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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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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Under section 512(f) of the Digital Millennium Copyright Act (DMCA), copyright owners are liable for “any damages” stemming from knowingly false accusations of infringement that result in removal of the accused online material. Section 512(f) aims to deter abuse of the DMCA requirement that service providers process takedown requests from purported copyright owners, but such abuses remain rampant. (E.g., as reported here and here.) In fact, until the March 2, 2015, decision in Automattic Inc. v. Steiner (adopting magistrate’s earlier recommendation), no court had awarded damages under section 512(f).The case concerned a blog by Oliver Hotham, who had contacted a group called “Straight Pride UK,” identifying himself as “a student and freelance journalist” and submitting a list of questions. Nick Steiner responded by identifying himself as the “Press Officer” for Straight Pride UK and providing a PDF file titled “Press Statement – Oliver Hotham.pdf.” The press statement laid out Straight Pride UK’s opposition to “everyone [in the UK] being forced to accept homosexuals” and stated its mission of ensuring “that heterosexuals are allowed to have a voice and speak out against being oppressed.” Hotham posted material from the press statement on his blog.Steiner, apparently displeased with the subsequent negative attention, sent an email to Automattic, Inc., the blog’s host, invoking section 512(f). Steiner claimed to hold copyright in the posted material and requested that Automattic remove the blog post, and Automattic complied. Hotham, however, again posted material from the Press Statement to his blog, prompting Steiner to send two more removal requests by email to Automattic. Automattic denied those requests, citing their legal insufficiency. Automattic and Hotham then filed a lawsuit to recover damages related to Steiner’s misrepresentation that the blog infringed his copyright.The court easily found that Steiner had violated section 512(f) because he “could not have reasonably believed that the Press Statement he sent to Hotham was protected under copyright.” Following the precedent of Lenz v. Universal Music Corp., the court then interpreted the statute’s specification of “any damages” to mean that damages are available, no matter how insubstantial. After requesting more detailed evidence concerning damages, the court found that Hotham and Automattic were entitled to certain types of damages.First, based on the time he was prevented from spending on freelance articles and his expected compensation for such work, Hotham estimated the value of the time he spent on activities related to the incident, including responding to media inquiries. Hotham also requested additional damages for “lost work” due to the “significant distraction” caused by the media coverage and legal disputes. Hotham claimed a total of $960, and the court found his declaration sufficient to support that claim. But the court denied Hotham’s request for reputational harm as speculative, and rejected Hotham’s request for damages based on emotional distress and “chilled speech,” citing the lack of authority that such damages are available under section 512(f).Automattic was likewise successful in claiming damages of $1,860, calculated based on employee salaries and a 2,000-hour year, for time spent responding to the takedown notices and related press inquiries. The court denied Automattic’s request for damages attributable to time spent by its outside public relations firm, however, because there was insufficient evidence to show how that time constituted a loss to Automattic.The court also awarded attorneys’ fees, which are expressly allowed by section 512(f). Based on comprehensive billing records submitted along with data indicating the average local billing rate for IP attorneys, the court granted the request for recovery at a rate or $418.50 per hour, for a total of $22,264 in fees.The court’s analysis is instructive in multiple ways. First, as mentioned, this was the first case resulting in a damages award under section 512(f), so the opinion is likely to serve as a road map for future courts considering such damages. Potential litigants should not read this case, however, as necessarily indicative of the magnitude of damages available in section 512(f) cases. Exposure can certainly be much greater, as demonstrated in Online Policy Group v. Diebold, Inc., a case that reportedly settled for $125,000. A few factors conspired to make damages in this case minimal (a total of $25,084). Steiner’s takedown notice was obviously fraudulent, so practically no resources were expended in meeting the normally demanding burden of proof. (As other commentators have noted, that same demanding burden of proof is one reason why there are not many section 512(f) cases in the first place.) Other cases may involve more protracted conflict over takedown notices and legal threats. Steiner also never appeared in his defense and therefore defaulted, which likely greatly reduced the time and expense of the lawsuit.This case also reinforces the most crucial strategic consideration for service providers in responding to a DMCA takedown notice: as Socially Aware has previously explained, no damages can be awarded under section 512(f) unless the notice actually prompts the removal of the accused material. Therefore, if it ultimately wants to resist a takedown notice, a service provider can only recover the expenses of doing so if it actually removes the accused material in the first place.On the other hand, the court applied the takedown requirement loosely in its actual assessment of damages. Steiner issued three purported DMCA takedown notices, but only the first notice resulted in actual removal of accused content. Even though Hotham and Automattic could have incurred a portion of their expenses due to the final two notices, the court did not discuss whether the takedown requirement precluded any portion of their claimed damages. While this bodes well for the availability of damages in cases involving multiple takedown notices, the analysis has questionable weight on this point. Given the absence of any opposition from defendant, future defendants will have a strong argument that the court simply did not consider this nuance.

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

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

Under section 512(f) of the Digital Millennium Copyright Act (DMCA), copyright owners are liable for “any damages” stemming from knowingly false accusations of 

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

Is it stealing to take data without permission from a public website, or is it simply making use of resources that are made available to you? “Web scraping” or “screen scraping” is the practice of extracting large amounts of data from public websites using bots.A recent case in the European Court of Justice has focused attention both on the intellectual property infringement aspects of scraping practices and on the potential for website owners to use their sites’ contractual terms and conditions to combat the scrapers.Scraping is not new, but it has become increasingly widespread in recent years, fuelled by the rise in big data analytics and the popularity of price comparison websites. Indeed, in 2013, it accounted for 18% of site visitors and 23% of all Internet traffic. Scraping is not inherently bad: it can have legitimate uses, spur innovation and give companies with limited resources access to large amounts of data. However, unsurprisingly, many website operators do not like it. Not only are operators keen to protect their proprietary rights, but repeated scraping can also take a heavy toll on websites by using up bandwidth and leading to network crashes.In the U.S., website operators have asserted various claims against scrapers, including copyright claims, trespass to chattels claims and contract-based claims alleging that scrapers violated their websites terms of use. In the EU, operators have tended to rely on intellectual property infringement claims against scrapers, but there has been little case law to provide guidance.However, in January 2015, in a much anticipated decision, the European Court of Justice (CJEU) held that where a website operator cannot establish intellectual property rights in its database, an operator may still be able to rely on its website terms and conditions to prohibit scraping. This ruling may impact an increasing number of companies whose business models rely on mining data from websites and social media platforms without permission. On the other hand, it will be viewed positively by those data-rich businesses keen to protect and/or monetise their data.RYANAIR LTD V PR AVIATIONThe CJEU case involved PR Aviation which operates a price-comparison website for low-cost airlines. Consumers can book a flight on the website and PR Aviation receives a commission. The website relies on information obtained by screen scraping publicly available data from the websites of low cost airlines, including data from Ryanair’s website.Ryanair sued the defendant for infringement of database rights under the Database Directive (96/9/EC), and breach of its website terms and conditions. It sought an order against PR Aviation to refrain from any further infringement on pain of a financial penalty and for PR Aviation to pay damages.WHAT ARE DATABASE RIGHTS?Database rights are a form of unregistered intellectual property rights introduced by the Database Directive in 1996 and implemented into national law across the European Union.The aim of the Database Directive was to harmonise the rules that applied to copyright protection of databases across the EU, safeguard the investment of database makers and secure the legitimate interests of database users. In essence, the Directive sought to create a legal framework appropriate to the use of databases in the information age. It did so by ensuring copyright protection to those elements of databases possessing protectable expression and introducing a new form of “sui generis” protection to those elements of databases which are not “original” in the sense of being the author’s own intellectual creation.Accordingly, the Database Directive provides two forms of protection. Article 3(1) establishes the first of these rights: “databases which by reason of the selection or arrangement of their contents, constitute the author’s own intellectual creation shall be protected as such by copyright”. The second form of protection (established by Article 7) provides protection where there “has been qualitatively and/or quantitatively a substantial investment in either the obtaining, verification or presentation of the contents [of a database]”.Importantly, the Database Directive includes certain limited exceptions to the rights created. In particular, Article 6 allows lawful users to make a copy of a copyright-protected database without consent where it is necessary to do so in order to access its contents. Further, Article 8 permits lawful users of a publicly available database to extract and/or reuse insubstantial parts of its contents, as long as this use does not conflict with normal exploitation of the database or unreasonably prejudice the legitimate interests of the database’s author.DUTCH SUPREME COURTThe Ryanair dispute ended up in the Dutch Supreme Court where PR Aviation successfully argued that Ryanair could not rely on copyright protection because Ryanair’s database was not sufficiently original to attract copyright protection, and also that there had been insufficient investment by Ryanair, in compiling its database, for it to claim the sui generis right.However, the court still faced the question whether Ryanair could assert a claim that PR Aviation had breached Ryanair’s website terms and conditions by scraping and re-using data from the Ryanair site. Significantly, Ryanair’s website terms and conditions contain the following express prohibition on the use of screen scraping: “The use of automated systems or software to extract data from this website or www.bookryanair.com for commercial purposes (‘screen scraping’) is prohibited unless the third party has directly concluded a written licence agreement with Ryanair which permits access to Ryanair’s price, flight and timetable information for the sole purpose of price comparison.”Ryanair sought to enforce this term. PR Aviation argued that the prohibition against screen scraping was not enforceable because, under Article 15 of the Database Directive, any contractual provisions which are contrary to Articles 6 and 8 are rendered null and void. The Dutch Supreme Court was unsure whether Article 15 of the Directive applied to a database which did not attract copyright protection or the sui generis right and therefore it sought a preliminary ruling from the CJEU.CJEU DECISIONIn a logical ruling, the CJEU ruled that the limitations on rights introduced by the Database Directive do not apply to databases that are not protected by the Directive. Accordingly, Articles 6, 8 and 15 of the Database Directive do not preclude a website operator from laying down contractual limits on the use of a database, without prejudice to applicable national law.The case has now been sent back to the Dutch courts, which must decide on the enforceability of the Ryanair website terms and conditions.For a website owner, it is not simply a question of prohibiting scraping in its terms and conditions; an operator also needs to ensure that those terms and conditions are enforceable. We have written before about the issues involved, particularly in Europe, in ensuring that online terms are deemed fair and reasonable.Ideally, a website operator would require any user of its site to accept the website terms and conditions before allowing the user to access the website. However, the majority of sites are reluctant to enforce this rule because it is not considered user-friendly. It is therefore more common to ensure that a link to the terms is displayed prominently on the site. The problem with this method is that there is no active acceptance of the terms (e.g., clicking a box). As a result, there is a risk that the website owner will be unable to demonstrate that there is a contract in place with the user. This is a question for national law, as indicated in this case.There is no binding case law on the issue in the UK. Unfortunately, although the issue was touched on in the recent high-profile Newspaper Licensing Agency v Meltwater [2011] EWCA Civ 890, the Court of Appeal did not consider whether an end-user was bound by the website terms of use because, given the nature of the case, it said that it was unnecessary “to enter into that controversy”.Lastly, the Ryanair judgment does not answer the question of whether a screenscraper would ever be able to rely on the lawful use exceptions set out in Article 6 or 8 of the Database Directive if the database owner were able to establish copyright protection or the sui generis right in the database.OTHER CLAIMSIt is worth pointing out that, in addition to intellectual property rights infringement and contract breach claims, website owners may have other legal arguments against scraping. For example, as in the U.S., in the UK, a website operator may try to bring a claim for trespass to chattels, a common law tort. In addition, an operator may seek to rely on the Computer Misuse Act 1990 which prohibits unauthorised access to, or modification of, computer material. To date, as with database rights, neither of these arguments have been tested in the UK courts in connection with web scraping. (However, similar legislation has formed the basis of claims elsewhere, for example, in the U.S., as described in our previous alert, “<a href="http://www.sociallyawareblog.com/2014/07/21/data-for-the-taking-using-the-cfaa-to-combat-web-scraping/" target="_blank" rel="noopener">Data for the Taking: Using the Computer Fraud and Abuse Act to Combat Web Scraping</a>”.)Of course, when dealing with scraped data, issues of privacy and security loom large and web scrapers and users of scraped data will also need to tread extremely carefully in order to avoid problems under applicable privacy laws. For a detailed discussion on privacy and big data, see our previous Alert.CONCLUSIONThe CJEU’s Ryanair decision appears to give a rather contrary result – in certain circumstances, a database owner may have broader, albeit contractual, rights to prevent scraping if it does not actually have proprietary rights in the database. However, in any event, in light of this decision, website owners based in the EU may be encouraged to amend their website terms and conditions to expressly prohibit screen-scraping in order to try to protect their valuable data.Whether the impact of this decision will truly disrupt those companies with business models that rely on the use of data mined from websites and social media platforms remains to be seen. Certainly, any business that carries out screen-scraping activities should consider where it sources its data from and identify whether such data are bound by contractual limitations or other restrictions. It can then make a reasoned decision on whether or not it should approach the database owner for a commercial licence to ensure that the data keeps flowing.

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Mercedes Samavi is an associate based in the London office of Morrison & Foerster and a member of both the Technology Transactions Group and the Global Privacy Group.
Mercedes advises domestic and int

Mercedes Samavi

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