[Labor Dispute 46976-09-17 The New Channel 10 Limited v. Guy Lerer, ruling dated April 22, 2018]
- Who has the right to manage the Facebook page bearing the name of a popular TV show (in the present case, "the Pipe") ("the Page")? The television channel on which the show is broadcast, or the talent, who hosted the show and worked for the television channel (until his departure to host a competing show on a competing channel)? This interesting and precedent-setting question was recently decided in Israel in a ruling that lays down rules and tests for deciding the question.
- The story is as follows: The defendant (Guy Lerer) was an employee of the plaintiffs, a large television network (Channel 10) and its news company, for a dozen years. At first he was employed as a sports reporter and later on as the presenter of a daily show. While working as a sports reporter, he conceived an idea for broadcasting popular internet content, and began working on collecting materials - with the consent and encouragement of his employers - outside of his regular working hours. Shortly thereafter, the defendant began to present a weekly item on one of the plaintiffs' shows, titled "the Pipe" ("the Item"), and later on the Item became an independent show under the same title (and for a certain period, titled "the Night Pipe") ("the Show"), which the defendant also hosted. At the same time, the defendant set up the Page. The dispute arose after the defendant terminated his employment with the plaintiffs and sought to retain the management rights in the Page, which the plaintiffs wished to receive in order to support the Show that continued to be broadcast by another host.
- At the beginning of its ruling, the court reviewed various provisions of the law relating to the ownership of intellectual property ("IP") created by employees. The court stated that according to such provisions, IP developed by employees cannot necessarily be associated with the employer for the sole reason that the creator was employed by the employer at the time of its creation, but that a requirement exists for an additional connection, linking the IP to the place of employment. It was also explained that faced with the changes that are currently evolving in the working environment, performing an analysis based on the tools used to create the work, creation of the IP during working hours or leisure time and the place for performing the work has become a challenging task, and that the legal rules must be adapted to conform to this new reality.
- Accordingly, the court saw fit to point out a number of tests, which, due to their weight, will make it possible for a decision to be given on the ownership of management rights in a social network account. The test which was given the most importance - in practice - is the degree of correlation between the social network account and the workplace. In this context, it was clarified that when examining the degree of correlation of a social network account with the workplace, there should be taken into account, their names, content, underlying goals, and the scope of the employer's use of the account, in comparison to other uses. Other tests noted by the court included classification of the hours during which the account was managed and operated (at leisure or at work); the identity of the initiator at the time the account was opened and the purpose opening it; the persons responsible for bearing the account management expenses; the persons involved in the actual management of the account and the extent of the employer's supervision in the management of the account; provisions in the employment agreement relating to the account; and the workplace procedure with respect to rights in social networking accounts.
- As a result of the implementation of these tests, it was determined that the rights to manage and use the Page will be retained by the defendant. The court pointed out that it was the defendant who initiated the opening of the Page, and that the main purpose of the Page was not to serve the Item (and later on the Show) or to promote it, but rather to create a social community instilled with a certain character. This, in contrast to the purpose of the Item and the Show, which was and remains to broadcast content from the internet. In examining the correlation between the Show and the Page, the court examined the external characteristics, the extent to which the Show contributed to the success of the Page and vice versa, as well as the correlation of the content. While in relation to the external characteristics it was determined that there is a significant (albeit incomplete) correlation between the Show and the Page, in so far as the contribution is concerned, it was determined that it was not proven that the Show helped to accumulate followers to the Page, in a manner that would lead to the conclusion that this was a by-product of the plaintiffs' investment. Regarding the correlation in the content, it was determined that the plaintiffs presented very few examples attesting to the correlation, and therefore failed to substantiate their claim that the contents that were published on the Page were significantly related to those broadcast in the Show. The court also gave weight to the fact that the Page did not serve the plaintiffs in any way that exceeded the defendant’s activity on the Page. In light of these findings, it was determined that the correlation between the Show and the Page was low, and that this conclusion attests to a separation between the defendant’s activity on the Page and his activity as part of the Show, to such a degree that it cannot be determined that the defendant's work on the Page fell within the ambit of work ancillary to his work on the Show.
- With regard to account management expenses, the court determined that the plaintiffs did not invest any real resources in managing the Page. On the other hand, it was determined that the defendant incurred expenses for the operation of the Page, and also solely managed the account and determined what content to include in his sole discretion, without the plaintiffs requesting or instructing him in this respect. Finally, the defendant's employment agreement was discussed, and in this context the court held against the plaintiffs the lack of any mention or reference in the agreement to the defendant being the administrator or operator of the Page, bearing in mind the requirement in the law that the main responsibilities of an employee must be specified in a written notice given by the employer. The court likewise held against the plaintiffs their lack in defining any procedure regarding the status of accounts in social networks which the employees use simultaneously, for their own purposes as well as to satisfy work-related needs. The court even remarked that it is expected that employers will establish procedures of this nature and that clear procedures constituting part of the working relations between the parties, will facilitate a determination that the rights in the account are as defined in the procedure.
- In summary, the ruling lays down clear rules and tests for deciding on competing rights between an employee and an employer, who both claim to have rights in a social network account. It is also quite possible that these tests will accompany the ruling in coming years. However, as with any legal field that is just beginning to develop, so here too a considerable void still remains to be filled. For example, little attention was paid by the court to the fact that according to various publications, Facebook intended to reject the settlement reached by the parties regarding the Page, in the preliminary stage of the proceedings, in terms of which the Page would be duplicated, so that it could be used by both parties. An additional passing remark (obiter dictum) in the judgment concerns the question of the rights in the content that was uploaded onto the Page, which the court was not requested to consider. In coming years, the courts and the legislator will have to establish a set of rules that will regulate the new reality that has developed on the internet, and whose impact, it seems, has increased over the years.
We thank our associate, Adv. Dor Goldiner, for his valuable assistance in preparing this report.