EMPLOYEES' PRIVACY VERSUS WALL STREET

Recently, several states have begun to enact laws that prohibit companies from monitoring their employees' personal social media accounts.  The impetus of this spate of legislation was to protect an individuals' privacy and to stop companies from asking for an employee's social media passwords.    

Last year, California, Illinois, Maryland, and Michigan adopted social media privacy laws.  Utah's social media privacy law took effect this month.  Thirty-five other states have similar privacy laws at various stage of the process.  Those who support these social media privacy laws say that the laws are necessary to protect employees--even when the employer may be the subject of social media messages made using an employee's personal account.  They say that giving employer's access to an employee's social media accounts is akin to asking to review the employee's photo albums on a regular basis, or listening in to his/her conversations. 

Securities regulators are seeking to create exemptions to state laws that allow certain financial firms to sidestep bans on looking at personal social media accounts of employees.  According to the Financial Industry Regulation Authority (the Wall Street authority that regulates Wall Street), financial firms need to follow up on "red flags" indicating that an employee is misusing his/her personal account.   Apparently, FIRA fears that employees will provide financial advice on Facebook or Twitter which would lead to an unregulated and unchecked avenue for these employees to create Ponzi schemes and other frauds.  Of course, the SEC recently issued a new guidance that allows companies to use social media to disseminate market information.  The privacy right protection laws promulgated by the states would prohibit or hinder efforts to monitor and regulate those schemes. 

The legislation does provide an exception when the company may be under an investigation for alleged employee misconduct.  There is also a question as to whether the Federal regulations allowing for monitoring of communications by securities sellers and the like preempts the state privacy laws.  Whatever the ultimate outcome between these competing interests, it is clear that the state of the law will be unclear for quite a while. 

Using Copyright Litigation as a Business Model Got a Law Firm in Some Hot Water

Prenda Law Inc., a "law firm," decided that it wanted to use the strict liability and statutory damage provisions of the Copyright Act to receive payments from copyright infringers.  Throughout the years in my practice, I have seen how expensive this type of litigation can be when the copyright owner's damage is nothing compared to the statutory damage amount allowed (up to $ 150,000 per infringement) and the litigation costs associated with defending oneself against an infringement action.  Most of my clients are entrepreneurs or small businesses.  As such, I have seen the wrongful use of intellectual property litigation cause great financial distress (and, in some cases, bankruptcy or financial ruin).

In the case of Prenda Law, Inc., the firm is taking copyright infringement cases to a whole new level.  Its business model appears to be to purchase copyrights (primarily those relating to pornography) and use those copyrights to extort settlements from persons who download the movies from the internet.  Apparently, Prenda Law Inc. ("Prenda") added the embarrassment factor as well as the steep penalties to extort "nuisance value" settlements from individuals.  Prenda clearly took its cue from the patent trolls who do much the same thing.  Where Prenda's tactics took trolldom to a whole new level happened when a court recently discovered who Prenda represented.  Apparently, two of Prenda's "clients" were actually shell companies for Prenda! Talk about a conflict of interest.  In addition, Prenda's claiming to "represent" these other companies without revealing that they are really owned by Prenda could be considered committing fraud on the court.  Prenda's bad conduct did not stop there.  Apparently, one of the "officers" of these shell corporations was no such thing.  Prenda simply used the name of someone who cares for one of Prenda's attorneys' property without that person's knowledge.  Yup, this "officer" is now suing Prenda.

While this is an extreme case of misuse of the Copyright Act by the Prenda attorneys (I hope), it simply reinforces the notion that Congress should take a long, hard look at the Copyright Act.  Hopefully, Congress can find a better balance between protecting the product of creativity and protecting against the use of the Copyright Act as an extortion device.  

GOOGLE TAKES ISSUE WITH SWEDEN'S INSERTION OF "OGOOGLEBAR" OR "UNGOOGLEABLE" IN ITS DICTIONARY

Given the near pervasive use of the term "Google" to mean to conduct a search via the internet and/or using Google's website to conduct such a search, it surprises me to hear that Google is taking issue with Sweden's Language Council. Apparently, the tiff between the two started when the Swedish Language Council (a Swedish government agency) to include the word "ogooglebar" on a list of new words.   A list that includes "emoji" which, for those of you who may not know, is an emotion icon used in texts.  The list also includes the word "grexit" which refers to Greece's potential exit from the euro zone.

The term that got Google's dander up was "ogooglebar" which, according to the Swedish Language Council, refers to something that is impossible to find on the internet using a search engine.  Google wanted the definition to directly relate to a Google search engine and not just any ol' search engine. 

The council decided that it was not worth the time and effort to enter into protracted discussions with Google over the definition of the word, and instead, just removed it from the list.  Although, Google did not seem to take issue with the term "googla" to mean looking for information on the internet using Google's search engine. 

THE REPORTS OF THE DEMISE OF TWINKIES HAVE BEEN GREATLY OVERSTATED

Private equity firms Apollo GlobalManagement and C. Dean Metropoulos & Co. purchased Hostess' Twinkies, CupCakes, Ho Hos, and Ding Dongs brands for $ 410 million.  The purchase includes bakeries and equipment and awaits final approval in the bankruptcy court.  My guess is that these equity firms are going to try to rebuild the brands by marketing them to those who pine for the nostalgia that these brands evoke.  Now, can I get anyone to revive the Marathonbar (you know, the one that lasts a "long time?").  Yes, I did just age myself.  I seem to be doing that quite often lately.

Copyright Chief Finally Urges Congress to Revamp the Copyright Act

Apparently, recognizing that the Copyright Act is in a need of a complete makeover, the Register of Copyrights, Maria Pallante, told a House congressional subcommittee that Congress should redo the Copyright Act.  The Copyright Act has struggled to keep pace with the new technology and the realities of artistic expression.  Recall that the White House announced that Americans should be able to unlock their mobile phones in order to allow them to freely move among any of the carriers.  The White House's announcement came in response to the Copyright Office stating that unlocking a mobile phone could subject someone to civil and criminal penalties.  Of course, that position by the Copyright Office created an outcry to reform the Copyright Act. 

Of the three areas of intellectual property, the Copyright Act seems the most out of step with its goal of encouraging creative expression.  Of course, Ms. Pallante wants to strengthen the enforcement capabilities of the Copyright Act.  I understand that position, but I would caution that there needs to be some common sense inserted into the equation.  Indeed, even Ms. Pallante seemed to understand this need for a more "balanced approach" to copyright enforcement.  For example, while sharing a song with another would subject the sharer to the statutory damages for copyright infringement, there should be some acknowledgement that, by sharing that song, the sharer may be actually providing a benefit to the artist. 

Consider this scenario:  Jane Doe hears a song by Band X that she absolutely loves.  Ms. Doe logs in to her iTunes account and searches for additional songs by Band X (she purchases additional songs by Band X and others similar to the sound of Band X by way of iTunes' suggestion features).  In her enthusiastic state about Band X, she sends the song to her good friends, John Roe.  John loves the song and he also searches and purchases additional Band X songs from iTunes.  In this scenario, while Jane Doe technically infringed Band X's copyright, it does not make sense to enforce the statutory damage amount because she actually provided a benefit to Band X and other bands by purchasing additional music.  The same holds true for sharing the song with John who makes additional purchases.  I would hope that under this scenario, Congress can find a way to rework the Copyright Act to more accurately take in the facts of the case.

Now, do not get me wrong, I am not saying that the Jane Does of the world should be given free rein to steal the creative expression of a band or other artist, but there should be some mechanism for allowing the punishment to fit the "crime."  Given the current state of Congress, I am fairly certain that any sweeping common sense re-configuring of the Copyright Act is not even close to coming to fruition.  I hope I am wrong. 

Naming Rights for Buildings Is Taking a Whole New Turn

I am sure everyone has heard about the recent spate of naming (and re-naming) rights being bought and sold for various sporting venues. There is Emirates Stadium in London.  The HP Pavilion (aka the "Shark Tank") in San Jose (home to the San Jose Sharks).  There is the O.co Coliseum (home to the Oakland Raiders and Oakland A's), PETCO Park (home of the San Diego Padres), AT&T Park (home to the San Francisco Giants), and the list goes on.  As many fans know, the names seem to change like the weather.  For example the soccer facility in Carson, California is changing its name from the Home Depot Center to the StubHub Center.

However, these companies have nothing on the fashion companies in Italy.  Apparently, the latest trend for these fashion companies is to invest in rescuing historical monuments in Italy.  Fendi is sponsoring the renovation of the Trevi Fountain.  Tod's donated several million dollars to rehabilitate Rome's Colosseum, Gucci donates half of its museum's ticket sales to preserve the city of Florence's art.  Prada is funding a six-year restoration of an 18th Century pallazzo in Venice.  Diesel is spending millions to restore Venice's Rialto Bridge.  Brunello Cucinelli is paying $ 1.4 million to restore the Arch of Augustus in Perugia.

To hear these companies put it, their brands received a boost to their reputations through Italy's reputation for beauty, elegance, and craftsmanship.  The idea is to give back to Italy's reputation when Italy's economy is such that Italy cannot maintain these historic treasures as it should.  Just as interestingly, the companies are not plastering their brands all over these historic treasures.  Instead, they receive their recognition in a small, fairly unobtrusive way.  For example, Fendi will have a small plaque installed near the Trevi fountain for four years acknowledging Fendi's donation.  Similarly, Tod's will see its logo on tickets sold to the Colosseum. 

This is an interesting take on branding.  It is definitely subtler and not so "in your face."  It is also an opportunity for these companies to "give back" to the treasures which helped make their brand, as well as making a statement to customers about their "ethics" or "ethos."  It also is an acknowledgement as to the growing inter-connectivity of "history" and "business."  I, for one, sure hope that these companies (and many more) continue to give back to the historical landmarks of the world--and, receive a huge boost in their good will for their efforts. 




 

Social Media and Discovery in Litigation

I have blogged about social media and litigation before, but it appears as if courts are starting to jump on the social media bandwagon and ordering parties to disclose their social media posts.  I am sure you have heard the stories about the attorney who sought a continuance of a hearing or a trial because s/he was going "on vacation" only for the court to discover via the attorney's Facebook posts that he was really not on vacation at the time.  Or, the litigant who claims a debilitating personal injury only to be discovered via Facebook posts that s/he can run a marathon, compete in a triathlon, or do some other incredible things despite the alleged injury. 

You may even have made sure that your social media accounts are "private" (i.e. only visible to your "friends").  That may not be enough.  Recently, a New York court ordered plaintiff to provide access to all status reports, e-mails, photographs, and videos posted on that plaintiff's Facebook profiles since the date of the accident which was the subject of her personal injury claim against defendants.  Apparently, defendants and/or their counsel trolled plaintiff's Facebook profile and discovered a photo of plaintiff--which was not protected by the privacy settings--skiing. 

In a Colorado class action sexual harassment case, defendants found Facebook content of the plaintiff wherein the plaintiff posted her financial expectations from the lawsuit, a photo of her wearing a t-shirt with a pejorative word that she claimed was used against her in the workplace, information about her emotional state unrelated to the alleged harassment, postings indicating that she was upbeat post-termination (as opposed to emotionally distressed), posts about her sexual prowess, and other information showing that her lawsuit may not have been legitimate.  So, defendants had all of this information without the need to seek a court order, right? Wrong.  Other class members posted on this plaintiff's wall such that defendants were able to convince the court that it should order those class members' social media be produced to defendants, too.  In addition, the court ordered plaintiffs to provide any cell phone used to send or receive text messages, all information necessary to access any social media websites used by the plaintiffs, and all necessary information to access any e-mail account or web blog used for communication with others or posting communications/pictures for the plaintiffs. 

In the highly open world of social media, it is important to be careful about what you put out for all to see.  I always counsel my clients to assume that every post, e-mail, etc. will be seen by anyone and everyone, including the other side.