United States: Ownership Of Business-Related Social Media Accounts

Last Updated: December 18 2013
Article by Aaron P. Rubin and Anelia V. Delcheva

Social media platforms have become an increasingly important means for companies to build and manage their brands and to interact with their customers, in many cases eclipsing companies' traditional ".com" websites. Social media providers typically make their platforms available to users without charge, but companies nevertheless invest significant time and other resources to create and maintain their presences on those providers' platforms. A company's social media page or profile and its associated followers, friends and other connections are often considered to be valuable business assets.

But who owns these valuable assets – the company or the individual employee who manages the company's page or profile? Social media's inherently interactive nature has created an important role for these individual employees. Such an employee essentially acts as the "voice" of the company and his or her style and personality may be essential to the success and popularity of that company's social media presence. As a result, the lines between "company brand" and "personal brand" may become blurred over time. And when the company and the individual part ways, that blurring can raise difficult issues, both legal and logistical, regarding the ownership and valuation of business-related social media accounts.

Such issues have arisen in a number of cases recently, several of which we discuss below. Although these cases leave open a number of questions, the message to companies who use social media is loud and clear: it is imperative to proactively establish policies and practices that address ownership and use of business-related social media accounts.

PhoneDog v. Kravitz

A recently settled California case, PhoneDog v. Kravitz, Case No. C 11-03474 (N.D. Cal.), raised a number of interesting issues around the ownership and valuation of social media accounts. The defendant, Noah Kravitz, worked for the plaintiff, PhoneDog, a mobile news and reviews website. While he was employed by PhoneDog, Kravitz used the Twitter handle "@PhoneDog_Noah" to provide product reviews, eventually accumulating 17,000 Twitter followers over a period of approximately four and a half years. Kravitz then left PhoneDog to work for one of its competitors but he maintained control of the Twitter account and changed the account handle to "@noahkravitz." When Kravitz refused PhoneDog's request to relinquish the Twitter account that had been previously associated with the "@PhoneDog_Noah" handle, PhoneDog filed a complaint against Kravitz asserting various claims, including trade secret misappropriation, conversion, and intentional and negligent interference with economic advantage.

Kravitz filed a motion to dismiss the complaint based on a number of arguments, including PhoneDog's inability to establish that it had suffered damages in excess of the $75,000 jurisdictional threshold. Kravitz also disputed PhoneDog's ownership interest in either the Twitter account or its followers, based on Twitter's terms of service, which state that Twitter accounts belong to Twitter and not to Twitter users such as PhoneDog. Finally, Kravitz argued that Twitter followers are "human beings who have the discretion to subscribe and/or unsubscribe" to the account and are not PhoneDog's property, and asserted that "[t]o date, the industry precedent has been that absent an agreement prohibiting any employee from doing so, after an employee leaves an employer, they are free to change their Twitter handle."

With respect to the amount-in-controversy issue, PhoneDog asserted that Kravitz's continued use of the "@noahkravitz" handle resulted in at least $340,000 in damages, an amount that was calculated based on the total number of followers, the time during which Kravitz had control over the account, and a purported "industry standard" value of $2.50 per Twitter follower. Kravitz argued that any value attributed to the Twitter account came from his efforts in posting tweets and the followers' interest in him, not from the account itself. Kravitz also disputed PhoneDog's purported industry standard value of $2.50 per Twitter follower, and contended that valuation of the account required consideration of a number of factors, including (1) the number of followers, (2) the number of tweets, (3) the content of the tweets, (4) the person publishing the tweets, and (5) the person placing the value on the account.

With respect to the ownership issue, PhoneDog claimed that it had an ownership interest in the account based on the license to use and access the account granted to it in the Twitter terms of service, and also that it also had an ownership interest in the content posted on the account. PhoneDog also pointed to a purported "intangible property interest" in the Twitter account's list of followers, which PhoneDog compared to a business customer list. Finally, PhoneDog asserted that, regardless of any ownership interest in the account, PhoneDog was entitled to damages based on Kravitz's interference with PhoneDog's access to and use of the account, which (among other things) purportedly affected PhoneDog's economic relations with its advertisers.

The court determined that the amount-in-controversy issue was intertwined with factual and legal issues raised by PhoneDog's claims and, therefore, could not be resolved at the motion-to-dismiss stage. Accordingly, the court denied without prejudice Kravitz's motion to dismiss for lack of subject matter jurisdiction. The court also denied Kravitz's motion to dismiss PhoneDog's trade secret and conversion claims, but granted Kravitz's motion to dismiss PhoneDog's claims of interference with prospective economic advantage.

The parties subsequently settled the dispute, so, unfortunately, we will never know how the court would have ruled on the variety of interesting issues that the case presented. Interestingly, although the terms of the settlement remain confidential, as of mid-September, Kravitz appears to have kept control of the Twitter account and its attendant followers. It is worth noting that the case might have been more straightforward—and the result more favorable to the company—had PhoneDog established clear policies regarding the ownership of business-related social media accounts.

Ardis Health, LLC et al. v. Nankivell

A New York case, Ardis Health, LLC et al. v. Nankivell, Case No. 11 Civ. 5013 (S.D.N.Y.), more clearly illustrates the fundamental point that companies should proactively establish policies and practices that address the ownership and use of business-related social media accounts.

The plaintiffs in Ardis Health were a group of closely affiliated online marketing companies that develop and market herbal and beauty products. The defendant was a former employee who had held a position at Ardis Health, LLC as a "Video and Social Media Producer." Following her termination, the defendant refused to turn over to the plaintiffs the login information and passwords for the social media accounts that she had managed for the plaintiffs during her employment. The plaintiffs then filed a lawsuit against the defendant and sought a preliminary injunction seeking, among other things, to compel her to provide them with that access information.

Fortunately for the plaintiffs, they had required the defendant to execute an agreement at the commencement of her employment that stated in part that all work created or developed by defendant "shall be the sole and exclusive property" of one of the plaintiffs, and that required the defendant to return all confidential information to the company upon request. This employment agreement also stipulated that "actual or threatened breach . . . will cause [the plaintiff] irreparable injury and damage." On these facts, the court noted that "[i]t is uncontested that plaintiffs own the rights to" the social media account access information that the defendant had refused to provide. Interestingly, the court held that the plaintiffs were likely to prevail on their conversion claim, effectively treating the disputed social media account access information as a form of intangible personal property. The court also determined that plaintiffs were suffering irreparable harm as a result of the defendant's refusal to turn over that access information. Accordingly, the court granted the plaintiffs' motion for a preliminary injunction ordering the defendant to turn over the disputed login information and passwords to the plaintiffs.

As far as we can tell from the reported decision in Ardis Health, the defendant's employment agreement did not expressly address the ownership or use of social media accounts or any related access information. Nonetheless, even the fairly generic work product ownership and confidentiality language included in the defendant's employment agreement, as noted above, appears to have been an important factor in the favorable outcome for the plaintiffs, which illustrates the advantages of addressing these issues contractually with employees—in advance, naturally. And as discussed below, companies can put themselves in an even stronger position by incorporating more explicit terms concerning social media into their employment agreements.

Eagle v. Morgan and Maremot v. Fredman

Former employers aren't always the plaintiffs in cases regarding the ownership of business-related social media accounts.  In an interesting twist, two other cases – Eagle v. Morgan, Case No. 11-4303 (E.D. Pa.), and Maremont v. Fredman, Case No. 10 C 7811 (N.D. Ill.) – were brought by employees who alleged that their employers had taken over and started using social media accounts that the employees considered to be personal accounts.

Eagle began as a dispute over an ex-employee's LinkedIn account and her related LinkedIn connections. The plaintiff, Dr. Linda Eagle, was a founder of the defendant company, Edcomm. Dr. Eagle alleged that, following her termination, Edcomm personnel changed her LinkedIn password and account profile, including by replacing her name and photograph with the name and photo of the company's new CEO. Among the various claims filed by each party, in pretrial rulings, the court granted Dr. Eagle's motion to dismiss Edcomm's trade secret claim and granted Edcomm's motion for summary judgment on Dr. Eagle's Computer Fraud and Abuse Act (CFAA) and Lanham Act claims.

Regarding the trade secret claim, the court held that LinkedIn connections did not constitute trade secrets because they were "either generally known in the wider business community or capable of being easily derived from public information." Regarding her CFAA claims, the court concluded that the damages Dr. Eagle claimed she had suffered – putatively arising from harm to reputation, goodwill and business opportunities – were insufficient to satisfy the "loss" element of a CFAA claim, which requires some relation to "the impairment or damage to a computer or computer system." Finally, in rejecting the plaintiff's claim that Edcomm violated the Lanham Act by posting the new CEO's name and picture on the LinkedIn account previously associated with Dr. Eagle, the court found that Dr. Eagle could not demonstrate that Edcomm's actions caused a "likelihood of confusion," as required by the Act.

Eventually, the Eagle case proceeded to trial. The court ultimately held for Dr. Eagle on her claim of unauthorized use of name under the Pennsylvania statute that protects a person's commercial interest in his or her name or likeness, her claim of invasion of privacy by misappropriation of identity, and her claim of misappropriation of publicity. The court also rejected Edcomm's counterclaims for misappropriation and unfair competition. Meanwhile, the court held for the defendants on Dr. Eagle's claims of identity theft, conversion, tortious interference with contract, civil conspiracy, and civil aiding and abetting. Although the court's decision reveals that Edcomm did have certain policies in place regarding establishment and use of business-related social media accounts by employees, unfortunately for Edcomm, those policies do not appear to have clearly addressed ownership of those accounts or the disposition of those accounts after employees leave the company.

In any event, although Dr. Eagle did prevail on a number of her claims, the court concluded that she was unable to establish that she had suffered any damages. Dr. Eagle put forth a creative damages formula that attributed her total past revenue to business generated by her LinkedIn contacts in order to establish a per contact value, and then used that value to calculate her damages for the period of time when she was unable to access her account. But the court held that Dr. Eagle's damages request was insufficient for a number of reasons, primarily that she was unable to establish the fact of damages with reasonable certainty. The court also denied Dr. Eagle's request for punitive damages. Therefore, despite prevailing on a number of her claims, Dr. Eagle's victory in the case was somewhat pyrrhic.

In Maremont, the plaintiff, Jill Maremont, was seriously injured in a car accident and had to spend several months rehabilitating away from work. While recovering, Ms. Maremont's employer, Susan Fredman Design Group, posted and tweeted promotional messages on Ms. Maremont's personal Facebook and Twitter accounts, where she had developed a large following as a well-known interior designer. Although Ms. Maremont asked her employer to stop posting and tweeting, the defendant continued to do so. Ms. Maremont then brought claims against Susan Fredman Design Group under the Lanham Act, the Illinois Right of Publicity Act, and the Stored Communications Act, as well as a common law right to privacy claim. The parties filed cross-motions for summary judgment, which the court denied with respect to the Lanham Act and Stored Communications Act claims, largely due to lack of evidence on whether or not Ms. Maremont suffered actual damages as a result of her employer's actions. The court granted Susan Fredman Design Group's motion for summary judgment with respect to Ms. Maremont's right of publicity claim, based on the fact that the defendant did not actually impersonate Ms. Maremont when it used her accounts. The court also granted Susan Fredman Design Group's motion for summary judgment with respect to Ms. Maremont's right of privacy claim because the "matters discussed in Maremont's Facebook and Twitter posts were not private and that Maremont did not try to keep any such facts private."

Proactive Steps

Considering how vital social media accounts are to today's companies, and given the lack of clear applicable law concerning the ownership of such accounts, companies should take proactive steps to protect these valuable business assets.

For example, companies should consider clearly addressing the ownership of company social media accounts in agreements with their employees, such as employee proprietary information and invention assignment agreements. Agreements like this should state, in part, that all social media accounts that employees register or manage as part of their job duties or using company resources – including all associated account names and handles, pages, profiles, followers and content – are the property of the company, and that all login information and passwords for such accounts are both the property and the confidential information of the company and must be returned to the company upon termination or at any other time upon the company's request. In general, companies should not permit employees to post under their own names on company social media accounts or use their own names as account names or handles. If particular circumstances require an employee or other individual to post under his or her own name – for example, where the company has engaged a well-known industry expert or commentator to manage the account – the company might want to go a step further and include even more specific contractual provisions that address ownership rights to the account at issue.

In parallel, companies should implement and enforce social media policies that provide employees with clear guidance regarding the appropriate use of business-related social media accounts, including instructions on how to avoid blurring the lines between company and personal accounts. (Keep in mind, however, that social media policies need to be carefully drafted so as not to not run afoul of the National Labor Relations Act, state laws restricting employers' access to employees' personal social media accounts, or the applicable social media platforms' terms of use.) Finally, companies should control employee access to company social media accounts and passwords, including by taking steps to prevent individual employees from changing account usernames or passwords without authorization.

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Aaron P. Rubin
Similar Articles
Relevancy Powered by MondaqAI
Fisher Phillips LLP
Morrison & Foerster LLP
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Fisher Phillips LLP
Morrison & Foerster LLP
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions