In January 2010, freelance photographer Daniel Morel uploaded to his TwitPic account a number of photos he took in Haiti in the immediate aftermath of the earthquake. An individual named Lisandro Suero took those photos from Morel’s Twitter account, reposted them to his own Twitter account, and tweeted that he had exclusive photos of the earthquake. AFP got the photos from Suero’s Twitter page, attributed the photos to Suero, and began distributing them to users of its wire and databank services. Getty Images (“Getty”) received the photos through AFP’s wire service. The Post received the photos from Getty. Getty and the Post published the photos on their websites, with captions that attributed them to Suero.

When Morel’s exclusive agent found out that AFP, Getty and the Post were using his photos, his agent complained. While at least some efforts were made by AFP, Getty and the Post to address Morel’s agent’s complaint, those efforts in most respects fell far short of what is required under the law.

In March 2010, AFP sought a declaratory judgment that it did not infringe Morel’s copyrights, and Morel counterclaimed for copyright infringement against AFP, Getty and the Post. During the course of the case, Morel moved for summary judgment on his copyright infringement counterclaim. In response, the defendants argued that pursuant to the Twitter Terms of Service (TOS), Morel provided them a license to use the photos by his very act of tweeting the photos.

Judge Nathan disagreed. Judge Nathan found that the Twitter TOS provides that users generally retain their rights to the content they post—with the exception of the license granted to Twitter and its partners. Twitter’s “Guidelines for Third Party Use of Tweets in Broadcast or Other Offline Media” further underscored that, while the Twitter TOS permit users to retweet posts, the Twitter TOS was not intended to let the “world-at-large” remove content from Twitter and commercially distribute it. Rebroadcasting tweets in their entirety is now a news program staple and actively encouraged by Twitter. Twitter’s TOS, however, do not permit media outlets to rip copyrighted material out of tweets and use it for some other purpose. Because AFP and the Post put forward no defense other than their license defense, Judge Nathan granted Morel’s motion for summary judgment and found them both liable for copyright infringement.

Unlike AFP and the Post, Getty argued that it was entitled to the benefit of the safe-harbor provisions of the Digital Millennium Copyright Act (DMCA) that protect service providers from liability for copyright infringement. Judge Nathan held, however, that genuine issues of fact existed as to whether Getty could take advantage of the DMCA safe harbor, noting that companies like Getty that are in the business of selling copyrighted material may not be shielded from copyright liability under the DMCA’s safe harbor. Thus, it remains to be seen whether Getty will also be found liable for copyright infringement.

In one bright spot for AFP and Getty, Judge Nathan granted summary judgment in their favor on the proper method for calculating statutory damages under the Copyright Act, which can result in awards of up to $150,000 per work infringed. Morel claimed that he was entitled to a statutory damage award “in the tens or hundreds of millions of dollars” against AFP and Getty. Morel argued that, because AFP and Getty distributed the photos to many of their subscribers, each downstream infringement by one of their subscribers would entitle him to an additional statutory damages award. Judge Nathan disagreed and held that any award of statutory damages against AFP and Getty could not be multiplied based on the number of infringers with whom they may be jointly and severally liable.

This decision clarifies that Twitter users do not lose ownership rights to their content by posting it to Twitter. Although you may have the right to retweet or publish tweets in their entirety, you don’t have the right to take someone else’s content and use it for commercial gain.

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In John Wiley & Sons Inc. v. Does Nos. 1-35, the plaintiff (Wiley), a publisher of books and journal articles, alleged that unidentified “John Does” used BitTorrent to illegally copy and distribute Wiley’s copyrighted works and infringe on Wiley’s trademarks. Wiley sued 35 defendants known only by their “John Doe Numbers” and Internet Protocol (IP) addresses. Seeking to identify the Does, Wiley moved for court-issued subpoenas to be served on various Internet service providers (ISPs), ordering them to supply identifying information corresponding to the Does’ IP addresses. In an attempt to maintain her anonymity and avoid liability, one of the 35 Does, then known only as John Doe No. 25 (“Doe 25”) or IP Address 74.68.143.193, moved to quash a subpoena served on her ISP, Time Warner Cable.

Wiley reflects a new wave of litigation in which copyright holders have shifted from suing host sites to focusing on individual users of P2P networks. The mere fact that copyrighted material is downloaded from a particular IP address may be insufficient to prove that the P2P network user is the infringer. An IP address typically provides only the location at which one of any number of devices may be used by any number of individuals (in fact, Doe No. 25 contended that her ex-husband, not she, downloaded the infringing works). If a motion to quash is granted, the account holder’s identity is not revealed, and the claim is effectively dead.

In considering whether to grant an anonymous account holder’s motion to quash a subpoena, courts balance the user’s First Amendment right to act anonymously with the plaintiff’s right to pursue its claims.

Anonymous users can rely on a line of precedent that extends the First Amendment’s protections to online expression. And under Rule 45 of the Federal Rules of Civil Procedure, a court must quash a subpoena if it requires disclosure of protected matter. Thus, to the extent that anonymity is protected by the First Amendment, courts will quash subpoenas designed to breach anonymity.

On the other hand, plaintiffs pursuing their claims can point to precedent holding that the First Amendment may not be used to encroach upon the intellectual property rights of others.

To balance these competing principles and determine whether certain actions trigger First Amendment protection, courts weigh the five factors set out in Sony Music Entertainment Inc. v. Does 1-40:

• whether the plaintiff has made a concrete showing of actionable harm;
• the specificity of the discovery request;
• the absence of alternative means by which to obtain the subpoenaed information;
• a central need for the data; and
• the party’s expectation of privacy.

In Wiley, each of these five factors weighed in favor of disclosure of the defendant’s identity. Wiley pled a sufficiently specific claim of copyright infringement, and, without a subpoena, Wiley would have no other effective way to identify potential infringers of Wiley’s intellectual property rights.

At least five other courts within the SDNY have denied motions to quash in similar litigations involving defendants accused of infringing Wiley’s copyrights via BitTorrent. Going forward, so long as copyright holders can satisfy the Sony five-factor test, they will be able to rely on cases like Wiley to ferret out copyright infringers.

As we have discussed previously (see here and here), Section 230 states that “[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” The Section 230 safe harbor immunizes websites from liability for content created by users, as long as the website did not “materially contribute” to the development or creation of the content. An important limitation on this safe harbor, however, is that it shall not “be construed to limit or expand any law pertaining to intellectual property.”

In the CYBERsitter case, plaintiff CYBERsitter, which sells an Internet content-filtering program, sued Google for selling and displaying advertisements incorporating the CYBERsitter trademark to ContentWatch, one of CYBERsitter’s competitors. CYBERsitter’s complaint alleged that Google had violated numerous federal and California laws by, first, selling the right to use CYBERsitter’s trademark to ContentWatch and, second, permitting and encouraging ContentWatch to use the CYBERsitter mark in Google’s AdWords advertising. Specifically, CYBERsitter’s complaint included the following claims: Trademark infringement, contributory trademark infringement, false advertising, unfair competition and unjust enrichment.

Google filed a motion to dismiss, arguing that Section 230 of the CDA shielded it from liability for CYBERsitter’s state law claims. The court agreed with Google for the state law claims of trademark infringement, contributory trademark infringement, unfair competition and unjust enrichment, but only to the extent that these claims sought to hold Google liable for the infringing content of the advertisements. The court, however, did not discuss the apparent inapplicability of the Section 230 safe harbor to trademark claims. As noted above, Section 230 does not apply to intellectual property claims and, despite the fact that trademarks are a form of intellectual property, the court applied Section 230 without further note. This is because the Ninth Circuit has held that the term “intellectual property” in Section 230 of the CDA refers to federal intellectual property law and therefore state intellectual property law claims are not excluded from the safe harbor. The Ninth Circuit, however, appears to be an outlier with this interpretation; decisions from other circuit courts suggest disagreement with the Ninth Circuit’s approach, and district courts outside the Ninth Circuit have not followed the Ninth Circuit’s lead.

Google was not let off the hook entirely with regard to the plaintiff’s state trademark law claims. In dismissing the trademark infringement and contributory trademark infringement claims, the court distinguished between Google’s liability for the content of the advertisements and its liability for its potentially tortious conduct unrelated to the content of the advertisements. The court refused to dismiss these claims to the extent they sought to hold Google liable for selling to third parties the right to use CYBERsitter’s trademark, and for encouraging and facilitating third parties to use CYBERsitter’s trademark, without CYBERsitter’s authorization. Because such action by Google has nothing to do with the online content of the advertisements, the court held that Section 230 is inapplicable.

The court also found that CYBERsitter’s false advertising claim was not barred by Section 230 because Google may have “materially contributed” to the content of the advertisements and, therefore, under Section 230 would have been an “information content provider” and not immune from liability. Prof. Eric Goldman, who blogs frequently on CDA-related matters, has pointed out an apparent inconsistency in the CYBERsitter court’s reasoning, noting that Google did not materially contribute to the content of the advertisements for the purposes of the trademark infringement, contributory infringement, unfair competition and unjust enrichment claims, but that Google might have done so for the purposes of the false advertising claim.

CYBERsitter highlights at least two key points for website operators, bloggers, and other providers of interactive computer services. First, at least in the Ninth Circuit, but not necessarily in other circuits, the Section 230 safe harbor provides protection from state intellectual property law claims with regard to user-generated content. Second, to be protected under the Section 230 safe harbor, the service provider must not have created the content and it must not have materially contributed to such content’s creation.

After CafePress refused to remove user designs incorporating the phrase, BTR filed a complaint for, among other things, trademark infringement. Following discovery, CafePress filed a motion for summary judgment, arguing that the “Born to Rock” designs were not used in commerce (an element of trademark infringement) and that, even if they were, CafePress’s use was “fair use”—i.e., a descriptive or ornamental use of the phrase “Born to Rock” in a non-trademark sense.  The court struck down the first argument outright, stating that CafePress was being “facetious” in arguing that it did not use the mark in commerce given that CafePress actually imprints the designs on merchandise and ships that merchandise to customers. In considering the fair use argument, the court acknowledged that certain uses of the “Born to Rock” designs may constitute non-trademark fair use (e.g. “Born to Ride / Born to Rock”), but concluded that CafePress could not rely on fair use as a blanket defense for all of the designs.

Legal scholar Eric Goldman has pointed out that CafePress can raise other, stronger arguments in the future, including that the trademark is invalid and that consumers were not likely to be confused by CafePress’s use of the mark. Nonetheless, the district court’s denial of summary judgment does send a message to trademark holders: you can sue online service providers for trademark infringement based on user-generated content and you just might win.  The Digital Millennium Copyright Act (DMCA) creates a safe harbor for online service providers who promptly remove user-generated copyright-infringing content after receiving takedown notices, but there is no equivalent safe harbor for content that infringes trademarks (although chillingeffects.org, a website devoted to the DMCA, does note that “in the absence of any caselaw on the subject, should a trademark holder bring a claim for contributory infringement, an [online service provider] might be able to mount a valid defense by analogy to [DMCA] section 512(c).”).

Social media sites in particular may be easy targets for trademark claims based on user-generated content. Such sites often host “community pages” that serve as fan pages for brands without any authorization from the companies involved (for example, compare this official Facebook page established by a trademark holder with this community page run by a fan). In the wake of the case against CafePress, social media sites and other websites that host user-generated content should be aware of these trademark-related risks and the fact that the DMCA safe harbors do not apply to trademark claims.

Burberry approached social media with an innovative concept: “historical timelines” on its various social media pages, including Facebook, Twitter, and Instagram. These timelines featured photos of celebrities wearing Burberry’s iconic trench coats, scarves, and other products. Among Burberry’s chosen photos was a shot of Humphrey Bogart from the final scene of Casablanca, in which Bogart’s Rick, clad in a timeless Burberry trench, sends Ingrid Bergman’s Ilsa off to Brazzaville. While Burberry acquired permission to use the photo from photo agency Corbis, which manages the rights to various stock photos from Casablanca, Burberry failed to clear its use with Bogart LLC, which owns the actor’s publicity rights. Applicable law allows a celebrity to object to use of his or her name or likeness in a commercial context, particularly if the use is likely to cause members of the intended market to believe that the celebrity endorses the product. Bogart LLC alleged that Burberry’s use of the photo falsely implied that Bogart had endorsed the brand, thereby violating Bogart LLC’s publicity rights. Burberry countered, arguing that its timelines constituted “a historical positioning of the image within an educational project along with numerous other photographs of people wearing Burberry apparel over the last century.”

Although Burberry and Bogart LLC settled their pending state and federal cases for an undisclosed amount, this case provides a good example of the unexpected issues that can arise when brand managers fail to consider the full spectrum of rights that may be implicated by the use of photographs and other content. While the content industries have spent the last decade educating the public on copyright law’s effects in the digital media world, less attention has been paid to other areas of potential liability, such as trademark infringement and privacy and publicity rights violations, and their respective effects on the social media experience.

For example, in 2007, Virgin Mobile Australia (VMA) launched an advertising campaign using amateur photography culled from the social photo-sharing site, Flickr. The photos used by VMA were licensed under a Creative Commons “Attribution” license, which requires only that the original creator—that is, the copyright holder—be given credit. VMA chose for its campaign a photo of then-15-year-old Alison Chang, taken by her church youth counselor and uploaded by him to Flickr. Although VMA had appropriate copyright clearance to use the counselor’s picture under the Creative Commons license, Chang’s parents sued VMA for failing to get permission from Chang or her parents to use Chang’s name or likeness. Although the case was dismissed on procedural grounds, the incident illustrates how easily (and often) clearance procedures are overlooked when it comes to Internet-based content.

Similar cases have raised complex issues relating to federal preemption of state law claims. For example, in Laws v. Sony Music Entertainment, Inc., the plaintiff sued Jennifer Lopez and LL Cool J, alleging misappropriation of her name and voice through use of a sound recording on which the plaintiff’s voice was featured. The defendants had obtained a license to use the sound recording on which the plaintiff’s voice was featured, but had not obtained from the plaintiff the right to use her voice. Nonetheless, the Ninth Circuit held that, on this set of facts, the federal Copyright Act preempted the plaintiff’s state law right-of-publicity claim. Thus, her permission was not required for the defendants to use the validly licensed sound recording. By contrast, a different Ninth Circuit panel in Downing v. Abercrombie & Fitch, Inc., held that the Copyright Act did not preempt the plaintiffs’ state law publicity claims based on Abercrombie’s advertising use of a photo of the plaintiffs taken after the 1965 Makaha International Surf Championship in Hawaii. Thus, Abercrombie should have sought the plaintiffs’ permission in the first instance. The preemption inquiry is fact-bound—the Copyright Act preempts state law publicity claims in some circumstances, but not others.

While the details of these preemption cases exceed the scope of this article, suffice it to say that a company’s social media marketing personnel may not have the expertise to wade through such complex clearance issues. A clearance system that focuses narrowly on copyright issues and doesn’t consider other forms of intellectual property may therefore result in unexpected claims. It is also worth noting that the safe harbors provided by the Digital Millennium Copyright Act apply only to copyright claims, not other types of claims such as those mentioned above, and in any event, provide protection only with respect to user-generated content, not content posted by a company’s own employees. Therefore, companies should not assume that the DMCA will shield them from all liability for content posted on their social media pages.

Social media is an exciting new channel for reaching both current and prospective customers. But from a rights-clearance perspective, the old rules largely remain in force. Accordingly, companies’ review procedures for company-driven social media content should, to the extent possible, mirror the process they undertake for print ads and other traditional media. And where that may not be feasible (given the speed and flexibility often required on social media platforms), companies should institute rigorous policies and train marketing associates on how to avoid potential liability.

And Twitter is no exception.  When you sign up for a Twitter account, “By clicking the button, you agree to the terms below.”  And although Twitter’s core Terms of Service are a bit shorter than Facebook’s Statement of Rights and Responsibilities, Twitter’s terms similarly link and branch off to a variety of policies, guidelines, and related documents, all of which govern your use of the service.

At the top of Twitter’s hierarchy of terms and conditions are the Twitter Terms of Service.  Those Terms of Service incorporate two documents by reference:  (1) Twitter’s Privacy Policy, which notes that use of Twitter’s services constitutes consent to the collection, transfer, manipulation, storage, disclosure, and other uses of information described in such policy and (2) the Twitter Rules, which describe how end-users should and should not use Twitter, and impose a variety of rules regarding content, spam, and abuse.  But the Terms of Service also link to Twitter’s Developer Rules of the Road (described by Twitter as “an evolving set of rules for how ecosystem partners can interact with your content”), which govern the use of Twitter’s application programming interface (API) and, more generally, Twitter’s philosophy around how information and content shared on Twitter can and cannot be used.

Given the complexity of Twitter’s ecosystem, the Developer Rules of the Road branch off to and incorporate a variety of other policies and guidelines, including the service’s Display Guidelines, (which describe how Tweets must be displayed), rules on trademark usage, automation rules, spam rules (which actually loop back to the end-user-focused Twitter Rules), and various other documents.  A complete list of Twitter’s terms, conditions, rules, guidelines, and best practices can be found here — there are 36 documents in total.

Below, we describe a few key terms from Twitter’s various written policies.  These terms are not necessarily uncommon for Internet-based services — particularly services that are free to use — but they’re worth keeping in mind:

Key Term for End-Users — Broad License to User Content.  Foremost for many end-users of social media services, is the license being granted to such services in users’ posted content — and end-users grant Twitter a typically broad license.  By posting photos or other content on Twitter, end-users grant Twitter the right to “use, copy, reproduce, process, adapt, modify, publish, transmit, display and distribute” such content in any manner now known or later developed.  The Terms of Service also expressly provide that such license “includes the right for Twitter to make [such content] available to other companies, organizations or individuals who partner with Twitter” for the purpose of distributing such content on other media and services.  True, given that Tweets are publicly available by their nature (assuming a public account), one would expect a broad license grant.  But the grant to Twitter gives Twitter the right to use Tweets for purposes other than simply operating the Twitter service, and the right to distribute those Tweets in ways that may not have even existed when the Tweets were originally posted.  Although the broad license grant does apply to “protected” Tweets (i.e., Tweets that are not publicly viewable) and public Tweets alike, Twitter does state  that protected Tweets will not appear in Twitter or Google searches, meaning that, as a practical matter, a user’s privacy settings should be useful in controlling how widely Twitter may disseminate the user’s Tweets.

Key Terms for Developers — API Terms.  Foremost for many developers who leverage social media services, are the services’ rules for accessing their platforms and APIs.  According to Twitter’s Terms of Service, unless otherwise permitted through Twitter’s services or terms, users are required to use the Twitter API  in order to “reproduce, modify, create derivative works, distribute, sell, transfer, publicly display, publicly perform, transmit, or otherwise use” Twitter’s content or services.  In light of this, it is important for developers who leverage Twitter in their own apps and services to carefully review the terms and conditions governing Twitter’s API.  Those terms and conditions are sprinkled throughout Twitter’s policies, including the Developer Rules of the Road (changes to which are archived at Twitter’s API Terms of Service Archive) and Twitter’s Rate Limiting page, which addresses the number of “calls” that can be made to various Twitter APIs and services over time.  Of course, all of Twitter’s API restrictions are in addition to, and not in lieu of, those found in the site’s Terms of Service and elsewhere — per the Developer Rules of the Road, use of the API and Twitter content “are subject to certain limitations on access, calls, and use as set forth in the [rules], on dev.twitter.com, or as otherwise provided to you by Twitter.”  Perhaps most importantly, Twitter retains the right to block use of the API and Twitter’s content if Twitter believes that a user has attempted to circumvent or exceed any limitations imposed by Twitter, and Twitter disclaims any liability for resulting costs or damages.

Key Terms for Everyone — Modifications to Twitter’s Terms and Services.  Twitter reserves the right to unilaterally modify its Terms of Service and the form and nature of its services at any time.  If Twitter determines in its sole discretion that changes to its Terms of Service are material, Twitter promises to notify users via a Twitter update or by email; nevertheless, as with changes to most websites’ terms of use, a user’s continued use of Twitter following such changes constitutes the user’s agreement to the modified terms.  It is important to keep in mind that changes in a social media site’s services or terms of use — even seemingly tiny changes in the way a social media profile appears to end-users, or in what flavors of activities are or are not permitted on the site — can wreak havoc on a company’s costly social media strategy.  Conveniently, Twitter provides an archive of previous versions of its Terms of Service, which can help users spot changes over time more easily. 

Our message to end-users and developers alike remains what it was back in 2010:  be sure to carefully review social media services’ terms and conditions so that you know what you’re getting into, particularly when you will be investing money or time in using a service for your business or building an app or site that relies on the service’s content or functionality.

October 15, 2010 was Kravitz’s last day at PhoneDog, an “interactive mobile news and reviews web resource.” After about four and a half years of providing product review and video blogging services for PhoneDog, Kravitz moved on to work at a competing website called TechnoBuffalo. While at PhoneDog, Kravitz used the Twitter account @PhoneDog_Noah to publish content related to mobile products and services. During the course of Kravitz’s employment at PhoneDog, the @PhoneDog_Noah account accumulated approximately 17,000 Twitter followers.

After Kravitz ended his employment with PhoneDog, the company requested that he relinquish use of the Twitter account. Instead, Kravitz kept the account and changed the account handle to “@noahkravitz.” Kravitz’s farewell post, published on the PhoneDog website days after Kravitz left the company, told PhoneDog website visitors that they could continue to follow Kravitz using the new @noahkravitz handle. As of February 2012, the @noahkravitz Twitter account more than 26,900 Twitter followers.

PhoneDog proceeded to file a complaint against Kravitz in the United States District Court for the Northern District of California that asserted a number of claims, including trade secret misappropriation, conversion, and intentional and negligent interference with economic advantage. Kravitz filed a motion to dismiss PhoneDog’s complaint based on, among other things, the argument that PhoneDog could not establish that it had suffered damages over the $75,000 jurisdictional threshold.

The jurisdictional amount-in-controversy issue raises interesting questions regarding the ownership and proper valuation of a Twitter account and its followers. PhoneDog asserted that Kravitz’s continued use of the @noahkravitz Twitter account resulted in at least $340,000 in damages to the company, using a calculation based on the total number of followers, the time during which Kravitz had controlled the account, and a purported industry standard value of $2.50 per follower. Kravitz disputed PhoneDog’s calculations and argued that any value attributed to the account came from his efforts in posting tweets and the followers’ interest in him, not from the account itself. Kravitz also argued that, to the extent a value can be placed on a Twitter account, it cannot be determined simply by multiplying the number of followers by $2.50, but rather requires consideration of a number of factors, such as: (1) the number of followers, (2) the number of tweets, (3) the content of the tweets, (4) the person publishing the tweets, and (5) the person placing the value on the account.

Kravitz also disputed whether PhoneDog had any ownership interest in the Twitter account or its followers at all. Kravitz argued that Twitter’s terms of service state that all Twitter accounts belong to Twitter, not to Twitter users such as PhoneDog. Kravitz also asserted that Twitter followers are “human beings who have the discretion to subscribe and/or unsubscribe” to the account and are not PhoneDog’s property. Finally, Kravitz argued that “[t]o date, the industry precedent has been that absent an agreement prohibiting any employee from doing so, after an employee leaves an employer, they are free to change their Twitter handle.”

For its part, PhoneDog claimed that it had an ownership interest in the @noahkravitz Twitter account based on the license granted to it by Twitter to use and access the account, and in the content posted to the account. PhoneDog also argued that it had an “intangible property interest” in the Twitter account’s list of followers, which PhoneDog compared to a business customer list. Finally, PhoneDog asserted that, regardless of any ownership interest in the account, it was entitled to damages based on Kravitz’s interference with PhoneDog’s access to and use of the account, which (among other things) affected PhoneDog’s economic relations with its advertisers.

The court determined that the amount-in-controversy issue was intertwined with the factual and legal issues raised by PhoneDog’s claims and, therefore, could not be resolved at the motion-to-dismiss stage. Accordingly, the court denied without prejudice Kravitz’s motion to dismiss for lack of subject matter jurisdiction. The court also denied Kravitz’s motion to dismiss PhoneDog’s trade secret and conversion claims, but granted Kravitz’s motion to dismiss PhoneDog’s interference with prospective economic advantage claims.

While we wait to learn the final disposition of the @noahkravitz Twitter account, employers should consider explicitly addressing ownership of company-related social media accounts in their agreements with their employees and independent contractors, including providing for transfer of control (including passwords) of such accounts to the company at the end of the employment or independent contractor relationship. In addition, if a social media account is intended to constitute the employer’s property, the account name or handle should refer only to the company and should not include the employee’s name.

Watch for an explosion of employment law disputes involving social media in 2012.  It’s coming.  Get ready. You heard it here first.

We’re going out on a limb here, but we believe that the Second Circuit may reverse and remand the lower court’s decision in the widely-followed Viacom v. YouTube litigation, potentially creating turbulence for online companies that rely on user-generated content to attract traffic and boost revenues.  Although the case raises some of the most important copyright issues of the digital era, the lower court’s decision, favoring YouTube, did not dig into the details and nuances of the parties’ respective arguments, and our sense is that the Second Circuit may ultimately reverse that decision and send the case back to the lower court for further proceedings.

With the rise of social media platforms, we are seeing more and more companies — even Fortune 500 companies — entering into extremely one-sided “clickwrap” agreements with platform providers. Although clickwrap agreements are generally enforceable under U.S. law, we expect to see more challenges on public policy and other grounds to particular provisions in these agreements.

Speaking of clickwraps, we often comment on how social media platforms’ terms of service (TOS) are typically long and intricate, branching off into various rules, policies, guidelines and “best practices” that change over time (and not necessarily all at the same time!).  As business users invest more and more time and money in creating and cultivating their social media presences, and as consumers increasingly turn to social media as the way to interact with their favorite brands, we anticipate a resurgence of interest in what these TOS say… not just what they say today, but what they said last week, last month and last year.  We foresee more services adopting Twitter’s practice of maintaining an archive of earlier TOS versions, and perhaps even the institution of a well-stocked third-party clearinghouse, along the lines of TOSback.org, dedicated to tracking social media TOS changes over time. 

Even with Facebook’s recent settlement with the FTC in connection with Facebook’s data collection practices, we anticipate still further privacy law headaches for social media companies in the coming year.  Global privacy laws get tougher and more burdensome each year, and yet many social media providers, anxious to justify astronomical valuations, are undoubtedly feeling pressure to make more aggressive use of the personal information that they have collected from their customers.  Watch for the first skirmishes in 2012 to be initiated by European regulators. 

Online behavioral advertising is a subject that attracts strong bipartisan opposition, even in the current bitterly divided Congress.  Watch for 2011’s call for greater regulation of OBA to grow louder over the coming year, resulting in new legislation or regulations.

We will see even the largest, most conservative Fortune 500 companies adopting internal, company-wide social media platforms of the type offered by Jive, NewsGator and SocialText.  And, in 2013 and beyond, we’ll be seeing a new generation of privacy, employment, defamation and other legal claims arising out of these enterprise social platforms.

We will likely continue to see courts struggle with the limits of the safe harbors provided by Section 230 of the Communications Decency Act.  Ever since the landmark 1997 case Zeran v. America Online, courts have fairly consistently held that Section 230 provides online service providers broad immunity for defamatory or otherwise actionable information posted by users.  But we have also seen courts occasionally impose some limits on the scope of Section 230 — e.g., in the 2008 case Fair Housing Council v. Roommates.com and the more recent Hill v. StubHub case.  And other courts, such as the California Supreme Court in Barrett v. Rosenthal, have expressed discomfort with the broad sweep of Section 230 even while upholding it.  Watch for more Section 230 cases in 2012 as courts continue to explore the outer boundaries of this critically important but controversial statute. 

You don’t need a crystal ball to see that mobile apps will continue to generate much of the growth in social network use and Internet use in general in 2012.  Perhaps more interesting is the question of what form those apps will take and where users will get them. Various app stores and marketplaces, large and small, will continue to offer consumers many choices to shop for apps for different mobile platforms. And the emergence of HTML5-based apps as an alternative to native apps adds another dimension to the issue.  We will likely see continued volatility in this area in 2012, but, if we were going to make a prediction — and that’s what we’re doing here, right? — our money is on HTML5-based apps to start taking market share from native apps in the coming year.

As the major global social media platforms vie for local eyeballs, we foresee more announcements like Twitter’s recently-reported arrangement withMixi,Japan’s long-time favorite social media platform, to collaborate on new products and services. Partnerships like this, coupled with geographic expansion (Twitter opened an office inTokyo in early 2011), could help the leading U.S. social media providers to establish brand recognition and ultimately market share in countries that are still ruled by homegrown incumbents.