Social media sites are transforming not only the daily lives of consumers, but also how companies interact with consumers. Here at Morrison Foerster, across all of our practice groups, we are seeing complex, cutting-edge legal issues arising out of social media. As with the Internet boom during the mid-to-late 1990s, social media is generating new legal questions at a far faster pace than the law’s ability to provide answers to such questions. In an effort to stay on top of these emerging issues, and to keep our clients and friends informed of new developments, Morrison Foerster publishes this blog devoted to the law and business of social media.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Aaron is the chair of the firm’s Technology Transactions Group and co-chair of the Interactive + Digital Media Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals.Aaron’s practice focuses on advising both established and emerging companies in a variety of data- and technology-intensive sectors, including software, SaaS, cloud-based technology, digital media (social media, AR/VR, gaming, streaming media, AdTech), AI, healthcare, consumer electronics, e-commerce, other online business models, and mobile applications. He also maintains an active practice counseling companies on branding and marketing, trademark licensing, and content-related transactions, as well as the intellectual property aspects of mergers, acquisitions, asset spin-offs, and private equity investments.He has represented clients such as Autodesk, Meta, OpenAI, Splunk, Konami, Kaiser Permanente, SoftBank, Visa, and Yahoo, among others.Aaron has been recognized by numerous publications for his work on market-defining technology transactions. He is currently ranked by Chambers USA for “Technology Transactions.”Aaron also serves as co-editor of Socially Aware, the firm’s award-winning newsletter and blog devoted to the law and business of social media, and regularly publishes on various IP and technology-related topics. Aaron is also a sought-after speaker on new and emerging areas of law, and is a frequent presenter and panelist at conferences and legal services programs. In addition to his active practice, Aaron regularly provides pro bono assistance to various nonprofit and charitable organizations such as Common Sense Media and the Starlight Children’s Foundation. He is a member of the board of directors of California Lawyers for the Arts.While in law school at the University of California, Berkeley, Boalt Hall School of Law, Aaron served as executive editor of the California Law Review and was elected to the Order of the Coif. Following law school, Aaron served as law clerk to the Honorable William H. Orrick and the Honorable Martin J. Jenkins, both United States District Judges for the Northern District of California.

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Aaron is the chair of our Technology Transactions Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals. Aaron’s practice focuses on advising both established and emerging companies in a variety of data– and technology–intensive sectors, including software, SaaS, cloud computing, AR/VR, AI, gaming, healthcare, consumer electronics, social media, e–commerce, other online business models, and mobile applications. He also maintains an active practice counseling companies on the intellectual property aspects of mergers, acquisitions, asset spin–offs, and private equity investments.

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Lawrence Gallick is of counsel in the firm’s Austin office and a member of the Technology Transactions Group.Lawrence focuses his practice on technology transactions and licensing matters. His diverse experience includes advising on SaaS agreements, cross-licensing agreements, research and collaboration agreements, development agreements, and distribution agreements. He counsels a broad range of companies across the software, hardware, life sciences, biotech and FinTech spaces, as well as other entities including universities.He advises clients in connection with general corporate matters including contract negotiations, and leasing and technology placement agreements.Lawrence also serves as co-editor of <a href="https://www.sociallyawareblog.com/" target="_blank">Socially Aware</a>, the firm’s award-winning newsletter and blog devoted to the law and business of social media, and regularly publishes on various IP and technology-related topics.Prior to joining the firm, Lawrence was counsel at another major law firm. Before earning his law degree, Lawrence was a web consultant, project manager, and web developer in Portland, Oregon, where he managed and consulted on projects using industry methodologies and performed custom development and integration of content management systems.Lawrence was named a Super Lawyers “Rising Star” in 2015 and 2018–2022, and is licensed in both California and New York. Lawrence earned his J.D. from the University at Buffalo School of Law, where he was the electronic systems editor for the Buffalo Law Review and awarded the ABA-BNA Award for Excellence in the Study of Intellectual Property Law.

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Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster.Anthony advises clients on general commercial and transactional matters. He regularly advises companies on the IP aspects of their M&A transactions. His clients include technology, digital media and content for television and music, financial services, and communications companies with diverse intellectual property assets and issues.His practice focuses on the legal aspects of developing, licensing, and commercializing technology and intellectual property, as well as negotiating general commercial contracts, including outsourcing transactions, as well as content and data licenses. He regularly assists clients with legal issues relating to licensing and commercialization of digital media and content, digital content that is distributed over the Internet or streamed, mobile applications and social media, as well as the licensing of recorded music for distribution via digital platforms. Anthony is also experienced with issues relating to open-source software, software development, artificial intelligence and machine learning, cloud-based technology, and protection of proprietary information.Anthony has extensive experience working on matters involving disruptive technologies, such as blockchain. He has helped fintech clients with general intellectual property issues in connection with terms of service for online financial products and services.Anthony is an integral part of the outside pro bono legal team for nonprofit organizations based in New York, including advising clients on legal issues regarding entertainment, social media, privacy rights, and the negotiation of outsourcing and service agreements. Anthony received his J.D. from the University of Michigan Law School in 2009. He received his B.S. from Cornell University in 2004.

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Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster. He advises clients on general commercial and transactional matters. His clients include technology, media, and communications companies with considerable intellectual property assets. His practice focuses on the legal aspects of licensing and commercializing technology and intellectual property, as well as negotiating general commercial contracts. He also regularly assists clients with legal issues relating to mobile applications and social media.

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Socially Aware is devoted to the law and business of social media, proactively addressing emerging issues and keeping our clients informed of new developments. We cover fields such as artificial intelligence, privacy and data security, Section 230, intellectual property, and much more.

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Lawrence W. Gallick

Social Links: Statehouse v. Smartphone

Federal Court Enjoins California Teen Privacy Law . . . Again

All Your Sale Are Belong to Us - Mitigating IP and Payments Risk in In-Game Economies (Part II – User-Generated Content and In-Game Payment Models)

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California’s Assembly Bill 587 Loses Key Provisions After Legal Challenge from X

Newsom Vetoes AI BillCalifornia Governor Gavin Newsom has vetoed <a href="https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202320240SB1047" target="_blank">SB-1047</a>. The controversial bill was intended to establish safety guidelines for artificial intelligence models and would have been the first significant piece of state AI legislation in the country. Though it had many <a href="https://www.latimes.com/entertainment-arts/business/story/2024-09-24/mark-hamill-jane-fonda-joseph-gordon-levitt-sign-letter-in-support-of-ai-safety-bill-sb-1047" target="_blank">high-profile supporters</a>, the Governor ultimately felt the bill went too far and would hamstring the state’s growing AI industry. In a <a href="https://www.gov.ca.gov/wp-content/uploads/2024/09/SB-1047-Veto-Message.pdf" target="_blank">statement to the Senate</a>, Newsom wrote: “While well-intentioned, SB-1047 does not take into account whether an AI system is deployed in high-risk environments, involves critical decision-making or the use of sensitive data. Instead, the bill applies stringent standards to even the most basic functions — so long as a large system deploys it. I do not believe this is the best approach to protecting the public from real threats posed by the technology.” He also announced that the state will partner with several industry insiders, including <a href="https://profiles.stanford.edu/fei-fei-li" target="_blank">Dr. Fei-Fei Li</a> (who opposed the legislation), to develop guardrails around powerful AI models. State Senator Scott Wiener, who introduced the original bill, has <a href="https://www.sfexaminer.com/news/technology/why-gavin-newsom-veto-just-beginning-of-ai-safety-fight/article_dd1dedb8-7f89-11ef-9510-6f396710820a.html" target="_blank">vowed to continue</a> the fight.AI technology is evolving far too quickly for reactive legislation. Will lawmakers emerge who understand the intricacies and implications of artificial intelligence, but also have the political clout to push proactive bills through legislatures? That’s a lot to ask of anyone. Time will tell.SB-976 Becomes Law in CaliforniaThere’s no shortage of news coming out of California. Governor Newsom has signed the <a href="https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240SB976" target="_blank">Protecting Our Kids From Social Media Addiction Act</a> (SB-976) into law, mandating that algorithm-based social media feeds will be inaccessible to children without parental consent. The law also stipulates that social media entities may not send notifications to children overnight or during school hours without express parental permission. The state attorney general is now tasked with outlining a process by 2027 to determine if users are children, which will certainly be controversial. This bill is very similar to <a href="https://www.nysenate.gov/legislation/bills/2023/S7694/amendment/A" target="_blank">legislation recently passed in New York</a> and may be a harbinger of things to come on the national stage. As we’ve <a href="https://www.sociallyawareblog.com/topics/state-social-media-laws-targeted-at-teens-face-opposition" target="_blank">previously reported</a>, parental consent rules run the risk of isolating vulnerable teens, while age-verification requirements may trigger privacy, bias, accuracy, and other concerns (including litigation). We’ll continue to pay close attention as this unfolds.California Deepfake Law BlockedShould political deepfakes be <a href="https://www.politico.com/news/2024/10/02/california-law-block-political-deepfakes-00182277" target="_blank">protected as satire</a>? In Kohls v. Bonta, Judge John A. Mendez of the U.S. District Court for the Eastern District of California ruled that it should. Despite being signed into law on September 17, 2024, <a href="https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240AB2839" target="_blank">AB-2839</a> was blocked in Judge Mendez’s court just two weeks later on grounds that the law does not meet the high standard for legislation that may burden protected speech. In rejecting the state’s argument that the law is akin to restrictions on defamation, Judge Mendez wrote: “YouTube videos, Facebook posts, and X tweets are the newspaper advertisements and political cartoons of today, and the First Amendment protects an individual’s right to speak regardless of the new medium these critiques may take.” Read <a href="https://storage.courtlistener.com/recap/gov.uscourts.caed.453046/gov.uscourts.caed.453046.14.0.pdf" target="_blank">Judge Mendez’s extensive ruling</a> in its entirety<a href="https://storage.courtlistener.com/recap/gov.uscourts.caed.453046/gov.uscourts.caed.453046.14.0.pdf">.</a>Privacy Rights Bill VetoedGovernor Gavin Newsom’s veto pen was working overtime as a number of tech-related bills recently landed on his desk. In addition to the aforementioned AI bill, Newsom vetoed <a href="https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240AB3048" target="_blank">AB-3048</a>. This law would have mandated that internet browsers and mobile operating systems provide Californians with a simple, single-click option to block the use and sharing of their data. Unsurprisingly, the bill was <a href="https://x.com/jason_kint/status/1834682846125944905" target="_blank">aggressively opposed</a> by major tech entities who argued that implementing such functionality presented too many technical hurdles and would be disruptive to operations for both the companies and the end users. Consumer and privacy rights activists <a href="https://advocacy.consumerreports.org/press_release/california-governor-vetoes-landmark-bill-for-privacy-rights/" target="_blank">strongly disagreed</a>. In his <a href="https://www.gov.ca.gov/wp-content/uploads/2024/09/AB-3048-Veto-Message.pdf" target="_blank">veto statement</a>, Governor Newsom wrote: “I am concerned… about placing a mandate on operating system (OS) developers at this time. No major mobile OS incorporates an option for an opt-out signal. By contrast, most internet browsers either include such an option or, if users choose, they can download a plug-in with the same functionality. To ensure the ongoing usability of mobile devices, it’s best if design questions are first addressed by developers, rather than by regulators.”Though AB-3048 <a href="https://leginfo.legislature.ca.gov/faces/billVotesClient.xhtml?bill_id=202320240AB3048" target="_blank">overwhelmingly passed</a> in both chambers, the California Legislature has not overridden a gubernatorial veto <a href="https://prospect.org/politics/2023-10-16-missing-veto-override-california/" target="_blank">since 1980</a>. As tech is a major economic engine of the state, a veto seems extremely unlikely in this case – despite the Legislature having more than enough votes to do so.X Ordered to Honor Severance AgreementA former Twitter employee who was terminated and offered a reduced severance package after Elon Musk purchased the platform for $44 billion in 2022 <a href="https://www.business-standard.com/world-news/ex-twitter-worker-wins-fight-with-elon-musk-over-unpaid-severance-124092400092_1.html" target="_blank">has prevailed in arbitration</a>. The company, now rebranded as X, was ordered to pay the unnamed employee the full amount owed under the initial severance agreement. It’s possible that this settlement may result in additional severance adjustments for the more than 2,000 former Twitter employees who have filed arbitration grievances after allegedly being denied their contractually agreed severance. Legendary Los Angeles <a href="https://www.youtube.com/watch?v=-ey5agy1blc&list=OLAK5uy_kBru2bFCew4EFmAoCTtT_XrydeTIPT4G0" target="_blank">punk band X</a> was unavailable for comment.

Social Links: Going Back to Cali

Lawrence Gallick is of counsel in the firm’s Austin office and a member of the Technology Transactions Group.

Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster. Anthony advises clients on general commercial and transactional matters. He regularly advises companies on the IP aspects of their M&A transactions.











Anthony Ramirez

Aaron is the chair of the firm’s Technology Transactions Group and co-chair of the Interactive + Digital Media Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals.

Aaron Rubin

Social Links: Going Back to Cali

California Governor Gavin Newsom has vetoed SB-1047. The controversial bill was intended to establish safety guidelines for artificial intelligence models and would have been the first significant piece of state AI legislation in the country. 

Sick of the “<a href="https://www.tiktok.com/@joolieannie/video/7399736793119247662" target="_blank">very demure, very mindful</a>” social media trend yet? The U.S. Patent and Trademark Office probably is too. Our national nightmare began on August 5 when TikToker Jools LeBron uploaded a video of herself pontificating about the way she dresses and behaves for a job interview, claiming that she was “very modest” while broadcasting self-absorption to millions of online followers (the very definition of modesty). The trend was picked up by a number of other entities—including the <a href="https://www.instagram.com/p/C-vr65nSM-N/?utm_source=ig_web_button_share_sheet" target="_blank">White House</a> and <a href="https://www.facebook.com/share/p/tjeKx23Zj1B9rjBj/">Dunkin’ Donuts</a>—and now LeBron is attempting to <a href="https://www.axios.com/2024/09/09/trademark-disputes-demure-viral-phrase" target="_blank">trademark the phrase</a>. Unfortunately for her, quick-acting IP vultures beat her to it. At least three other applicants with absolutely no connection to the viral trend had the same idea and <a href="https://tsdr.uspto.gov/#caseNumber=98706752&caseSearchType=US_APPLICATION&caseType=DEFAULT&searchType=statusSearch" target="_blank">filed to register a trademark</a> before her. Will Jools LeBron become an enduring symbol of cultural excellence like the <a href="https://youtu.be/C7tydu_erZo?si=m3RxTvVJo0AW4Qm0&t=5" target="_blank">Hawk Tuah girl</a>, or will she become irrelevant like art and literature?Utah’s proposed law regulating the use of social media by minors, which we <a href="https://www.sociallyawareblog.com/topics/social-links-july-2024" target="_blank">reported on in July</a>, has been <a href="https://www.reuters.com/world/us/utah-law-restricting-youth-social-media-use-blocked-by-judge-2024-09-11/#:~:text=Sept%2011%20(Reuters)%20%2D%20A,impose%20restrictions%20on%20minors'%20accounts." target="_blank">temporarily blocked</a> by U.S. District Court Judge Robert J. Shelby. In <a href="https://fingfx.thomsonreuters.com/gfx/legaldocs/gkvllnwexvb/09102024utah.pdf" target="_blank">the ruling</a>, Judge Shelby wrote that the law likely constitutes an unconstitutional limitation on protected speech and plaintiff NetChoice is “substantially likely to succeed on its claim the Act violates the First Amendment.” NetChoice has successfully blocked similar legislation in several states and recently prevailed in the Supreme Court in <a href="https://www.theverge.com/2024/7/1/24166388/supreme-court-ruling-moody-paxton-texas-florida-social-media-law" target="_blank">two content moderation cases</a>. Judge Shelby summed up the ruling in no uncertain terms, writing that “The court recognizes the State’s earnest desire to protect young people from the novel challenges associated with social media use, but owing to the First Amendment’s paramount place in our democratic system, even well-intentioned legislation that regulates speech based on content must satisfy a tremendously high level of constitutional scrutiny.”<a href="https://www.msn.com/en-ca/music/news/feds-indict-musician-on-landmark-massive-streaming-fraud-charges/ar-AA1q0wI9" target="_blank">By robots, for robots</a>. That’s the new dystopia we apparently find ourselves in. North Carolina-based musician Michael Smith <a href="https://www.justice.gov/usao-sdny/media/1366241/dl" target="_blank">has been indicted</a> in federal court on three counts of wire fraud, wire fraud conspiracy, and money laundering conspiracy. Smith used AI to create hundreds of thousands of songs which he uploaded to multiple music streaming services. He then created thousands of bot accounts to “listen” to his music nonstop, generating more than $10 million in royalty payments. AI-generated music is uncharted territory for artists, labels, publishers, and IP attorneys, as society wrestles with the incredibly fast-moving technology. A number of major record labels are trying to put the <a href="https://www.billboard.com/pro/major-label-lawsuit-ai-firms-suno-udio-copyright-infringement/?utm_source=twitter&utm_medium=social" target="_blank">genie back in the bottle</a>, but a long road of litigation is a near certainty. Perhaps it will be settled by robot lawyers arguing in front of a robot judge on behalf of the <a href="https://www.youtube.com/watch?v=okhQtoQFG5s" target="_blank">robot artists</a> and robot listeners they represent.After an investigation by the EU, X has <a href="https://www.dataprotection.ie/en/news-media/press-releases/data-protection-commission-welcomes-conclusion-proceedings-relating-xs-ai-tool-grok" target="_blank">agreed to comply</a> with the European Data Protection Commission’s guidelines and to stop using personal data to train its AI chatbot, Grok. X has agreed to delete data collected from May 7 to August 1 and cease collecting user data for developing Grok. Despite X’s compliance, the social media giant <a href="https://techcrunch.com/2024/09/06/elon-musks-x-could-still-face-sanctions-for-training-grok-on-europeans-data/" target="_blank">may still face sanctions</a> over AI models trained on the previously collected data. In the U.S., where laws governing data usage are less stringent, <a href="https://www.msn.com/en-us/money/other/how-to-stop-x-from-using-your-posts-to-train-its-ai/ar-BB1qHPJX?apiversion=v2&noservercache=1&domshim=1&renderwebcomponents=1&wcseo=1&batchservertelemetry=1&noservertelemetry=1" target="_blank">users may now opt out</a> of allowing the platform to access their data for AI training, but the process is not intuitive and users are opted in by default.In a <a href="https://ag.ny.gov/sites/default/files/letters/social-warning-label-letter.pdf" target="_blank">letter to Congress</a>, 42 state attorneys general have encouraged lawmakers to pass legislation requiring cigarette-style warning labels on social media platforms. The action was <a href="https://www.theverge.com/2024/6/17/24180005/surgeon-general-warning-labels-social-media-mental-health" target="_blank">spearheaded last June</a> by U.S. Surgeon General Dr. Vivek Murthy after a 2019 AMA study published in the Journal of American Medicine. The impact of so many attorneys general advocating for legislation remains to be seen, but it could very well move the needle in Congress. As the AGs wrote, “A surgeon general’s warning on social media platforms, though not sufficient to address the full scope of the problem, would be one consequential step toward mitigating the risk of harm to youth.” With so many <a href="https://www.ncsl.org/technology-and-communication/social-media-and-children-2024-legislation" target="_blank">states considering legislation</a> to curtail social media use among children, overarching federal guidelines may be inevitable. The issue appears to be bipartisan and has gained real momentum over the last few months.

Social Links: TikTok Trademarks, Social Signposts, and Robot Rock

On August 8, 2024, the U.S. District Court for the Eastern District of Virginia in <a href="https://scholar.google.com/scholar_case?case=17363838191298839802&q=Lovinfosse+v.+Lowe%27s+Home+Centers,+LLP&hl=en&as_sdt=20006&as_vis=1" target="_blank">Lovinfosse v. Lowe’s Home Centers, LLP</a> addressed the enforceability of an arbitration clause in Lowe’s terms of service, serving as a reminder of the problems that may arise from terms of service (TOS) language allowing unilateral modifications. The plaintiff, Eleanor Lovinfosse, alleged that the retailer’s use of <a href="https://www.gov.uk/government/publications/online-choice-architecture-how-digital-design-can-harm-competition-and-consumers" target="_blank">Online Choice Architecture (OCA)</a> led her to purchase a water hose labeled as “Required for Use” while buying a washing machine online. Lovinfosse later discovered the washing machine came with all necessary parts, rendering the additional purchase unnecessary. She subsequently filed a class action lawsuit against the retailer, alleging deceptive practices.Lowe’s maintained the dispute is subject to the arbitration requirement in its TOS; arguing that Lovinfosse agreed to the terms by clicking the “Place Order” button during checkout.Directly below the “Place Order” button, hyperlinked text states: “By placing an order, I agree to Lowe’s Terms and Privacy Statement.” This allows users to reference the <a href="https://www.lowes.com/l/about/terms-and-conditions-of-use" target="_blank">full text of the terms</a> if they click the link. Lovinfosse did not click on the hyperlinked terms and asserted that she was not aware of their contents, including the arbitration clause.The court agreed with the defendant on this point, reasoning that based on the layout and language of the website, Lovinfosse had constructive notice of the terms and had manifested assent by moving forward with the order.The court then turned its analysis to the unilateral modification clause within the TOS, which stated:“You agree that Lowe’s may change, terminate, modify, add, end or delete any of these terms and conditions (including, without limitation, the Terms) under which the Site is offered at any time and without notice to you. Lowe’s, in its sole and absolute discretion, reserves the right to update, change, terminate, suspend, modify, add, end or delete any of these Terms . . . , in whole or in part, at any time with or without notice.”Although the arbitration clause existed as part of the TOS at the time Lovinfosse agreed to them, the unilateral modification clause purported to allow the retailer to change its terms at any time and without notice. The court concluded that, while Lovinfosse may have agreed to the TOS, the unrestricted ability to modify the terms without notice made the arbitration clause illusory and unenforceable.The court further reasoned that a customer who makes a single transaction would have no way of knowing if the terms had changed unless they constantly checked the website, highlighting that the lack of required notice distinguished this case from others where unilateral modification clauses were upheld.The court’s reasoning in Lovinfosse is reminiscent of the conclusions drawn in <a href="https://casetext.com/case/harris-v-blockbuster-inc" target="_blank">Harris v. Blockbuster Inc.</a>, a Northern District of Texas decision from 2009. In that case, the court similarly held that the unilateral modification clause in Blockbuster’s online terms of use rendered the arbitration clause illusory and unenforceable. The court reasoned that Blockbuster could, in theory, unilaterally modify the arbitration provisions and apply those modified provisions to earlier disputes.The case law regarding unilateral modification in online terms has shifted over the years. After Harris, unilateral modification requirements appeared to loosen, as evidenced by the 2014 San Francisco Supreme Court decision in <a href="https://digitalcommons.law.scu.edu/cgi/viewcontent.cgi?article=1656&context=historical" target="_blank">Rodriguez v. Instagram</a>. In Rodriguez, Instagram’s terms stated that users would be notified of material changes to the terms, and the meaning of “material change” would be determined at Instagram’s sole discretion.Though Instagram had sole discretion to determine when to give notice of a change in its terms, the court upheld the unilateral modification of its terms of use – noting that Instagram had in fact provided reasonable advance notice via email and that continued use of the service constituted Rodriguez’s acceptance of the new terms.More recently, decisions like <a href="https://casetext.com/case/sifuentes-v-dropbox-inc-1" target="_blank">Sifuentes v. Dropbox</a> have permitted unilateral modification but made it much harder to meet the requirement for giving notice. In Sifuentes, the United States District Court for the Northern District of California reviewed Dropbox’s ability to enforce amendments to its terms, which contained a notice provision that was similar to Instagram’s. The court held that Dropbox could not enforce its amended TOS because it failed to show that the plaintiff’s continued use of the service was conditioned on agreement to the amendments.The court found that the plaintiff also didn’t have actual notice of the modified terms because Dropbox did not show that the plaintiff had read the email notifications of the amendments. The Sifuentes court further characterized the provision as “essentially disavow[ing] any obligation to alert [users] to changes.” This decision underscored practical challenges of meeting the necessary notice standard, but these cases did not focus on or require the Harris standard of only enforcing unilateral amendment provisions where the terms themselves required the provider to give notice (presumably in addition to such notice being given where applicable to the case’s facts).Lovinfosse appears to mark a return to the stricter stance seen in Harris, serving as a reminder of the limitations and potential pitfalls of unilateral modification clauses in TOS. While the court acknowledged that the plaintiff had agreed to the terms, the ability to change those terms without notice made the arbitration clause illusory and unenforceable.In many ways, this is a frustrating standard for companies that have followed best practices when implementing enforceable terms, only to face the risk that agreed upon contractual terms which have not changed might be declared unenforceable simply because they could change. As companies navigate the complexities of digital contracts, Lovinfosse underscores the necessity of transparency in consumer agreements.

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Associate

Tricia Matibag

Lose Your Illusion: District Court Holds that Unilateral Modification Clause Makes ToS Unenforceable