Social media sites such as Facebook, Twitter and LinkedIn are
powerful business tools for marketing products and services and
building brand recognition. However, the undeniable advantages of
using such tools cannot be discussed without addressing the legal
risks. To minimize the risk of becoming a plaintiff or defendant in
costly litigation, companies must be aware of the legal pitfalls,
and actively take steps to address the risk.
Who owns your social media accounts?
Social media accounts and content are created, established,
developed and updated by individuals. The individual that creates
the content therefore may have rights in the account. Issues often
arise when the individual that developed a valuable social media
presence for your company is no longer employed by your
organization. What if the individual refuses to divulge the login
credentials? Who "owns" the Twitter followers? Who owns a
blog that was created and maintained by the former employee? Who
owns your employees' LinkedIn accounts?
Few business owners understand that ownership of a
business's social media platforms is often not a
straightforward matter. A business and its former employee are
currently embroiled in litigation in California over who owns a
Twitter account that was created and published in the
business's name but maintained entirely by the former employee.
In another case, a business that invested a great deal of time and
money in developing its former employee's LinkedIn account is
suing the fired employee for "misappropriation" of the
account and its associated list of connections. There are many
instances of former employees or business partners being sued for
misappropriation and damages where they have refused to divulge
login credentials for the "business's" social media
accounts – however, the plaintiff businesses have had
only moderate success in regaining control over the accounts or
being awarded damages.
The expense of litigating such ownership issues also likely
pales in comparison to the business losses that can result from a
loss of control over, or a misappropriation of, your business's
marketing-related lists, including Twitter followers and Facebook
friends. In the past, businesses have successfully asserted control
over such assets by arguing that these valuable business assets
were "trade secrets" or confidential information.
However, the public nature of the customer and marketing
information that is created and maintained through social media
platforms has made it increasingly difficult for companies to
successfully argue that such lists are protectable as trade secrets
or confidential information, which poses a significant challenge
for businesses that wish to restrain their use or publication.
Liability for User-Generated Content
"User-generated content" (UGC) is the content created
by consumers posting material on the company's social media
forums. This popular marketing technique uses a company's
consumers to promote the companies' products and services, and
enhances brand loyalty by engaging users of the companies'
products and services.
Numerous legal issues surround UGC, not the least of which is
the company's potential liability to third parties for
copyright or trade-mark infringement or defamation. What if a
consumer posts a third party's music video or a cinematic movie
clip to the company's Facebook page? Or if a consumer posts
defamatory material using another company's trade-marks?
Although the law in this area remains unclear, the "host"
business may be liable to injured third parties for publishing the
Reducing the risks
The stakes are high as social media tools increasingly become
integrated into every part of many businesses. As the courts
continue to grapple with who owns, controls, and can modify social
media tools, businesses can reduce their risk of such legal
conflicts by having a well-drafted, comprehensive computer,
Internet and social media use policy that clarifies ownership, use,
and liability issues for these valuable business assets. If you
wish to determine whether your business is at risk, or discuss how
to secure protection for your social media profiles, our
Intellectual Property and Technology Group has expertise in this
area and would be happy to assist.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Violation of the Competition Act prohibitions can result in serious remedies, including administrative monetary penalties of up to $1 million per violation for individuals and up to $15 million per violation for organizations.
On December 9, 2014, Bill C-13, An Act to amend the Criminal Code, the Canada Evidence Act, the Competition Act and the Mutual Legal Assistance in Criminal Matters Act (Act) – also known as the Protecting Canadians from Online Crime Act –, received the royal assent.