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Socially Aware Blog

The Law and Business of Social Media

Drugs and the Internet: FDA Distributes New Draft Guidance Regarding Social Media Platforms and Prescription Drugs

Posted in FDA Regulations

Last week the Food and Drug Administration (FDA) promulgated two much-anticipated draft guidance documents on using social media to present information about prescription drugs and medical devices. The draft guidance documents, which were originally promised by the FDA in 2010, represent the FDA’s latest attempt to provide direction for drug and device manufacturers concerning how and when they may use social media.

BACKGROUND

Drug and device labeling and promotion are highly regulated activities, subject to onerous approval requirements enforced by the FDA under the Federal Food, Drug, and Cosmetic Act (the “Act”). Under the Act, “labeling” includes “all labels and other written, printed, or graphic matter” that “accompany” a drug or device. 21 U.S.C. § 321(m); 21 C.F.R. § 1.3(a). This definition has been broadly interpreted by the courts to include materials that supplement or explain a drug or device, even when there is no physical attachment to the drug. See Kordel v. United States, 335 U.S. 345, 350 (1948).

Rapidly growing Internet-based technologies have made it quicker and easier for both manufacturers and independent third parties to disseminate information about drugs and devices. This has led to a host of issues including (1) what drug companies can say online about their drugs without violating the “misbranding” regulations; and (2) what drug companies can do with what third parties have said online about their drugs. The guidance documents attempt to answer both of these questions.

The Twitter Guidance: “Internet/Social Media Platforms with Character Space Limitations – Presenting Risk and Benefit Information for Prescription Drugs and Medical Devices”

The FDA’s position concerning manufacturers presenting “benefit information” for regulated drugs on electronic platforms with character space limitations is laid out in the Twitter Guidance. This Guidance instructs companies on the steps to take to avoid inadvertently “misbranding” a drug by providing information about a drug’s benefits without disclosing accompanying risks. With that in mind, the Twitter Guidance provides the following direction for drug companies seeking to use space-limited social media platforms:

  • Include the brand and established name, dosage form, and ingredient information;
  • Ensure that any benefit information provided is accurate;
  • Accompany benefit information with risk information;
  • Provide direct access to a more complete discussion of the risks associated with the drug or device. Notably, the Twitter Guidance says the link should lead to a page devoted “exclusively” to risk information; and
  • If both benefit and risk information cannot be communicated within the space limit, consider using a different platform.

To prove that it is not impossible to provide the required information within Twitter’s 140 character limit (just very difficult), the Twitter Guidance provides the following – entirely fictional – example of an acceptable tweet:

Notably, this example from the FDA might not prove helpful in reality, especially considering that many drugs would be required to list more than one risk.

The main take-away from the Twitter Guidance is nothing new: to avoid enforcement, provide “truthful, accurate, non-misleading, and balanced product promotion.” If a company cannot achieve this delicate balance within Twitter’s space limitations, it should “reconsider using that platform for the intended promotional message.”

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Supreme Court Stifles Aereo, but Tries to Keep the Cloud Away

Posted in Copyright, IP, Litigation, Supreme Court

In a closely watched case, the U.S. Supreme Court ruled today in a 6-3 decision that Aereo’s Internet streaming service engages in unauthorized public performances of broadcast television programs in violation of the Copyright Act, reversing the Second Circuit’s decision in American Broadcasting Companies, Inc. v. Aereo, Inc. (No. 13-461).

In ruling against Aereo, the Court sought to limit its decision to Aereo’s service—which the Court considered to be “equivalent” to that of a traditional cable company—and noted that it was not addressing the legality of cloud storage lockers, remote-storage DVRs and other emerging technologies.  But the Court’s interpretation of the public performance right in the context of Aereo’s technology will nevertheless influence future decisions on whether the transmission of content using other technology constitutes copyright infringement.

Background

Aereo provides broadcast television streaming and recording services to its subscribers, who can watch selected programing on various Internet-connected devices, including smart televisions, computers, mobile phones and tablets.  Aereo provides its service through individual, “dime-sized” antennas that pick up local television broadcast signals and transmit those signals to an Aereo server where individual copies of programs embedded in such signals are created and saved to the directories of those subscribers who want to view such programs.  A subscriber can then watch the selected program nearly live (subject to a brief time delay from the recording) or later from the recording.  No two users share the same antenna at the same time, nor do any users share access to the same stored copy of a program.

In 2012, various broadcasting companies sued Aereo for copyright infringement in the Southern District of New York, claiming, among other things, that Aereo’s transmission of the plaintiffs’ copyrighted content to Aereo’s subscribers violated the copyright owners’ exclusive right to publicly perform those works.  That public performance right, codified in the 1976 Copyright Act, includes (1) any performance at a place open to the public or any gathering with a substantial number of people outside the “normal circle of family and social acquaintances,” and (2) the transmission of a performance to the public, whether or not those members of the public receive it in the same location and at the same time.  This latter provision, commonly referred to as the “Transmit Clause,” was added to the Copyright Act by Congress in part to overturn earlier Supreme Court decisions that had allowed cable companies to retransmit broadcast television signals without compensating copyright owners.

The district court denied the broadcast companies’ preliminary injunction requests, finding that, based on Second Circuit precedent, Aereo’s transmissions were unlikely to constitute public performances.  The Second Circuit affirmed the decision, relying on that court’s earlier decision in Cartoon Network LP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008) (“Cablevision”), which found that a cable company’s remote-storage DVR system did not run afoul of the public performance right because each transmission emanated from a unique copy of a program that was sent only to an individual user.  The Second Circuit held that Aereo does not engage in public performances because, as in Cablevision, Aereo’s system makes unique copies of every recording, and each transmission of a program to a customer is generated from that customer’s unique copy.   Continue Reading

Status Updates

Posted in Status Updates
  • In the top news story of the day, the U.S. Supreme Court ruled against Aereo in a closely watched copyright dispute with broadcasters; the Court found that Aereo engages in unauthorized public performances in violation of U.S. copyright law. Will cloud storage models survive this decision? What remains, if anything, of the Second Circuit’s landmark Cablevision ruling? Stay tuned for an upcoming blog post on this subject .
  • If 140 characters seems too long, an Israeli entrepreneur has launched Yo, a social network that simply permits users to communicate the word “Yo” to others. It is not a joke, and he has received investment offers from venture capitalists and hopes to launch soon.
  • Facebook says the use of video by its users has doubled in the past six months and that it will now deliver more video to people who have demonstrated interest in viewing that type of content and will downplay video for users who have not shown an interest in it.
  • A Utah family law attorney wants to use his personal YouTube channel to broadcast divorce court proceedings. Court administrators and judges, however, are skeptical and have questioned his motivations for wanting to do so.

Court Holds That DMCA Safe Harbor Does Not Extend to Infringement Prior to Designation of Agent

Posted in Copyright, DMCA, Litigation

The safe harbor provisions in § 512(c) of the Digital Millennium Copyright Act (DMCA) provide a mechanism that insulates online service providers from monetary damages for infringing materials posted or stored by their users.  To receive this protection, service providers must designate an agent to receive notice of claims of infringement with the Copyright Office and publicly post the agent’s contact information on the website.  A recent case in the Northern District of California, Oppenheimer v. Allvoices, Inc., examined whether service providers can avail themselves of the § 512(c) safe harbor for infringing acts that precede designation of such an agent.

Allvoices is an online service provider that maintains a community-driven platform for the exchange of ideas as well as graphical, written, and audio content.  Allvoices provides users with financial incentives to upload content to the site, and treats such users as “citizen journalists” and independent contractors.  While it began providing access to contributor content in 2008, Allvoices did not designate its DMCA agent until March 2011.

The plaintiff, David Oppenheimer, is a professional photographer whose photographs were posted on Allvoices’s website by contributors in January 2011.  Oppenheimer learned that his photographs had been posted on the Allvoices website in February 2011, prior to Allvoices’s DMCA agent designation.  Oppenheimer sent a cease and desist letter to Allvoices in August 2011, several months after Allvoices designated its DMCA agent.  While Allvoices eventually removed the photographs, Oppenheimer alleged that Allvoices failed to reply to his cease and desist letter and failed to terminate the accounts of repeat infringers, as required by the DMCA.

 Allvoices argued that it was entitled to the protection of the § 512(c) safe harbor for all alleged infringements, not just infringement occurring after it had designated its DMCA agent.  Allvoices did not cite any authority for this position, but maintained that, because the DMCA does not expressly carve out or preserve liability for pre-designation infringement, Congress had intended for the safe harbor to apply to such infringement.

The court rejected Allvoices’s argument and held that, under the plain language of the DMCA, an online service provider may invoke the § 512(c) safe harbor only if it has registered a DMCA agent with the Copyright Office.  According to the court, designation of an agent is a “predicate, express condition” for application of the safe harbors, so Allvoices could not avail itself of the safe harbors with respect to infringement that occurred prior to designation.  The court cited two previous Northern District of California cases that came to similar conclusions, Louis Vuitton Malletier, S.A. v. Akanoc Solutions, Inc. and Nat’l Photo Group, LLC v. Allvoices, Inc. (note that Allvoices was also a defendant in the latter case).  On the merits, the court held that Oppenheimer sufficiently alleged claims of direct, contributory, and vicarious infringement to overcome Allvoices’s motion to dismiss those claims.

A question remains regarding the period of time during which Allvoices may be liable for infringement of Oppenheimer’s photographs.  Specifically, the court did not address whether Allvoices’s potential liability is limited to the period during which the photographs were posted on Allvoices’s website prior to the date that Allvoices designated its DMCA agent with the Copyright Office.  Regardless, the message is clear: online service providers should designate a DMCA agent with the Copyright Office as early as possible in order to obtain the protection of the applicable DMCA safe harbors.

Status Updates

Posted in Status Updates
  • Debt collectors are using social media more and more frequently to try to track down people who owe money, but they are bound by restrictions in the Fair Debt Collection Practices Act when they do so, just as if they used traditional means.
  • The controversial “right to be forgotten” recently received another boost when a Canadian court required Google to remove specific search results worldwide. Under an interim injunction issued by the Supreme Court of British Columbia, Google must cease indexing or referencing in its search results certain websites related to a protracted intellectual property dispute between two corporations. Google has announced that it will appeal the ruling.
  • The American Bar Association has voted to take the view that attorneys are allowed to scour the publicly available social-media postings of jurors, but they are ethically not permitted to friend jurors.
  • In other “legal ethics meet social media” news, the New York State Bar Association has determined that tweets directed to potential clients in shareholder lawsuits constitute “advertisements” that, while not prohibited, must be labeled as “attorney advertising” and retained for at least one year. Further, such tweets constitute “solicitations” and are subject to certain filing requirements if directed to New Yorkers.

Status Updates

Posted in Status Updates

Status Updates

Posted in Status Updates
  • Are threats made on social media protected free speech, or potentially criminal acts? The U.S. Supreme Court has agreed to examine the constitutionality of a federal law making it a crime to transmit communications containing “any threat to injure the person of another.” In this case, the “threats” were in a series of Facebook postings.
  • The U.S. Department of Transportation wants to formally clarify that it has the authority to regulate navigation aids of all sorts in automobiles, including apps in smartphones. It’s interested in preventing distracted driving in additional situations besides cellphone conversations.
  • Social-media participation by people participating in double-blind drug trials has the potential to “unblind” the trials and make them less useful because participants are sharing their experiences in online forums in violation of instructions not to do so. This problem has no obvious solution.

Bitcoins, Big Headaches? Hazards Abound for Companies Seeking to Accept Bitcoin

Posted in Financial Institutions

From our sister blog, MoFo Tech:

The Bitcoin “Cryptocurrency” has gained momentum in the market, and some businesses, including Overstock. com and TigerDirect.com, now accept bitcoins as payment. Many others are wondering if Bitcoin is a good fit for them—and they should factor regulatory uncertainty into their calculations.

In the U.S., certain companies exchanging bitcoins and real currency must register with the Financial Crimes Enforcement Network and are subject to Bank Secrecy Act regulation, says Jeremy Mandell, an associate in the Financial Services Practice Group at Morrison & Foerster. Such companies may also be subject to state licensing requirements, which can be burdensome for start-ups and smaller firms.

Other concerns include the potential for illicit use and fraud—Bitcoin has been the currency of choice for some online black markets. And there have been major incidents of theft: in December, some $5 million worth of bitcoins was drained from accounts on Sheep Marketplace, one of those black markets. When such problems occur, there’s little recourse for victims. “There are no consumer protections like those we see in more traditional payment mechanisms; there are limited dispute resolution rights, no deposit insurance for virtual currency holders, and account access can be restricted,” says Mandell. “But the market is evolving to address these consumer exposures.”

As virtual currencies become more widespread, regulators will continue to scrutinize them. The IRS ruled recently that bitcoins are property, and some states are also moving forward. The New York State Department of Financial Services announced that it will propose a virtual currency regulatory framework by late 2014. “Other states are taking about these issues too,” says Mandell, “so we are likely to see more regulation of virtual currency— sooner rather than later.”

Status Updates

Posted in Status Updates
  • Twitter’s leadership was thrown into disarray on June 12 after Ali Rowghani resigned suddenly as the company’s chief operating officer amid a dispute with Chief Executive Dick Costolo. Twitter’s stock has fallen about 42 percent this year as concerns have arisen that the company is not signing up enough new users.
  • More and more couples are sitting down with their lawyers before marriage to discuss a social media clause in their prenuptial agreement – covering what they can and cannot say or post about each other. These agreements appear to be enforceable in court if they are specific enough.
  • Amidst political instability in Iraq, many users report that the government has closed down most social-media channels, fearing that insurgents will use them to organize revolution, so users have turned to Whisper, an anonymous channel.
  • Rock band Foo Fighters agreed to play a show in Richmond, Virginia following a crowdsourcing campaign launched by a local fan without the band’s participation or knowledge.  Using the Crowdhoster and Crowdtilt Open platforms, Richmond resident Andrew Goldin raised over $70,000 in support of the proposed concert, representing over 1,400 tickets at $50 each.  Will we see more top bands embracing crowdsourcing in determining where to perform?

“Do You Want to Know a Secret?” The Risks Posed by Anonymous Social Apps

Posted in Privacy

First we had social media platforms, but recently a variety of “anti-social” media platforms have emerged—well, anti-social in a sense. For years, social media platforms have encouraged (or even, in some cases, required) us to use our real identities, with the aim of building friendships and networks in the online world. But these new social media apps (such as “Secret,” “Whisper,” “Yik Yak”) are designed specifically to enable users to share posts anonymously. The types of “secrets” disclosed on these apps vary enormously—from teenage angst, fantasies and gossip, to the experiences of soldiers and survivors of abuse.

With these apps, one might say that we have gone full circle back to the early days of the Internet when anonymous posts on message boards were standard. Even Mark Zuckerberg, who in 2010 stated that he believed the social norms on privacy had changed, now apparently sees some merit in anonymity. In January 2014, when discussing certain new Facebook apps that can be accessed with anonymous sign-in, he stated, “If you’re always under the pressure of real identity, I think that is somewhat of a burden.”

People sometimes complain that much of social media is fake, with users presenting themselves in the best possible light. Some argue that these apps are different because they encourage authenticity by allowing people to say what they really think without worrying about damage to their digital reputation or posts coming back to haunt them. Fans of the apps also talk of their voyeuristic and addictive nature. And media outlets have even started using anonymous posts as news sources (sometimes to their dismay when the posts turn out to be false).

Whether these apps have longevity or are just a short-term fad remains to be seen. It is clear, however, that users should not be lulled into a false sense of security simply because these apps purport to be anonymous. Such apps present risks similar to any other social media platform. Indeed, these purportedly anonymous platforms may even be riskier than traditional social media platforms because anonymity may create an environment where users feel free to behave recklessly.

The truth is that “anonymous” doesn’t necessarily mean anonymous. Even if users are not required to provide any form of contact details to use an anonymous app, the app is very likely to collect certain information that will help identify the user (e.g., the unique digital ID of the user’s phone, location information, etc.). Therefore, it may not be very difficult to trace a user if required (e.g., by subpoena/court order). Indeed Secret’s Terms of Service state, “We may share information about you … in response to a request for information if we believe disclosure is in accordance with any applicable law, regulation or legal process, or as otherwise required by any applicable law, regulation or legal process.” Also, it is worth noting that the extent to which a user can maintain anonymity from other users will depend on how the app works. With Secret, a user’s posts are shown to the user’s network of phone contacts, and so, depending on what information a user posts, it may not take much for those contacts to figure out who posted a particular secret.

Accordingly, users of anonymous apps need to think carefully about what they post just as they would when using any social media platform. For example, users should be careful to avoid posting:

  • Information that could cause them to breach a court order or be in contempt of court
  • Information that could breach regulatory rules, e.g., in terms of insider trading or market abuse
  • Information that is classed as confidential or a trade secret
  • Information that breaches a third party’s intellectual property rights
  • Defamatory statements
  • Statements that could be considered threatening, abusive, discriminatory or in breach of applicable laws
  • Information that would be a breach of their terms of employment or otherwise constitute misconduct
  • Anything that violates the app’s terms of use

Using anonymous apps as a vehicle for whistleblowing is particularly problematic. Whisper’s editor-in-chief, Neetzan Zimmerman, has publicly advocated such use of Whisper, stating, “We’re talking about whistleblowing, exposing secrets at corporations … on the government level.” But many countries, including the U.K. and U.S., have specific whistleblower laws in place to protect employees, and companies may also have formal whistleblowing policies that prescribe how employees should report issues. An employee who blows the whistle using an anonymous app rather than through the proper channels may not be able to take advantage of the protection provided by such laws and policies if a disciplinary action is brought against the employee based on such action.

Companies will need to consider these new types of apps when formulating social media policies and educating their employees on social media use. But it’s not just an employee issue. As with other social media platforms, organizations need to be aware of the risks to the company of any criticism or attack via such an app (e.g., from a disgruntled user or competitor) and put in place appropriate monitoring and crisis management procedures to deal with such events.

That said, anonymous apps pose opportunities as well as risks, particularly in terms of targeting consumers who don’t use the more traditional social networks. Indeed, in February 2014, Gap Inc. claimed to be behind the first marketing post on Secret. Gap’s post asking, “This is the first Fortune 500 company to post on Secret. Guess who?” drew a lot of attention … and a few correct guesses.