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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Last week­—the week of May 12, 2013­—proved to be an eventful week for Aereo.On May 14, 2013, the controversial broadcast television streaming service filed a motion for summary judgment in the Southern District of New York on copyright claims brought by broadcast television networks (including ABC, NBC, CBS and Fox) that Aereo’s service directly infringes the networks’ public performance rights and directly and secondarily infringes their reproduction rights.The very next day, Aereo kicked off its plans to expand the New York City-based service to 22 additional U.S. cities by launching in Boston.This flurry of activity shortly follows the April 1, 2013 opinion of the Second Circuit Court of Appeals, which affirmed the District Court’s opinion in WNET v. Aereo, Inc. denying a motion for preliminary injunction against Aereo based on infringement of the networks’ public performance rights.In case you are not yet familiar with Aereo’s inner workings, the service transmits broadcast television programs to subscribers via the Internet by using miniature antennas. Specifically, Aereo provides each subscriber with a dedicated antenna for the period of time during which the subscriber is using the service.  When a subscriber chooses to “Watch” or “Record” a particular television program through the Aereo interface, the Aereo system makes a unique copy of the television program from the broadcast signals received by the antenna and transmits such copy to the subscriber’s Internet-connected device.To the disappointment of the broadcast television networks, the Second Circuit found that the operation of Aereo’s service does not infringe the networks’ public performance rights under the Copyright Act.  Citing the doctrine of stare decisis (which obligates judges to follow precedential court opinions), the majority of the three-judge panel found that the Second Circuit’s 2008 opinion in Cartoon Network, LP v. CSC Holdings, Inc. (commonly referred to as “Cablevision”) precluded a finding that Aereo’s transmissions are “public performances” within the meaning of the Copyright Act’s “transmit clause.”The Cablevision court held that whether a performance is made “to the public” should be determined by the potential audience of the copy of the work being performed (as opposed to the potential audience of the work being performed).  Accordingly, the Aereo court found it inconsequential to its copyright analysis that the Aereo service makes broadcast television programs available to members of the public; instead, the court looked at how each subscriber received access to a particular television program to determine whether the performance of such program was a “public performance.”  Because Aereo transmits the broadcast television programs to its subscribers using a copy unique to each individual subscriber, the court determined that Aereo’s transmissions constitute private performances for the purposes of copyright law.Circuit Judge Denny Chin dissented in the Aereo case, referring to Aereo’s system as “a sham” that has been technologically manipulated to fall within an apparent loophole created by copyright case law in the Second Circuit.  According to Judge Chin, both the plain meaning of the Copyright Act’s “transmit clause” and legislative history support a finding of copyright infringement by Aereo, as Aereo is transmitting the networks’ copyrighted works to “paying strangers” through the use of Aereo’s system.  Judge Chin also made much of the fact that Aereo does not hold a license to retransmit the broadcast television programs, unlike Cablevision had in the Cablevision case (a fact that the majority of the Aereo court found irrelevant).Judge Chin’s arguments echo those of Judge George Wu of the Central District of California, who ruled in favor of the networks in Fox Television Stations, Inc. v. BarryDriller Content Systems, PLC  (commonly referred to as “Aereokiller”) in December 2012.  Noting tension between the Second Circuit’s Cablevision decision and Ninth Circuit copyright case law, Judge Wu issued an injunction against service provider Aereokiller, a competitor of Aereo based in California that offers a streaming service technologically similar to that of Aereo.  The Aereokiller decision offers an alternative interpretation of the Copyright Act’s “transmit clause” that directs courts to look at whether a performance made via a transmission is made “to the public” (rather than whether the specific transmission is made “to the public”).  Based on this interpretation, Judge Wu found that Aereokiller’s transmissions of broadcast television programs to its subscribers using unique copies of such programs were nonetheless “public performances” under copyright law.  The Aereokiller case is currently on appeal to the Ninth Circuit.If the Ninth Circuit affirms Judge Wu’s opinion, a significant split is likely to arise between the Second and Ninth Circuits on the critical question of when an online transmission constitutes a “public performance” for purposes of the Copyright Act.  The broadcast networks have not given up in the Second Circuit, however, and have petitioned for an en banc rehearing (i.e., a rehearing before all Second Circuit judges) of the Aereo case, hoping to achieve a reversal of the three-judge panel opinion.The ultimate outcomes of the Aereo and Aereokiller cases are likely to have a big impact on how consumers access broadcast television over the coming years.  Both copyright owners and online distributors are undoubtedly staying tuned for future developments.

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The Second Circuit’s Aereo Math: One Copy + One Subscriber ≠ Public Performance

The Second Circuit’s Aereo Math: One Copy + One Subscriber ≠ Public Performance

Last week­—the week of May 12, 2013­—proved to be an eventful week for Aereo. On May 14, 2013, the controversial broadcast television streaming service filed a 

Readers in the New York area, please join us for a complimentary, in-person event on Tuesday, May 28.Recently, regulators provided some additional guidance regarding the use of social media channels to disseminate issuer information. FINRA and the Commission also have been focused on the use of social media by registered broker-dealers, and by investment advisers. During this session, we will review current guidance, best practices, and potential pitfalls, and address the following topics:<ul><li>Using your website or social media tools for Reg FD purposes;</li><li>Using the Internet for capital-raising in exempt offerings;</li><li>Liability for hyperlinked and other third-party data on websites;</li><li>FINRA guidance to broker-dealers;</li><li>Guidance for private funds; and</li><li>Guidance for advisers.</li></ul>Speakers:<ul><li>Jay G. Baris</li><li>Anna T. Pinedo</li><li>David M. Lynn</li></ul>Tuesday, May 28, 2013Registration / Breakfast: 8:00 am – 8:30 am EDTSeminar: 8:30 am – 10:00 am EDTMorrison & Foerster LLP 1290 Avenue of the Americas New York, NY 10104New York and California CLE credit is pending. Breakfast will be served.For more information and to register, please email Joe Marano at <a href="mailto:jmarano@mofo.com">jmarano@mofo.com</a>.

Use of Social Media for Issuers, Broker-Dealers and Advisers, and Investment Companies

Readers in the New York area, please join us for a complimentary, in-person event on Tuesday, May 28. Recently, regulators provided some additional guidance reg

Use of Social Media for Issuers, Broker-Dealers and Advisers, and Investment Companies

Morrison & Foerster’s Sherman Kahn Interviews American Arbitration Association Vice President, Sandra PartridgeMany companies are providing for arbitration of disputes in their terms of service agreements governing use of their websites or other online or mobile services. Arbitration clauses in online terms of service agreements should be carefully drafted in order to ensure that they are enforceable, particularly when arbitrations under the agreement may be conducted between the business and a consumer. It is also important to design the presentation of the clause so that the counterparty is aware of the clause and consents to it. We have previously written about these issues in <a href="../2012/02/21/click-accept-arbitration-enforcing-arbitration-provisions-in-online-terms-of-service/">Click-Accept Arbitration: Enforcing Arbitration Provisions in Online Terms of Service. </a>One of the decisions that must be made when drafting an arbitration clause is which organization will administer the arbitration. One of the organizations frequently chosen to administer arbitrations arising from online terms of service agreements is the American Arbitration Association (AAA). We are pleased to publish here a discussion with Sandra Partridge of the AAA. Ms. Partridge is the Commercial Vice President for the AAA in New York. She shares practical advice in the interview regarding how to provide for arbitrations in connection with your terms of service agreements.Ms. Partridge, can you tell us about the AAA and its administration of arbitrations arising from online terms of service?The AAA administers two types of arbitrations arising from online terms of service agreements—business-to-business and business-to-consumer. Business-to-business agreement disputes are heard under the AAA Commercial Arbitration Rules and proceed the same way as any other business-to-business arbitration. The AAA is prepared to handle both large and small business-to-business disputes. The AAA’s Commercial Rules include Expedited Procedures to govern the arbitration where the amount in dispute is under US$75,000. The AAA Expedited Procedures provide parties with a fast, cost-efficient method for resolving less complicated disputes.Can you explain how the AAA’s approach differs when it is administrating a business to consumer dispute?Pre-dispute arbitration clauses (i.e., agreements entered into before a dispute arises), such as clauses in online terms of service agreements, that may result in arbitration between the business and a consumer require additional scrutiny. This is because when businesses enter a pre-dispute arbitration agreement with consumers, a greater level of due process protection is required in order to ensure fairness. The AAA, in conjunction with a variety of other organizations, jointly developed a Consumer Due Process Protocol that addresses issues such as locale for arbitration hearings, cost-shifting and allocation, legal representation and access to remedies. Businesses considering adding pre-dispute arbitration clauses to terms of service agreements would find it advisable to become familiar with the Consumer Due Process Protocol. The AAA has also developed supplementary procedures for the conduct of consumer arbitrations. It is helpful to review those procedures before preparing a consumer-directed arbitration provision. In addition, the AAA has dedicated a section of its website to disputes between businesses and consumers that provides a variety of helpful material for the arbitration clause drafter.What additional steps should the arbitration clause drafter take if the drafter expects that arbitrations under the agreement may include arbitration of disputes between the business and consumers?As mentioned above, the drafter should refer to the Consumer Due Process Protocol when drafting the arbitration clause. In addition, where a clause may result in arbitration with consumers, the AAA requires that the clause drafter submit the clause to the AAA for review and approval in advance of the administration of any arbitration under the clause.Why does the AAA require pre-arbitration review of arbitration clauses?The AAA requires that a consumer-directed pre-dispute arbitration clause be in compliance with the Consumer Due Process Protocol before it can administrate cases brought under that clause. The AAA only administrates cases between businesses and consumers arising from pre-dispute arbitration provisions that are in compliance with the Protocol in order to ensure fairness and a level playing field for both sides. Consumers and businesses can expect a fair process and enforceable awards. Pre-approval also allows the AAA to administrate any cases that are filed pursuant to the clause without delay.How would the AAA proceed if presented with a consumer arbitration filing based upon an arbitration clause that the AAA had not pre-approved?When a case is submitted based on a compliant but not previously approved pre-dispute arbitration clause, the AAA’s consumer department will conduct an immediate review, approve the clause, and contact the business to arrange for administration of the case.  However, if a clause is not pre-approved, the business runs the risk that the clause will not be approvable as written, causing the AAA to reject the filing.Some companies are concerned that the pre-review will take substantial time and effort, and potentially require major changes to clauses that have already been approved by top management. Can you respond to those concerns?The AAA is able to approve a compliant clause in a matter of days. If a clause is not compliant, the AAA will notify the drafter of the specific reasons why; allowing the drafter to promptly correct those concerns. This can also be done in a matter of days. Top management’s concerns may be assuaged by the realization that a compliant clause contributes to both fairness and enforceability.How can companies get in touch with the AAA to discuss potential administration of an arbitration program?Neil Currie, the AAA Vice President who oversees the consumer area, is the best individual to contact for information, answers to questions and ultimate approval of an arbitration program involving consumers. His email is <a href="mailto:Currien@adr.org">Currien@adr.org</a> and his phone number is 213-362-1900.

Administering Arbitration Clauses in Online Terms of Service Agreements

Morrison & Foerster’s Sherman Kahn Interviews American Arbitration Association Vice President, Sandra Partridge Many companies are providing for arbitration of 

Administering Arbitration Clauses in Online Terms of Service Agreements

On March 28, 2013, the Court of Appeals, New York’s highest court, issued a <a href="http://law.justia.com/cases/new-york/court-of-appeals/2013/33.html">decision</a> in Overstock.com, Inc. & Amazon.com, LLC, et al., holding that New York’s “click-through nexus” statute does not violate the Commerce Clause or the Due Process Clause of the U.S. Constitution. As a result, an Internet vendor may be presumed to have nexus in New York, and be required to collect sales tax from New York customers, when a link to the vendor’s website appears on websites of New York residents who are compensated via a commission arrangement.The <a href="http://codes.lp.findlaw.com/nycode/TAX/28/I--DEFINITIONS/1101">New York law</a> was amended in 2008 to provide a presumption that the definition of a “vendor,” required to collect New York State sales tax on sales to New York customers, includes an entity that enters into an agreement with a New York resident under which the resident refers potential customers, including via a link on a website, “for a commission or other consideration.” Amazon and Overstock challenged the facial constitutionality of that presumption.The Court of Appeals found that it was rational for the state legislature to presume that New York residents who were compensated on a commission basis would seek to increase their business by soliciting New York customers, and that the ability to rebut the presumption through an annual certification “sensibly” placed the burden on the retailers to demonstrate the lack of solicitation activities.One judge dissented, finding that the placing of links on a website was no more than advertising, and that the change in compensation method for such advertising—from a flat fee to a commission—does not change its essential nature.This decision is important to all Internet vendors who have relationships with “affiliates” and other business partners, not only in New York but in other states that have enacted similar statutes. We note, however, that a lower court in Illinois has found a similar Illinois statute unconstitutional, and an appeal of that decision is pending before the Illinois Supreme Court. The U.S. Supreme Court may yet have to weigh in on this issue.

E-Commerce Providers Take Note: New York’s Highest Court Upholds “Amazon” Sales Tax Statute