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What Every Online Entrepreneur Needs To Know To Avoid Social Media Legal Disasters

By Bobby Klinck | Social Media

Oct 03

When I first launched my business, I have to admit that I was woefully unprepared from the social media perspective. I had a LinkedIn account, but only because I signed up at one point to try to find information about a long-lost friend. I had a Twitter account, but not any followers who were among my target group of clients. And I had a Facebook account that I used to keep up with old friends. But that was it.

That was not a sustainable model. Facebook, LinkedIn, Twitter, Instagram, Snapchat, Pinterest, YouTube . . . Social media is no longer optional. Nope, it is pretty much a required tool for all businesses. If you’re not on social media, you are leaving WAY too much value on the table. I’m no social media guru, and I can’t claim to be an expert at using each of the services. But I know that I need to be on social media creating and curating content for my potential customers.

The statistics pretty much speak for themselves. Wordstream’s post with a roundup of 40 Essential Social Media Marketing Stats is good read. Here are some highlights:

  • Facebook boasts 68% of adults in the United States as users (and the vast majority of those users visit daily)
  • Instagram is second with 32% of adults in the United States as users
  • Pinterest is a close third with 31% of adults in the United States as users
  • LinkedIn boasts an impressive 29% of adults in the United States as users (an impressive feat considering its professional focus)
  • Twitter has 24% of adults in the United States as users

These stats tell an impressive story – the social media networks allow businesses to reach their customers where they are and to deliver messages to them.

While social media marketing is important for all businesses, it is especially important to online entrepreneurs like you and me. Indeed, social media marketing (and advertising) are often a core aspect of building an online business. I guess you could try to build an online business without using social media, but why would you try?

As with all business tools, social media comes with its own risks. We’ve all heard about #fails on social media. If you’d like to relive the glorious mistakes, just type “social medial disasters” into the Google and you will find a slew of stories. I personally enjoyed the 7 Disasters from 2015 shared by Inc.com.

But I’m not a PR specialist or a general brand advisor. So I’m not here to warn you about these types of PR disasters. Nope, I’m here to help you understand the legal issues surrounding social media and the issues you need to avoid to ensure your social media practices don’t create a legal disaster for your company.

Yes, You Really Need To Worry About This Now

Before I get to the actual advice, I have to address a question I hear over and over again: Do you really need to address this now or can it wait?

If you read more than one of my blog posts (or watch my FB Live videos or tune into any of my other channels), you are going to hear me constantly beat the drum that you need to worry about these legal issues NOW, not later. For example, I explained why you need to address legal issues now in my epic blogpost about podcasting issues and I spent a whole FB Live video about podcasting on the subject.

It may seem like I’m beating a dead horse here, but too bad. I’m going to keep talking about this because it is an issue that comes up over and over again. And I am going to keep drilling this into online entrepreneurs’ heads because the consequences of not dealing with legal issues at the outset can be catastrophic.

Ignoring the problem is not a good solution. . .

I get it, we all like to ignore things that might be upsetting. But ignoring potential legal issues will not make them go away (or get less pressing). In fact, ignoring legal issues up front will often make them worse! As I explained in last week’s post about podcasting, when you make legal errors at the beginning, you are putting a time bomb into your business. And that time bomb is going to go off at the worst possible time. You won’t have the opportunity to course correct early on when the pain will be low. Nope, you’ll end up having to make changes (and potentially lose your platform) after you’ve built your business into something great.

There is actually a very special risk that comes up in the context of social media (beyond those that apply to all aspects of your business). With social media, your content may get taken down and your accounts may get shutdown if you ignore the legal rules.

I recently came across a Twitter thread that took me to a video where two social media mavens were complaining that YouTube had taken down their videos recently after they started to get traction. These mavens thought it was because of their political message, but as they described what had happened, I immediately understood that the issue was much simpler. They were infringing intellectual property owned by someone else, so YouTube took the videos down.

There is a law known as the Digital Millennium Copyright Act. I won’t bore you with the details, but this law was passed when the Internet was still in its early stages (not its infancy, maybe somewhere around its gawky teenage years). There was concern that companies that provided forums and/or hosted websites might be held liable for the actions of the people posting on their sites or on websites they hosted.

To solve this concern, the law provides a method for copyright holders to lodge a complaint with these companies and demand that the infringing content be taken down. These are called DMCA Takedown Notices. Under the law, the companies are encouraged to comply because it provides them with a “get out of jail free” card. So long as they take reasonable actions in response to these notices, they are not liable.

Back to those social media mavens. . . YouTube had received a complaint because their videos contained unlicensed copyrighted material (they were playing music in the background).  The copyright holders had complained, so YouTube complied with its obligation and took the videos down.

YouTube is not alone in this practice. All of the social media platforms have crafted their terms of service to prohibit you from posting any infringing material, giving them the right to terminate your service if you are a repeat offender, and providing a mechanism to comply with the DMCA.  If you are interested take a look at provisions 6(d), 7(a), and 8 of YouTube’s Terms of Service. Or you’d rather not read a bunch of legal gobbledegook, you can take my word for it.

Although I joke, you actually should take the time to read the terms of service for each of the social media sites you use. This can be an eye-opening experience and it will provide you with a good guide for how to behave on that site.

The threat of having them take one post down is bad enough, but one of the key elements of the terms of service is not only that the social media platform will take down particular infringing posts, but also that they will suspend your service entirely if you are a repeat offender. So, if you violate the rules that are set out in this post, you not only risk having individual posts deleted, you risk having your entire account shut down.

Do I have your attention yet?

If not, go ahead a click away from this page. I know I shouldn’t be telling you to stop reading my content, but seriously go ahead.

Now on to the specific errors to avoid.

Don’t Appropriate Someone Else’s Brand

It’s all about the brand. . .

In creating your social media user names, you should be mindful to avoid using someone else’s brand name. Brand names are protected under trademark law, and the first person to use a name gets protection automatically. You can learn more about trademark law by checking out the 10 Things Every Entrepreneur Needs To Know About Trademarks. The important thing for today’s discussion is simply to understand that if a company is already using the name, that company has the exclusive right to use the name going forward.

Some people run afoul of this by intentionally choosing a name that will be confused with a famous brand (or famous person). This is a form of cybersquatting or impersonation, and it’s not allowed. I’d like to think that no one reading this post (or any of my work) would ever be in the camp of those who intentionally take someone else’s name. But if you are doing it, stop it. Seriously, stop it now. That’s not okay.

The more likely way that you might find yourself in this box is if you choose a catchy social media handle that infringes a trademark without realizing you are doing it. This issue tends to come up a lot in industries where there are some obvious puns or plays on words. It is definitely an issue for online entrepreneurs because there are only so many “preneur” words we can create. Chances are that if you think of it, someone else has already too.

Whether intentional or accidental, if you choose a social media handle that is the same as – or even confusingly similar to – an existing brand, you are putting yourself at risk. The company that used the name first will have the right to demand that you cease using the name.

Remember when I mentioned above that the consequences will come at the worst possible time? Here’s how that will play out in the case of a trademark issue. In many cases, the trademark owner will not learn about your use of its name at the outset. Indeed, the fact that the name is available is probably a good sign that the company is not currently using that social channel. Chances are the trademark holder also isn’t monitoring the site.

You will go about your business, including building your following on social media under the trademarked name. You will craft some amazing social media posts and curate content that is to die for. As a result, you’ll end up with a following of raving fans who can’t wait for your next post (okay, I exaggerate a bit for emphasis).

Then, at some point in the future, the trademark holder will decide to use the social network or will hear from one of its customers that someone else is using the brand name on the network. That is when the time bomb will go off. You will get a letter from the trademark holder demanding that you stop using the name. And there may not be much you can do other than stop using the name.

You will find yourself having to start again with a different name (luckily some sites will allow you to change your name without losing your following). Even if you don’t lose your following entirely, you will lose much of the goodwill you’ve built up with the name.

To avoid these issues, you need to check to make sure that no one else has trademark rights in the name you choose. And this involves more than simply searching to see if the handle is available. You also need to search Google to see if anyone is using the name generally and search the TESS system at the United States Patent and Trademark Office to see if anyone has registered a trademark for the name.

If someone else is already using the name for their business or has already filed a trademark registration for the name, it is not worth taking the risk. Pick a different name.

Don’t “Borrow” Copyrighted Material

One of the most common mistakes people make online – and especially in social media – is to appropriate someone else’s copyrighted material. In last week’s post about podcasts, I addressed this in the context of discussing choosing the right music (and not using copyrighted music). In the context of social media, the concern is much broader and can involve multiple forms of copyrighted material.

Borrowing isn’t cool when it comes to copyrights. . .

As a quick background, copyright law protects creative works, including images, written work, music, recordings, etc. You can learn more about copyright law in our post setting out 5 Things Every Entrepreneur Needs To Know About Copyright.

Because different social networks have different formats, you might infringe someone’s copyright by using any of the forms of copyrighted work. On YouTube, you might post a video that contains music or other videos without permission. On Facebook, Twitter, Pinterest, or Instagram, you might post a copyrighted image without permission.

In the example of the social media mavens who were complaining about YouTube taking down their videos that I described above, the error they made was to play music in the background of the videos. The artist (or more likely the company that holds the right to license the copyright to the music) heard the music on the video and demanded that YouTube take the videos down.

Facebook also has a good system for automatically detecting users who are using copyrighted music in FB Live videos. According to iag.me, Facebook has banned a number of users from going live “for up to 3 months for inadvertently or intentionally playing copyrighted music.” So in the case of Facebook, the copyright holder will not even need to complain. The system will likely detect the music and you’ll find yourself in some hot water.

Under copyright law, you are not allowed to play ANY of the music on your iTunes or other music account in the background of a video that you post on YouTube or anywhere else. In buying the record, CD, or MP3 file, you did not get the right to use the music in an online video. You only obtained the right to use it personally. So, don’t include any music on any videos or recordings that you post on social media unless you go through the process of getting a license to the music. As I explained in last week’s post about podcasting, if you want music, the best bet is a royalty free music site.

In the online world, images are probably the most infringed form of copyright. Many entrepreneurs go to Google Images or some other similar source to find and copy images that they then use on their websites and in social media campaigns. That is not allowed. Those images are protected by copyright law, so you may not use them without permission (what is called a “license”). Indeed, many entrepreneurs have received a letter from Getty Images (or another major image company) demanding payment for the use of an unlicensed image.

Ironically, Getty Images itself has been found to have infringed a copyright based upon similar activity. No seriously. In 2010, a photojournalist tweeted photos he took of the aftermath of the horrific earthquake in Haiti. Agence France-Presse (AFP) found the photos on Twitter and added the photos to its database and provided them to Getty Images. Getty Images added the photos to its own database, which was shared with numerous clients including news organizations that published the photos. The photojournalist sued AFP and Getty Images, along with other news outlets, for copyright infringement. AFP asserted that, because the photo was shared on Twitter, it had an implicit license to use the photos. (Under Twitter’s Terms of Use, an IP owner grants Twitter and others a “worldwide, nonexclusive, royalty-free license.”). The Court did not agree. It stated that AFP took and used the photos knowing that the photos were not AFP’s. AFP and Getty Images had to cough up $1.2 million.

This case provides a useful teaching point. Images that are shared on social media are fair game so long as you follow the protocol of that social network. Put another way, you can’t get in trouble for liking, sharing, retweeting, or otherwise making a post go viral according to the terms of service of the network at issue. But you can’t grab an image from a social media site (you know, right click then “save image as”) and then use it elsewhere or even on the same site but out of its original context.

The lesson with images is actually quite simple. Do NOT simply grab an image from any source on the Internet and use it. You may only use images for which you have a license. This could come from one of the various free image sites (Pixabay, Pexels), from a site that gives unlimited access for a membership fee (Storyblocks), or from a site that sells images individually (Shutterstock, Getty Images).

Get Agreements With All “Creators”

If you are creating 100% of your social media content (including all written content, all images, all videos), you can skip this point. Wait, on second thought, you need to pay attention anyway to make sure you’re not making this mistake elsewhere in your business. This is another point I am going to drill into your head in post after post and video after video. It really is THAT important.

If it isn’t in writing, it never happened. . .

You need written agreements with EVERY person who has any role in creating ANY portion of your online platform. This includes anyone involved in creating your social media posts.

Are you legally required to have an agreement with someone who is creating content for you?  Nope.

Is there a chance that you’ll be just fine without written agreements with these folks? Yep.

But you are courting disaster if you go without these agreements and could end up in a nasty dispute. What you need is a written agreement to make clear that YOU OWN the material they create. If you don’t have these types of written agreements, the person could later claim to continue to have an ownership interest in some aspect of your platform.

This may seem crazy to you, but I can’t tell you the number of times that companies end up in disputes with employees (and former employees) about ownership issues. Former employees will often claim to be an owner of a part of the business or of some aspect of the business’s platform.

If you find yourself in such a dispute, would you necessarily lose? Nope, you might win. But you might lose.

More importantly, however, without a written agreement you will end up paying me (or another lawyer like me) five or six figures to resolve the dispute. Now let me be clear, I’m not going to turn you away if you come to me down the line to defend you in one of these disputes. But wouldn’t you rather keep that money for yourself rather than paying me?

Getting written agreements in place with creators (and other employees) allows you to avoid a dispute in the future (or will make it quick, easy, and cheap to resolve if one should arise). Don’t put this matter off. Get written agreements with your creators now.

Don’t Give Complete Control To Employees

You are busy, so, as you grow, chances are that you will outsource at least some of your social media activity. It could be that you outsource some or all of your social media to an employee or an independent contractor or to a company that handles social media. This can be a HUGE time saver and make it possible for you to focus on your highest value work.

But what happens when the employee leaves or the independent contractor moves on? Would you lose access to your social media? This may seem like a silly question, but I have seen examples where a company gave full control of the social media to a single employee (even to the point of having the company’s Facebook page set up under that user’s account). The company was then left out to dry when the employee left because the company could not even access the accounts.

These mistakes can sometimes force companies to sue. In 2015, CDM Media had to sue a former employee because he failed to transfer back control of the company’s private LinkedIn group of CIOs and senior IT executives. Having to sue a former employee just to get access to your social media accounts may be a bit extreme, but it is a symptom of a broader problem – giving complete control to someone else.

You can avoid this issue by making sure that you have direct access to all of your social accounts as an “admin” user. This should ensure that you always have access and can always exert control.

Don’t Steal Someone’s Personality. . . Rights

As online entrepreneurs, we’ve been taught that social proof is HUGELY valuable. And while impressive social media follower stats and testimonials from customers can be important forms of social proof, one of the best forms of social proof would be if a celebrity (or a celebrity within our particular field) were to give us a thumbs up and endorse our products.

I mean, if I could get endorsements from all the top online entrepreneurs (you know, the ones that everybody looks up to), and could tell you all about those, you’d be more likely to listen to me, right? Of course you would.

The problem is that this reality can lead entrepreneurs (and even big companies that should clearly know better) to misappropriate rights held by celebrities. You see, everybody (celebrities and non-celebrities) has the right to control the use of their name, image, and likeness. This is called the “right to publicity” or “personality rights.” Although the contours of this right varies from state to state, one constant is that you can’t use someone as an “endorsement” without that person’s permission.

One famous example of this issue that IP lawyers like me tend to cite is the royal screw up by Duane Reade (a pharmacy chain). In March 2014, Duane Reade posted on Twitter a picture of actress Katherine Heigl leaving the store with bags in hand. Not only did the company post a picture of the actress, but it also tagged her. Specifically, the company tweeted: “Love a quick #DuaneReade run? Even @KatieHeigl can’t resist shopping #NYC’s favorite drugstore.

Duane Reade was clearly running afoul of the restrictions imposed by the right to publicity. It was using Heigl’s image and name to promote its brand and to create the implication that she endorsed the brand. And the company’s hubris was amazing because by tagging Heigl, they ensured that she would know what they had done. Seriously bad move. Heigl sued Duane Reade for unauthorized use of her publicity at a sparkling sum of $6 million. The case ultimately settled after Duane Reade had no doubt paid a bunch of money to a lawyer like me and then almost certainly paid something to Heigl.

So how might this come up in your business?

Let’s start with testimonials. We all love to get testimonials. But you MAY NOT USE a testimonial unless you get permission to do so. So if an enthusiastic customer emails you with a note about how great you are, don’t just add that to your webpage or social media as a testimonial. You have to ASK and get PERMISSION before using it. To be clear, this applies to everyone, regardless of whether the person is a celebrity. In most cases, your happy customers will gladly give you permission, but get that permission and get it in writing.

The bigger issue is that you aren’t allowed to note that some famous person or big-name online entrepreneur uses your product, listens to your podcast, or anything else without getting permission first. I mean, I know you would like to tell everyone that Bobby from Your Online Genius (because I am a lawyer, I naturally think I’m very important) thinks you are the best thing since sliced bread, but you can’t do that without asking me first. I joke here to try to make this a bit amusing, but you need to think about it carefully.

Another way you might run afoul of this provision is by including video that has other people in it on your social media account. You’ve no doubt seen reality shows in which there are people whose faces are blurred out in the background? Did you ever wonder why? Probably not, but it’s all about the right to publicity. Everyone has the right to control the use of their “image.” You can’t simply record a video of random people and then use it. You have to get a signed release before using that video.

Although this may seem like a lot of rules, the essential point is this – don’t try to profit using a person’s name, image, or fame unless you get permission first.

Require Employees To Sign A Social Media Policy

You should have your employees – especially those authorized to speak in any way on behalf of your brand – sign a social media policy. The point of this policy is to get everyone on the same page about what is expected, what is legally permissible, and what is off limits.

Most notably, your social media policy should reiterate to your employees (or contractors) that they should not share any of your company’s confidential information and must respect your (and third parties’) intellectual property rights. These aren’t necessarily controversial, but they are also important to safeguard your company’s secrets and maintain the trust of your clients.

This is not an issue that is unique to online entrepreneurs and it is not a mistake that lawyers are immune to. At a prior law firm, we filed a lawsuit against one of the major social media companies on behalf of a client. One of the junior lawyers on the case actually posted on THAT social network that we were “going to war” or something to that effect. And the lawyer did this from an account with no privacy settings (so the entire world could see the post). Our client was not all that happy to come across this post. Luckily, the post did not violate the law, but it was not exactly great for client relations. And it could have been avoided with a simple Social Media policy.

You should get a policy in place to make sure your employees understand what they may and may not share from their experience working for you.

Conclusion

Social media is a great asset to your business, but you need to be careful to avoid having it create legal jeopardy for your business. Following the rules set out in this post will allow you to avoid the legal landmines. You are on your own when it comes to the PR landmines. . .

About the Author

Bobby Klinck is an intellectual property attorney, but he’s not your typical lawyer. Sure, he went to Harvard Law School and worked at some of the most prestigious firms in the country, but if you look at the big whiteboard in his office, you won’t see much about the law. His whiteboard is filled with tasks related to platform building, inbound marketing, and sales-funnels. Bobby is a full-fledged online entrepreneur, whose area of expertise is the law.

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