Legal considerations for social network application programming interfaces

An application programming interface (API) is a library or structured set of software tools that provides an interface to a backend software platform, such as a social networking platform, without providing direct access to the underlying source code of the platform. For example, Facebook™, Twitter™, Instagram™, LinkedIn™, Google Plus™, and Tumblr™ offer APIs so that developers can interface with their social networking platforms, resulting in widespread development of various social network based software applications. For example, social gaming applications use social network APIs to access social connections and profile page data, and publish activities to user news feeds and profile pages. Using the social network API, a developer can add social features to a software application with profile, friend, status, photo, video, event, and group data from the social network platform. The software application may exchange data with the social network platform through API software tools.

A software application built using a social network application API is often tightly connected and dependent on the underlying social network platform, which gives rise to practical legal considerations.

Generally, terms of use govern how the API software tools may be legally used by the software application. Any breach of the terms of use generally provides the social network platform with the ability to deny use of the API and effectively shut down operation of the software application. A careful review of such terms of use is critical prior to any development using the API for the social network to ensure any contemplated use is in line with those terms.

Commonly, social network API terms of use require representation that the developer owns the intellectual property (IP) rights in its software and that its software does not infringe on the IP rights of others. This may require extra IP diligence by the developer. In the event of an IP dispute involving the software application, a social network platform may give deference to the IP owner pending resolution of the dispute even if a legitimate defense exists, and block the software application from interfacing with the social network platform using the API as a violation of terms of use.

Branding of the software application built using the API requires careful consideration of any third party trade-marks, including the social network trade-mark. Generally, the owner has exclusive of use of its trade-mark. Any software application branding may not be permitted to refer to the social network brand or another third party brand in a way that causes confusion as to the owner. Again, even if a trademark dispute is unfounded or uncertain, the social network can effectively shut down operation of the software application pending its resolution.

Copyright protects computer programs as literary works. Copying sections of software code when developing the software application may violate copyright, which in turn may violate terms of use of the API. Even if the copying is considered a fair use or fair dealing, the terms of use may require ownership of the intellectual property. In some cases, copyright protection may also extend to the library or structure set of the API. Accordingly, even developers of the social network API itself must be careful not to copy another social network API library or structured set of software tools.

Finally, patent protection may extend to particular forms of software. Independent creation may not be a defense to patent infringement so even if the developer did not intentionally copy any third party intellectual property they may be unknowingly infringing on patent rights and violating the terms of use.

Accordingly, while using an API for a social network may facilitate software development, the dependency of the software application on the underlying social network requires additional legal diligence.

Maya Medeiros (Maya.Medeiros@nortonrosefulbright.com  / 416.216.4823) is a lawyer, Patent Agent, and Trade-mark Agent in the Toronto office of Norton Rose Fulbright Canada.

Consumer confusion with marketing on social media

Social media often serves as a powerful mechanism that trademark owners can employ to promote and expand their brands, but a case currently pending in the Southern District of California illustrates just how easily social media can also be used to spread consumer confusion.

In Faegin v. LivingSocial, Inc., No. 14CV00418-WQH-KSC, 2014 WL 5307186, at *1 (S.D. Cal. Oct. 15, 2014), the plaintiffs operated a residential and commercial cleaning service in San Diego called A.T. Your Service Cleaning and Janitorial. They enlisted the services of defendant LivingSocial, an online marketing company, to promote their business with online advertising and discounts through the LivingSocial website and social media channels. The parties signed an agreement for a two-month promotional period that involved the sale of discounted vouchers.

But months after the promotional period had ended, the plaintiffs were startled to receive additional phone calls from potential customers trying to redeem vouchers. An investigation revealed that LivingSocial had been promoting the services of another company in San Diego, At Your Service Housekeeping. LivingSocial’s omission of contact information on the vouchers led to confusion and numerous negative reviews about the plaintiffs’ business on Yelp and Facebook, according to the Complaint in which the plaintiffs alleged federal and federal claims for trademark infringement and false advertising against LivingSocial and the owners of At Your Service Housekeeping.

The district court recently denied LivingSocial’s motion to compel arbitration under the marketing agreement, holding that the original agreement did not contemplate rights or obligations regarding the plaintiffs’ mark or other companies with similar names. Consequently, the dispute did not arise from or relate to the agreement.

The case demonstrates how easily actual consumer confusion can spread through social media and serves as a reminder of the importance of monitoring the Internet and social media for infringing users.

When conducting the likelihood of confusion analysis, courts often consider whether the two opposing parties use or are likely to use similar marketing and advertising channels. Notably, the parties in this case had both turned to the same social media marketer. Though social media access can facilitate would-be infringers, it may also help trademark owners to develop strong trademark infringement claims—in addition to promoting their marks.

Andrea Shannon (andrea.shannon@nortonrosefulbright.com / +1 512 536 3088) is a lawyer in Norton Rose Fulbright’s Austin intellectual property practice.

WhatsApp your contract

“This post discusses an interesting case in South Africa involving contract amendments via e-mail and other electronic platforms.”

A recent court decision (Spring Forest Trading v Ecowash) potentially allows contracting parties to sign their contracts by way of a data message (which includes emails and other communication platforms such as WhatsApp, BBM and social media) by typing their name at the end of a message. In the case, the contract was subject to a non-variation clause stating that no variation or consensual cancellation would be valid unless reduced to writing and signed by both parties. An email signed “Greg” was held to be a signed document.

Electronic communications = writing

The Electronic Communications and Transactions Act, 2002 (ECTA) gives communications via data messages the same effect as non-electronic documents. This means that if there is a requirement to have a document in writing, the ECTA gives the same legal effect to that document in electronic format.

Email signature = electronic signature

If a signature is required by law (i.e. statute), ECTA requires an electronic communication to contain an advanced electronic signature from an accredited authority (for example, ante nuptial contracts and sale of immovable property). But an agreement between private parties to sign a document, such as a non-variation clause in a contract, does not amount to a legal requirement for a signature and therefore an advanced electronic signature is not required.

If private parties require a signature in order to conclude or amend a contract, but have not agreed the type of signature to be used when transacting electronically, the “signature” requirement is met if the method used:

  1. identifies the person;
  2. indicates the person’s approval of the information communicated; and
  3. is reliable and appropriate for the purposes for which the information was communicated, having regard to the circumstances.

In this case, a person’s name at the end of an email satisfied these requirements.

Beware of counterfeit advertisements on social media

Despite the efforts of brand owners and entities providing online advertising space to police against counterfeit goods, advertisements for counterfeit goods on social media continues to be a recurring problem. Moreover, the appearance of many of these advertisements as genuine and leading to websites that contain the logos and trademarks of the brand owner or a similar website template can often deceive consumers into believing that they are purchasing authentic goods.

Italian cyber-security experts Andrea Stroppa and Agostino Specchiarello recently conducted a survey of more than 1,000 advertisements on Facebook, including 180 advertisements in the category of luxury and fashion. Of the 180 luxury and fashion advertisements, 43 of them led to websites selling counterfeit goods, including for example, counterfeit Ray-Ban aviator eyewear. Often, the websites that resolved from the advertisements for the counterfeit goods contained the logos or trademarks belong to well-known security companies and payment systems.

Like other social media platforms, the Facebook terms of use prohibit advertisements that promote or facilitate the sale of counterfeit goods and Facebook reviews and takes action on reports of illegal advertisements. Additionally, a Facebook spokesperson told Bloomberg that Facebook prohibits “fraudulent or misleading claims or content, and to enforce our terms and policies, we have invested significant resources in developing a robust advertising review program that includes both automated and manual review of ads.”  Despite these efforts, it is still important for both consumers and brand owners to be cognizant of the problem.

The advertisement and sale of counterfeit goods online is not a new problem – and is not limited to luxury or fashion goods. In fact, according to a recently published report by the United Kingdom IP Crime Group found that the sale of counterfeit goods on social media platforms rose by 15% in 2013-2014. Moreover, with the increasing role of social media in today’s advertising, these surveys highlight the importance of brand owners policing against the advertisement and sale of counterfeit goods and entities unfairly capitalizing on the goodwill of the brand.

The sales that ultimately result from these counterfeit links can cause financial damage to a company through lost sales of the genuine article and also damage the reputation of the brand by leading to lower consumer confidence. Therefore, brand owners should be vigilant in monitoring and policing against advertisements for counterfeit goods on social media platforms and obtaining infringing domain names through the proper channels.

This article was prepared by Shelby Bruce (shelby.bruce@nortonrosefulbright.com / +1 612 321 2207) is a lawyer in Norton Rose Fulbright’s Minneapolis intellectual property practice.

NLRB approves social media policy disclaimer language

The Office of the General Counsel (OGC) of the National Labor Relations Board (NLRB) recently released another advice memorandum providing enforcement guidance on employer social media policies. This time, the OGC reviewed a company social medial policy which required employees to post a specific disclaimer that they were sharing their own views and not the views of the company if they identified themselves as company employees on any website or blog.

The relevant portion of the policy stated:

If you identify yourself anywhere on a web site, blog, or text as an employee of USA . . . we require that you put the following notice in a reasonably prominent place on your site: “The views expressed on this web site/blog are mine alone and do not necessarily reflect the views of my employer, US Security Associates, Inc.

The OGC found this provision to be lawful. It explained that posting this disclaimer would not be burdensome for employees to implement or infringe on their Section 7 right to discuss working conditions. By way of background, the National Labor Relations Act protects an employee’s right to self-organize, form, join or assist unions, collectively bargain, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection. Although the advice memorandum does not constitute binding precedent, it provides useful guidance for employers looking to implement a social media policy with disclaimer language.

In an effort to provide additional guidance, the OGC reviewed the remainder of the social media policy. It determined that:

  • a provision encouraging employees to express themselves on social media in a “respectful manner” is not unlawful;
  • provisions preventing employees from publishing on websites or blogs “confidential information” and “material that violates the privacy of another” are unlawfully overbroad and could be construed to inhibit Section 7 rights;
  • a provision preventing employees from disclosing “sensitive information” on websites or blogs is unlawfully overbroad because the meaning of sensitive information was ambiguous; and
  • a provision prohibiting employees from referring to their employer’s website without prior written approval from the employer is unlawful. The OGC explained that employees could be hindered in exercising their Section 7 rights if they cannot refer third parties to the  website to garner support for their position.

This latest advice memorandum highlights the importance of a carefully crafted social media policy. Past blog posts have discussed other guidance from the OGC and provided examples of carefully drafted and clearly defined social media policies, including:

 

Heather Sherrod (Heather.Sherrod@nortonrosefulbright.com / +1 713 651 5163) a lawyer in Norton Rose Fulbright Houston’s intellectual property practice.

Proving the authenticity of a digital account at trial: a lesson from the second circuit

While certain state legislatures may be getting closer to understanding digital assets and digital accounts in trusts and estates, using digital assets and digital accounts as evidence in the federal court system remains a murkier proposition.

In United States vs. Vayner, 2014 WL 4942227 (Oct. 3, 2014 2d Cir. ), a jury had convicted the defendant on a single count of unlawful transfer of a false identification document. Crucial to the prosecution was a screenshot of the defendant’s social media page, which was used to show a relationship between the defendant and the prosecution’s key witness. The trial court admitted into evidence the screenshot, despite defendant’s objections that the screenshot was insufficiently authenticated―that is, there was insufficient evidence offered to prove that the defendant himself created the social media account, entered the text that appeared on the profile and added images and other media. On appeal, the Second Circuit agreed with the defendant’s objection and vacated the conviction and remanded the case for retrial.

Writing for the U.S. Court of Appeals for the Second Circuit, Judge Debra Ann Livingston noted that Rule 901 of the Federal Rules of Evidence (Authentication or Identifying Evidence) is a broad standard: “To satisfy the requirement of authenticating or identifying an item of evidence, the proponent must produce evidence sufficient to support a finding that the item is what the proponent claims it is.” Although Rule 901 did not “definitely establish” the nature or amount of proof needed for authentication and, Livingston noted that under Second Circuit law “[t]he bar for authentication of evidence is not particularly high.”

Normally, the party offering a website or digital account into evidence can rely on uncontroverted direct testimony from the creator of the website or digital account in question. Since the defendant was the purported creator of the digital account, that testimony was not available. The prosecution relied on circumstantial evidence―the photo, work history and certain contact information were matched to the defendant.

The Second Circuit was unmoved: “The mere fact that a page with [the defendant’s] name and photograph happened to exist on the Internet at the time of [the investigator’s] testimony does not permit a reasonable conclusion that this page was created by the defendant or on his behalf.” The Second Circuit analogized the digital account to a printed handbill. If the prosecution had introduced “a flyer found on the street that contained [defendant’s] Skype address and was purportedly written or authorized by him,” the Second Circuit reasoned, “the district court surely would have required some evidence that the flyer did, in fact, emanate from [defendant].”

Therein lies the lesson of Vayner―while a screenshot of a website may prove that the content once existed, the screenshot alone will not prove who actually put the material on the page.

Jay Greathouse (jay.greathouse@nortonrosefulbright.com / +1 210 270 7155) is a lawyer in Norton Rose Fulbright’s San Antonio Corporate, M&A and securities practice.

Facebook blocks Facemba

In September, we blogged on the successful opposition by Facebook to a trade mark registration in Australia for ‘Friendbook’. Facebook has had further success in the Australian Trade Marks Office, protecting their brand through a successful opposition to an international registration of the trade mark FACEMBA.

Application 1504587 for the word mark FACEMBA was an international registration that designated Australia. It was filed in the name of company FACEMBA, LDA under the Madrid Protocol on 30 April 2012.

International trade mark registrations under the Madrid Protocol

The system of international registration of marks is governed by two treaties:

After achieving registration in a home country, a brand owner can apply to register their mark with WIPO. Following registration of the mark in the Madrid regime, brand owners can then ‘designate’ further jurisdictions where protection can be achieved using a streamlined system.

Each designated country still examines the trade mark in accordance with their own trade mark legislation, with opportunities to oppose registration in the designated jurisdictions.

Blocking FACEMBA in Australia

Facemba’s international registration originated from Portugal. The trade mark was filed in Class 38 for ‘provision of an Internet platform for social networking services’. Australia, Switzerland, China, Russia and Singapore were designated for registration.

IP Australia advertised its intention to extend protection to Australia in the Australian Official Journal of Trade Marks on 30 August 2012. On 28 February 2013 Facebook, Inc filed a Notice of Opposition. A hearing was held on 18 June 2014. Facebook was required at that hearing, on the balance of probabilities, to successfully establish at least one ground of opposition to the mark.

In this case, as with the earlier decision of Friendbook, Facebook was successful under section 60 of the Australian Trade Marks Act 1995 because

  1. Facebook’s trade marks, before the priority date for the registration of FACEMBA trade mark in respect of those goods or services, acquired a reputation in Australia; and
  2. Given the reputation of Facebook’s trade marks, the use of the FACEMBA trade mark would be likely to deceive or cause confusion.

Establishing reputation was hardly a hurdle for Facebook. As the evidence before the Hearing Officer indicated:

  • Facebook is arguably the worldwide leader in online networking services.
  • at the relevant time, Facebook had approximately 11 million active users in Australia and was the third most trafficked website in Australia. ‘Some 67% of Australian regular users use the FACEBOOK website, for an average of seven hours and six minutes per month.’
  • the Hearing Officer described Facebook’s revenue and advertising in Australia and globally under the FACEBOOK trade mark as ‘massive, which certainly fulfils the “substantial” requirement referred to above.’
  • the FACEBOOK branded social networking site has been the subject of ‘numerous books, a movie, third party case studies, printed and online press and brand surveys.’

Whereas FRIENDBOOK was confusing because of the ‘BOOK’ suffix, FACEMBA was likely to cause confusion because of the FACE prefix. As the Hearing Officer decided:

Having regard to the evidence of the Opponent’s reputation in the area of social networking and Internet platforms, I consider that deception or confusion with the Holder’s mark is likely. Consumers confronted with a social networking platform with the prefix FACE- would be caused to wonder if it was associated with the Opponent.

The Hearing Officer thought this particularly true given the University origins of Facebook, and MBA being strongly associated with a Masters of Business Administration.

Commentary

An effective opposition in Australia has prevented the trade mark from being registered here.

Registration through the Madrid regime has been achieved in China (perhaps due to Facebook’s restricted presence there) and an application is on foot in Russia. Registration in Singapore was abandoned after a technical objection from that jurisdiction.

To the casual observer, defending an established brand from a new trade mark can seem ‘heavy handed’ or aggressive. However, while Australian trade mark law does not have a legal concept of ‘dilution’ in the same sense as the United States, it is crucial that trade mark owners are vigilant in ensuring they have up-to-date and ongoing protection. Facebook, for example, has a strong interest in maintaining their control of the prefix ‘FACE’ in the social media space; although a casual search of the Australian register reveals multiple ‘FACE’ marks already registered in Class 38. The risk to brand can be critical.

Trade mark watch services and brand portfolio reviews are effective tools. Given Facebook’s enviable position as a global brand, their brand protection strategy is sensible and, it seems, effective.

Appeals from the Australian Trade Marks Office are possible; however, it seems Facebook has managed to block FACEMBA for now.

 

Luke Hawthorne (Luke.Hawthorne@nortonrosefulbright.com / +61 2 9330 8736) is a lawyer in Norton Rose Fulbright’s Australia IP practice.

Pre-suit discovery on social media

A Kings County, New York court has held that a plaintiff may obtain social media information (such as another’s user information and evidence posted through social media) as part of pre-suit discovery under New York law. This decision could have ramifications in a number of jurisdictions that permit pre-suit discovery to preserve evidence and/or obtain identities of witnesses or potential parties. See, e.g., Fed. R. Civ. P 27; N.J. R. Civ. P. 4:11-1; Tex. R. Civ. P. 202. N.Y. C.P.L.R. 3102.

In Lemon Juice v. Twitter, Inc., 44 Misc. 3d 1225(A) (N.Y. Sup. Ct. Aug. 29, 2014) the plaintiff complained that an anonymous third party had committed various torts (including intentional infliction of emotional distress) by posting information on a Twitter account containing the plaintiff’s name.

Pursuant to New York rules of civil procedure, the plaintiff sought an order directing Twitter to:

  1. disclose basic subscriber information, records, and IP addresses for the account at issue, and
  2. preserve certain evidence (i.e., the offending tweets and accompanying pictures).

The court held that the plaintiff’s allegations were sufficient to state a prima facie cause of action, which was a prerequisite under the rules to obtaining any pre-suit discovery and which was not contested by Twitter. Having made a prima facie case, the court held the identity of the anonymous user was necessary for the plaintiff to seek appropriate redress. Only Twitter had this information, so the court ordered Twitter to disclose the subscriber information sought by the plaintiff.

Similarly, the tweets and accompanying photos would be necessary evidence in prosecuting the plaintiff’s claim. The court therefore ordered preservation of this information as well.

As of November 11, 2014, Twitter has not appealed the decision.

This article was prepared by James V. Leito IV (james.leito@nortonrosefulbright.com / +1 214 855 8004), an associate in Norton Rose Fulbright’s litigation practice group.

What does LinkedIn’s updated privacy policy mean for you?

You are responsible for your information. It is important to understand how your information is being used.

LinkedIn updated their privacy policy and user agreement on October 23, 2014. It is easier to read and understand in comparison to earlier versions. If you read through the policy it will give you an understanding of the types of information collected about you when using LinkedIn (and similar platforms) and what your rights are to opt-out of certain forms of collection of your information.

Targeted advertising

You may choose to opt-out of your information being collected for targeted advertising. Before racing to click the opt-out button, remember that this does not mean that you will no longer receive advertising. It means that the advertising you receive will no longer be tailored to you based on the information collected about you through your demographic and online behavior.

I often see website banner advertisements for shoes, bags and clothing, and unsurprisingly these are things that I would be interested in purchasing. Targeted advertising is not always a bad thing―if I opt-out of receiving the advertising that is relevant to me, I may end up receiving adverts for lawnmowers which are currently irrelevant to me. In addition, the information is used to send you relevant job opportunities.

The “internet of things” (the name given to connectivity between devices, for example phone to watch to computer to car to home) and big data (the name given to analytics of vast amounts of information) may result in targeting so accurate that you no longer need to remember when to purchase milk or buy your daughter a birthday present as you will be told when to do this, what to buy and how to get it.

Cookies

Collection of cookies is regulated in some jurisdictions, such as the EU, where websites need to alert you to the collection and direct you to the opt-out facility. Similarly, turning off collection of cookies could result in a lower performance of the website features and functionality because it will not be able to store and remember what you like or which options you use most often. Cookies and other similar tracking technologies may also be used to track information about you on other websites unrelated to LinkedIn and its services.

Mail and syncing

Although you can opt-out of receiving some types of communications from LinkedIn, you cannot opt-out of receiving services messages. For example, the email you received to say that LinkedIn’s privacy policy was updated cannot be prevented. Information such as location data (e.g. IP address) is also collected for fraud prevention and security purposes, for example to identify malicious links and spam in your inbox.

When you sync your address books, LinkedIn stores that information which may include phone numbers and also uses that information to suggest connections to you.

Navigating the world of social media apps

Social media apps and networking websites are exploding in the world of social media. Just last year, Apple announced that its Apple iOS App Store reached a landmark 40 billion downloads and 775,000 apps for its platform.[1]  Companies are taking advantage of this rise of social media apps and many of them use more than one social media site to connect with users and to advertise their services. The social media landscape is rapidly changing, and the increased time and costs in adapting to these changes has incentivized companies to manage and control their social media activity.

Third party organizational apps are beginning to emerge that bring all of a company’s social media accounts together in one place. These apps are intended to assist corporations in managing their social media activity by making it quicker and more effective to use more than one site. For example, HootSuite is a social media app that is beginning to gain popularity. With HootSuite, all of a company’s social media accounts can be accessed in one place and managed with one simple login.[2]  Companies can access comments, messages, mentions, tweets, likes, pins, posts and Instagram messages in one convenient location rather than managing separate accounts.

Companies are not only faced with a rapid growth in social media networking sites, but the legal landscape is also rapidly changing. It is important for companies to consider the need to implement social media strategies that meet regulatory compliance across all facets of the organization. In addition, companies are faced with other legal implications of using social media, including in the areas of copyright, trade-mark, defamation and privacy law. In these circumstances, companies may wish to consider investing in social media policies designed to navigate the complexities of the legal system. Social media policies may address a number of issues including:

  • Procedures for using copyrighted material in company posts, blogs and other commentary
  • Procedures for handling complaints of copyright infringement
  • Procedures for using trade-marks of other users in company posts, blogs and other commentary
  • Procedures for handling complaints of trade-mark infringement
  • Procedures to avoid making comments or endorsing other users’ comments that could be considered defamatory
  • Procedures to govern the use and disclosure of personal information in social media, including safeguards to ensure compliance with local and federal privacy legislation
  • Procedures governing the use of electronic commercial messaging and SPAM
  • Procedures governing employee misconduct in the use of social media that could expose the corporation to liability

In order to navigate the world of social media apps, companies need to remain adaptive in their strategies and policies. Companies may wish to seek guidance as to how to maximize their exposure on social media, how to minimize their costs of managing social media, and how to comply with all applicable laws governing the use of social media in all relevant jurisdictions in which companies operate because many laws regarding social media vary by jurisdiction. And the laws and legal issues regarding social media are continuing to evolve, so it remains important to be aware of continuing developments in this arena.

 

Daniel Daniele (daniel.daniele@nortonrosefulbright.com / +1 416 216 2317) an attorney in Norton Rose Fulbright Canada’s Intellectual property practice.

Sources
[1] http://readwrite.com/2013/01/07/apple-app-store-growing-by.
[2] HootSuite: https://hootsuite.com.

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