police Cybersquatting

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Privacy

Watch out for potential invasions of privacy Statements that invade the privacy of others can provide the

basis for a legal claim

Privacy Statements With increasing federal and state legislation regarding Internet

privacy, many bloggers post (and many readers expect to see) privacy statements promising to protect the confidentiality of personal information that may be provided or collected, such as that transmitted in the course of blog registration/log-in by those seeking to post comments

Blog hosts must comply with their own established policies

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Appropriation/Use of Name or Likeness

New York Civil Rights Law §§ 50-51 Article, 48 Albany Law Review 1-47 (1983)

Appropriation Use of name, portrait, or picture For advertising or trade purposes Without prior written consent

Defenses Newsworthy exception

Used to illustrate matter of public interest with which it is reasonably related

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Obscenity Issues

Could come up in context of discussion of facts of a case, either in text or if include graphics/illustrations

Bear in mind global audience Standards vary

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Linking Issues

Be careful about providing external links Accompany them with a notice disclaiming responsibility

for and denying any endorsement of products, services or information contained on outside sites

Liability for linking? “Bad” content at blog/site to which you link “Deep” linking (bypassing design/organization of blog/site to

which you link – which often means advertising) Recent case: BidZirk LLC v. Smith (D.S.C. 10/22/07): Mere act

of linking to a photo on another’s publicly-accessible website is not a misappropriation (plaintiff had consented to the other’s posting)

Liability for not linking?

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Right to Refuse Advertising General rule: publishers have long had leeway in

refusing to publish advertisements (courts may vary on how much leeway)

May need to do that to avoid potential liability for running certain ads (for example, ads for illegal activity) If publisher knew that advertisement was fraudulent, deceptive,

or misleading, publisher may possibly be held responsible for the ad along with the person or company who placed it

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Right to Refuse Advertising (cont’d)

Allegations made by plaintiffs (usually unsuccessfully) in favor of requiring publication: First Amendment rights

Advertising as protected speech (strongest in political context)

Refusal to run seen as denial of free speech and expression

"Restraint of trade"

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Right to Refuse Advertising (cont’d)

Exceptions to freedom to reject: Motive or effect is anticompetitive

Publisher refused ads in some sort of anticompetitive scheme to injure another business

Rare and hard to prove Publisher has agreed to run an ad then refuses in

breach of that contract Publications of non-private or governmental entities

may have less leeway to refuse advertising

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Violation of Advertising Laws

Keep applicable advertising laws and regulations in mind Certain blogs may be viewed in whole or part as

advertisements Example: the blog of a business that pointedly extols

the quality of its staff and services to potential customers and clients

If so, blog operator must comply with applicable advertising, consumer protection, deceptive practice and unfair-competition laws and regulations.

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Liability for Legal/Business/Professional Advice "One who, in the course of business, profession or employment,

or in any other transaction in which he has a pecuniary [financial] interest, supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information."

"[This] liability . . . is limited to loss suffered: "(a) by the person or one of a limited group of persons for

whose benefit and guidance he intends to supply the information or knows that the recipient intends to supply it, and

"(b) through reliance upon it in a transaction that he intends the information to influence or knows that the recipient so intends or in a substantially similar transaction"

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Other Issues/Considerations Claims

Intentional infliction of emotional distress Tortious interference with contractual/business relations

A plaintiff may claim that statements have wrongfully interfered with the plaintiff's contractual or business relations with another, causing the plaintiff harm (often asserted along with defamation claim)

Product liability claims against publishers Check your insurance coverage

Determine whether these types of blogging risks are covered If they’re not, consider obtaining additional coverage such as

third-party media liability coverage for infringement and liability costs associated with Internet publishing

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Types of Blog Disclaimer/Terms of Use Language

Parameters of use/requirement of compliance Set forth the conditions of use and require acceptance of the

terms “We grant you a nonexclusive, nontransferable, limited right to

access, use and display the blog and the materials provided hereon, provided that you comply fully with these Terms and Conditions of Use.”

Postings may not be current: “The information on the blog may be changed without notice

and is not guaranteed to be complete, correct or up-to-date.”

Distinguish company from individual posters: “The opinions expressed on the blog are the opinions of the

individual author and may not reflect the opinions of the company.”

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Types of Blog Disclaimer/Terms of Use Language (cont’d)

External links: “Links to external sources are provided solely as a courtesy to

our blog visitors.” “We have no control over the linked sites or the materials,

information, goods or services available or contained on these linked sites.”

“We are not responsible for and do not endorse or warrant in any way any materials, information, goods or services available through such linked sites or any privacy or other practices of such sites.”

“If you decide to access any of the linked sites, you do so entirely at your own risk.”

“We reserve the right to terminate any link at any time.”

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Types of Blog Disclaimer/Terms of Use Language (cont’d)

Other matters addressed in such statements Use of blog’s e-mail/messaging system does not constitute

giving legal notice to the company Reservation of right to revise terms and conditions Prohibition against certain activities by users Protection of blog’s IP (copyright/trademark)

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Caveat: RSS Feeds (Syndication/Aggregation)

Helpful for reader (need not visit multiple blogs) but may have legal implications for you

Appearance may change from way you set up your blog Depending on how they were created, not all of what you have

created in terms of notices, etc. may necessarily transfer

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Need for Legal Counsel

The potential liability for a corporate blog largely depends on the details of the circumstances

To get the full picture, preventive legal review or monitoring by in-house or external counsel with expertise in these areas is critical

Lawyers should educate and update involved personnel on pertinent legal issues

Clients should consult counsel on questions about contemplated blog content

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Conclusion

Understand traditional analysis Be aware of risks Use common sense Use those disclaimers If not a lawyer, consider legal review Sensitizing yourself and/or your company to the major

legal issues and taking steps to deal with them in advance can help reduce the risks of legal liability for corporate blogs An ounce of prevention can save you a lot of headaches and

expense down the road