About this seminar

The rise of digital marketing and social media has provided a tremendous opportunity for businesses to engage consumers. However, this fast-paced and ever-changing social landscape is littered with legal landmines and challenges. This session will provide information on managing and leveraging social media with a view to helping businesses ensure they are protected.

This program counts for up to 1 hour of substantive credit towards the mandatory CPD requirements of the LSUC.

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Full transcript

Eric:

Welcome to another Risk and Rewards Seminar at Gowlings. Thank you for coming so early in the morning. I have two young kids. I had to negotiate this for about 2 months. I empty the dishwasher next Tuesday, Thursday and Friday and I can’t play with my friends anymore. My name is Eric Macramalla. I do intellectual property prosecution and litigation. A lot of online enforcement. Anytime someone has something on the internet they call me. Whether the request is appropriate or, in some cases, inappropriate. I’m a partner at Gowlings. I’ve been here since 1999. Been a partner for about, I don’t know, about 10 years or so. After I speak my colleague, Dan Cole, who flew in from Toronto for this will speak. Dan has been practicing for a long time as well and he’s an advertising lawyer. He’s very, very good at it. Gives you simple clear answers. In our profession that’s not always the norm. I’m sure you’re laughing because it’s true and then you get the bill, you’re like, “What happened?” I understand. Michelle, is there a changer? There’s no changer. Should have hired somebody. Is it too late to articling student down here? Your laughing but it’s true. They’re cleaning my car as we speak.

Audience:

They should be doing your dishwasher.

Eric:

Not a bad idea. Should be surrounded by students as I negotiate with my wife. It’s not a negotiation because I never have a chance of winning. Anyway. I love this photograph. Back a few years ago this little girl named Tessa was turning 16 years old. She wanted to have a party with her friends. This is in Hamburg, Germany. She went on Facebook and she invited her friends to a party. She posted it on Facebook, was having a party. She didn’t mark the posting as private. You have that option. Private or public. This was a public posting. As a result all of these people showed up to her home. As the result of a single posting. All boys. All men. I don’t know what that says about guys, desperate, will do anything for attention. Cops came. There were fights. Blood was spilled. This was incredible. I remember this was happening as I was going in to talk about social media a few years ago. I remember, I just grabbed it. It’s such a compelling image of the power of social media. It’s obviously not a fad. You all know that. From a business stand point you leverage social media. From a brand messaging stand point it is deeply valuable as a tool, as a marketing tool. This is really interesting. The ad spending for TV spots was passed by online ad spending. Traditionally brand owners would advertise through television and through radio and magazines. And now has changed. They are now allocating significant funds to online advertising and in some instances not spending as much on TV ads or other traditional form of media. This to me was a very meaningful benchmark and again, deeply representative of the shift that we are seeing. Again, another indicator of the shift we’re seeing is great show, House of Cards, in its first season was nominated for, I think, was it 13 Emmy’s, or something? This was the first television that wasn’t on regular TV that as nominated for Emmy’s and ended up winning some Emmy’s. Again, reminds us of the shift. Here are your main social media sites: Twitter, Facebook, LinkedIn. I’ll focus on these. I used to have MySpace up there, I figure loyal, I felt bad because it was up there for so long but I just deleted it. These are the main ones. I’ll focus on that and, again, the point of this presentation is twofold, shine a light on social media, whatever your level is. Some of you are more sophisticated more than others. Hopefully we’ll give you some new information and also make you sensitive to the legal issues that materialize online and how you can go about trying to identify them, or in some instances, address them yourselves. You don’t always have to call a lawyer. You might be in a position to address the issue yourself. God forbid a lawyer give you tools that you can use on your own. That’s why I live in such a small house.

Your top social media leaders, Facebook plus Twitter. The first four are Facebook so they’re cheating obviously but you’re looking at 440 million friends plus followers. Twitter plus Facebook. Then you’ve got Rihanna, Katy Perry, YouTube, Shakira, the Biebs, Ronaldo, Lady Gaga and Eminem. This list kind of reminds you. If you’re on Twitter or on Facebook and you’re providing information, it’s still infotainment. Gowlings has a Twitter account. It’s always going to be limited in its value because people go to Twitter for infotainment. They’re not going there necessarily for erudite serious information. There is certainly a value to that and for every business but the fun you can make those 140 characters, the more you’re going to gain some traction.

Top Facebook. Again, the top four are Facebook, Shakira, Eminem, Rihanna at 87 million friends. I just joined Facebook actually. I’ve been on Twitter for a long time. Have a few followers there and I realized I have no friends. Coca-Cola, Ronaldo, YouTube, Vin Diesel. I think that’s magic. I don’t know how that happened. Then Michael Jackson’s estate is there at the bottom. Top Twitter Katy Perry, Bieber, Barack Obama, YouTube, Lady Gaga, Taylor Swift, Justin Timberlake at the bottom and Ellen DeGeneres and her show. She was one of the first to Twitter along with Ashton Kutcher. I think a lot of us associate Ashton Kutcher with Twitter and same thing with Ellen. I remember when she was on Twitter I was like, “What is this? I don’t understand what it is.”

Brand owners are, of course, very social in the ways that they go about leveraging their brands on social media. Two-thirds have a Twitter account. Half have a Facebook account. Half have a YouTube Channel and about a third have corporate blogs. Blogs are a little bit more difficult. If you do not update your blog on a regular basis then is of no value. Some brand owners are very good with that. And then some have just kind of given up and focused on other forms of social media. The one that I find interesting is the YouTube Channel. Does anybody here have a YouTube Channel? Just a few. So, Kyle, right?

Kyle:

Yes.

Eric:

So what do you post on the YouTube Channel?

Kyle:

Videos, anything …

Eric:

Top of mind is Facebook and Twitter, right? Then YouTube Channel is, I guess, probably third. You have to direct them there, don’t you? It’s not something that’s intuitive. Is that the sense that you get.

Kyle:

Yeah ...

Eric:

I think that’s kind of the lesson that every brand, every business, will be able to utilize different forms of social media as it accommodates their brand. Brand owners advertise products and services, communicate news and special events which is advertising, connect with customers which is a form of advertising, and monitor customer satisfaction which is a form of advertising.

Facebook. 1.3 billion active users. Average user has a 130 friends, none of which include me. People spend over 700 billion minutes per month on Facebook. True story. Someone once said, “Oh is that per person?” Sometimes you don’t know what to say. So, I just said, “No.” Average users connect to 80 community pages, groups and events. This is the key, under 50 million active users using Facebook through their mobile communication device. This is the change, isn’t it? Is in the old days you’re watching TV and watching a ball game, there’s the ad. I walk away and the ad is on the TV. I don’t take it with me. Now you are taking advertising with you. That’s the value of social media and that’s why those devices are so critically important. About half of Facebook users log in at any given day. Total number of Facebook pages, 54 million. Number of languages on Facebook, 70. 75% of users outside the US. Number of fake accounts, aka my mortgage, 81 million. Facebook revenue for 2013, it’s all I had available, 6.1 billion. About a quarter of users check their account 5 times a day. That’s kind of how I am with my fantasy leagues. Nothing changes on the Wednesday in Football but I keep checking it. I should speak to someone about that. 18% of 18-34 years old check Facebook when they get out of bed. At least it’s not in bed. Average time spent on Facebook per visit is 18 minutes. That’s another change. Nearly 20 minutes. Radio, 5-6 minutes. That’s why you listen to the radio. They keep resetting so often and if you listen to a show that goes 3 hours it’s repetitive. Because they say they believe you’re in your car for only a certain amount of time. So they want to keep resetting. Of course, the drawback is that listeners then stop listening, go to a podcast where there are no redundancy’s. So that’s going to force the radio industry to shift its model as well. 350 million photos uploaded per day on Facebook. If you’re on social media as a business photographs are far more powerful than anything that you could ever, ever type. That’s what gets the attention. Just think about how you are when you’re scrolling through Twitter or through Facebook. This is just exponential tremendous growth. In April 2009 200 million users and fast forward 6 years – 1.44 billion. Really, exponential unparalleled growth.

Twitter. 500 million users. 300 million interactive. 500 million tweets per day. Up 400 million from June 2012. 40% of those on Twitter do not tweet. People are now using Twitter as a place to get your breaking news before it breaks. If you want your news on any event that is unfolding Twitter is the best place to go. Despite some of the failings they have and some of the issues their shareholders have, this is where Twitter dominates. Breaking news. You have the intermediaries are now gone. You have people on the ground. Just regular folks tweeting things out. This is what I’m seeing. This is what I’m recording. That’s now where people go. Time between the first tweet and the billionth tweet was 3 years, 2 months, 1 day and a driving force of Twitter. As an advertiser you love this, don’t you? 25-54 year olds. That’s the driving force. Lots of disposable income here. A pretty good demographic. A pretty inviting demographic if you are in advertiser. 28% of re-tweets are someone begging. Please re-tweet. Don’t beg it’s not attractive. That’s what I was told while I was speed dating. 60% of Twitter users access Twitter from the mobile communication device. Again, absolutely critical. You’re taking the ads with you. And about 20 million fake accounts. I come across a lot of fake accounts. Some are very elaborate and their designed to piggyback on the goodwill of a third party mark so as to misdirect traffic to a third party website and at that point they may phish for your data or simply direct you to a competitor. They’re recognizing that very little effort has to go in to create a Twitter account but for them the return is disproportionally high.

LinkedIn. 300 million users. Number of new members every second, 2. 100 million users in the US. LinkedIn is in 200 countries and territories. The average time on LinkedIn is 17 minutes. So again, Facebook was 18. That’s a lot of time. Again, that’s a lot of time to have a captive audience. Only social networking site that 50-64 year olds use more than 18-29 year olds. Again, they may well have some income as well to spend. Most used adjective on LinkedIn is “responsible”. That word’s changed. Any ideas what the word was when the economy was booming? Any thoughts. If the economy is doing really, really well people are not describing themselves as responsible. Anyone want to take a shot at what that word may be? Any?

Audience:

Innovative.

Eric:

Innovative. Yeah, I like that one. That’s really close actually. Any other thoughts? The word was creative. I’m creative. And now that things aren’t going as well, I’m responsible. I’m going to look after your money. 30 million recent grads, or students, on LinkedIn. Turkey, Colombia and Indonesia are fastest growing countries. I had a number of Facebook cases in Indonesia. These are misappropriations of trademarks and copyrighted works by third parties in Indonesia seeking to enjoy some find of financial windfall. Because since now, obviously with the economy there is really no borders, they can get someone’s goods and bring them in and sell them. It’s very hard for some of these brand owners to maintain strict control over how their brand is being used. The good thing is Facebook is very receptive. I’ve had stuff taken down to Malaysia, Mongolia, Vietnam and Indonesia and that’s just this week. 43% of visits, again, are from a mobile communication device. 3 million companies have a LinkedIn page.

I just want to give you sort of a snap shot of the internet landscape generally. About 1.7 billion users worldwide. 250 billion was spent online last year. 43.2 billion in the second quarter and these are your top performing products.

About 42% of users are in Asia. Any of you work for companies that offer services or goods in Asia? One. If you don’t know you may well at some later point or end up working with a company or a firm that does that. The amount of revenue that I am seeing being generated by local clients in Asia is staggering, to say the least. Feels like everyone is rich but me. 24% of users from Europe. Only 15% of internet users are from North America. Then 1% from Australia because they’re hanging out at the beach.

So, your legal issues on social media. What are the things that you normally see? You see impersonation, trademark infringement, user name squatting and copyright infringement. I want to let you know what these are, how you fix them practically and what these look like.

I’m going to focus on Facebook and Twitter because these are the sites that come up all the time. LinkedIn comes up once a while. Generally that’s someone pretending to be a CEO so you’ll take that page down. But Twitter and Facebook obviously dominate. This is just up here, I want to show you what a user name is for Facebook. That’s the user name over there. This is called the post domain name path after the forward slash and then on Twitter the user name is Starbucks. For Facebook you can, I’m sure some of you are aware, you guys can create your own user name now. It was a new feature about 5 or 6 years ago. I remember when it was being released I was driving down to Detroit for the game 7 Stanley Cup final between the Penguins and the Red Wings and I had prepared all the clients for it but the questions were arising. We kept pulling the car over answering the question because Oprah says you don’t text and drive at the same time. And then we just kept going on.

Impersonation is what it sounds like. You pretend to be another person in order to deceive. If you are guilty of impersonation Twitter can suspend the user name. So the “@gowlings” for example. Twitter users, however, are allowed to create parody accounts, commentary accounts, fan accounts. Twitter provides certain wording or factors they’ll consider to determine whether your site, whether your Twitter account, is an impersonation or not. If you distinguish your account with qualifiers like “not fake” or “a fan” or the Twitter bio indicates this is a parody, and the tweets are not designed to mislead or confuse, you may be permitted to keep your impersonation account because it becomes a fan account or an account dedicated to critical commentary. However, this is key, the Twitter account may have words like “this is a fake” or “it’s not real” but ultimately that is not the test. The test is what is the overall commercial impression created by that Twitter account? If the overall commercial impression is such that the end user believes that this account is affiliated with, or otherwise connected to, a brand owner then it should come down. If you’re confronted with a situation where you have “not” and “fake” and it says parody but it’s misleading, if it’s a fake credit card account and it says “this is fake” but then the tweets are interest rates, for example, then the end user may be confused as to source. Don’t be deterred in issuing a complaint in a circumstance like that simply because this person is using the right words.

Despite that confusion may still be likely. Here’s the thing with impersonation. If I file an impersonation account, if I say Dan is impersonating me and I’m successful, “@danielcole” the user name, is going to be suspended. But it won’t be transferred to me. Even if I am Daniel Cole. I’m not Daniel Cole but if I was Daniel Cole, I want to be Daniel Cole but I’m not Daniel Cole, if I am Daniel Cole, it’s still not transferred to me. And that may be a bit counterintuitive to you because you’re saying, “Look, he’s impersonating me. I want that. I’m Starbucks. He’s not Starbucks.” But it’s just suspended. So, what do you do? Here’s a good example of one such case. So, Nick Kypreos, there’s a fake account. Nick Kypreos at the top. He secured the user name “realkyper”. This had a real impact. At the trade deadline a few years ago Nick Kypreos tweeted out that the Canadians have made a trade. I knew the trade wasn’t real, I’m a Canadians fan, because the trade made sense and was reasonable. It’s still too soon to talk about Subban. That tweet was run across the AP, across the country and it was being reported on TV, on radio, via different forms platforms. That’s the power of 140 characters. If he files an impersonation complaint he doesn’t get his name back. Does that sound fair? No, it doesn’t sound fair but, at law, it’s all about how you frame your complaint. If you’re Nick Kypreos you don’t file an impersonation complaint. You file this. You file a trademark complaint. Trademark infringement effectively is that someone’s use suggests that their affiliated with or endorsed by the brand owner. When in fact that is not the case. The overall commercial impression is designed to deceive or mislead the end user that there is some type of connection between two parties. This Twitter policy does provide for the transfer of the user name to the brand owner. If it’s Pizza Hut, for example, and I’m Pizza Hut and Dan is Dominos and he has “@pizzahut” as his user name on Twitter and it’s the exact same site, obviously you don’t file an impersonation complaint, you’ll file a trademark infringement complaint. That’s more intuitive. It looks like trademark infringement because they’re using my brand and then I get the user name transferred over to me. It’s a bit trickier in the case of Nick Kypreos because at first blush a name does not function as a trademark. A name is only elevated trademark use if it functions as a trademark. Calvin Klein is a name. Slap it on the back of jeans, suddenly it’s a trademark. Nick Kypreos is a bit more difficult but the way you frame it is you say, “The name is a name but also functions as a trademark in association with broadcasting services in the field of sports.” That’s a service. So his name is more than just a name. It is also a trademark. The point I am making is this, like anything else the choices you make are critically important. If you make the wrong decision, with Twitter, and you file an impersonation complaint you don’t get the desired result you were hoping for. Namely, apart from the account coming down, securing that user name. You determine the goals you have ahead of time and then you use the right type of policy. The thresholds are different but this to me is your starting point. It’s always your starting point because you can get so much more.

There’s also a user name squatting policy. People will pick up user names, not use them, hope to be contacted and then make some money off of that. You can file a user name squatting complaint if you wish. If it’s not being used in association with an account, it’s just sitting there, there are not tweets, no images, no graphics, anything, then you may want to do that. But, again, my focus would be on the trademark complaint because that casts a far broader net.

The one thing I want to say is this. It’s a bit tricky with Twitter. Remember I showed you how fast Facebook grew? Twitter grew even faster relatively speaking. Facebook, their in house counsel and the legal processes they have in place, are very efficient. You file a complaint today, you get an automated response within minutes and generally within 24-48 hours the Facebook page can be down if it’s an infringing site. And they seem to know consistently what they are doing. They have been trained to identify instances of infringement. Twitter is a little bit different. Response times lag. Could be a day, 2 days, a month, you never hear back and the application of the law is all over the map. To the point where you could re-file a complaint, which I’ve done, and get an entirely different result. And in cases where it is like a law school exam question of trademark infringement. Everything is going wrong here. Everything is going wrong and Twitter will come back, no, it’s fine. The other person will say, “Oh my goodness. This is horrible. We’re going to take it down.” Here’s the one thing about user names. I also want to mention that when you get it transferred over, let’s say I’m say Starbucks and Dan has Starbucks999, for some reason let’s say that is of value to Starbucks, both user names cannot be used in association with the same Twitter account. Nor can you hyperlink one to the other. You can hyperlink NHL.ca to NHL.com, right? On top of that the issue is if you don’t use the user name for 6-9 months Twitter will cancel it. So if you go through the whole process, secure the user name, you might lose it in 6-9 months. What do you do? You create an account and every month, or 2 months, just tweet something out. “Hey, if you’re looking for us we’re located here.” Unfortunately it’s not a perfect system but it’s the way to hang onto that new user name and not have any issues.

Copyright. Here is the issue with copyright. I talk about picking about the right policy. If someone has misappropriated your intellectual property on Facebook and they have your logo there, and that’s the only instance of copyright infringement the rest is trademark infringement, if you file a copyright claim what happens? Facebook removes the logo but the account stays up. So make sure you file the right complaint. Copyright infringement is just misappropriating someone’s copyrighted work, photograph, tag line, whatever it is, substantially reproducing their work or a part of it so that it’s recognizably theirs, effectively. Copyright can be a very effective tool to get certain copyrighted works removed from a Facebook and Twitter page but make sure if you want everything to come down that you also allege trademark infringement.

Here are my tips. Number one, think of your trademarks. Secure your main marks as user names through Facebook and Twitter. All you need is a unique email address for every user name and a unique password. It takes all of 10 seconds. It’s so fast. Just create these email addresses through gmail or through yahoo. Secure them. It doesn’t cost you anything and, trust me, if someone misappropriates your IP as a user name it’s going to cost you a lot more to get it back. Do that through Twitter and Facebook. Also just run your brands through that social media platforms. See what comes up. You might be surprised that someone is ripping you off. Happens more often than you might think. Review those sites for unauthorized use of your intellectual property. Then if you come across unauthorized use of your trademarks or your copyright then address it. Address it through Twitter and Facebook. You file complaints. The complaints that I mentioned are all filed through the sites themselves. They have online forms. The one thing I’ll add is if you don’t have your registered trademark you can still file your complaint. If I’m alleging trademark infringement, I want Starbucks to come down, I don’t have a trademark registration for Starbucks, the forms will ask you for the registration number. You just leave it blank. At the end of these forms it says, “Anything else?” That’s when you put in your spiel. There are 2 kinds of trademarks in Canada. A registered mark and what’s called a common law trademark. A registered trademark is that piece of paper you get after a year and half after applying for your trademark and it gives you rights across Canada, irrespective of where you’ve used. It’s a very strong effective tool. There’s also something called a common law trademark right. Those are trademark rights that arise by virtue of the use of the mark in the market place. Whether you have a registration or not and those rights are enforceable. But because it’s used based, if you’ve only used in Ottawa, then your trademark rights only extend and are enforceable in Ottawa. Not across Canada. So you can’t stop someone in Vancouver, for example. That being said, Twitter and Facebook will allow you to rely on common law trademark rights as part of your complaint. So don’t be deterred. If you used your mark it is going to be enforceable. Every case is different. You’re likelihood of success depends on the facts at play. Every trademark is different. Okay? But definitely be proactive and you’ll have fewer and fewer headaches, I promise.

Any questions on the IP side? We’re good? Okay. I introduce Dan Cole again. Dan, advertising lawyer, and he’ll speak to you about contests and advertising online.

Dan:

Morning everyone. As Eric said I’m from Toronto and I had to fly in last night, stay in a hotel. I also have 2 young kids. You can’t imagine the negotiation I got. I stayed in a very nice hotel last night as opposed to sleeping in a house with 2 screaming children. I didn’t have to drive just a few minutes to work. I wanted to talk to you quickly about advertising and marketing on social media. Eric did a really good job, I think, in the beginning of highlighting all of the potential rewards. Looking at the size of these sites, the bandwidth of users that you can reach. But I want to talk to you a little bit about a few of the key rules of them and then maybe some of the risks that you see in playing in this space and then how to try to mitigate them for instance. The first key rule of thumb that I have in this space is that there is no such thing as risk free. It’s just intuitive. It makes complete sense. Unlike traditional advertising where we would sit in a room, we would carefully craft a message and then put it on TV, or as Eric said on radio, this is a conversation. It’s a conversation with millions of your closest friends. You have no idea how the other side of that conversation is going to react. Just intuitively there is no such thing as risk free. This is a little formula I put together when I was trying to come up with the idea of how to explain the risk in social media. As you saw in the video at the very beginning you have this extremely powerful communication tool. Everyone in here has a phone. Very good ease of dissemination. Anybody can tweet something. Anybody can post something. Both from within private meetings or on their own time. You have this extremely wide and diverse range of audience and tastes and tolerances and I’ll show you a few examples of some things that have gone horribly wrong in social media to illustrate that point. And then nothing is private. You saw the example with Tessa. Very little, if not nothing, is private. You put all of that together and you net out that there is some harm risks. As long as we can start on the understanding as there’s no such thing as risk free I think now we can look at how to mitigate those various risks.

The other thing to keep in mind in this space, and this is one of the most common fallacies that our clients come to us with, “Well, it happened on social media so surely it’s fine, right?” It’s different somehow than what you were normally doing. The same rules that applied before still apply. So all the rules that Eric mentioned, all the trademark infringement, copyright infringement, IP, contest promotions, false and misleading advertising. Just because it’s happening on social media doesn’t somehow make it different. So you still can’t lie to people in your advertising just because it’s happening on social media. The other trick though is that now you have a contract with every social media site with whom you engaged. So, Facebook, Twitter, LinkedIn, all the sites that Eric mentioned, you as the user when you are going to go on and create an account and post content and engage with users, are agreeing to their terms of service. Those terms of service, as you would expect, are completely one sided in favour of that site. So, you have to take very close look at those terms. Make sure you understand the rules that you’re agreeing to to play in that space. By way of example, extremely broad indemnities, warranties and representations. You are going to be on the hook for anything that happens, vis a vis, that site. And that site reserves for itself, as you’d expect, extremely broad discretion. They can take down your site if they feel what you are doing is inappropriate. That’s the other kind of angle to this. Not only the traditional laws that we’ve always had to consider but now all these contracts that we have with every one of these sites with whom we’re engaging. The big note of caution in that space is that those terms of service are revised very frequently and often with very little notice. So Facebook is a really good example of that. They’ve got rules and promotions for everything. Advertising policies, contests and promotion policies, platform policies. They’ll make little changes to those policies. As Eric said they are very sophisticated. They’ve grown so huge and they won’t necessarily tell you that those changes happened. Now their promotion, the advertisement, the contest, whatever is you were doing on their site, may somehow be in violation of their policy and they can take it down. If they take it down there’s risk for you in that. There’s legal risk. For example, if it was contest that was just shut down in the middle of the contest, there is legal risk for you if that happens. There’s also reputational risk, right? Your page was there. Now your page is not there. Your fans, your users are asking what happened.

I want to walk through a couple of examples of the wide range of risks and tolerances and what people think is funny and other people do not. Here’s an example of IHOP. It’s a big brand, in the States, and flat but has great personality. They tweeted that out. You can imagine the backlash they took for tweeting something like that. “Earlier today we tweeted something dumb and immature that does not reflect what IHOP stands for. We’re sorry.” That’s what your left to respond with because somebody in their marketing department thought this was a good idea.

Just when you thought it was helpful. Here is a link to an article that talks about sexual assault and how to avoid sexual assault. The caption of the article “Sexual assault is always avoidable”. No, it’s not. Obviously it’s not. They take an extreme amount of backlash for this. So they’re trying to be helpful. They’re trying to put out material that they feel is helpful but they frame it in the wrong way. Just when you thought it was a good idea to engage. So these are called tweetups. They’re very risky unless you really know what you’re doing but this is JPMorgan Chase. This happening at the height of the financial crisis in the States. JPMorgan Chase sets out, “You can come and basically tweet with one of our top executives. Ask us questions and we will come back to you with answers.” “Can I have my house back?” “Does JPM stand for just pay more?” “What’s your favourite type of whale?” Okay tomorrow’s Q&A is cancelled. Bad idea. Back to the drawing board. Before it even gets started this gets shut down. Just when you thought it was an appropriate time to respond. Here you have a breakfast cereal company, “Boston our hearts are with you. Here’s a bowl of breakfast energy we could all use to start the day.” This is on the morning of the Boston bombing at the marathon. Probably not the right time to hock your products in that type of situation. “Our food tweets this morning were frankly insensitive. Our deepest sincerest apologies.” That actually comes after they let this go on for quite some time. The backlash was immense as you can imagine. There is key learnings in all of these examples, right? They’re entertaining and funny, of course, but at the end of the day there is good key learnings. Here’s another good key learning. Don’t let bots take over your accounts. Here you have US Air and American Air. “Congrats to American Air and US Air in creating the largest shittiest airline in the world.” “Thanks for your support. We look forward to a bright future.” You can’t have these automatic responses coming back to that type of thing. And of course people pick up on this, right? It’s funny that they’re responding to every tweet come in their way especially when this happens, right? This is the kind of risk you face in this space. That’s not a legal risk. That’s a reputational risk. You look like an idiot.

Just when you thought you would join the conversation. Here is a digital pizza company. #whyistayedyouhadpizza If they’d taken 30 seconds, 5 seconds, and googled why #whyistayed was trending they would have realized it was about domestic violence. It really ultimately had to do with Ray Rice’s wife, or fiancé at the time, Ray Rice the NFL player got accused domestic violence against this fiancé. She wrote an article about why she stayed. #whyistayed That’s why that was trending. Not a good idea. “A million apologies. Did not read why the hashtag was before posting.” They owned it. You got to own it but at the end of the day it makes you look ridiculous.

And then here’s another example of just making sure that you understand when you’ve got accounts and circumstances change and you’ve got automatic responses that were ready to go out, don’t let that happen. So, Joan Rivers posting about her new badass iPhone after she died. Here we have her, she’s written this, somebody’s written this on her behalf, she dies and no one looks at the system, realizes that’s set out to go out on a certain day and time. Obviously looks a bit ridiculous. Those are just examples. As I say there is no such thing as risk free. They give you good kind of key tips in terms of running your social media platforms. Not letting bots take over your account. Actually taking 5 seconds to look why something is trending before engaging. Understanding that what you think is funny others might not think is funny.

So now I think I just want to dive quickly into the various legal issues. The most prominent legal issues that we see on a day in and day out basis when it comes to social media. The first is and this is the question that usually comes to us is we’ve got this bot tool. We’ve got some type of data scraper and it’s going to go and it’s going to grab a bunch of stuff from all over the internet and it’s going to pull it back and we’re going to put it on our website. Surely there is nothing wrong with that. The question really is it feels like still stealing, right? At the end of the day all those rules that Eric talked about, trademark, copyright, IP, all of those things, they still apply. Just because it’s on the internet does not mean it’s free for a company to take. So if I wanted to take it as a personal user the risk to me is obviously very low. I’m still stealing things, still copyright infringement, but I’m going to post it on my fan page. Who cares? Company, the organization, the person to tweet, they’re not going to get upset by that. But if you’re a brand, you’re a company, you’re using it for a different reason. You’re using it for commercial purposes and that changes the rule of the game. The way to think about this analysis is to look at the terms of service of any site from which you are taking that material. And you say, “Do those terms of service allow the content on that site to be used for commercial purposes?” If it doesn’t say that, and there are several do say that it cannot be done for that purpose, then that’s a non-start. You can’t take stuff from that site for your commercial purposes if that is expressly prohibited.

The next thing you need to look for is what we call a flow through licence. YouTube is a really good example of this. So YouTube says when you post a video on YouTube you grant a licence fee to YouTube. YouTube needs that licence fee because they are now broadcasting that content to the world. What you really want is, what YouTube says is, when you post a video on YouTube you grant a licence to YouTube and every other user of YouTube. That’s what we’re looking for. We need to make sure the rights flow through to us as the ultimate commercial end user. If you can use it for commercial practices and you have that flow through licence then you’ve got to look at the terms and say, “Well, are there specific ways in which it must be done?” YouTube, for example, says you can’t just take YouTube’s content, even though you have that flow through licence, and just take the content and do whatever you want with it. You have to use what they give to their embeddable player. That’s how you have to use the contents. What they want you to do is take embeddable player, put that on your site, flow the video through that embeddable player so that people know that it ultimately comes from YouTube. Just taking stuff from other online sources can be extremely risky unless you go through and do this analysis.

The last piece, and I’m going to talk a little bit about implied endorsement in a minute, but this is the other issue to consider. Let’s say you do all of that stuff. You can use it for commercial purposes, you have a flow through licence, you use the embedded player but the video contains content that might otherwise raise risks for you. Just because you’ve done all those other things, if it’s got a celebrity in there, or its got third party content or rights and music and things like that in there, your use for your commercial purposes of that content despite all those other licences, is your risk. If it’s a video with Sidney Crosby in it and you put that on your site that is your risk for using his image for your commercial purposes. That’s the other risk to consider in that analysis. It’s a complex analysis but at the end of the day it really boils down to you need to take a very close look at the terms of use of each site with which you want to engage.

Here is another big trend in social media and this is influencers. These people are people who have huge social problems. They’re either celebrities in some cases or they’re bloggers. They’re people who’ve spent enough time and effort in building up a social following. These people are extremely attractive to brands in organizations because that’s an immediate way to get their base of followers. You saw in the video that Eric played at the beginning, something like 78% of people trust peer reviews, 14% trust advertising. So that’s exactly what this is intending to get to the heart. Eric’s a really influential guy. He’s got 17,000 followers on Twitter. I would rather pay Eric, or associate with Eric, to promote my brand because I know I’m going to reach his 17,000 followers and he says he likes it, that’s good for me. Versus going out and creating an advertisement for that. The problem is is that there’s what we call a material connection. I’ve given Eric something to do that. I’ve paid Eric to do that. I’ve given him free product to do that. There’s a material connection there. That material connection needs to be made clear to the ultimate end consumer. That’s why in advertising you see things like #ad, #sponsor. What it is is it’s telling you that I have a relationship with the person that’s ultimately created that content for me. Because otherwise consumers are left to assume that Eric must really, really, really like Dan’s car, the car brand that he created. Because he’s out there promoting it. But if I told you that I gave him that car and let him use it free for 6 months that might change your perception of what he’s saying. That’s a critical piece. Advertising Standards Canada, which is a regulatory body looking at advertising in Canada, they’ve lagged behind on this. In the FTC in the States, Federal Trade Convention, are all over this issue. They’ve got extremely good guidelines on how we need to make these various disclosures. So if you’re in the States, if you’re using influencers, check out the FTC guidelines. ASC, Advertising Standards Canada, is actually just about to release a proposed interpretation of its requirement to disclose impure connections. So just keep that in mind if you’re dealing with influencers.

This question always comes up which is something has just happened in the market and we need to capitalize on it. You saw some bad examples of people trying to capitalize on things in the market like the Boston bombing, for example, but when good things happen, when somebody’s seen with your brand, with your product and you go, “Oh my god, we have to tweet that out right now. This is important.” The marketing folks come rushing in the door and they say, “Can we do this? Can we do this? Can we do this?” That’s a point to hit pause and think of this analysis. And so here are the opposite ends of the spectrum when it comes to this issue. Here you’ve got Pharrell Williams. Pharrell Williams was at the Grammy’s and he’s wearing a hat which looks conspicuously like the Arby’s hat. Arby’s takes a shot in the dark and says, “Hey Pharrell can we have our hat back?” So now Arby’s, commercial brand, for commercial use has used Pharrell’s image. They’ve used his name. There is liability there. There’s risk there. They have no right to associate with Pharrell in any way, shape or form for their commercial purposes. But they took a risk. At the other end of the spectrum you’ve got Katie Heigl. Katie is photographed coming out of Duane Reade, shopping store in the States, she’s got the bags and they write, “Even Katie Heigl can’t resist shopping at NYC’s favourite drug store.” If I ask you what you thought would have happened in this case, Pharrell engages back. Loves it. Thinks it’s hilarious. Ha ha ha. They have really good social conversation. Nothing comes of it. It’s good, it’s good fun. She sues them for $6,000,000.00. And so when marketing comes through the door and says, “We need to do this.” That’s the point to pause and say listen, “Are we dealing with Pharrell or are we dealing with Katie Heigl?” It takes time. You’ve got to look at the situation. Google the individual. Google the situation. Figure out what’s truly going on. Are they known to engage like Pharrell or are they known to sue? That’s an easy one if you can figure that out I think you’re in pretty good stead. Are you going to add context? One of the problems here is that that’s pretty innocuous, right? This is actually making an endorsement saying, “She loves us.” She might have just went into the store because it was the closest one. Who knows? But you’re making it sound like she loves you. Adding that context is a problem so it’s a really good opportunity to step back and say, “Are we going to get sued for 6 million bucks or are we going to have a really good social interaction?” and that’s not an easy task in real time because, again, a day later no one cares about this. It’s gone. You have to capitalize on it in the moment which means you have to do that legal analysis in the moment. Real time lawyering.

Here’s a way to think about doing that. Where you’re not necessarily getting into the Katie Heigl risk. This has to do with Luis Suarez who bites the Italian football player during the World Cup. That happens, everybody wants to talk about that, but maybe they don’t necessarily use Luis Suarez’s image because of the reasons we just talked about. More satisfying than Italian#luissuarezsnicker. Brilliant. I think that’s absolutely brilliant. Some people will say what about #luizsuarez? You’re using his name. You have no right to use his name for commercial purposes so there is a level of risk there. The practical side of you says, “He’d be an idiot to sue anybody in that moment. He was the laughing stock of the world.” But that said, if you were so inclined and didn’t even want to take that level of risk in that moment, send him a cinnamon toast crunch. “One cinnamon toast crunch biting another cinnamon toast crunch.” That was tweeted right at the same moment, everybody got what that meant. Everybody got what that meant. But now all these years later as I put it on my slide here you would have no idea what that meant without the context that I’ve just given you. That’s a really good example. I say there’s no such thing as risk free. That might be as close to risk free as I think you can possibly get because that is not using his name, it’s not using his image, it’s not using any other thing that he could bring any claim on. Yet, everybody in the moment knew what that meant.

The other big kind of trend in this space, or thing to consider, is what is called native advertising. This is is it an ad or is it content? This is trickery. That’s what it ultimately boils down to. You can’t deceive people. You see this, and this is not a new concept, it’s just been kind of brought to the light in social media. These are like advertorials. Newspaper or magazine articles that were written by brands or had editorial control by the brand and put it in the magazine. You read it and you go, “That’s a really good article. They’re really, really promoting Toyota but okay I guess that’s it.” Then you realize that Toyota paid for the whole thing. That’s always been around. Product placement. It’s always been around but it’s really, really come to the forefront in social media. What you see, and this is like when you’re reading an article and you get to the bottom of the article and it says from around the web, more things you might like, top 10 choices to drive on your honeymoon. You go look and go “Look at that” and then you don’t realize a couple of things have been paid for by Expedia. This is where you see #added #sponsor. What you have to do in this context is you need to make it very clear to people that this isn’t advertising. If we’ve paid for the content, if we’ve created the content, if we’ve had editorial control over the content, it is advertising, it’s not editorial content. Marketing hates this. The whole point of this is to make people think that it’s real content. Again, 14% of people trust advertisements. They don’t want people to do that. That’s where the law in marketing, that’s a great example for the law in marketing area, complete odds. Marketing wants people to think that it’s editorial content. The law wants you to know that it’s advertising. This is what we’re seeing. When you see things like #ad, #sponsor, it’s either the influencers, the material connection issue, or native advertising.

I’ll just end on this then. Those are examples of obviously how you do all of this. Eric said at the beginning that we like to put some power back in the hands of people. I think these are examples of exactly how you can do that in social media. That is having policies and procedures in place to make sure you’re doing this properly. There’s a huge common sense intuitive component to this. Obviously don’t tweet the IHOP tweet, that’s just bad common sense. But in terms of how you manage your site, how you manage your communications, here are a couple of examples of the types of policies that you would want to consider. Having an employee policy is critical. Making sure your employees understand and know who can speak on behalf of the organization. What they can say. The approval process. All of those different things. Disclosures that need to be made but the fact that their employee can be tweeting on behalf of the organization, having that policy will help mitigate some of this risk. Having a moderation policy will help mitigate this risk. Moderation being the people who look at your channels. The people who sit there and look at your Twitter channel 24/7 or whatever the frequency is and say when something goes wrong, because something always goes wrong, how are we going to manage it? If you’ve pre-thought of this, if you have a policy in place that says when A happens we do B. When B happens we do C and so forth, you will be better equipped to handle it quickly and deal with it swiftly than if you’re thinking about it in the moment. When all of a sudden something happened to you, “Holy crap, never thought of that. What are we supposed to do about this? Get the team together. Call the lawyers. Meeting tomorrow at 8:00, fine.” It’s gone by then. At the end of the day that has moved on and whatever damage was done to your brand or reputation will now be perpetuated and exponentially permanent. That’s something to keep in mind. The moderation policy is you thinking in advance how we’re going to deal with all these situations. One example on the moderation policy is things like this. Malicious posters against other users. Moderators can deal with that. That’s what moderators do. Complaints about the functionality of the products. That needs to go to a private representative for a response. Negative comments about sensitive, political or worldwide situations. That’s a trained PR professional. What are we going to do when these situations arise? Who’s going to respond? How are we going to respond? If you’ve pre-thought of that at least to a large degree I think you’re going to find that you will be able to manage those situations quite well. And the last one I’ll mention is a posting policy. Which is these are kind of the public facing rules of … If you want to play on our space, if you want to come onto our fan page, participate in our contests, whatever happens to be, have some rules of the road which give you discretion to take the actions that you deem appropriate. We don’t like what you’re doing, we’re going to stop you from doing it. We’re going to try to take down your content. We’re going to try to disqualify you from participating in the promotion or whatever it happens to be. Have clear cut comprehensible rules that show people what your expectations are for them participating with you on social media.

I think I’ll end it there. Any questions on any of that we’re happy to take.

Eric:

No questions?

Dan:

That’s it. We covered it all.

Eric:

We want to thank you so much for taking time and coming out to another Risk and Rewards seminar. We know it’s early. Hopefully you found this interesting and helpful. We look forward to seeing you guys again. Thanks very much for coming. We appreciate it.

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