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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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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The FTC has released its much anticipated <a href="http://www.ftc.gov/system/files/documents/reports/federal-trade-commission-staff-report-november-2013-workshop-entitled-internet-things-privacy/150127iotrpt.pdf">report</a> on the Internet of Things (“IoT”) – a topic that has been top-of-mind for many companies. The FTC’s report, “Internet of Things: Privacy & Security in a Connected World” (the “Report”), discusses the benefits and risks associated with IoT, and addresses the privacy and data security measures the FTC recommends for consumer-facing IoT products and services [The FTC’s discussion of IoT within the report, consistent with the FTC’s jurisdiction, is limited to such devices that are sold to or used by consumers, and not devices sold in a business-to-business context or broader machine-to-machine communications]. While the Report is not legally binding, it provides a strong and valuable indication of the positions that the FTC may take in enforcement actions related to IoT.WHAT IS THE INTERNET OF THINGS?According to the FTC, IoT refers to “‘things’ such as devices or sensors – other than computers, smartphones, or tablets – that connect, communicate or transmit information with or between each other through the Internet.”FTC RECOGNIZES BENEFITS AND RISKS OF IOTThe Report acknowledges that Internet-connected devices offer numerous benefits, many of which remain untapped. In the health arena, connected medical devices allow patients to more efficiently communicate with their physicians to manage their medical conditions. In the home, smart meters enable energy providers to analyze consumer energy use, identify issues with home appliances, and enable consumers to be more energy-conscious. On the road, sensors on a car can notify drivers of dangerous road conditions, and software updates can occur wirelessly. And these applications are just the beginning.On the flip side, however, the FTC cautions that IoT may present a variety of potential security vulnerabilities that could be exploited to harm consumers. First, as with computers, a lack of security could enable unauthorized access and misuse of personal information. This risk is heightened in the IoT world by the plethora of devices to be connected and secured. Second, security vulnerabilities in a particular device may facilitate attacks on the consumer’s network to which it is connected, or enable attacks on other systems. Third, the FTC notes that IoT may present a heightened risk of harm to personal safety. For example, the Report describes an account of how it may be possible to hack remotely into a connected medical device and change its settings, impeding its therapeutic function.According to the FTC, these risks are exacerbated by the fact that companies entering the IoT market may not have experience in dealing with security issues, or may be creating inexpensive devices for which it may be difficult or impossible to apply a patch for a security bug.SECURITYIn light of these increased risks, the FTC asserts that “inadequate security presents the greatest risk of actual consumer harm in the Internet of Things.” As such, it recommends that companies focus on security when developing connected devices. The FTC acknowledged that what constitutes reasonable security for a given device will depend on a number of factors, including the amount and sensitivity of data collected, and the costs of remedying the security vulnerabilities. However, the staff did offer approaches that it encourages companies to adopt when developing their products:<ul><li>Building security into their devices at the outset, by conducting an initial privacy or security risk assessment, considering how to minimize the data collected and retained, and testing security measures before launching the product.</li><li>Training all employees about good security, and ensuring that security issues are addressed at the appropriate level of responsibility within the organization.</li><li>Retaining service providers that are capable of maintaining reasonable security and providing reasonable oversight.</li><li>Implementing a defense-in-depth approach for systems that involve significant risks, considering security measures at several levels.</li><li>Imposing reasonable access control measures to limit the ability of an unauthorized person to access a consumer’s device, data, or network.</li><li>Continuing to monitor products throughout the life cycle and, to the extent possible, patch known vulnerabilities.</li></ul>In sum, devices that collect sensitive information, present physical security or safety risks (such as door locks, ovens, or medical devices), or connect to other devices or networks in a manner that would enable unauthorized access to those devices, may require heightened consideration of security measures.DATA MINIMIZATIONThe Report emphasizes the FTC’s view that companies should reasonably limit their collection and retention of consumer data, including in the IoT context. The FTC believes that these practices, known as data minimization, will help guard against two privacy-related risks: first, larger data stores present a more attractive target for data thieves; and second, if a company collects and retains large amounts of data, there is an increased risk that the data will be used in a way that departs from consumers’ reasonable expectations.At the same time, the Report acknowledges concerns that data minimization requirements may curtail innovative uses of data. Accordingly, the FTC proposes a “flexible” approach to data minimization that gives companies a variety of options: they can decide not to collect data at all, collect only the fields of data necessary to the product or service being offered, collect data that is less sensitive, or de-identify the data they collect. The FTC also suggests that if none of these options work, a company can seek consumers’ consent for collecting additional, unexpected data.NOTICE AND CHOICEThe FTC acknowledges that notifying consumers of privacy principles and offering them a way to meaningfully choose privacy settings may be more difficult in the context of connected devices, which may not have a screen with which to communicate with consumers. However, the report makes clear that the FTC does not believe it will be sufficient for IoT companies to simply have a privacy policy available on their website, and expect consumers to find that policy. Rather, the FTC recommends that a company find ways to present meaningful privacy notices and choices to the consumer, including in the set-up or purchase of the product itself. The Report suggests creative solutions to this issue, including:<ul><li>Offering video tutorials to guide consumers through privacy settings.</li><li>Affixing a QR code that, when scanned, would take the consumer to a website with information about privacy practices.</li><li>Offering a set-up wizard that provides information about privacy practices.</li><li>Allowing users to configure devices, such as home appliances, so that they receive information through emails or texts.</li><li>Creating a user experience “hub” that stores data locally and learns a consumer’s privacy preferences based on prior behavior.</li></ul>Companies may also want to consider using a combination of approaches. Of course, whatever approach a company decides to take, the FTC expects the privacy choices to be clear and prominent, and not buried within lengthy documents.LEGISLATIONLast but not least, the FTC reiterated its recommendation for Congress to enact strong, flexible, and technology-neutral legislation to strengthen the Commission’s existing data security enforcement tools, and require companies to notify consumers when there is a security breach.CONCLUSIONAs the FTC describes, “in the future, the Internet of Things is likely to meld the virtual and physical worlds together in ways that are currently difficult to comprehend.” As a result, companies should consider guidance offered by the FTC and other regulators, and evaluate what steps they can take to mitigate those risks in the privacy and data security context.

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FTC Issues Landmark Report on Internet of Things

“Firsts” for the World of Virtual Currencies

The FTC has released its much anticipated report on the Internet of Things (“IoT”) – a topic that has been top-of-mind for many companies. The FTC’s report, “In

FTC Issues Landmark Report on Internet of Things

Once the hottest new technology innovation around, <a href="http://www.bbc.com/news/technology-30831128" target="_blank" rel="noopener">Google Glass was put out to pasture yesterday</a>, at least for the near future.In the tech industry, we generally assume that a game-changing product like Glass will somehow find a way to thrive, especially with Google’s virtually unlimited resources behind it. So why did Glass suffer this major setback?I don’t have an answer. But I wonder if the relentless stream of negative publicity–often unreasonably negative publicity–about Glass may have contributed to consumers’ reluctance to embrace the product.Consider, for example, the following items:<ul><li>A recent study allegedly showing that Google Glass can partially obstruct the wearer’s peripheral vision received widespread coverage in the popular press. The study found that, even when the device is turned off, Google Glass’s hardware creates a blind spot in the upper right area of the wearer’s visual field. But, remarkably, this “study” was based on the experiences of only three people–hardly a statistically significant sample. (Most statisticians agree that, for a test to produce a meaningful result, there should be <a href="http://www.tools4dev.org/resources/how-to-choose-a-sample-size/" target="_blank" rel="noopener">at least 100 subjects involved</a>.)</li></ul><ul><li>Another <a href="http://www.ncbi.nlm.nih.gov/pubmed/25306386" target="_blank" rel="noopener">recent study</a> <a href="http://www.cnn.com/2014/10/15/health/google-glass-addiction/" target="_blank" rel="noopener">picked up by the news media</a> described the Navy’s Substance Abuse and Recovery Program’s treatment of a 31-year-old serviceman for alcoholism and “significant frustration and irritability related to not being able to use his Google Glass,” as a case of “Google Glass addiction,” as if that were an established disorder (it’s not). At least the “obstructed peripheral vision” study noted above involved three participants; this “study” involved only a single subject.</li></ul><ul><li>A social media consultant’s claims that <a href="http://sanfrancisco.cbslocal.com/2014/02/26/google-glass-attack-against-social-media-consultant-spurs-huge-backlash/" target="_blank" rel="noopener">her Glass device was knocked off her face in a San Francisco bar</a> received extensive national and even <a href="http://www.dailymail.co.uk/news/article-2590135/I-want-white-trash-tape-Google-Glass-wearer-bar-fight-releases-footage-fracas.html" target="_blank" rel="noopener">international press coverage</a>, generally inciting not sympathy, but ire, for the consultant; news stories reporting her version of the events received a flood of negative comments and prompted a barrage of social media posts blaming the Google Glass wearer for “her failure to perceive the negative reception by bar patrons of her wearing the device and her decision to begin recording video as the situation escalated,” according to <a href="http://sanfrancisco.cbslocal.com/2014/02/26/google-glass-attack-against-social-media-consultant-spurs-huge-backlash/" target="_blank" rel="noopener">one news outlet</a>. A number of bars <a href="http://www.businessinsider.com/google-glass-ban-san-francisco-2014-3" target="_blank" rel="noopener">reportedly banned Glass in the wake of the incident</a>.</li></ul><ul><li>It was <a href="http://www.wired.com/2014/06/google-glass-snoopers-can-steal-your-passcode-with-a-glance/" target="_blank" rel="noopener">widely reported</a> last year that Glass would make it easier for eavesdroppers to steal ATM and tablet users’ PINs and passcodes–not because Glass’s technology makes it superior for those purposes, but because Glass is allegedly less conspicuous than, say, a smartphone with a camera. But the fact that Glass lights up when in use would seem to make it an awkward tool for spying on people using ATMs and tablets in public.</li></ul>Even a cursory Google search will turn up many other articles warning us of the perils of Glass. (We covered anti-Glass sentiment in greater detail in a <a href="https://www.sociallyawareblog.com/2013/09/09/peering-into-the-future-google-glass-and-the-law/" target="_blank" rel="noopener">blog post</a> last year.)  But I don’t mean to suggest that the press was solely responsible for anti-Glass hysteria; governments and big business did their part to stoke consumer fears.For example, several state legislatures have been considering bills that would make it illegal to wear Google Glass while driving. As a practical matter, <a href="http://blogs.wsj.com/law/2014/08/13/proposed-google-glass-driving-restrictions-are-unenforceable-says-professor/" target="_blank" rel="noopener">for such legislation to be effective</a>, it would have to forbid motorists from wearing any head-mounted device, whether or not it’s in use–a police officer cannot be expected to know whether a person behind the wheel actually had her Glass device turned on while she was driving.The federal government also jumped on the anti-Glass bandwagon. In May 2013, for example, a bipartisan caucus of U.S. congressmen sent Google an <a href="http://www.scribd.com/doc/141962016/Congress-Inquires-About-Google-Glass" target="_blank" rel="noopener">inquiry</a> regarding a variety of privacy matters. In response to that inquiry, Google <a href="http://www.forbes.com/sites/petercohan/2013/06/03/google-shivs-developers-by-nixing-glass-facial-recognition/" target="_blank" rel="noopener">announced</a> in June 2013 that it would not allow applications with facial recognition on Google Glass. It’s remarkable that, even in these bitterly partisan times, Glass fears could unite Democrats and Republicans.Regulators in other countries <a href="https://www.sociallyawareblog.com/2014/06/27/google-glass-into-europe-a-small-step-or-a-giant-leap/" target="_blank" rel="noopener">entered the fray</a> as well, <a href="https://www.priv.gc.ca/media/nr-c/2013/nr-c_130618_e.asp" target="_blank" rel="noopener">writing</a> to Google to complain that they had not been approached by Google to address Glass-related privacy concerns.Further, all types of businesses and organizations have rushed to ban Glass–bars, restaurants, banks, schools, hospitals, museums, casinos, circuses, strip clubs and so on. Some of these bans, of course, make sense, but others do not; interestingly, history informs us that the revolutionary Kodak camera, upon its introduction in 1888, was banned from beach resorts and even the Washington Monument.In any event, it’s hard to imagine any product, no matter how innovative, surviving the barrage of negative developments related to Glass. Everywhere one looked, the message was that Glass had the potential to do damage–damage to its user’s physical and mental health, damage to its owner’s integrity, damage to the privacy of bystanders, damage to other motorists, damage to a business establishment’s income.I don’t mean to suggest that Glass didn’t raise some legitimate privacy concerns–it did. And so does the Internet. And social media. And mobile phones. And the Internet of Things. And even the Kodak camera, for that matter.Now that Glass is no longer with us, perhaps we can look at it with clearer vision. Is it possible that all of the relentless criticism of Glass was, well, short-sighted?

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Narrow Vision: Did Anti-Glass Hysteria Contribute to the Demise of Google Glass?

Narrow Vision: Did Anti-Glass Hysteria Contribute to the Demise of Google Glass?

Once the hottest new technology innovation around, Google Glass was put out to pasture yesterday, at least for the near future. In the tech industry, we general

President Obama provided a <a href="http://www.whitehouse.gov/the-press-office/2015/01/12/remarks-president-federal-trade-commission" target="_blank" rel="noopener">preview</a> of his State of the Union address next week which will propose comprehensive data privacy legislation, including a nationwide data-breach notification law, a Consumer Privacy Bill of Rights, and limitations on the use of student data. The announcement comes at a pivotal time for privacy in the wake of the high-profile data breaches that filled the news in 2014.In his remarks, President Obama called for Congress to create a “single, national standard” for notifying consumers of a data breach. Specifically, the president’s legislative proposal generally would require companies to notify customers of breaches of computerized data within 30 days. The proposed breach legislation would also preempt the current patchwork of state breach laws, although preemption would be limited to state laws “relating to notification” of breaches involving computerized data. The proposal would provide the Federal Trade Commission (FTC) with rulemaking authority and would be enforceable by the FTC and state Attorneys General. In addition, the proposed legislation would extend computer-crime laws to reach extraterritorial conduct in an effort to prosecute perpetrators of cyber-attacks even when the perpetrators are located overseas.The president also proposed legislation adopting the Administration’s 2012 Consumer Privacy Bill of Rights. The proposal would outline “basic principles to both protect personal privacy and ensure that industry can keep innovating.” Such a law would provide consumers the right to decide what personal data companies collect from them and how companies use that data, as well as require that companies protect the security of consumer information and be held accountable for its use. The president promised that this legislation would be introduced by the end of February 2015.Finally, President Obama proposed legislative language that would be focused on protecting student data from being used for commercial purposes, such as targeted advertising. Specifically, the president’s proposal would require that data collected regarding students be used only for educational purposes and would restrict companies from selling student data to third parties for non-educational purposes. The president’s proposal is likely modeled on California’s recently passed landmark student privacy law, the Student Online Personal Information Protection Act, which prohibits operators of online educational services from selling student data and using such information to target advertising to students or to “amass a profile” on students for a non-educational purpose.

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Looking Ahead in 2015: Obama Announces Push for Privacy Legislation in Final Term

Looking Ahead in 2015: Obama Announces Push for Privacy Legislation in Final Term