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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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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In this election season, we hear a lot of complaints about laws stifling business innovation. And there is no doubt that some laws have this effect.But what about laws that spur innovation, that result in the creation of revolutionary new business models?<a href="https://www.law.cornell.edu/uscode/text/17/512" target="_blank" rel="noopener">Section 512(c) of the Digital Millennium Copyright Act</a> (the DMCA) is one such law. Passed by Congress and signed by President Bill Clinton in 1998, Section 512(c) has played an enormous role in the success of YouTube, Facebook and other social media platforms that host user-generated content, by shielding such platforms from monetary damages from copyright infringement claims in connection with such content.Absent this safe harbor, it is difficult to imagine a company like YouTube thriving as a business. For example, in 2014 alone, YouTube removed <a href="http://www.pcworld.com/article/2891852/google-scores-a-win-in-sopatinged-mississippi-case.html" target="_blank" rel="noopener">over 180 million videos</a> from its platform due to “policy violations,” the vast majority of which likely stemmed from alleged copyright infringement; yet, absent the Section 512(c) safe harbor, YouTube could have been exposed to staggering monetary damages in connection with those videos.The DMCA’s protection from liability is expansive, but it is not automatic. To qualify, online service providers must affirmatively comply with a number of requirements imposed by the law. While most of those requirements may seem straightforward, a recent case in the Southern District of New York illustrates how even seemingly routine paperwork can pose problems for websites that host user-generated content.For companies seeking protection under the DMCA, the typical starting point is designating an agent to receive “takedown” notices from copyright owners. If a company is sued for copyright infringement relating to its website, that company will want to show that it has designated a DMCA agent. But what if the designation paperwork was handled by another entity within the defendant’s organizational structure, such as a corporate parent? That was the situation faced by one of the defendants in <a href="http://business.cch.com/ipld/BWPMediaUSAIncHollywoodFanSitesLLC.pdf" target="_blank" rel="noopener">BWP Media USA Inc., et al. v. Hollywood Fan Sites LLC, et al. (S.D.N.Y. 2015)</a>—and the court held that the defendant was out of luck.Although the defendant’s corporate parent had filed a registration form with the U.S. Copyright Office under the parent’s name, nothing on the form mentioned the defendant or made any general reference to affiliates. Under those circumstances, the court concluded that the defendant was ineligible for the safe harbor because it had “no presence at all” in the Copyright Office’s <a href="http://copyright.gov/onlinesp/list/a_agents.html" target="_blank" rel="noopener">directory of DMCA agents</a>. The court reasoned that those searching the Copyright Office directory should not be “expected to have independent knowledge of the corporate structure of a particular service provider.”Despite lacking a Copyright Office registration, the defendant argued that it did actually post the agent’s information on its own website, and that one of the plaintiffs had successfully used such information to send a takedown notice resulting in removal of the allegedly infringing material. The court found those assertions “irrelevant,” because they did nothing to address the Copyright Office registration requirement. As the court noted, the DMCA requires each service provider to post the agent’s name and contact information on the provider’s website, and submit such information to the Copyright Office.Would the defendant’s DMCA eligibility have turned out differently if the parent had included the affiliate’s name on the form, or at least made a general reference to the existence of affiliates? The court’s opinion leaves those questions unaddressed, but the <a href="http://copyright.gov/fedreg/1998/63fr59233.html" target="_blank" rel="noopener">preamble to the Copyright Office regulations</a>—cited in passing by the court—appears to reject such an approach. According to the preamble, each designation “may be filed only on behalf of a single service provider[, and] related companies (e.g., parents and subsidiaries) are considered separate service providers who would file separate [designations].”Following the Hollywood Fan Sites decision, we expect that many companies that host user-generated content will be checking to make sure that all of their legal names are indeed listed in the Copyright Office directory—and, in light of the Copyright Office’s position on this subject, many such companies may also decide to file separate designations for each legal entity within a corporate family. While this process may be cumbersome, it seems a small price to pay for the generous safe harbor benefits offered by the DMCA, especially for companies with business models that depend on user-generated content.

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.











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New Court Decision Highlights Potential Headache for Companies Hosting User-Generated Content

New Court Decision Highlights Potential Headache for Companies Hosting User-Generated Content

In this election season, we hear a lot of complaints about laws stifling business innovation. And there is no doubt that some laws have this effect. But what ab

Companies love to use third-party content for free. In this era of belt-tightening and slashed marketing budgets, why pay to create photos and videos for advertising and other commercial uses when compelling photos and videos are readily available online for licensing for commercial use at no charge?Perhaps the most important source of such works is Creative Commons, a nonprofit organization that promotes the free sharing and use of copyrighted works. Creative Commons publishes user-friendly copyright licenses that are free to use, and relatively light on legalese; some of these licenses allow for even commercial use of the licensed works at no charge. Since the first Creative Commons licenses were made available in 2002, the organization estimates that hundreds of millions of works have been distributed under the Creative Commons regime, and counts Google, Wikipedia and even the White House as users.Despite such popularity, there have been surprisingly few court decisions involving a Creative Commons license—Creative Commons identifies only nine such decisions total, and only two in the United States. A recent decision by the D.C. District Court, however, highlights potential pitfalls of the Creative Commons licensing regime for both licensors and licensees when a Creative Commons work is used for commercial purposes.<h3>Creative Commons Licensing</h3>Each of the Creative Commons license variations permits use of a copyrighted work without paying a licensing or royalty fee, provided that the licensee complies with certain conditions. *  Licensee must attribute the work to its author. **  Licensee may modify the work and create new works using the work. ***  Licensee must distribute derivative works under the same license terms as the original work.<h3>The Art Drauglis Decision</h3>The case at hand, Art Drauglis v. Kappa Map Group, LLC, involved the commercial use of a photo on the cover of an atlas under the Attribution-ShareAlike license. While the photographer apparently did not intend his photo to be incorporated into a for-profit work, the D.C. District Court found that the disputed use fell squarely within the terms of the license.The photographer, Art Drauglis, posted a landscape photograph entitled “Swain’s Lock” to his public page on the photo-sharing website Flickr. Flickr offers its users the option to make their photos available for use by third parties in one of two ways: (1) By dedicating the work to the public domain (thereby waiving copyright protection), or (2) by licensing the work under a Creative Commons license (and retaining copyright in the work). Rather than selecting one of the more restrictive Creative Commons licenses, Drauglis chose the Attribution-ShareAlike 2.0 license, which allows anyone to “copy and redistribute the [licensed work] in any medium or format” and to “remix, transform, and build upon the [licensed work] for any purpose, even commercially.”  (Emphasis added.)Kappa Map Group, which publishes a variety of maps and atlases, selected Swain’s Lock for the cover of its 2012 “Montgomery Co., Maryland Street Atlas,” which it sells for about $20. Kappa included an attribution notice on the back cover of the atlas identifying Drauglis as the photographer, as follows:Photo: Swain’s Lock, Montgomery Co., MDPhotographer: Carly Lesser & Art Drauglis, Creative Commoms [sic], CC-BY-SA-2.0When Drauglis discovered that his photo was being used on the atlas’s cover, he filed suit against Kappa, claiming that Kappa was in breach of various conditions on which the license grant was predicated and therefore was infringing his copyright.Specifically, Drauglis argued that (1) the atlas (or at least the atlas cover) was a derivative work of his photo and, per the license’s ShareAlike requirement, Kappa was obligated to distribute the atlas under similar license terms for free; (2) the photo attribution notice displayed on the atlas was insufficient because it did not include either a copy of or a URL link to the license terms; and (3) Kappa failed to comply with the license’s attribution requirement because the attribution notice (which was displayed in 7-8 pt. font on the back cover) was not as prominently displayed as the copyright notice for the atlas as a whole (which was displayed in 10 pt. font on the inside cover). The court dispensed of each argument rather summarily.Regarding Drauglis’ first argument, the parties agreed (per the plain language of the license) that only “derivative works”—as distinct from “collective works”—must be distributed free of charge pursuant to the ShareAlike requirement. Indeed, the Attribution-ShareAlike license makes clear that “collective works” and “derivative works” are mutually exclusive categories – terms applying only to derivative works do not apply to collective works, and vice versa. A “collective work” is defined in the license as “a work, such as a periodical issue, anthology or encyclopedia, in which the [licensed work] in its entirety in unmodified form, along with a number of other contributions, constituting separate and independent works in themselves, are assembled into a collective whole.” Because Kappa incorporated the photo into the atlas cover “with no major deletions or alterations” and the atlas itself was a compilation of individual maps together forming a “collective whole,” the court found that the atlas was a “collective work,” and therefore the ShareAlike requirement did not apply.Regarding Drauglis’ second argument, the license requires that the attribution notice include “a copy of, or the Uniform Resource Identified for” the Attribution-ShareAlike license, together with information identifying the licensed work and its author(s).  (Emphasis added.) Although the attribution notice used by Kappa did not include a URL link to the license terms, the court found that it did sufficiently identify them. “CC-BY-SA-2.0” is, in fact, the shorthand identifier used by Creative Commons to refer to version 2.0 of the Attribution-ShareAlike license, and the first result in a search for “CC-BY-SA-2.0” in Yahoo!, Google or Bing links directly to the license’s summary page on the Creative Commons website.Regarding Drauglis’ final argument, the Attribution-ShareAlike license requires that the attribution notice be displayed as prominently as “comparable authorship credit” appearing in a collective or derivative work. The court found that the appropriate point of comparison in this case was not the atlas copyright notice, as Drauglis argued, but rather the copyright notice for each individual map within the atlas, to which the photo attribution notice was sufficiently similar in both font size and prominence.<h3>Takeaways</h3>Although Drauglis’ arguments were thin, and Kappa’s use of the licensed photo was found to be well within the scope of the Attribution-ShareAlike license, the court nonetheless denied Kappa’s request for attorneys’ fees. Paying a negotiated license fee or investing in the creation of original cover art presumably would have been less costly to Kappa than 14 (long) months of discovery and litigation. Further adding to the cost of what was expected to be a fee-free license, Kappa ultimately replaced Drauglis’ photo with a new cover photo, presumably in an effort to mitigate potential damages while the trial was ongoing.Anyone considering commercial use of a Creative Commons work will want to take note of this case and bear in mind the risk of litigation, as commercial uses under a Creative Commons license are seemingly more likely to be challenged by the licensee than non-commercial uses, and had Kappa not carefully complied with each applicable license requirement, the decision might well have gone the other way.Licensors making their work available under a Creative Commons license should also take care to understand the various uses permitted under each license, rather than assuming that all Creative Commons licenses necessarily prohibit licensees from turning a profit.

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Creative Commons Works: Free to License, But Not Necessarily Free to Use

Creative Commons Works: Free to License, But Not Necessarily Free to Use

Companies love to use third-party content for free. In this era of belt-tightening and slashed marketing budgets, why pay to create photos and videos for advert