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The Law and Business of Social Media

Status Updates

Posted in Status Updates

Out with the inbox? The overwhelming popularity of workplace-specific platforms that facilitate coworker communication—commonly referred to as “enterprise social media”—is undeniable. But are these platforms poised to someday supplant business email accounts altogether? New York Times technology columnist Farhad Manjoo thinks so. The one big advantage that enterprise social media platforms like Slack have over regular email is their potential for workplace transparency; as Mr. Manjoo notes, by making employees’ communications archivable and visible to the entire company, they facilitate the flow of information and make electronic exchanges a resource for employees looking for background information on a project, or what Slack’s co-founder and chief executive, Stewart Butterfield, refers to as “soft knowledge”: how the employees at the company approach group projects, for example. While privacy advocates will undoubtedly raise concerns at the prospect of employees having to communicate in a fish bowl, many of the workers at companies that use enterprise social media platforms appreciate that such platforms inhibit the hoarding of information, thereby facilitating collaboration and resulting in less hierarchical workplaces.

Tweet carefully. Financial services firms operating in the United Kingdom need to be careful of running afoul of that country’s regulations when they use social media. According to new guidance issued by the UK’s Financial Conduct Authority (FCA), re-tweeting a customer’s comment can be enough to trigger the rules that apply to financial promotions if the tweet “comments on or endorses the benefits of a regulated financial product or service.” Among the many other guidelines set forth by the FCA in its social media communications guidelines is the admonition that a certain platforms’ restrictions—Twitter’s 140-character limit, for example—can make it especially difficult to for financial services firms to ensure that their communications are compliant.

All is fair in love… and movie promotions? A controversial social media ad campaign generated as much attention as any up-and-coming rock band at this year’s SXSW festival. To promote a science-fiction film—Ex Machina—that debuted at the festival, the film’s producers set up a fake Tinder account for “Ava,” a character featured in the movie. Ava’s profile incorporated a photograph of Alicia Vikander, the Swedish actress who plays Ava in the film. Once a Tinder user gave Ava’s (Vikander’s) photo the right-swipe-of-approval on the popular dating app, the computer-generated Ava asked the user a series of questions that, only in hindsight, are appropriate for both a young woman quizzing a guy she just met on a dating app and a robot trying to figure out what it’s like to be human—the role Vikander’s character Ava plays in the movie. If Ava approved of a Tinder suitor’s answers, she offered up her Instagram account, @meetava, for his perusal. Upon visiting Ava’s Instagram account, the avatar’s wanna-be boyfriends—perhaps to their chagrin—found videos and pictures promoting Ex Machina. Is this the beginning of a new era in online advertising—computer-generated fake friends and love interests being used to pressure us into buying stuff that we didn’t think we needed? If so, let’s hope that advertisers keep the FTC’s Endorsement Guides in mind…

UK’s Financial Services Regulator: No Hashtags in Financial Promotions

Posted in FCA Regulations

Earlier this month the UK’s financial services regulator, the Financial Conduct Authority (FCA), issued its final guidance on financial promotions made via social media channels.

As we reported last year, the FCA issued long-awaited draft guidance in August 2014 on the use of social media in financial promotions by regulated financial institutions. Following the publication of the draft guidance, the FCA held a consultation exercise which closed on Nov. 6, 2014. In response to feedback from regulated firms and industry bodies, in the final guidance the FCA has clarified a few areas and amended portions of the text, as well as added more visual examples.

Very little has changed in the final guidance with respect to the FCA’s approach to regulating promotions in social media. The overarching principle for all communications with consumers is that they must be “fair, clear and not misleading” and the FCA’s view remains that its rules are, and should be, media neutral. It believes that to take any other approach would create a more complex and costly regime.

However, there is one notable amendment in the final guidance. In the draft guidance, the FCA had suggested using a hashtag #ad to help identify promotions. In the final guidance, the FCA has done an about turn and stated that the use of hashtags is not an appropriate way to identify promotional content.

KEY RECOMMENDATIONS

The recommendations detailed in the final guidance include the following.

  •  Form of communication

Any form of communication made by a firm is capable of being a financial promotion – the key is whether it includes an invitation to engage in financial activity. All communications must be fair, clear and not misleading, even if the communication ends up in front of a non-intended recipient (e.g., due to a re-tweet).

  • In the course of business

Some communications will not include an invitation to engage in financial activity – for example, communications solely relating to the firm’s community work. Only financial promotions made “in the course of business” will be subject to the FCA guidance. The definition laid down in the guidance effectively requires a commercial interest on the part of the firm. The FCA provides a couple of examples to illustrate the issue.

Firstly, if a company is already operating, it will be acting in the course of business when seeking to generate additional capital. However, if the company has not yet been formed, and the proposed founders approach friends and family to obtain start-up capital, they will not generally be acting in the course of business. Secondly, where a personal social media account is used by someone associated with a firm, that firm and individual should take care to distinguish clearly personal communications from those that are, or are likely to be understood to be, made in the course of that business. During the consultation exercise, further guidance was requested as to the difference between personal and business communications. The FCA clarified that if an employee of a firm uses their own social media account to send communications that could be considered an inducement or invitation then this may constitute a financial promotion and will therefore be subject to the same rules that apply to the firm. Accordingly, firms will need to ensure that their social media policies and training cover the risks of personal social media use.

  • Hashtags

All financial promotions made via digital media must be clearly identified as such. In the original draft guidance the FCA suggested using a hashtag #ad to help identify promotions. However, in the final guidance, in response to feedback, the FCA has reversed its stance and stated that hashtags are not an appropriate way to identify promotional content. This is based on a few factors.

Firstly, the FCA believes that most promotions on social media will be self-evident. For example, paid-for advertising on various social media platforms already indicates that a communication is promotional (e.g., on Twitter ‘promoted by’, on Facebook ‘SPONSORED’). Secondly, the nature of a hashtag means that if the consumer looks up that hashtag the consumer will be presented with a whole series of communications unrelated to the firm. The FCA believes that this could lead to consumer confusion.

The FCA has also explicitly stated that hashtags would be inappropriate for the inclusion of risk warnings (e.g., #capitalatrisk) or to highlight jurisdictional limitations (e.g., #UKinvestors). The FCA has suggested that signposting of a tweet will only be appropriate where the promotion is obscured or combined with other content (e.g., a celebrity endorsement or native advertisement).

It seems surprising that the FCA did not appreciate how hashtags worked until now. In addition, given that a consumer who regularly uses Twitter is likely to be familiar with how hashtags work, would a consumer really be confused by the use of #ad? Nevertheless, given the position taken in the guidance, if companies have been widely using hashtags in connection with financial promotions they will need to rethink their approach.

  • Re-tweets

The FCA has confirmed that when a communication is re-tweeted or shared, the responsibility lies with the person who sends the communication. Accordingly, if a consumer re-tweets a firm’s promotional communication and is not acting in the course of business, then it is only the original communication that will need to be compliant with the promotion rules. The firm would not be responsible for the re-tweet.

Where a firm re-tweets, shares, or likes a consumer’s communication, whether this is a financial promotion or not will depend on the content of the tweet. For example, if the tweet praises the firm for good customer service, the FCA has confirmed that would not be a promotion because customer service is not a controlled activity. Whereas, if a customer is endorsing the benefits of a particular product, then re-tweeting, sharing or liking that tweet would constitute a promotion. Accordingly, firms will need to ensure that training for their social media operators deals with the potential risks of sharing positive customer comments.

  • Images

Risk warnings must be suitably prominent in social media promotions. If a risk warning is set out in too small a font size and/or lost in surrounding text, the promotion will not be compliant with the guidance. Of course, social media often poses particular challenges because of space and character limitations. The FCA has suggested that one solution is to insert images (such as infographics into tweets) as long as the image itself is compliant. The FCA acknowledges that the functionality which allows a Twitter image to be permanently visible may be switched off so that the image appears simply as a link. Accordingly, any risk warning or other information required by the rules cannot appear solely in the image.

  • Signposting

It may be possible to signpost a product or service with a link to more comprehensive information, provided that the signpost remains compliant in itself. The FCA has rejected that compliance should be assessed based on the combination of a tweet and the website to which it links. This form of ‘click-through’ approach was proposed by a number of respondents during the consultation period. The FCA is of the opinion that the tweet and the website are separate financial promotions and so each tweet needs to be compliant, even if the tweet has been created to point the consumer to the firm’s website.

  • Image advertising

Firms may be able to advertise through image advertising, which is less likely to cause compliance issues. An image advertisement (i.e., an advert that only includes the name of the firm, a logo or other image associated with the firm, contact point, and a reference to types of regulated activities provided by the firm or its fees or commissions) may be exempt from financial promotion rules, but will still need to be fair, clear and not misleading.

  • Likes

Being a follower of a regulated firm on Twitter or having “liked” its Facebook page does not constitute an “existing client relationship” or “express request” for a communication under applicable rules. Issuing a financial promotion to such an individual would therefore be considered unsolicited.

  • Systems

Firms need to put in place adequate systems for signing off digital media communications. Sign-off should be by a person of appropriate competence and seniority within the organisation. 3 © 2015 Morrison & Foerster LLP | mofo.com Attorney Advertising lient Alert

CONCLUSION

The final guidance does not introduce any major surprises. By and large, it follows very closely existing guidance relating to financial promotions and includes some pretty clear-cut examples of compliant and non-compliant communications.

Some firms may have been holding back from becoming fully engaged on social media in anticipation of this final guidance. Such firms may be disappointed that the guidance is not more detailed and does not give them the regulatory certainty that they were hoping for, but that’s really not surprising – FCA guidance is rarely prescriptive.

In any case, firms can’t afford to wait any longer to take the plunge. Increasingly consumers want to engage via social media and with the rise of FinTech, we are seeing a whole host of new competitors moving into the financial services market, many of whom are potentially more agile and better equipped in terms of a digital strategy than the traditional finance brands. While organisations need to be careful to comply with the relevant laws and regulations, they also need to get on board with social media if they do not want to be left behind.

Social media may be a new method of communicating with customers, but compliance risks are not insurmountable. Firms need to exercise the same risk-balancing that they use with other types of media. It’s a case of putting in place appropriate guidance, policies and procedures to adequately address the risks, while not overly restricting the firm’s ability to be up-to-date in terms of its promotional campaigns.

The New Frontier in Interest Based Advertising: FTC Shifts Focus to Cross-Device Tracking

Posted in FTC, Internet of Things, Privacy

As consumers increasingly connect to the Internet using multiple devices—such as mobile phones, tablets, computers, TVs and wearable devices—advertising technology companies have rapidly developed capabilities to reach the same consumers across their various devices. Such “cross-device” tracking enables companies to target ads to the same consumer regardless of the platform, device, or application being used. Last week, the Federal Trade Commission (FTC) announced that it will host a workshop on November 16, 2015, to explore the privacy issues arising from such practices—signaling that interest based advertising (IBA) is still at the forefront of its agenda.

For a long time, advertisers and publishers have tracked consumers’ online activities using HTTP cookies stored in web browsers on desktop and laptop computers. In response to the FTC’s concerns over consumers’ visibility into and control over such tracking for IBA purposes, industry responded with widely adopted ways for publishers and advertisers to provide consumers with enhanced notice and cookie-based choice with respect to such tracking.

As consumers’ behavior has shifted, however, traditional cookie-based technologies are becoming less effective. Most consumers now access the Internet through apps on various platforms, in addition to web browsers, and they tend to use different devices throughout the day. This presents challenges for advertisers, publishers and others who want a complete picture of how individual consumers interact with their websites, services, and advertisements over time— as well as for those who want to know where and how they can reach such consumers. In response, companies have developed various solutions for identifying the same consumer across devices. One approach, for example, is to use “deterministic” methods that link the consumer’s devices to a single account as the consumer logs into websites and services on different devices. Another is through “probabilistic” methods that infer links among devices that share similar attributes, such as location derived from IP address. In some cases, companies may combine multiple techniques for greater accuracy.

In its announcement, the FTC explained that these new practices may raise privacy issues if consumers are not provided with adequate notice and control—and the workshop will address, among other topics, how companies can make their tracking more transparent and give consumers greater control over it. If history is a guide, the FTC will likely publish a staff report some months after the workshop, to highlight the privacy issues it sees with cross-device tracking and to offer industry guidance on addressing them.

The FTC’s announcement is a natural extension of its recent workshops on mobile privacy disclosures, the Internet of Things, and mobile device tracking. It also follows recent news from the Digital Advertising Alliance (DAA) that it has launched tools to provide in-app notice and choice to consumers about IBA practices and that it expects enforcement of the DAA Self-Regulatory Principles in the mobile environment to begin this summer.

Five Vital Questions on the Implications of UK Law on Social Media

Posted in Employment Law, Online Promotions, Privacy

Chevy Kelly, a partner in the UK-based Social Media Leadership Forum, recently sat down with Socially Aware’s own Sue McLean, a Social Media Leadership Forum member, to discuss the legal implications of UK companies’ use of social media as part of their marketing strategies.

Chevy Kelly: In your opinion, what are the top three legal risks that organizations in the United Kingdom face when engaging in social media?

Sue McLean: Compliance with relevant advertising and marketing rules is a key priority. All relevant rules, whether it’s the CAP Code, unfair trading regulations, FCA promotions rules, are concerned with organizations treating the customer fairly and being transparent. Companies will be experienced with applicable rules in terms of traditional media but, of course, social media brings its own challenges, including space/character limitations and the immediacy element of social media bypassing the time for review and approval protocols built into “old media” usage.

Data protection is also a key challenge. Whether you’re collecting personal information from customers via your social media channels, mining data from social media platforms or carrying out Big Data analytics, you need to ensure that you comply with relevant privacy laws. If you’re a global business, unfortunately that means a myriad of different laws. It’s not just a question of compliance. Showing that you take customers’ data seriously will help build trust; it may even help give you a competitive advantage.

Lastly, companies need to continue to focus on social media policies and the education and training of employees. Given the rate of change, companies really need to regularly review their policies and practices. New platforms can trigger new issues, as we have seen with instant messaging, as well as visual, anonymous, self-deleting platforms. Get social media right and employees can be fantastic brand ambassadors; but get it wrong and their activity could result in damage to your reputation and potentially legal or regulatory action.

CK: Are UK lawmakers able to keep up with the rate of change and disruption in the digital era and how are they coping to legislate for every scenario?

SM: No. Given the rate of technological change we have seen over the past decade and are continuing to see (whether it’s social media, Big Data, the Internet of Things, drones, etc.), the law is always playing catch-up; it’s virtually impossible for the lawmakers to keep up.

Also, it often takes so long to bring in a new law, that by the time it’s adopted it may be out of date. By way of example, the long-awaited Data Protection Regulation was proposed back in 2012 to reflect technological changes, including social media—but is still being debated in Europe and, even if it is finalized this year, there will be a transition period of two years before the law applies.

But it’s not always a case of bringing in new laws. Often it’s about interpreting how existing laws can apply to new platforms. That’s certainly the approach the FCA has taken (at least up until now) with respect of the use of social media by financial organizations, the approach that their rules are media neutral and apply to social media in the same way as they apply to traditional media. It’s also the approach the government has taken to trolling and other malicious behavior via social media—that the framework of laws we have are fit for purpose in this digital age (even if they were designed in a world before social media, e.g., to apply to poison-pen letters).

And, of course, while laws are inherently national, social media is a global phenomenon. Unless laws are very closely harmonized (which they are not), social media users face uncertainty because of different approaches to law and regulation in the key countries.

CK: Would you say that large organizations are taking the legal risks surrounding social media as seriously as other traditional communications channels?

SM: I’m not sure it’s a case of not taking the legal risks of social media seriously. I think it’s more a case of organizations being less experienced with social media generally, and that includes legal and compliance departments. If social media is being run out of a marketing/communications team then they will be very experienced with the legal risks of traditional media. But social media triggers new, different types of risk and both the marketing/ communications team and the legal and compliance teams are trying to figure out how to handle those risks.

And, of course, not all social media platforms are the same, and we are getting new platforms all the time. Companies may have become just about comfortable with Facebook and Twitter, but now they have to deal with, say, Pinterest, Instagram, Snapchat. And that’s just in the West; if you are a global organization, it’s likely that you have to deal with a variety of platforms across the different regions.

Of course, it’s not just a question of using social media to promote your business and interact with customers. If you’ve implemented an enterprise social media platform for your employees, that throws up a whole host of other issues.

CK: If you were to reference an example to give a wake-up call to an organization that may be laid-back in their attitude to social media governance, what would it be?

SM: There are a lot of examples I can point to where companies’ social media activity has ended up making headlines for all the wrong reasons. For example, the HMV case where the company didn’t take sufficient control of its Twitter account and employees managed to send a series of angry tweets before the company took control. In fact, I expect that a lot of companies still don’t put enough focus on social media in the context of insolvency and crisis management. It’s not just a question of implementing proper social media governance to avoid legal sanctions. In many cases, it’s equally important to avoid the risk of damage to the company’s reputation.

CK: Have you found that having an in-depth understanding of the law actually makes organizations more risk averse, or are they more averse when they don’t know the boundaries?

SM: A number of companies have taken limited steps into social media because they think that they should be on it, but haven’t fully engaged because of a lack of understanding of social media and a fear of the potential legal risks. But legal risks must be weighed up against the damage that may be caused to the business of not properly engaging. If you appreciate what the risks are, you can weigh up those risks against the business benefit, and also the damage that may be caused to your business of not engaging. Whereas, if you don’t understand the nature or level of the risks, you could be almost paralyzed into inaction. In most cases, the legal risks are not insurmountable. Companies need to exercise the same common sense, judgment and risk-balancing that they use with other media.

 

First-Ever Award of “Any Damages” for Fraudulent DMCA Takedowns Under Section 512(f)

Posted in Copyright

Under section 512(f) of the Digital Millennium Copyright Act (DMCA), copyright owners are liable for “any damages” stemming from knowingly false accusations of infringement that result in removal of the accused online material. Section 512(f) aims to deter abuse of the DMCA requirement that service providers process takedown requests from purported copyright owners, but such abuses remain rampant. (E.g., as reported here and here.) In fact, until the March 2, 2015, decision in Automattic Inc. v. Steiner (adopting magistrate’s earlier recommendation), no court had awarded damages under section 512(f).

The case concerned a blog by Oliver Hotham, who had contacted a group called “Straight Pride UK,” identifying himself as “a student and freelance journalist” and submitting a list of questions. Nick Steiner responded by identifying himself as the “Press Officer” for Straight Pride UK and providing a PDF file titled “Press Statement – Oliver Hotham.pdf.” The press statement laid out Straight Pride UK’s opposition to “everyone [in the UK] being forced to accept homosexuals” and stated its mission of ensuring “that heterosexuals are allowed to have a voice and speak out against being oppressed.” Hotham posted material from the press statement on his blog.

Steiner, apparently displeased with the subsequent negative attention, sent an email to Automattic, Inc., the blog’s host, invoking section 512(f). Steiner claimed to hold copyright in the posted material and requested that Automattic remove the blog post, and Automattic complied. Hotham, however, again posted material from the Press Statement to his blog, prompting Steiner to send two more removal requests by email to Automattic. Automattic denied those requests, citing their legal insufficiency. Automattic and Hotham then filed a lawsuit to recover damages related to Steiner’s misrepresentation that the blog infringed his copyright.

The court easily found that Steiner had violated section 512(f) because he “could not have reasonably believed that the Press Statement he sent to Hotham was protected under copyright.” Following the precedent of Lenz v. Universal Music Corp., the court then interpreted the statute’s specification of “any damages” to mean that damages are available, no matter how insubstantial. After requesting more detailed evidence concerning damages, the court found that Hotham and Automattic were entitled to certain types of damages.

First, based on the time he was prevented from spending on freelance articles and his expected compensation for such work, Hotham estimated the value of the time he spent on activities related to the incident, including responding to media inquiries. Hotham also requested additional damages for “lost work” due to the “significant distraction” caused by the media coverage and legal disputes. Hotham claimed a total of $960, and the court found his declaration sufficient to support that claim. But the court denied Hotham’s request for reputational harm as speculative, and rejected Hotham’s request for damages based on emotional distress and “chilled speech,” citing the lack of authority that such damages are available under section 512(f).

Automattic was likewise successful in claiming damages of $1,860, calculated based on employee salaries and a 2,000-hour year, for time spent responding to the takedown notices and related press inquiries. The court denied Automattic’s request for damages attributable to time spent by its outside public relations firm, however, because there was insufficient evidence to show how that time constituted a loss to Automattic.

The court also awarded attorneys’ fees, which are expressly allowed by section 512(f). Based on comprehensive billing records submitted along with data indicating the average local billing rate for IP attorneys, the court granted the request for recovery at a rate or $418.50 per hour, for a total of $22,264 in fees.

The court’s analysis is instructive in multiple ways. First, as mentioned, this was the first case resulting in a damages award under section 512(f), so the opinion is likely to serve as a road map for future courts considering such damages. Potential litigants should not read this case, however, as necessarily indicative of the magnitude of damages available in section 512(f) cases. Exposure can certainly be much greater, as demonstrated in Online Policy Group v. Diebold, Inc., a case that reportedly settled for $125,000. A few factors conspired to make damages in this case minimal (a total of $25,084). Steiner’s takedown notice was obviously fraudulent, so practically no resources were expended in meeting the normally demanding burden of proof. (As other commentators have noted, that same demanding burden of proof is one reason why there are not many section 512(f) cases in the first place.) Other cases may involve more protracted conflict over takedown notices and legal threats. Steiner also never appeared in his defense and therefore defaulted, which likely greatly reduced the time and expense of the lawsuit.

This case also reinforces the most crucial strategic consideration for service providers in responding to a DMCA takedown notice: as Socially Aware has previously explained, no damages can be awarded under section 512(f) unless the notice actually prompts the removal of the accused material. Therefore, if it ultimately wants to resist a takedown notice, a service provider can only recover the expenses of doing so if it actually removes the accused material in the first place.

On the other hand, the court applied the takedown requirement loosely in its actual assessment of damages. Steiner issued three purported DMCA takedown notices, but only the first notice resulted in actual removal of accused content. Even though Hotham and Automattic could have incurred a portion of their expenses due to the final two notices, the court did not discuss whether the takedown requirement precluded any portion of their claimed damages. While this bodes well for the availability of damages in cases involving multiple takedown notices, the analysis has questionable weight on this point. Given the absence of any opposition from defendant, future defendants will have a strong argument that the court simply did not consider this nuance.

Data for the Taking: Using Website Terms and Conditions to Combat Web Scraping

Posted in Privacy, Terms of Use

Is it stealing to take data without permission from a public website, or is it simply making use of resources that are made available to you? “Web scraping” or “screen scraping” is the practice of extracting large amounts of data from public websites using bots.

A recent case in the European Court of Justice has focused attention both on the intellectual property infringement aspects of scraping practices and on the potential for website owners to use their sites’ contractual terms and conditions to combat the scrapers.

Scraping is not new, but it has become increasingly widespread in recent years, fuelled by the rise in big data analytics and the popularity of price comparison websites. Indeed, in 2013, it accounted for 18% of site visitors and 23% of all Internet traffic. Scraping is not inherently bad: it can have legitimate uses, spur innovation and give companies with limited resources access to large amounts of data. However, unsurprisingly, many website operators do not like it. Not only are operators keen to protect their proprietary rights, but repeated scraping can also take a heavy toll on websites by using up bandwidth and leading to network crashes.

In the U.S., website operators have asserted various claims against scrapers, including copyright claims, trespass to chattels claims and contract-based claims alleging that scrapers violated their websites terms of use. In the EU, operators have tended to rely on intellectual property infringement claims against scrapers, but there has been little case law to provide guidance.

However, in January 2015, in a much anticipated decision, the European Court of Justice (CJEU) held that where a website operator cannot establish intellectual property rights in its database, an operator may still be able to rely on its website terms and conditions to prohibit scraping. This ruling may impact an increasing number of companies whose business models rely on mining data from websites and social media platforms without permission. On the other hand, it will be viewed positively by those data-rich businesses keen to protect and/or monetise their data.

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Status Updates

Posted in Status Updates

Forced friendship. A committee of the Arkansas Senate is expected to vote this week on a bill that would allow companies and other organizations responsible for supervising minors to require their employees to include a supervisor or manager in the employees’ list of social media contacts or friends. Specifically, the bill exempts employers at schools, daycares, summer camps and churches from a 2013 Arkansas prohibition on employer social-media-access requests. Purportedly drafted to protect children from sexual predators, the bill passed the Arkansas House of Representatives 91-1. Its detractors—which include the CEO of the non-profit ConnectSafely.org as well as major social media companiesargue that, in addition to compromising employees’ privacy, the bill could actually wind up endangering minors who work in the childcare industry, such summer camp counselors, by enabling their adult supervisors to contact them inappropriately through social media.

A dip in popularity. As we’ve discussed before, a business doesn’t really further its marketing efforts by accumulating Facebook “likes” from anyone other than real patrons who are genuinely capable of and interested in patronizing that establishment. To that end, Facebook has for some time now tried to weed out the likes generated by phony accounts. Now, in the interest of further ensuring a like’s legitimacy (and marketing value), the social media giant will remove from business-page-audience-data any likes generated by accounts that have been manually deactivated or “memorialized” after the account owner has died. (Facebook had already been doing this for personal pages). Just how many likes can a business expect to lose? According to TechCrunch, “it’s all relative to how many Likes you have to begin with. If your page only has a few dozen likes, you might not even lose one; if it has a few million, that slight dip will feel a bit bigger.”

Strippers in a snap. If a social media user is looking for an online platform on which to conduct secretive business, a vanishing messaging app with a feature that allows users to exchange money would be the place to do it. And so, as soon as the increasingly popular Snapchat unveiled a feature allowing users to send each other payments by simply typing a dollar amount into their messages and clicking a green dollar sign button, the platform began to attract people who sell sex and their online patrons. Strippers’ sales of personalized photos, videos, messages and personalized sex shows now account for a small but growing number of Snapchat’s transactions. The company seems to be cracking down on this use of its platform, which is both in violation of its policies and often illegal, by shutting down accounts. Strippers and their fans have found workarounds, however. Some have managed to avoid expulsion by initially connecting on online sex forums and exchanging porn for dollars later, after the buyers have provided their Snapchat usernames to the sellers.

Who Will Update My Status When I’m Dead?: The Biggest Social Media Platforms’ Policies on Deceased-User Accounts

Posted in Terms of Use

It’s often said that, when it comes to regulating technology, U.S. laws aren’t up to speed. That includes U.S. trusts and estates laws, which, in many cases, do not say much about what happens to your digital assets after you die.

Unless you or your trustee lives in one of the few states that, like Delaware, has a law that allows your executor to access your online accounts, your loved ones may have to follow the procedures set forth in social media platforms’ terms of use if they want to access your account after your death. (Alternatively, a deceased social-media-account holder’s survivors could seek a court order granting them access to your social media accounts, but it’s a lengthy and not-always-successful process.)

The fluid nature of the major social media platforms’ approach to handling deceased users’ accounts is illustrated by Facebook, which recently changed its policy to afford users more post-mortem control over their pages. The recent press coverage of Facebook’s policy piqued our curiosity regarding how the major social media platforms address this issue. Below we summarize Facebook’s, Twitter’s, Instagram’s, Pinterest’s, LinkedIn’s and Google’s (including Google companies YouTube’s and Blogger’s) policies regarding management of deceased users’ accounts.

Facebook: Allows users, while they’re alive, to designate a “legacy contact,” or elect to have the account deleted after they’ve died

Facebook recently changed its terms of service to allow the platform’s U.S. users to elect to have their accounts permanently deleted after they die, or to select a “legacy contact“— a family member or friend to whom Facebook will accord limited management of the user’s Facebook account after the user dies. Once a friend of the deceased user completes an online form notifying Facebook of the user’s death, Facebook will add the tagline “Remembering” over the user’s name and notify the legacy contact. The legacy contact may then: (1) download the photos and other information that the deceased shared on Facebook (if the deceased indicated that he or she would like to give the legacy contact that permission); (2) “write a post to display at the top of the memorialized Timeline (for example, to announce a memorial service or share a special message)”; (3) update the profile photo and cover photo; and (4) accept new friend requests on the deceased’s behalf.

The legacy contact will not be able to access the deceased’s private messages or login as the deceased.

Step-by-step instructions on how to designate a Facebook legacy contact are available here.

Twitter: Offers only possible account deletion at the request of the deceased’s lawful representative or immediate family member

Twitter’s terms of use specifically provide that the company is “unable to provide account access to anyone regardless of his or her relationship to the deceased.” Twitter will, however, “work with a person authorized to act on the behalf of the estate or with a verified immediate family member of the deceased to have an account deactivated.”

To fulfill this request, the company requires significant proof of the requester’s relationship with the deceased, including a death certificate.

Instagram: Offers only account deletion at the request of the deceased’s lawful representative

Instagram’s terms of use provide that “to protect the privacy of people on Instagram,” the company is “unable to provide anyone with login information to an account.” Like Twitter, however, Instagram will “remove the account of a deceased person from Instagram,” once the requester provides certain documentation, including the deceased’s birth and death certificates.

Pinterest: Offers only account deletion at the request of a family member

Pinterest’s terms of use also state that, in the interest of the platform’s users’ privacy, the company won’t give out login information, but will “deactivate a deceased person’s account if a family member gets in touch with us.” True to Pinterest’s homey image, the company will accept less formal documentation of the requester’s relationship with the deceased, including a “family tree.”

Of the terms of use that we examined, Pinterest’s were the only ones to offer condolences, stating, “We’re so very sorry to hear about the loss of your loved one.”

LinkedIn: Offers only account deletion at the request of anyone with a relationship to the deceased and a link to the deceased’s obituary

LinkedIn’s terms of use state that the company will close the account and remove the profile of “a colleague, classmate, or loved one who has passed away” if the requester provides certain basic information and a link to the deceased’s obituary.

Google+, YouTube, Blogger: Allows a user, while he or she is alive, to designate up to 10 people with whom Google will share the user’s data after the user has died

In keeping with its reputation as an extremely progressive company, Google since 2013 has allowed its social media platforms’ users a good measure of post-mortem control over their digital assets. Under Google’s terms of use, which have been in place for the last couple of years, a user of  +1s, Blogger, Contacts and Circles, Drive, Gmail, Google+ Profiles, Pages and Streams, Picasa Web Albums, Google Voice and YouTube may select a time period of account inactivity—three, six, nine or 12 months—after which Google will fulfill the user’s wishes for the post-mortem disposition of his or her account (after first warning the user by sending a text message to his or her cellphone and an email to a secondary address that the user provided). At that point, Google will notify “up to 10 trusted friends” that the user’s account is inactive, and—if the user so chooses—share his or her data with all or some of those people.

Users can also elect to have Google delete their accounts or set up an auto-response to all incoming messages once a user’s account becomes inactive.

To instruct Google on what you’d like the company to do with your Google accounts and the data in them after you’ve died, go to the Account Settings page of the Google platform that you use, scroll down to the Account Tools subheading, and click on Inactive Account Manager.

With Highly Anticipated Copyright Decision, The AutoHop Litigation Is Coming to a Close

Posted in Copyright

In 2012, DISH Network announced two novel product offerings that would result in considerable backlash from the four major broadcast television networks and set in motion a three-year, wide-ranging, multi-front battle with the networks. As the dust now begins to settle, the copyright litigation has resulted in important precedents that will help define the boundaries under the Copyright Act for the multi-channel programming distribution industry.

DISH Introduces PrimeTime Anytime and AutoHop

On Jan. 9, 2012, at the Consumer Electronics Show (CES) in Las Vegas, DISH unveiled its PrimeTime Anytime service. In connection with its two-terabyte Hopper DVR, PrimeTime Anytime allows DISH subscribers, with a few pushes of a button, to copy up to eight days of ABC, NBC, CBS and Fox primetime programs. Once initiated, the service continually makes copies of the primetime lineup going forward, with the last eight days available for the subscriber.

About four months later, on May 10, 2012, DISH introduced AutoHop, which works in conjunction with the PrimeTime Anytime service and allows subscribers, with the single push of a button, to replay those network programs without advertisements. Viewed as a serious threat to their advertising supported revenue model, the introduction of this ad-skipping technology pushed the major networks to take action.

On May 24, 2014, the networks launched litigations. In the Central District of California, Fox, NBC, and CBS, each in separate cases, filed copyright infringement complaints against DISH. See, Fox Broad. Co. v. Dish Network LLC, 2:12-cv-04529-DMG-SH (C.D. Cal.), NBC Studios LLC v. Dish Network Corp., 2:12-cv-04536-DMG-SH (C.D. Cal.), and CBS Broad. Inc. v. Dish Network Corp., 2:12-cv-04551-DMG-SH (C.D. Cal.). On the same day, DISH — apparently seeking the protection of the then more favorable Second Circuit authority, including Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008) (the “Cablevision decision”) — preemptively moved for declaratory judgments against ABC and the other networks in the Southern District of New York. See, Dish Network, L.L.C. v. Am. Broad. Cos., Inc., 1:12-cv-04155-LTS-KNF (S.D.N.Y.).

Ultimately, the cases proceeded on two tracks, with the Fox and NBC cases proceeding in California before the Honorable Dolly M. Gee, and the ABC and CBS cases proceeding in New York before the Honorable Laura Taylor Swain.

While the networks also pursued breach of contract claims arising out of their existing agreements with DISH, the focus here is on the core copyright claims. Counterparties like DISH and the networks will often agree to expand or limit their own rights under the Copyright Act depending on their own commercial interests, but the more lasting legacy of the AutoHop cases will be the copyright precedents they have established.

DISH Wins the Early Rounds In California

On Aug. 22, 2012, Fox made the first move and sought a preliminary injunction against DISH’s PrimeTime Anytime and AutoHop services. Fox suffered an early defeat. On Nov. 7, 2012, the district court denied Fox’s motion for preliminary injunction, finding that Fox had not established a likelihood of success on the merits of its claims with respect to those two services. Fox Broad. Co. v. Dish Network, L.L.C., 905 F. Supp. 2d 1088, 1111 (C.D. Cal. 2012)

First, with respect to the claims that DISH directly infringed Fox’s copyrights in offering the PrimeTime Anytime service, the district court held, relying on the Cablevision decision, that because the subscriber is the one who decides whether to initiate the PrimeTime Anytime service, the subscriber not DISH is the one who makes the copies. The district court also held that notwithstanding the extent of DISH’s control over which programs get recorded and the subscriber’s inability to stop a recording in progress, DISH is not “the most significant and important cause” of the copying.

Second, with respect to the claims that DISH was secondarily liable under the Copyright Act for the conduct of its subscribers, the district court held that to establish derivative copyright infringement, direct infringement by a third party must be established. The district court held that DISH subscribers’ conduct is no different than that of the consumers in the Supreme Court’s decision in Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417 (1984) (the ” Betamax” case), which involved copying programs to Betamax tapes with the ability to skip ads. Because the DISH subscribers would not be liable for direct copyright infringement, the district court held that DISH cannot be liable for secondary or derivative copyright infringement.

Fox immediately appealed the decision to the Ninth Circuit. Again, Fox lost. On July 24, 2013, the Ninth Circuit held that Fox did not demonstrate a likelihood of success on its copyright infringement claims regarding the PrimeTime Anytime and AutoHop services. Fox Broad. Co. v. Dish Network L.L.C., 747 F.3d 1060 (9th Cir. 2014) (as amended). The Ninth Circuit, citing the Cablevision decision with approval, held that Fox failed to demonstrate a likelihood of success on its direct copyright infringement claim regarding PrimeTime Anytime, because infringement would require DISH to cause the copying, but here, because DISH’s program creates the copy only in response to the subscriber’s command, the subscriber causes the copying. The Ninth Circuit further held that Fox was unlikely to succeed on its claim of secondary copyright infringement for the PrimeTime Anytime and AutoHop services. The court held that advertising skipping does not implicate Fox’s copyright interest, because Fox does not own the copyrights to the ads aired during commercial breaks. While Fox would later note that it in fact owns a copyright interest in ads promoting Fox programs, the district court would hold that the Ninth Circuit’s holding on the merits of Fox’s ad-skipping claims would have resulted in the same outcome.

Fox Expands Litigation Scope

DISH Anywhere and Hopper Transfers

On Feb. 21, 2013, during the appeal of the earlier preliminary injunction decision, Fox expanded the litigation by amending its complaint to include two additional DISH product offerings.

First, with respect to DISH’s second-generation Hopper set-top box, loaded with Hopper, Sling and DISH Anywhere, which allows subscribers to view broadcast signals over the Internet, Fox claimed that DISH publicly performs Fox’s copyrighted works by streaming them over the Internet and is secondarily liable for the conduct of its subscribers.

Second, with respect to a service called Hopper Transfers, which allows subscribers to copy programs saved on their Hopper DVRs to mobile devices, thereby enabling them to watch programs where they may not have Internet connectivity, Fox alleged that this service violated Fox’s exclusive right to reproduce the works and made DISH secondarily liable for the conduct of its subscribers.

As it had with respect to PrimeTime Anytime and AutoHop, Fox moved for a preliminary injunction on the DISH Anywhere and Hopper Transfers products. On Sept. 23, 2013, without reaching the question of whether Fox was likely to prevail on the merits of its claims, the district court again denied Fox’s preliminary injunction motion. The district court held that “[i]f a plaintiff fails to establish that a significant threat of irreparable harm exists, the Court need not reach the likelihood that he would be successful on the merits of his claims.” Fox Broad. Co., Inc. v. Dish Network, L.C.C., No. CV 12-04529 DMG (SHx), 2013 U.S. Dist. LEXIS 187499 (C.D. Cal. Sept. 23, 2013)

As before, Fox immediately appealed to the Ninth Circuit. Fox lost again. On July 14, 2014, the Ninth Circuit, in a summary six-paragraph order, affirmed the district court’s decision focusing on the failure to show irreparable harm without discussing the merits of Fox’s claims. Fox Broad. Co. v. Dish Network L.L.C., No. 13-56818, 2014 U.S. App. LEXIS 13348 (9th Cir. July 14, 2014).

DISH Also Prevails in the Early Rounds in NY

Separately, on Nov. 23, 2012, in its case pending in the Southern District of New York, ABC also moved for a preliminary injunction against DISH based on the PrimeTime Anytime and AutoHop features. ABC’s preliminary injunction motion met the same fate as Fox’s motion.

On Sept. 18, 2013, the district court denied ABC’s motion for a preliminary injunction. DISH Network, L.L.C. v. ABC, Inc. (In re AutoHop Litig.), No. 12 Civ. 4155 (LTS) (KNF), 2013 U.S. Dist. LEXIS 143492 (S.D.N.Y. Sept. 18, 2013). With respect to ABC’s direct infringement claim, the district court found that ABC had failed to demonstrate “likelihood of success on its direct copying cause of action because the evidentiary record indicates, and the Court finds, that the consumer makes the copy [such that there] is thus no factual basis upon which DISH could be found liable for direct infringement of ABC’s right of reproduction.” With respect to the secondary infringement claim, the district court found that DISH had “demonstrated that it is likely to succeed in carrying its burden of demonstrating that its subscribers’ time-shifting constitutes fair use [and that] ABC has failed to demonstrate that it is likely to succeed on the merits of its claim of secondary or vicarious infringement.”

ABC appealed the decision. While the Second Circuit heard oral argument on Feb. 20, 2014, the court never got the opportunity to decide the appeal.

ABC and CBS Settle With DISH

On March 3, 2014, ABC and DISH issued a press release announcing that the parties had reached a settlement of the dispute in connection with the renewal of the carriage agreement. Of critical importance to DISH, the agreement granted DISH the “rights to stream cleared linear and video-on-demand content from the ABC-owned broadcast stations, ABC Family, Disney Channel, ESPN and ESPN2, as part of an Internet delivered, IP-based multichannel offering.” Thus, the renewal agreement set the groundwork for DISH to be able to launch its Sling TV, which is a first of its kind over-the-top offering that includes ESPN sports programming. Of critical importance to ABC, DISH agreed to “disable AutoHop functionality for ABC content within the C3 ratings window.” Thus, DISH subscribers would now have to wait until three days had passed before they could play back primetime ABC programming while automatically skipping the advertisements.

Similarly, on Dec. 6, 2014, CBS and DISH issued a press release announcing a renewal of their carriage agreement and the settlement of the litigation. The parties announced that “[t]he agreement will result in dismissal of all pending litigation between the two companies, including disputes over PrimeTime Anytime and AutoHop [and that as] part of the accord, DISH’s AutoHop commercial-skipping functionality will not be available for CBS Television Network-owned stations and affiliates during the C7 window.” Thus, DISH subscribers would now have to wait until seven days had passed before they could play back primetime CBS programming while automatically skipping the advertisements.

The Fox Summary Judgment Decision

On Aug. 22, 2014, in the California action, Fox and DISH filed opposing motions for summary judgment on Fox’s copyright claims with respect to the AutoHop, PrimeTime Anytime, DISH Anywhere, and Hopper Transfers product offerings.

On Oct. 17, 2014, the district court, from the bench promising a written decision to follow, provided the parties with its tentative decision on the claims. With respect to each of the core product offerings, the district court noted that she was inclined to rule in favor of DISH.

On Jan. 12, 2015, the district court issued its written summary judgment decision under seal. Shortly thereafter, DISH and Fox filed a joint stipulation noting that the current Fox carriage agreement expires on Oct. 29, 2015, that “DISH has settled similar disputes with both ABC and CBS in the context of renewals of their respective … agreements,” and that the parties “believe it highly likely that the negotiation later this year of a renewal of their 2010 agreement will result in resolution of this lawsuit.” The parties proposed keeping the summary judgment order under seal during the stay, claiming that “unsealing the Order may impair the parties’ ability to reach a resolution of the case.”

Although it granted the stay motion, the district court denied Fox’s and DISH’s request to keep the summary judgment order under wraps. On Jan. 21, 2015, the district court unsealed its written summary judgment decision, which revealed a clean sweep for DISH on Fox’s copyright claims regarding the core product offerings, AutoHop, PrimeTime Anytime, DISH Anywhere, and Hopper Transfers.

In reaching the decision, the district court rejected the expansive reading of the Supreme Court’s decision in ABC, Inc. v. Aereo, Inc., 134 S. Ct. 2498 (2014) that Fox advocated. While Fox argued the Aereo decision was a “game-changer,” the district court disagreed, noting the Supreme Court’s “effort to cabin the potential overreach of its decision” and its express admonition that “its ‘limited holding’ should not be construed to ‘discourage or to control the emergence of use of different kinds of technologies.'” The district court found that Aereo should be limited to companies that engage in conduct like Aereo, stating that “Aereo’s holding that entities bearing an ‘overwhelming likeness’ to cable companies publicly perform within the meaning of the Transmit Clause does not extend” to DISH’s product offerings.

Contrary to Fox’s suggestion, the district court further expressly held that the volitional conduct doctrine survives the Aereo case. The district court held “[t]he volitional conduct doctrine is a significant and long-standing rule, adopted by all Courts of Appeal to have considered it, and it would be folly to presume that Aereo categorically jettisoned it by implication.”

What Lies Ahead

With CBS and ABC having already settled with DISH and a settlement with Fox likely to be completed before the expiration of the parties’ current carriage agreement in October 2015, NBC would then be left as the last remaining network with which DISH has not reached an accord.

In comparison to these other networks, NBC has not been active in the litigation. Pursuant to an Aug. 6, 2014 stipulation between the parties, the NBC action was stayed until a final judgment in the Fox action. To date, no action has been taken to lift the stay. In light of the March 2013 acquisition of NBC by Comcast, it is questionable whether NBC has the same interest in pressing copyright claims that, if successful, could limit the rights of a programming distributor like Comcast. Thus, one would imagine that DISH and NBC will likely also reach an accord.

If the recent summary judgment decision in the Fox action marks the end of the road for the litigation, these rulings with respect to ad-skipping, the automated wholesale copying of programming blocks, and place-shifting devices such as DISH Anywhere and Hopper Transfers, will likely provide greater license for distributors to offer these products to their subscribers and limit the copyright owners’ ability to prevent the distribution of their works through new distribution channels.


This article originally appeared in the Intellectual Property Strategist.

Twenty Years Down the Road: A Q&A With Paul Goldstein, Author of Copyright’s Highway

Posted in Copyright

More than two decades have passed since internationally recognized copyright law expert and award-winning novelist Professor Paul Goldstein of Stanford Law School (and Of Counsel to Morrison & Foerster) published his landmark book, Copyright’s Highway: From Gutenberg to the Celestial Jukebox—a wide-ranging and insightful (not to mention entertaining!) examination of the past, present and future of copyright law, from both a cultural and legal perspective. We sat down with Professor Goldstein to discuss how his predictions have fared over the last twenty years, and what his thoughts are on the future of copyright law.

Socially Aware: In writing Copyright’s Highway, at a time before the existence of Hulu and Spotify (and during which Amazon and Netflix delivered content solely by physical mail), you predicted with almost spooky accuracy our society’s transition from traditional content distribution models to the “celestial jukebox,” which you defined as a “technology-packed satellite” or earthbound web of “cable, fiber optics and telephone wires” providing on-demand access to “films, sound recordings and printed materials” alike. Looking back at your predictions, how do you think you did as a prognosticator? 

Prof. Goldstein: In broad outline, I think the book’s predictions were pretty accurate. I had help, though. Between 1972-1974, I had the opportunity to do some legal and policy work with a small Palo Alto company headed by a brilliant engineer and visionary, Paul Baran, that, among other projects, was consulting with the Defense Advanced Research Projects Agency on the divestment from government control, and introduction into the private sector, of something called the Arpanet­—which matured into what we know today as the Internet. As I said, it was a small company—Vint Cerf was one of the other two principals—but it had no problem with big ideas. My work and conversations with Paul, Vint and Ed Parker, the other principal, surely informed what I wrote in Copyright’s Highway.

Socially Aware: Are there content delivery developments today that you hadn’t anticipated in Copyright’s Highway? Have you been surprised at how rapidly that transition has occurred?

Prof. Goldstein: The delivery (and implicitly the production) model I had in mind was that the traditional suppliers of entertainment and information—film studios, record labels, book publishers—would continue to supply content through this new, speedy and highly individuated channel, but would be joined as suppliers by individual creators—writers, musicians, even filmmakers—taking advantage of the new economies of digital production and delivery to bypass these more traditional institutions. I thought that would happen sooner than it did, and I also hadn’t a clue about the emergence of such low-creativity adventures as file-sharing and YouTube.

Socially Aware: You also anticipated in Copyright’s Highway the key issue raised in 2014’s most closely followed U.S. copyright case, American Broadcasting Companies, Inc. v. Aereo, Inc.:  “[W]ill courts call it a public performance when a copyrighted work is not broadcast simultaneously to a large public but rather is transmitted to subscribers by the celestial jukebox, one performance at a time, on demand?” In its opinion last summer, the Supreme Court answered in the affirmative (at least with respect to the particular transmission methods employed by Aereo). What was your reaction to the Aereo decision?

Prof. Goldstein: My first reaction to Aereo was relief that the Court got the law right. The second was surprise that the majority opinion was authored by Stephen Breyer who, from his 1970 tenure article in the Harvard Law Review, “The Uneasy Case for Copyright,” on through his first sale opinion in the Kirtsaeng case the previous term, has been no fan of a robust copyright system. Someone who does support a robust copyright system might be disappointed with the extent to which the majority opinion tethered the Aereo system to the analogue of more traditional cable systems (a tactic presumably dictated by the need to assemble a majority), but on the crucial question of what the 1976 Act means by “public performance” in the context of transmissions, the majority opinion got the answer as demonstrably right as the Second Circuit got it demonstrably wrong in the decision below and in the Cablevision case.

Socially Aware: Aereo supporters have predicted doom and gloom for the celestial jukebox and other innovative cloud solutions in the wake of the Supreme Court’s ruling, despite the Supreme Court’s efforts in its decision to limit the impact to Aereo’s specific business model. Given your Nostradamus-like track record, we’re interested in your predictions regarding the short-term and long-term effect of the Aereo decision—any thoughts?

Prof. Goldstein: The short term is pretty much past by now and, on the ground, I think that we have seen no great threat to innovations in the cloud emerging as a consequence of Aereo. Longer term, I believe that a factual distinction between the Cablevision and Aereo systems—that in the former there was an occasion for license negotiations between the transmission provider and the content supplier, and in the latter there was not—will take on added legal salience. The point, not lost on the Court, is that if program suppliers want to capture the value of such functionalities as remote DVR, they can put this on the table when they negotiate their next license agreement with cable companies. The Aereo model provided no such occasion for contract negotiations. This is, however, only a factual distinction between the two cases, and not an endorsement of Cablevision, which got the law so painfully wrong.

Socially Aware: In Copyright’s Highway, you explored issues raised by private copying, including efforts by courts over the years to define the line between “public” and “private” copying. Congress has previously responded to concerns regarding private copying in the context of library photocopying (through Section 108 of the Copyright Act) and home audiotapes (through the Audio Home Recording Act). Any thoughts today as to how the public vs. private issue may play out going forward?

Prof. Goldstein: Looking forward, there is no more important battleground for copyright than the private-public distinction. Private copying, although it undermined licensing possibilities for film studios (Betamax) and publishers (Williams & Wilkins), never threatened the very existence of these sources of creativity, for alternative markets (theatrical, free TV, pay TV, cable, in the case of film; library and individual subscriptions in the case of print) existed side-by-side with these free uses. By contrast, to treat public performances of streamed films and music as “private,” as Cablevision misconstrued the 1976 Act to do, or to propose that the Act be amended to exonerate all private uses from copyright control, as one self-appointed American public policy initiative proposed, would cut the economic heart out of copyright industries for which, in the age of the celestial jukebox, private uses will be the only markets, as other, less convenient markets grow smaller by orders of magnitude.

Socially Aware: In your book, you discuss the impact the photocopier had on notions of copyright in the 1960s and 1970s through the lens of Williams & Wilkins Co. v. United States. And, of course, the Sony Betamax was another disruptive technology that helped to shape today’s copyright laws. The common wisdom in Silicon Valley and elsewhere is that copyright law must make accommodations for cutting-edge technologies—that, as a society, we simply can’t allow laws adopted in the analog era to prevent technological innovation and progress. Yet, with Aereo, we’ve seen a promising, potentially game-changing technology stopped dead in its tracks due to copyright law. What’s the interplay between new technologies and copyright law? Should new technologies receive some benefit of the doubt when they don’t appear to fit nicely into our decades-old copyright regime? Or should we wait for Congress to intervene?

Prof. Goldstein: In the current political environment, waiting for Congress to act is like waiting for Godot, so let’s put that possibility aside. And certain—but far from all—voices in Silicon Valley are correct in how they frame the proposition that copyright law ought to be designed to accommodate new technologies. But, that said, it would be a serious mistake for policy makers (and I include the courts) to reflexively reach for a new exemption or an expanded fair use any time copyright appears to stand in the way of the roll out of some new technology. It would be a mistake because the characteristic impediment in all of these cases is not copyright, but the transaction costs associated with securing licenses under copyright. The proper target, then, is not copyright, but transaction costs, and digital facilities, including the Internet, offer dramatic possibilities for reducing these transaction costs to close to zero. Today’s Congress, faced with the picture that confronted Congress a century ago, of musical performances in hundreds of thousands of restaurants, saloons and dance halls, all beyond the reach of individual composers or publishers to control, would probably carve out an exemption for these uses, citing transaction costs as an impediment to licenses, and the occasion would never have arisen for Victor Herbert and his fellow composers and music publishers to form ASCAP to engineer  a means for reducing  the transaction costs connected to licensing these performances. (Congressional stalemate does have certain benefits!)

Socially Aware: In your book, you discuss the impact the celestial jukebox might have on the traditional filtering or screening role played by book publishers and motion picture and record producers—allowing artists of all disciplines to directly access the public at little or no cost over the Internet, bypassing these types of traditional intermediaries. And, once again, since the publication of the book, we’ve seen the creation of new channels pursuant to which content creators can directly connect with their audience. Is there still a role for traditional content intermediaries? Have you seen signs that such intermediaries are adapting to this change?

Prof. Goldstein: It’s still too early, I think, to forecast how the individual-intermediary tradeoff is going to shake out. In terms of quantity, the Web has certainly enabled a vast outpouring of self-published novels; in terms of quality . . . well, Fifty Shades of Grey was originally self-published. The same can be said for music. I would keep my eye on the still primitive technologies of recommendation engines if I wanted to speculate on the ultimate role of print and music publishers in screening works for consumers. The large publishers, at least, don’t do a particularly good job of it at present, and I can imagine that between developments in artificial intelligence and the spread and increasing sophistication of social networks, we are one day going to see the technologies of the Web overtake the craft of publishers and record labels in targeting new works at receptive audiences.

Socially Aware: There’s talk out there about the need for an extensive overhaul of the U.S. Copyright Act to ensure its relevance to the digital age. Do you see such an update to the law happening any time soon? What are some of the issues that you think should be addressed in connection with any such update?

Prof. Goldstein: Some years ago I gave a talk entitled “Copyright on a Clean Slate” suggesting what a copyright law might look like if it took into account only the contemporary conditions surrounding the production and use of copyrighted works, and if it was unencumbered either by history or by the special pleadings of industry groups. That law, which of course would never be enacted, would be no more than four pages long—about the length of the first U.S. Copyright Act in 1790—and would possess the immense virtue of being immediately apprehensible by the lay user of copyrighted works. Short of that, I do hope that Congress gets around to dealing with the question of orphan works, even if only in laying the framework for the private sector to develop mechanisms for clearing rights, and also—this was the subject of hearings just last week—providing the Copyright Office with the budget and the technological independence that it needs to execute its mandate well.

Socially Aware: Professor Goldstein, thank you for sharing your thoughts with us! (We note that, of course, all views expressed by Professor Goldstein are his own, and not to be attributed to Socially Aware, Morrison & Foerster, its clients or others.) For our readers, if you haven’t had the pleasure of reading Copyright’s Highway, check it out here.