Want To Know What A Social Media Law Final Looks Like?

Not that anyone actually writes law school finals with a pen, but you get the point.

Thinking about going to law school or want to revisit those horrifying amazing three years of your life?  If you’re curious about a law school final, or what a final looks like for a social media law class, then you’ve come to the right blog post.

Long time readers may recall when I first announced I’d be teaching a class at the University of Texas School of Law on Law and Social Media.  Last night I finished entering the grades for my students and so the class is officially over.  It was a blast to teach and I hope I get invited back to do it again, although developing the material was a lot more work than I expected.  Yes, I was warned this would be the case but I thought that all the other material I had in training about various social media legal issues would help.  They did–but it still took a lot of time to convert that into a format that was better for students.  That’s a big reason why this blog has been so silent these last few months.

As I mentioned in the original post, my class was about the many different legal topics that social media impacts.  There’s a lot of attention around social marketing and for good reason–that’s a highly regulated area and one that’s ripe with consumer protection issues.  But that is just one area I wanted to cover–employment, free speech, privacy, and several other topics were worth exploring.  I wanted my final to touch upon several topics while giving the students a bit of a taste of practicing in this emerging field.

Just to put this in context, the students had three hours to complete this exam (including reading time).  They could use any notes they created or assisted in creating and all three questions were weighted equally.  The final is shown below.  No, I’m not going to give you my model answers but feel free to ask questions in the comments about any issues you see.

Question One

Congratulations!  After four rounds of interviews and a grueling series of one-on-one discussions with the Board of Directors, you have been appointed General Counsel to BCB — the only social network dedicated to Bacon, Cats, and Babies.  With over four million users and an average of one million new pieces of content daily, BCB is one of the hottest social networks in the world.  It’s basic functionality allows users to upload a photo that features either Bacon, Cats, or Babies (or combination thereof).  These photos can be Liked and Shared and the picture can also be linked to some other online location–users browsing the site can click on the photo to be taken to the link provided by the original content creator.  Unfortunately, the site has yet to make any revenue and its initial funding is being consumed by the massive servers BCB must use.

BCB’s VP of Making Money has decided to make money through affiliate programs.  He would like every piece of content to be linked to an item that can be purchased from a web site.  Each link would contain a code that gives credit for the sale to BCB and the sites have agreed to pay BCB 3% of all sales.  For pieces of content that are posted without a link, BCB’s software will automatically select the optimal commercial item to link to the content and embed BCB’s affiliate code.  If the piece of content posted by the user already has a link then one of two things will happen:

1. If the link is to a non-commercial page, that link will be moved to a special button under the photo and the photo itself will then be linked to a commercial item similar to photos without links.

2. If the link is to a commercial page then the BCB affiliate code will be embedded in the URL.  If the link already has an affiliate code, that original affiliate code will be stripped out and replaced by the BCB affiliate code.

BCB’s Terms of Use section that deals with content says the following:

You can only post content you have permission to post.  Anything you post may be used by BCB as part of normal site functionality or in our efforts to make money.

Draft an email to the VP of Making Money describing the risks of his proposed plan and the changes to the Terms of Use you would propose to address those risks.

Question Two

The VP of Marketing for BCB has come to you with a plan for a new contest and would like your advice on how to proceed.  The contest would run for the month of May and invite all site users to submit their best BCB content that includes pictures of Google, Owen Wilson, or Vince Vaughn (in addition to the obligatory Bacon, Cat, or Baby).  He is hoping to capitalize on the popularity of the upcoming movie The Internship in which Wilson and Vaughn play unpaid interns at Google and is also hoping the contest has side benefits of making BCB show up in more Google searches.  He would like to give away $15,000 to the best content in terms of ten $500 prizes, one $2,500 prize, and one $7,500 prize.  Winners will be determined by the number of Likes clicked on each picture.  He would like the contest to be open to anyone in the world age 13 and up.

Draft an email to send to the VP of Marketing to discuss what changes, if any, he would need to make to his contest prior to running it, or highlight any issues/concerns you may have.

Question Three

You receive the following email from your VP of Human Resources:

Hi new General Counsel (sorry, I should know your name but I’m really busy)!

I’ve got a bit of a situation I’m hoping you can advise me on.  We hired Pat as our head of Online Community about a year ago.  I conducted the interview of Pat myself and I was really excited to do so because I had checked out all of Pat’s social media accounts prior to the office visit.  I was especially interested because it turns out Pat and I go to the same church and I didn’t even know that before!  

Anyway, I wanted to make sure Pat was a thorough professional in all their social media interactions so during the interview I had Pat log into all the major platforms and I browsed through the accounts, just to make sure there wasn’t anything tasteless that might go viral and embarrass us.  It was all good so Pat came on board and did a great job for many months.

But in the last few months, Pat has gotten weird.  Mostly on personal posts, but if you read those then you can see how it spills over to our corporate accounts.  Our users have started to notice too and Pat got into a nasty debate last week over whether a picture of Canadian Bacon was eligible for the site.

We may need to let Pat go soon.  Anything I need to be concerned about?

Draft a response to the VP of Human Resources.

Zach Braff Explains Why The JOBS Act Matters To Social Media

This + $Millions = Movie

Zach Braff is making a new movie thanks to social media.  The star of Scrubs has starred in several movies over the years but has only written, directed, and starred in one full length theatrical film, Garden State back in 2004.  That’s about to change with the launch of his Kickstarter project to fund a new movie, Wish I Was Here.  The project requires funding of $2 million but only one day in it has raised nearly $1.5 million.  It might even be fully funded by the time I finish writing this post.

Braff’s successful Kickstarter project comes on the heels of another record-breaking Kickstarter project for the Veronica Mars movie.  That project is not only the most funded movie project on Kickstarter (the second highest film raised just over $800,000) but also shows the power that social media, crowdfunding in particular, can have on an established industry like making movies.  Kickstarter has been used to fund hundreds of movies from documentaries to comedies to unofficial Star Trek fan pics.  Veronica Mars was the first time a major Hollywood studio allowed Kickstarter to participate in its development.

Series creator Rob Thomas had the idea for the film and ensured the series star was interested, then pitched the concept of launching the Kickstarter project to the studio that owned the Veronica Mars franchise.  Warner Bros. approved of the concept, essentially telling Thomas and the fans that if they raised $2 million then the movie was a go (and WB would distribute the film, another huge hurdle for actually seeing movies once they’re made).  The project gave itself 30 days to reach its funding goal; it raised $2 million in less than a day.

This is not to say that all Hollywood financing will shift to Kickstarter.  Nor does it make any star’s project instantly successful–the Veronica Mars project succeeded and Braff’s looks highly likely to succeed but another TV star, Melissa Joan Hart, has a Kickstarter project with a deadline of May 26 to raise $2 million.  To date is has raised a bit over $36,000.

Kickstarter funding does have the ability to connect fans of characters or stories and put their money where their mouth is in terms of making a movie happen.  In that sense it’s a brilliant market research and fundraising tool with almost no downside.  The only criticism that emerged after the Veronica Mars project, largely driven by bloggers as far as I can tell, is that the projects take money from fans only for the reason of taking more money from them down the road (when they go see the movie).  But anyone who has ever been a fan knows that’s how it works–we pay money to attend conventions/shows where we buy more items.  We go see a movie then buy it on DVD or digital download.  We’re fine paying for multiple items connected to stories we love.

And with Kickstarter, that’s exactly what you get.  Kickstarter is known as a perk-based or reward-based funding platform.  Meaning that when you contribute to a project you are signing up to receive something based on your contribution.  At the lowest level it may be a thank you.  At higher levels it could be physical goods, pre-ordered products, participatory credits, special meetings with the creators/inventors, all kinds of things.  But ultimately that is what you’re paying for–nothing else.  If the project fails, you don’t get money back.  If the project succeeds and results in billions of profit, you don’t get anything else.  You are not an investor, you simply bought something associated with the project.  If you don’t get what you paid for you can sue the project owner, but that’s not like a giant lawsuit over a failed company by disgruntled investors.

That distinction matters.  In the US it is currently against the law to crowdfund for equity investments (where you put money in to own a piece of the final result or company).  That kind of investment is controlled by the SEC and ran into a very public wall when the website buyabeercompany.com tried to gather enough pledged funds to purchase Pabst Blue Ribbon brewery for $300 million.  After gathering pledges above $200 million the SEC stepped in and informed the site owners that this kind of activity was highly regulated–the SEC shut down the site and settled with the creators.

As Braff explained in an interview about the project:

Listen, I would love, more than anything, to have it be you get an equity stake. You have 10 bucks, you make your 10 bucks back with the percentage of profit, like a stock. But that’s not legal yet.

And he’s right, for now.  But that’s set to change soon.  In 2012, Congress passed the Jumpstart Our Business Startups Act or JOBS Act.  The bill focused on having the SEC relax regulations about gathering investors to contribute money in exchange for ownership–equity investment as opposed to reward-based investment.  The prior rules essentially forced businesses that wanted to raise money from large groups of people to issue stock and jump through all the hoops associated with such an offering–it made this kind of investment only financially viable for extremely large sums of money.  For smaller amounts of money, $50,000 or $10 million, it didn’t make sense to issue stock and private lenders including banks may not be interested, leaving those companies with no viable option.  But with the changes in technology and the ability to raise money via social media, there needed to be a change to regulations to allow that activity to take place.

Even in the middle of a re-election year and our highly partisan political environment the law passed the House by a vote of 407 to 17.  The law requires the SEC to issue new guidelines on investments–it has issued draft guidelines for institutional investors (large banks, wealthy single investors, etc.) but is overdue for issuing guidelines for consumer investment (the $5 or so you and I might contribute to a project).

Once those guidelines come, we’ll see if the journey Kickstarter has begun in transforming Hollywood economics takes the next step.  The potential is there–in the UK where equity crowdfunding is legal, at least one UK platform reported at a recent crowdfunding conference that reward-based projects typically raised from $3,500 to $35,000 but equity-based projects raised an average of $88,000.  Investors are more willing to give money in exchange for ownership.  That may make larger budget movies possible if we take successful projects from the $5 million range to the $15 million range or higher.

This additional money doesn’t just impact Hollywood but virtually every creative industry.  Virtually every media can now be distributed digitally and crowdfunding not only raises money but establishes an initial audience of consumers and evangelists.  Years ago to raise money from thousands of people you had to travel from city to city, struggling to get the word out.  Now you can use social media and have thousands of people backing your project.

Ultimately, this is a movement that can bring a new wealth of creative content as projects that may not have been funded with the old models suddenly find enough support to reach the market.  Which really only matter if it helps bring us a Chuck movie.

Social Media Is Jimmy Olsen, Not Superman

Social media is a lot like Jimmy Olsen. Except we don’t have a signal watch.

Last week showed how social media can be incredibly powerful on the one hand and incredibly damaging on the other.  In the wake of the marathon bombings in Boston, social media communities rose up to offer assistance.  Some of it was valuable and helpful, like Google’s Person Finder tool which helped people in the Boston area find each other in the hectic aftermath, or the online document which connected people in need of places to stay with generous locals willing to house stranded runners or visitors.  Some of that offered assistance was less than helpful.

Two communities (which I’m not going to name but they’re easy to find) took it upon themselves to try and find the bomber(s) by combing through photos and videos taken near the scene and identify suspects.  While the sentiment behind the effort appears well intentioned, the results were anything but.  The groups focused their efforts on a number of people, inferring malicious motives to the way they carried bags or their proximity to some of the bombing locations or the fact that a single frame showed the person not intensely studying the runners still on the marathon course.  But what certainly stood out was one word.

Brown.

For example:

The communities focused on a number of criteria: carrying bags, distracted, alone, pictures showing they did not have bags later, etc.  But one criteria that popped up numerous times was whether the individual had dark skin.  A factor that was ultimately wrong and ended up saying much more about the reviewing community than it did the actual suspects.  That thinking wasn’t alone on internet forums though.  Even the New York Post jumped in on the potentially racist, certainly irresponsible accusations as Deadspin called them out for falsely accusing a high school runner of being sought by authorities.  The real story was that the student saw his picture circulating online so he turned himself in to avoid anything bad happening.  One of the communities that contributed to this false identification later apologized for their part, but we should be thankful the harm was contained.

It turns out that social media may be good at reporting some facts, uploading photos, and providing video, but it’s really, really bad at forensic analysis.  One could easily say dangerously bad given the heightened emotions around this situation.

But the strength of providing information is certainly a good thing for social media, it’s just a question of what we do with it afterwards.  That’s what makes social media Jimmy Olsen rather than even Lois Lane–we can take pictures but collectively we might not be very good at analyzing or even accurately reporting on the information.  And we certainly can’t act on them (thank goodness).

Social media is still a valuable resource in the pursuit of justice.  Take, for example, the 2011 Vancouver riots where concerned citizens provided authorities with thousands of hours of video and over a million photos taken during the riots.  Analyzing video tape and pictures after a riot wasn’t a new experience, not even to Vancouver in 2011–after their 1994 riots they analyzed a bit over 100 hours of video footage but that took authorities four months.  In 2011, with the help of the Law Enforcement and Emergency Services Video Association (LEVA), authorities were able to analyze over 5,000 hours of footage and over a million photos in two weeks.  Authorities were able to tag 15,000 criminal acts which led to just over 300 convictions.  A fraction of the identified actions, but still a huge improvement over the time taken to analyze the resources in 1994 (which led to only around 100 convictions).

Social media’s application in criminal justice will only grow over time.  The value now in contributing photos and other information is incredible–but we must be very careful as the crowd starts to get involved beyond the purely objective.  It turns out there’s a reason why we have experts doing analytical work.

Why Roger Ebert Mattered To Social Media

Roger Ebert, Social Media Pioneer

No single person best displayed the essence of social media like Roger Ebert.  Even if he wasn’t on every platform or the most popular person on any site he used, Roger showed us all the power of conversation.  When he passed away on April 4, 2013, he left behind a grieving family and a mourning social media following.  For a man whose career consisted mostly of reviewing movies to amass over 110,000 Facebook followers and over 840,000 Twitter followers is truly impressive.

To put that in context, the only other two popular movie reviewers I can find are Richard Roeper (~4,000 Facebook; ~55,000 Twitter) and Peter Travers (~1,000 Facebook; ~48,000 Twitter).  To be fair, Roger had a much more active social media presence than the other two, or perhaps any other movie reviewer alive.  But it is that online presence that makes him such a breakout social media star.  Roger is one of three American celebrities I’m aware of that took a small amount of notoriety and used their own voices to turn that into much larger online personas.  The other two are George Takei and Wil Wheaton although there may be more.

The irony, or perhaps perfect justification, is that Roger began cultivating his online voice when he lost his own.  In 2006, following surgical complications from treating thyroid cancer that left him without the ability to speak, Roger took his already prolific career writing movie reviews and blogging about movies, and instead spoke using social media.  He wrote about politics.  He wrote about religion.  He wrote about his alcoholism.  He took bold stands on video games not being art and drunk driving.  He began a lengthy campaign to win the New Yorker’s Cartoon Caption Contest, which he finally did just two years ago.

Esquire magazine ran an amazing article on Roger in 2010.  In it he spoke about his online activity:

When I am writing my problems become invisible and I am the same person I always was. All is well. I am as I should be.

And all was well right up until the end.  Roger’s final blog post, posted just one day before he died, spoke of his taking a Leave of Presence.  It mentioned how in the last year he wrote the most reviews of any year during his career (306), 1-2 blog posts per week, plus some other articles.  It fails to mention his active social media accounts–the multiple items he would post per day, not to mention that while Roger did not frequently engage with his followers it was obvious he read all of their remarks and reacted to them later.  His final posting mentions how he was taking a step back to address new health concerns while also laying out a number of ambitious projects that would have made men half his age and twice as healthy struggle to keep up.  The online community reacted to his announcement with disappointment over his new health concerns but also looking forward to the additional contributions we expected to see from him in the future.

One day later, that future was taken from Roger and all of us.

I exchanged emails once with Roger many years ago.  I had just completed a Bracket Battle (similar to the NCAA basketball tournament where you have 64 contenders battle it out) to determine the Ultimate Movie Quote.  I wrote him to let him know that our community had picked “Hello. My name is Inigo Montoya.  You killed my father.  Prepare to die.” as our ultimate winner and I asked what was his favorite movie quote.  I didn’t really expect a response, so I was surprised when I got it.

He wrote me back and told me his favorite movie quote was from Shanghai Express: “It took more than one man to change my name to Shanghai Lily.”  (A huge hat-tip to Fielding who helped me remember this.)

Not only was this an interesting choice but I also found it fascinating that for one of the most famous movie reviewers of all time and a prolific writer, he often got the quote wrong when he wrote it.  In his essay 100 Great Movie Moments he wrote the quote as “It took more than one night to change my name to Shanghai Lilly.”  Less than three weeks before he died, Roger tweeted how the movie was back in print with the quote “It took a lot of men to change my name to Shanghai Lilly.”

It isn’t that he completely missed the quote.  A stray word here or a slight turn of phrase.  He got the essence of the thing he loved even if he missed some details.  That may not be a perfect summary of Roger Ebert’s life, but it’s one of the biggest things I’ll remember.

Did The SEC Just Issue Double Secret Guidance For Using Social Media?

“How many followers do we have? 0.0? Well, maybe if you could figure out how I can tweet from this rotary phone…”

It’s a little bit odd for a government agency concerned with full disclosure to bury important guidance but that’s just what the SEC did in resolving their dispute with Netflix.  Social media practitioners will recall when the SEC first announced they were contemplating a formal investigation of Reed Hastings for posting on Facebook that Netflix had passed the billion streaming hours per month milestone.  This triggered a flood of press, even a blog post on this site, about the investigation and whether the SEC understood social media.  Yesterday, the SEC announced via press release that after its initial inquiry it would not launch a formal investigation.

But that wasn’t the real news.

Even though the press release and the seeming end of the matter is what was reported the most yesterday, the real news lies in the SEC’s Report of the Investigation it issued along with the press release.  Because buried within the investigation report, the SEC has issued guidance on how publicly traded companies can use social media.

That’s guidance with a lower case ‘g,’ not Guidance–which is typically released with more fanfare and a longer title.  For example, the original Regulation FD (if you want more background on Reg FD or this case, check the earlier SoMeLaw Thought How To Tell One Billion People A Secret) was adopted to prevent companies from giving information to only selected investors via phone calls.  As use of the Internet expanded, the SEC issued the Commission’s 2008 Guidance on the Use of Company Web Sites (much longer title, see?) which covered how companies could use their own site to distribute information.  It also included some general language to cover emerging technologies, which back then were “push” technologies and RSS readers.  While social media existed in 2008 it was not on most people’s radar, certainly not the SEC, and the 2008 guidance primarily discusses technologies controlled by a company used to distribute information.  It never formally addresses how a company might use someone else’s web site (such as Facebook.com) for distributing information.

This put the SEC in a bit of a bind as it attempted to look into Hastings’ Facebook postings.  Did it need to issue new Guidance about social media or were Reg FD and the 2008 Guidance enough?  The SEC decided the right answer was yes and no.

In the press release, Lona Nallengara, Acting Director of the SEC’s Division of Corporate Finance, was quoted with saying

“Companies should review the Commission’s existing guidance — it is flexible enough to address questions that arise for companies that choose to communicate through social media, and the guidance does so in a straightforward manner.”

So according Director Nallengara, the existing guidance was sufficient.  But inside the investigation report, the SEC states

[T]he Commission deems it appropriate and in the public interest to issue this Report of Investigation (“Report”) pursuant to Section 21(a) of the Exchange Act to provide guidance to issuers regarding how Regulation FD and the 2008 Guidance apply to disclosures made through social media channels.

Leaving aside the SEC’s statement that social media is no different than other web sites, blogs, or RSS feeds (I think we could debate that), or the fact that they found it necessary to issue guidance while simultaneously saying the previous guidance was sufficient, the SEC does go on to issue specific guidance for how publicly traded companies can continue to use social media channels while complying with Reg FD.  There are two main points that the SEC provides some little ‘g’ guidance.

If you disclose to one of these people, Reg FD may be triggered

These people are listed in § 243.100(b)(1) but just in case you don’t have that handy, here they are:

• Stock brokers and dealers
• Investment advisers
• Investment companies
• Stockholders

So if you’re a publicly traded company and you’re posting something publicly on Facebook, that odds that someone is subscribed to your posts and in this list are approximately 100%, give or take 0%.  There’s still going to be the analysis of whether you are disclosing material, previously non-public information, but even if you only have one stockholder subscribed to your feed and a million people who aren’t on this list, Reg FD applies.

Publicly traded companies should identify their social media sources for disclosures

Recognizing that the channels being used by companies are changing so quickly, the SEC’s guidance here is for companies to disclose what channels they use and how they intend to use them.  This seems a bit overbearing since it can be difficult to say exactly how you’ll use a particular account or community, but the intention here is a good one.  There are giant social media platforms and then there are hundreds of equally small yet interesting sites that publicly traded companies might use.  Telling investors which sites are significant enough for the company to follow for disclosures will prevent interested parties from trying to research every new platform to see if a company has established a presence yet.

 

While I think the guidance is good, it still avoids some of the crucial questions intially presented by the Hastings case–when is something disclosed to the public in social media?  The SEC report spends significant time talking about how some press outlets immediately saw the Hastings Facebook post and published reports while mainstream financial press covered it later, perhaps after the market closed.  That could be true, but does that differ from issuing a press release on the same subject?  Did the SEC find a single mainstream financial press reporter that felt the story was late because they didn’t know where to look?  Did they find any investors that wanted this information, always attend every investor phone call, yet didn’t get this information in a timely manner?

The focus of Reg FD was to fix selective disclosures.  The SEC wanted to make sure all investors got the same information.  Reg FD was never intended to address the issue of people getting the information instantly.  Social media has changed our expectation of when we receive information and how we can receive it, and the SEC is making an attempt to address the changing environment.  But it seems like there’s one more case that may need to come out to resolve the issue.  For example, the first time a company doesn’t list Twitter as an official source of information but tweets out to over a million followers some material information, what will the SEC do?

Three Legal Risks In The Year Of The Hashtag

And if you want to read more about Hashtag gang signs…I mean hand signs, check out http://www.briansolis.com/2011/06/hashtag-this-the-culture-of-social-media-is/

2013 is the year of the hashtag.  Forget all of those silly predictions we made for this year in social media just a few short months ago, the number one trend for the next 9 months is the total domination of the hashmark.

Hashmarks (the actual symbol #) have been used on the internet for decades although it was never quite rescued from obscurity the way email brought the @ symbol back from the brink of death.  The most common use of hashmarks prior to social media was their use in IRC, an Internet chat technology, where hashmarks were used to label chat channels people could join.

But hashmarks became popular in the social media age thanks to Twitter users.  For a platform where everyone spoke to everyone else at the same time, users needed a way to differentiate between different topics and conversations.  The proposal to use hashmarks combined with a word or phrase to create a hashtag was first proposed by Chris Messina in August, 2007 but the concept really took hold a few months later when the hashtag #sandiegofire was used for updates on the massive fires that hit San Diego in October, 2007.  After that real fire, hastags caught virtual fire and spread across Twitter.

Fast forward to 2013 and not only has Twitter integrated the hashtag into their platform (many years ago they made all hashtags automatic search terms just by clicking on them) but other platforms have integrated the same function.  Google+ launched with it, Instagram uses hashtags, so does Pinterest and several others.  The biggest holdout is rumored to be caving as Facebook is reported to be adding hashtag functionality.

A fantastic analysis of social integration in this year’s Superbowl ads shows how hashtags have caught on amongst marketers as well.  Every kind of social integration in a television commercial (showing a link to a Facebook page, showing a link to a corporate website, or even use of niche technologies like Shazam’s audio tagging) were down except for the use of hashtags which were up a whopping 31%.  Why hashtags instead of more specific links?  Probably because hashtags are about conversation topics rather than platforms–if I’m a brand and I start using a specific hashtag I might see that topic pop up on Twitter, photos posted with the topic on Instagram, related links pinned to Pinterest with the hashtag, even longer posts about the topic placed on Google+.  Hashtags are platform-neutral, although some platforms make it easier than others to discover.

Commercial incorporation of the hashtag and social conversation has been a fascinating evolution to watch.  It started with traditional “Follow us @account” messages on commercials and TV shows.  Then it became “Tweet us and we’ll show it on the air!”  Then we saw several shows try to use their name as a hashtag to promote conversations while the show was on.  The latest move is to have several hashtags appear during the show or commercial, often around key moments.  The TV show Survivor will now display hashtags like #immunitychallenge rather than a more general #survivor topic.

However, with this evolution and broader hashtag use comes a few legal risks which brands should keep in mind.

Hashtag contests can go places you don’t want to go

Back when hashtags were largely a Twitter-only function, it was possible to run social media contests by asking people to post their entry using a hashtag.  Both the brand and the entrants largely understood that meant posting on Twitter only.  But now that hashtags are supported on so many platforms, brands must be careful about using more than just hashtags to denote the proper place for entries.  Google+, for example, has hashtag functionality but does not allow contests to take place on their platform.  So be clear about entry places beyond just hashtag.

Hashtags as consent probably still don’t work

I’ve seen some promotional efforts that ask users to post a comment or picture using some unique hashtag like #UareDbest2013WhatWhatHolla!  Then the picture or content or even user avatar associated with that post will be used by the brand on a web page, as a contest entry, or even as a printed ad.  Brands need to be especially careful about treating these hashtags as consent without some other kind of communication.  First, it’s unclear if the platform you are pulling the content from will allow that under their terms.  Second, while the hashtag may be so unique that it can only originate from someone who wants to participate in your event, it’s also possible one of their friends will see it and start using it or sharing it without knowing that was supposed to carry a consent to participate.

Now might be a good time to refresh your social media team about using hashtags wisely

It’s been a while since Kenneth Cole posted some stupid tweets about #Cairo.  Or since a small boutique posted some stupid tweets about #Aurora.   Or since Quantus airlines stupidly timed a promotion around #QuantusLuxury.  Or since Entemann’s stupidly tried to create a trend around #notguilty the day the Casey Anthony verdict was rendered.  Or since British furniture retailer Habitat stupidly tried to participate in every trending topic to sell some product.  The list goes on and on.  Now that hashtags are a hot topic, it may be time to get the right people in a room to go over the right way to use hastags so your brand doesn’t end up on this list.

Top 4 Legal Myths about AP v. Meltwater

Just as the baconicorn is, so far, a mythical creature, there are a bunch of myths flying around about AP v. Meltwater. Sadly, those myths have 100% less bacon.

Translating legal opinions as they apply to social media is a difficult task.  It’s even harder when the opinion involves fair use.  Because even though fair use is something almost everyone has heard of, nobody really knows exactly how it works.  This is true for lawyers and courts as well.  Although there’s a well-known four-factor test, the factors aren’t easy and they aren’t designed to be simple.  One of the major cases where the Supreme Court spoke about these factors even stated that these are intended to be difficult questions to answer.

Last week the Southern District of New York (a very active and highly influential circuit when it comes to copyright questions) rendered summary judgment in the Associated Press’ lawsuit against Meltwater.  Meltwater is a site that clips thousands of news articles and distributes “summaries” (I hate putting words in quotes but necessary here as the summary could be just the first sentence of the article or up to 60% or more of the original article) of articles that match search queries set up by paying customers.

I’m not going to summarize the case for you here, sorry.  It’s far too complicated for a quick blog post.  Instead I just wanted to address a lot of  myths getting circulation right now around this case.

Myth 1: This case applies to you

Unless you are the Associated Press or Meltwater, except in rare circumstances, this case probably does not apply to you.  Yes, it involves a company that copied stories from the AP and if you are a social media practitioner you may have copied quotes from an article with or without links.  But what Meltwater did was several orders of magnitude different from a typical blogger or social media practitioner.  Their service pulled thousands of stories and used an automated program to copy relevant information and present it to people who had related search queries.  Unless you have a business engaged in this kind of systemic commercial copying, odds are that there are enough differences in what you do to this case that you don’t have an immediate need to worry (but if you do have a similar business, I’m guessing you’re talking with your lawyer anyway just to be safe).

Myth 2: This dispute is over

As much influence as the Southern District of New York has when it comes to copyright cases, this case is far from over.  It might be overturned.  It might be upheld for completely different reasons than the ones articulated by the court.  It might be upheld without comment, affirming the entire analysis already done.  It will be a few years before we know for sure.

Myth 3: The decision has a ton of problems

Techdirt wrote an article that claimed the opinion in this case had a ton of problems.  They even put the word ton in italics to really show the legal impact.  But their analysis was flawed and missed the point on several aspects.  I’m not even linking it here because I don’t want to encourage the spreading of bad info, but if you have read their take on the case just know that it was a total swing and a miss.  The court’s opinion may very well be overturned, that can happen with almost any case.  But Techdirt didn’t understand the legal analysis done for the fair use factors (for example, he confuses the concept of innovation with the first fair use factor of transformation–innovation in technology happens all the time, even by automating previously manual tasks, while transformation in fair use is a different and not necessarily related analysis).

Myth 4: This is a clean win for the AP

This myth came from a decent summary over at PaidContent as an entire section about AP’s victory at summary judgment.  Yes, the AP did win this phase of the case but any case that involves fair use isn’t a clean win.  It was a messy win filled with extensive electronic discovery, investigating five independent defenses put forth by the defendant, and enough billable hours to make at least a couple of law firms’ years.  There’s even some discussion in the 91 page opinion of the fight between the two sides over producing evidence of Meltwater’s click-through rate.  Any attorney with litigation experience will read those passages and grimace at the probable pain that both sides went through over several months to resolve that issue (if it was ever resolved).  There is a victory here, so far, but that isn’t clean.  It might not even be repeatable.

There might be more myths to come, but for now those are the biggest ones I’m seeing.