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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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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Congress enacted the Digital Millennium Copyright Act (“DMCA”) nearly two decades ago seeking to balance the needs of two factions: Content creators, who were struggling to protect their intellectual property in the digital age, and fledgling Internet companies, who feared being held liable for the misdeeds of their customers.For the Internet companies, Congress offered relief by creating a number of “safe harbors” shielding such companies from copyright-related damages arising from their customers’ infringing activities.In particular, the DMCA established four distinct safe harbors for online service providers, each safe harbor aimed at a different type of online activity (i.e., transitory digital network communications; system caching; online hosting; and provision of information location tools) and each with its own set of eligibility requirements.To qualify for any of these DMCA safe harbors, however, the DMCA requires that service providers “reasonably implement” a policy that provides for the termination of “repeat infringers” in “appropriate circumstances.”Despite the threshold importance of repeat infringer policies, the DMCA left many questions unanswered. Who exactly counts as an “infringer”? Does it include every user accused of infringement or only those found culpable in court? If it’s somewhere in between, what level of proof is required before a service provider is required to take action? Can the repeat infringer policy differentiate between those who upload infringing content for others to copy and share and those who only download such content for their own personal viewing? And how many acts of infringement does it take to become a “repeat infringer” anyway?When the Second Circuit Court of Appeals recently denied rehearing en banc and issued a <a href="http://www.leagle.com/decision/In%20FCO%2020161213106/EMI%20CHRISTIAN%20MUSIC%20GRP.,%20INC.%20v.%20MP3tunes,%20LLC" target="_blank" rel="noopener">modified opinion</a> in EMI v. MP3tunes, it added its voice in the limited—but growing—number of cases addressing these questions. The MP3tunes case involves two websites founded in 2005 by Internet entrepreneur Michael Robertson. (Mr. Robertson is also the founder and CEO of MP3.com, which, only a few years earlier, had been held liable for widespread copyright infringement.)The first of Mr. Robertson’s two websites at issue, mp3tunes.com, was an early cloud storage “locker” for digital music. The second website, sideload.com, allowed users to search the Internet for “free” music files and then copy (i.e. sideload) those files directly to their online locker. Many of these files allegedly contained pirated music and, in 2007, EMI sued MP3tunes and Mr. Robertson for copyright infringement.In a 2011 summary judgment decision, Judge Pauley, a federal judge in Manhattan, held that, as a matter of law, MP3tunes had reasonably implemented a repeat infringer policy under the DMCA; in support of his decision, Judge Pauley noted that the company had instituted a policy for responding to DMCA takedown requests and had actually “terminated the accounts of 153 users who allowed others to access their lockers and copy music files without authorization.” The court’s analysis, however, used a narrow definition of “repeat infringers,” including only those who upload infringing content to the Internet with knowledge that the content is infringing. The court explained:MP3tunes’ users do not upload content to the internet, but copy songs from third-party sites for their personal entertainment. There is a difference between (1) users who know they lack authorization and nevertheless upload content to the internet for the world to experience or copy, and (2) users who download content for their personal use and are otherwise oblivious to the copyrights of others.Despite the court’s validation of the MP3tunes repeat infringer policy, the jury <a href="http://www.hollywoodreporter.com/thr-esq/mp3tunes-founder-michael-robertson-found-689785" target="_blank" rel="noopener">ultimately found</a> the company willfully blind to infringing activity by its customers and thus ineligible for DMCA safe harbor protection.On appeal, a panel of judges on the Second Circuit <a href="http://www.leagle.com/decision/In%20FCO%2020161213106/EMI%20CHRISTIAN%20MUSIC%20GRP.,%20INC.%20v.%20MP3tunes,%20LLC" target="_blank" rel="noopener">found</a> that the district court had erred, both regarding the definition of “repeat infringer” and on whether MP3tunes’ repeat infringer policy was reasonable as a matter of law.Reevaluating the meaning of “repeat infringer,” the Second Circuit noted that infringement is a strict liability offense with no requirement to prove unlawful intent. Moreover, both uploading and downloading can constitute infringement. Because the DMCA does not define “repeat infringer,” the court adopted this ordinary meaning and held that “all it [takes] to be a ‘repeat infringer’ [is] to repeatedly [upload or download] copyrighted material for personal use.”Next, the Second Circuit found that MP3tunes’ repeat infringer policy was not, in fact, reasonable as a matter of law because, while the site did respond to takedown notices from copyright owners and terminated the accounts of some users, “MP3tunes did not even try to connect known infringing activity of which it became aware through takedown notices to users who repeatedly sideloaded files and created links to that infringing content in the sideload.com index.”Requiring this sort of search would seemingly run up against a separate DMCA provision that prohibits the conditioning of safe harbor protection on “a service provider monitoring its service or affirmatively seeking facts indicating infringing activity.” The Second Circuit, however, found that such a search would not constitute “monitoring” or “affirmatively seeking facts” under the DMCA because “MP3tunes would simply have had to make use of information already within its possession”—the takedown notices provided by EMI—“and connect that information to known users.”In the wake of the decision, several high-powered amici, including Dropbox, Facebook, Google, Pinterest and Twitter, took issue with the Second Circuit’s approach to repeat infringer policies and joined in supporting MP3tunes’ petition for rehearing before the full Second Circuit. Specifically, these leading Internet companies were concerned that requiring service providers to “tally strikes and terminate users merely for having accessed, viewed, or otherwise engaged with content that later might be the subject of a takedown notice” would destabilize the DMCA safe harbor regime and unfairly penalize users. The Second Circuit was unmoved and denied rehearing by the full court. MP3tunes has since indicated that it will seek Supreme Court review of Robertson’s personal jurisdiction issues, but the Second Circuit has had the final say on the copyright question.Also on the horizon is a similar dispute that may provide further guidance in this area. Later this year, the Fourth Circuit Court of Appeals is slated to review a lower court decision in BMG v. Cox, which turns on whether “repeat infringers” includes all users accused of infringement or only cases of infringement adjudicated in courts. The district court squarely rejected Cox’s “adjudicated infringer” position late last year, and MP3tunes does little to signal sympathy for that reading, but, in an area with little case law, the issue is far from settled.In the meanwhile, for companies that host or are otherwise involved with user-generated content, they will want to revisit their current repeat infringer policies and determine whether such policies need to be updated in light of the emerging DMCA safe harbor case law addressing such policies. *          *          *For an earlier Socially Aware post regarding the DMCA repeat infringer policy requirement, please see Rough Waters: Repeat Infringer Policies and the DMCA Safe Harbors. For other Socially Aware posts relating to the DMCA safe harbors, please see <a href="http://www.sociallyawareblog.com/2016/12/06/new-copyright-office-rule-creates-potential-gotcha-for-blogs-and-websites-hosting-user-generated-content/" target="_blank" rel="noopener">New Copyright Office Rule Creates Potential “Gotcha” for Blogs and Websites Hosting User-Generated Content</a>; <a href="http://www.sociallyawareblog.com/2016/01/14/new-court-decision-highlights-potential-headache-for-companies-hosting-user-generated-content/" target="_blank" rel="noopener">New Court Decision Highlights Potential Headache for Companies Hosting User-Generated Content </a>;<a href="http://www.sociallyawareblog.com/2014/06/24/court-holds-that-dmca-safe-harbors-do-not-extend-to-infringement-prior-to-designation-of-agent/" target="_blank" rel="noopener"> Court Holds That DMCA Safe Harbor Does Not Extend to Infringement Prior to Designation of Agent</a>; <a href="http://www.sociallyawareblog.com/2015/03/16/first-ever-award-of-any-damages-for-fraudulent-dmca-takedowns-under-section-512f/" target="_blank" rel="noopener">First-Ever Award of “Any Damages” for Fraudulent DMCA Takedowns Under Section 512(f)</a>.

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Alex advises on all aspects of complex commercial litigation in federal and state trial and appellate courts and in arbitration. He has represented U.S. and international clients in actions involving 

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Second Circuit Clarifies “Repeat Infringer” Policy Requirement for DMCA Copyright Safe Harbors