Category: Communication Media & Internet

The Intersection of Libel Law and Politics

Libel Commentary

Since its beginning, the American Republic has debated sedition, free speech, and protection of reputation. After we cut our British roots we ensured our right to criticize our leaders, the politicians who control our government. The British crown demanded loyalty of its printers, but American courts would not tolerate such prosecutions as the notion of a truly free press emerged.

Today, we are witnessing an intense intersection of politics and libel law unlike anything we’ve seen since the 1960s. Politicians are suing for libel damages and being sued. The current overlap of politics and libel includes a push by the president of the United States to change libel law. Those who seek change, including President Trump, say they want to make it easier for plaintiffs to prevail and collect damages. Careful what you wish for, though, because such change would ease the path for plaintiffs seeking to collect damages from public officials such as Donald Trump.

Heading into the 2020 election, the Trump campaign filed three lawsuits in a 10-day period against mainstream media.

Legal scholars and pundits have opined that Trump’s pending libel complaints against The New York Times, The Washington Post, and CNN are weak or even dead on arrival. These analysts point out that Trump’s campaign is seeking damages due to political opinions, which are protected speech under the First Amendment.

As a life-long public figure and now public official, Trump (his re-election campaign is the plaintiff) must prove that the media defendants acted with actual malice, that is, reckless disregard for the truth or that they published information knowing it was false. The actual malice standard is well established through the First Amendment by a unanimous U.S. Supreme Court in New York Times v. Sullivan in 1964.

Win or lose in court, the president’s libel lawsuits also are political messaging, dramatic actions that complement his anti-press rhetoric. The stories about the libel suits are arguably more effective than the libel suits themselves in the president’s battles to discredit the mainstream press. In addition to political messaging, libel claims – even when they fail in court — can be a form of punishment.

Historical Context

Presidential involvement in libel litigation is rare, but not unprecedented. President Theodore Roosevelt was irritated by published allegations of corruption in the sale of the Panama Canal. He pushed the Justice Department to prosecute publisher Joseph Pulitzer and other newspapermen for criminal libel. Courts later quashed indictments.

After his presidency, Roosevelt was sued for libel by a New York political figure (William Barnes) who objected to being called corrupt by Roosevelt. The jury trial, in Syracuse in 1915, was grist for Dan Abrams’ book “Theodore Roosevelt for the Defense.” The jury ruled in Roosevelt’s favor; he seemed to thrive in legal combat, the book says.

Fifteen years ago, there was speculation about the prospect of President George W. Bush suing the National Enquirer. The Enquirer published a report based on unnamed sources who claimed that pressures of the job led Bush to drink, even though he said he gave up alcohol on his 40th birthday.

“The president would be exceptionally ill-advised to file suit over this story, even if he knows . . . it’s false,” wrote First Amendment lawyer Julie Hilden in 2005.

She suggested such a suit would likely fail because its “actual malice” claim appeared to be weak. Plus, she warned, the suit would expose the president to civil discovery. Bush did not sue.

After the 1964 election, Republican presidential candidate Barry Goldwater successfully sued Fact Magazine and its publisher for an article questioning Goldwater’s mental fitness to hold office (Goldwater v. Ginzburg). Federal courts found that Goldwater’s complaint met the actual malice standard, awarding $75,000. The U.S. Supreme Court, in 1970, declined to hear the case.

Trump’s Track Record

In seven earlier speech-related cases filed by Donald Trump or his companies before he became president, four were dismissed on the merits, two were voluntarily withdrawn, and one was an arbitration won by Trump by default. These findings were compiled by Susan E. Seager, a First Amendment attorney who teaches media law at University of Southern California. Indeed, this appears to be a way of life for the highly litigious Trump, who has been involved in approximately 4,000 legal battles over the past 30 years, both as a plaintiff and defendant. An exhaustive analysis by USA Today detailed those seven libel cases where he initiated the lawsuits and seven more where he was named defendant. These don’t even include the threats of suits, the so-called “I’ll sue you” effect that can too often chill speech.

A common thread of these cases is the pursuit of jumbo damages. Trump alleged $5 billion in damages (in New Jersey state court) because author Timothy O’Brien and his book publishers cast doubt on the size of the real estate mogul’s wealth. Trump lost after five years of litigation but assessed the outcome this way to The Washington Post: “I spent a couple of bucks on legal fees but they spent a whole lot more. I did it to make [O’Brien’s] life miserable, which I’m happy about.”

Judicial Nominations

Judicial appointments are a priority for the Trump Administration. Interestingly, a judge nominated by the president in 2018 dismissed (with prejudice) a case filed by a Republican congressman.

On August 5, 2020, U.S. District Court Judge C.J. Williams of the Northern District of Iowa dismissed Congressman Devin Nunes’ defamation complaint against Esquire writer Ryan Lizza and its publisher. The judge said published criticism of Nunes (R-CA) was not actionable (Devin G. Nunes v. Ryan Lizza and Hearst Magazine Media, Inc).

Interestingly, part of this recent case deals directly with President Trump and his tweets. I’ll quote Judge Willliams’ opinion regarding Trump’s tweet that “Obama had my ‘wires tapped’ in Trump Tower:”

First, to the extent defendants assert President Trump “made up” the tweet,

the statement is not of an concerning plaintiff (Nunes). Second, plaintiff has

not alleged that the statement is false. Third, even if the statement is factually inaccurate, the statement that plaintiff’s theory about surveillance of the Trump campaign “began” with President Trump’s tweet is not defamatory.

Other Political Cases

Sarah Palin, John McCain’s vice-presidential running mate in 2008, sued The New York Times for defamation, claiming that a 2017 editorial maliciously associated her with a mass shooting that injured Congresswoman Gabrielle Giffords (D-AZ). A federal judge dismissed her case, but a 3-0 panel of the U.S. Second Circuit Court of Appeals reversed, thus reviving the case (Sarah Palin v. The New York Times).

Besides the characters involved – and the reversal in federal court – this case is interesting because The New York Times published a correction: “An earlier version of this editorial incorrectly stated that a link existed between political incitement and the 2011 shooting of Representative Gabby Giffords. In fact, no such link was established.”

To prevail, Palin – a public figure — must show that the newspaper acted with actual malice.

Meanwhile, a former contestant on “The Apprentice,” Summer Zervos sued President Trump in 2017 claiming she was defamed because candidate Trump said her allegations of his sexual misconduct in 2007 were lies. In 2019, a 3-2 majority of a New York State appeals court rejected the argument from Trump’s counsel that a sitting president cannot be sued in state court (Zervos v. Trump).

In addition to its spotlight on the Supremacy Clause, the Zervos lawsuit also examines the boundaries of opinion-as-defense in defamation disputes. Trump’s lawyers argue that his campaign rhetoric and opinions are protected by the First Amendment.

Nicholas Sandmann, a student at Covington Catholic High School in northern Kentucky, alleged that he was defamed by news coverage and social media sharing of accounts of his encounter near the Lincoln Memorial with a Native American activist in early 2019. Sandmann sued The Washington Post for $250 million; NBC and CNN for $275 million each.  CNN and The Washington Post settled for undisclosed terms.

Are media rattled by all this litigation? Yes, I think that’s pretty apparent. How could they not be in this anti-press environment? Libel claims are part of a general, overarching criticism of press, reporting the news, and media prerogatives.

From a bottom-line standpoint, media must pay for legal defense. Newspaper publisher McClatchy — a defendant in one of Congressman Devin Nunes’ myriad libel suits — filed for bankruptcy in February. The Poynter Institute for journalism published commentary in 2019 that McClatchy could hire 10 reporters for the money it would spend on the Nunes lawsuit.

A small newspaper in Iowa (Carroll Times Herald) won a libel case but created a GoFundMe appeal in 2019 because the legal defense drained its resources. Response to the solicitation — mainly small donations, from across the country — was impressive.

Most certainly the Sandmann cases have drained considerable resources from some of the most noted media companies in the country as those out-of-court settlements show.

Non-political Cases

We also see a flurry of high-dollar claims not directly related to political speech.

On August 14, the unanimous North Carolina Supreme Court upheld a jury’s libel decision against the Raleigh newspaper (Beth Desmond v. The News & Observer Publishing Company). The Ohio private liberal arts Oberlin College is appealing the whopping $44 million in damages awarded to a local bakery stemming from an alleged shoplifting attempt by three African American students (Gibson’s Bakery v. Oberlin College). Rolling Stone paid dearly for its flawed article about a campus rape at the University of Virginia.

Is libel law likely to change?

Fundamental change is not likely in the near future. Justice Clarence Thomas suggested it’s time for the Supreme Court to examine/roll back the New York Times v. Sullivan standard created in 1964. The premise is that current strict standards intended to protect free speech and free press make it nearly impossible for public figures and public officials to prevail in libel cases.

Justice Thomas’ colleagues on the Court have not publicly joined him in urging review of Sullivan.

Libel cases are percolating in federal and state courts that eventually could ripen for Supreme Court review. The Roberts Court has been protective of speech, including commercial and political speech, such as:

  • Citizens United v. FEC, 2010 (political contributions)
  • Snyder v. Phelps, 2010 (picketing at funerals)
  • Sorrell v. IMS Health, 2011 (data mining, drug marketing)
  • Reed v. Town of Gilbert, 2015 (sign regulations cannot be based on content)
  • Matal v. Tam, 2017 (trademarks)​

We all can be grateful that American libel law does not mirror British libel law, where the burden of proof is on the defendant rather than the plaintiff. Surely by now we have all seen the clickbait coverage of actor Johnny Depp’s libel case against The Sun (Johnny Depp v. News Group Newspapers) for its 2018 reportage of his contentious divorce, which included a headline calling him a “wife beater.”

American libel law is not British libel law. And we need to keep it that way.

© Aimee Edmondson, PhD

Article by Aimee Edmondson, PhD E.W. Scripps School of Journalism at Ohio University and National Law Review Guest Contributor.
For more on free speech, see the National Law Review Constitutional Law section.

National Security Meets Teenage Dance Battles: Trump Issues Executive Orders Impacting TikTok and WeChat Business in the U.S.

On August 6, 2020, Trump issued two separate executive orders that will severely restrict TikTok and WeChat’s business in the United States.  For weeks, the media has reported on Trump’s desire to “ban” TikTok with speculation about the legal authority to do so.  We break down the impact of the Orders below.

The White House has been threatening for weeks to ban both apps in the interest of protecting “the national security, foreign policy, and economy of the United States.”  According to the Orders issued Thursday, the data collection practices of both entities purportedly “threaten[] to allow the Chinese Communist Party access to Americans’ personal and proprietary information — potentially allowing China to track the locations of Federal employees and contractors, build dossiers of personal information for blackmail, and conduct corporate espionage.”

This is not a new threat.  A variety of government actions in recent years have been aimed at mitigating the national security risks associated with foreign adversaries stealing sensitive data of U.S. persons.  For example, in 2018, the Foreign Investment Risk Review Modernization Act (FIRRMA) was implemented to expand the authority of the Committee on Foreign Investment in the United States (CFIUS) to review and address national security concerns arising from foreign investment in U.S. companies, particularly where foreign parties can access the personal data of U.S. citizens.  And CFIUS has not been hesitant about exercising this authority.  Last year, CFIUS required the divestment of a Chinese investor’s stake in Grindr, the popular gay dating app, because of concerns that the Chinese investor would have access to U.S. citizens’ sensitive information which could be used for blackmail or other nefarious purposes.  That action was in the face of Grindr’s impending IPO.

In May 2019, Trump took one step further, issuing Executive Order 13873 to address a “national emergency with respect to the information and communications technology and services supply chain.”  That Order stated that foreign adversaries were taking advantage of vulnerabilities in American IT and communications services supply chain and described broad measures to address that threat.  According to these new Orders, further action is necessary to address these threats.  EO 13873 and the TikTok and WeChat Orders were all issued under the International Emergency Economic Powers Act  (IEEPA), which provides the President broad authority to regulate transactions which threaten national security during a national emergency.

Order Highlights

Both Executive Orders provide the Secretary of Commerce broad authority to prohibit transactions involving the parent companies of TikTok and WeChat, with limitations on which transactions yet to be defined.

  • The TikTok EO prohibits “any transaction by any person, or with respect to any property, subject to the jurisdiction of the United States,” with ByteDance Ltd., TikTok’s parent company, “or its subsidiaries, in which any such company has any interest, as identified by the Secretary of Commerce”
  • The WeChat EO prohibits “any transaction that is related to WeChat by any person, or with respect to any property, subject to the jurisdiction of the United States, with Tencent Holdings Ltd., WeChat’s parent company “or any subsidiary of that entity, as identified by the Secretary of Commerce.”
  • Both Executive Orders will take effect 45 days after issuance of the order (September 20, 2020), by which time the Secretary of Commerce will have identified the transactions subject to the Orders.

Implications

Until the Secretary of Commerce identifies the scope of transactions prohibited by the Executive Orders, the ultimate ramifications of these Orders remain unclear.  However, given what we do know, we have some initial thoughts on how these new prohibitions may play out.  The following are some preliminary answers to the burning questions at the forefront of every American teenager’s (and business person’s) mind.

Q:  Do these Orders ban the use of TikTok or WeChat in the United States?

A:  While the Orders do not necessarily ban the use of TikTok or WeChat itself, the app (or any future software updates) may no longer be available for download in the Google or Apple app stores in the U.S., and U.S. companies may not be able to purchase advertising on the social media platform – effectively (if not explicitly) banning the apps from the United States.

Q:  Will all transactions with ByteDance Ltd. and Tencent Holdings Ltd. (TikTok and WeChat’s parent companies, respectively) be prohibited?

A:  Given the broad language in the Orders, it does appear that U.S. app stores, carriers, or internet service providers (ISPs) will likely not be able to continue carrying the services while TikTok and WeChat are owned by these Chinese entities.  However, it is unlikely that the goal is to prohibit all transactions with these companies as a deterrent or punishment tool – which would essentially amount to designating them as Specially Designated Nationals (SDNs) – the  Orders clearly contemplate some limitations to be imposed on the types of transactions subject to the Order by the Secretary of Commerce.  Furthermore, the national security policy rationale for such restrictions will not be present in all transactions (i.e. if the concern is the ability of Chinese entities to access personal data of U.S. citizens in a manner that could be used against the interests of the United States, then presumably transactions in which ByteDance Ltd. and Tencent Holdings Ltd. do not have access to such data should be permissible.).  So while we do not know exactly what the scope of prohibited transactions will be, it would appear that the goal is to restrict these entities’ access to U.S. data and any transactions that would facilitate or allow such access.

Q:  What does “any property, subject to the jurisdiction of the United States” mean?

A:  Normally, the idea behind such language is to limit the prohibited transactions to those with a clear nexus to the United States: any U.S. person or person within the United States, or involving property within the United States.  It is unlikely that transactions conducted wholly outside the United States by non-U.S. entities would be impacted.  From a policy perspective, it would make sense that the prohibitions be limited to transactions that would facilitate these Chinese entities getting access to U.S.-person data through the use of TikTok and WeChat.

Q:  What about the reported sale of TikTok?

A: There is a chance the restrictions outlined in the TikTok EO will become moot.  Reportedly, Microsoft is in talks with ByteDance to acquire TikTok’s business in the United States and a few other jurisdictions.  If the scope of prohibited transactions are tailored to those involving access to U.S. person data and if a U.S. company can assure that U.S. user-data will be protected, then the national security concerns of continued use of the app would be mitigated.  Unless and until such acquisition takes place, U.S. companies investing in TikTok or utilizing it for advertising such be prepared for the restrictions to take effect.  At this time, there do not appear to be any U.S. buyers in the mix for WeChat.

Q:  The WeChat EO prohibits any transaction that is “related to” WeChat…what does that mean?

A:  The WeChat prohibition is more ambiguous and could have significantly wider impact on U.S. business interests. WeChat is widely used in the United States, particularly by people of Chinese descent, to carry out business transactions, including communicating with, and making mobile payments to, various service providers.  The WeChat EO prohibits “any transaction that is related to WeChat”  with Tencent Holdings Ltd., or any of its subsidiaries.  Unlike TikTok, WeChat’s services extend beyond social media.  While the language of the ban is vague and the prohibited transactions are yet to be determined, it appears likely that using WeChat for these communications and transactions may no longer be legal. It is also unclear if the WeChat prohibition will extend to other businesses tied to Tencent, WeChat’s parent company, including major gaming companies Epic Games (publisher of the popular “Fortnite”), Riot Games (“League of Legends”), and Activision Blizzard, all in which Tencent has substantial ownership interests.  There has been some reporting that a White House official confirmed Tencent’s gaming interest are excluded from the Order as being unrelated to WeChat, but until the Secretary of Commerce specifies the prohibited transactions, the scope of the Order remains uncertain

Bottom Line

Until the Secretary of Commerce issues its list of transactions prohibited under these Executive Orders, the scope and effect of these Orders is conjectural.  This Administration’s all-in posture towards China would suggest that the prohibitions could be broad and severe.  U.S. companies utilizing WeChat or TikTok for business purposes or conducting business with the apps’ owners, should think carefully about ongoing and future transactions.  Of course, there is an election right around the corner and a new Administration may bring significant change to related foreign, trade and technology policy.  Thoughtful planning for a variety of scenarios will enable companies’ to respond appropriately as the restrictions on TikTok and WeChat are crystallized.

Copyright © 2020, Sheppard Mullin Richter & Hampton LLP.

Domestic Violence: What is a Dating Relationship?

Several months into the COVID-19 pandemic, the daily lives of most people have changed in many ways. With many people still desiring to find companionship, dating websites and mobile applications have provided somewhat of a substitute for traditional in-person dates, which are no longer feasible during the pandemic.

What happens if the relationship you’ve developed in these virtual settings goes awry, and the continued virtual contact becomes unwanted, threatening, malicious, and/or harassing? Can you obtain a restraining order to prevent further contact?

The answer largely depends on whether your online relationship with this person is considered to be within the definition of a “dating relationship” under the New Jersey Prevention of Domestic Violence Act.

The New Jersey Prevention of Domestic Violence only provides protection for certain classes of relationships, defined as a spouse, former spouse, household member (whether presently or at any prior time), parties with a child in common, or parties with whom the victim has had a dating relationship.

Fortunately, recent case law has shown an evolution of the term “dating relationship” under the statute to account for the evolution of dating itself.

The case of C.C. v. J.A.H., decided by the New Jersey Appellate Division on June 11, 2020, took into consideration two individuals who had never experienced a traditional, in-person “date.” They never visited each other’s homes, or met each other’s friends or family members. They never engaged in sexual relations, kissed, or even held hands. What they did do, however, was exchange nearly 1,300 highly personal and intimate text messages over the course of several months. Eventually, when one of the parties tried to cease the contact and spurn any further relationship, the other party’s communications became threatening and malicious.

In this first case of its kind, the court held that these two individuals, who shared no other meaningful contact aside from these text messages, were in enough of a “dating relationship” to provide protection to the victim.

This case may have broadened the protections available to victims of domestic violence tremendously. If you are being threatened, harassed or otherwise are subjected to domestic violence, you may be able to obtain a Final Restraining Order to protect yourself.

COPYRIGHT © 2020, STARK & STARK

Apple, Inc. Probed by European Commission for Possible Antitrust Violations

In late June, the European Commission (EC) opened several formal cases investigating Apple’s mobile payment technology (Apple Pay) and various third-party and user agreements to determine whether the tech giant’s practices and policies infringe on competition rights and abuse market power. Specifically, the Commission will investigate the company’s terms and conditions integrating the payment feature into merchant applications and websites, and the imposition of its proprietary in-app purchase system and accompanying restrictions. The latter prevents third-party developers from informing their users of cheaper alternative purchases available outside the app. The investigations follow complaints made by Spotify, a music streaming service competitor, and an e-book/audiobook distributor competitor, according to the EC’s press release.

In a statement, EC Executive Vice President Margrethe Vestager said that the Commission needs to allay fears that Apple’s “gatekeeper role” in the distribution of apps and content to users does not distort market competition. The impetus, she said, was to ensure that “Apple’s measures do not deny consumers the benefits of new payment technologies, including better choice, quality, innovation and competitive prices.”

Apple is one of the latest tech targets to experience regulatory scrutiny. Facebook, Amazon, and Google are facing antitrust inquiries by EU member states, the European Commission, and the United States’ Department of Justice and Federal Trade Commission.

© MoginRubin LLP

ARTICLE BY the Competition Policy and Advocacy practice at MoginRubin.
For more on mobile payment portals, see the National Law Review Financial Institutions & Banking law section.

FTC Reports to Congress on Social Media Bots and Deceptive Advertising

The Federal Trade Commission recently sent a report to Congress on the use of social media bots in online advertising (the “Report”).  The Report summarizes the market for bots, discusses how the use of bots in online advertising might constitute a deceptive practice, and outlines the Commission’s past enforcement work and authority in this area, including cases involving automated programs on social media that mimic the activity of real people.

According to one oft-cited estimate, over 37% of all Internet traffic is not human and is instead the work of bots designed for either good or bad purposes.  Legitimate uses for bots vary: crawler bots collect data for search engine optimization or market analysis; monitoring bots analyze website and system health; aggregator bots gather information and news from different sources; and chatbots simulate human conversation to provide automated customer support.

Social media bots are simply bots that run on social media platforms, where they are common and have a wide variety of uses, just as with bots operating elsewhere.  Often shortened to “social bots,” they are generally described in terms of their ability to emulate and influence humans.

The Department of Homeland Security describes them as programs that “can be used on social media platforms to do various useful and malicious tasks while simulating human behavior.”  These programs use artificial intelligence and big data analytics to imitate legitimate activities.

According to the Report, “good” social media bots – which generally do not pretend to be real people – may provide notice of breaking news, alert people to local emergencies, or encourage civic engagement (such as volunteer opportunities).  Malicious ones, the Report states, may be used for harassment or hate speech, or to distribute malware.  In addition, bot creators may be hijacking legitimate accounts or using real people’s personal information.

The Report states that a recent experiment by the NATO Strategic Communications Centre of Excellence concluded that more than 90% of social media bots are used for commercial purposes, some of which may be benign – like chatbots that facilitate company-to-customer relations – while others are illicit, such as when influencers use them to boost their supposed popularity (which correlates with how much money they can command from advertisers) or when online publishers use them to increase the number of clicks an ad receives (which allows them to earn more commissions from advertisers).

Such misuses generate significant ad revenue.

“Bad” social media bots can also be used to distribute commercial spam containing promotional links and facilitate the spread of fake or deceptive online product reviews.

At present, it is cheap and easy to manipulate social media.  Bots have remained attractive for these reasons and because they are still hard for platforms to detect, are available at different levels of functionality and sophistication, and are financially rewarding to buyers and sellers.

Using social bots to generate likes, comments, or subscribers would generally contradict the terms of service of many social media platforms.  Major social media companies have made commitments to better protect their platforms and networks from manipulation, including the misuse of automated bots.  Those companies have since reported on their actions to remove or disable billions of inauthentic accounts.

The online advertising industry has also taken steps to curb bot and influencer fraud, given the substantial harm it causes to legitimate advertisers.

According to the Report, the computing community is designing sophisticated social bot detection methods.  Nonetheless, malicious use of social media bots remains a serious issue.

In terms of FTC action and authority involving social media bots, the FTC recently announced an enforcement action against a company that sold fake followers, subscribers, views and likes to people trying to artificially inflate their social media presence.

According to the FTC’s complaint, the corporate defendant operated websites on which people bought these fake indicators of influence for their social media accounts.  The corporate defendant allegedly filled over 58,000 orders for fake Twitter followers from buyers who included actors, athletes, motivational speakers, law firm partners and investment professionals.  The company allegedly sold over 4,000 bogus subscribers to operators of YouTube channels and over 32,000 fake views for people who posted individual videos – such as musicians trying to inflate their songs’ popularity.

The corporate defendant also allegedly also sold over 800 orders of fake LinkedIn followers to marketing and public relations firms, financial services and investment companies, and others in the business world.  The FTC’s complaint states that followers, subscribers and other indicators of social media influence “are important metrics that businesses and individuals use in making hiring, investing, purchasing, listening, and viewing decisions.” Put more simply, when considering whether to buy something or use a service, a consumer might look at a person’s or company’s social media.

According to the FTC, a bigger following might impact how the consumer views their legitimacy or the quality of that product or service.  As the complaint also explains, faking these metrics “could induce consumers to make less preferred choices” and “undermine the influencer economy and consumer trust in the information that influencers provide.”

The FTC further states that when a business uses social media bots to mislead the public in this way, it could also harm honest competitors.

The Commission alleged that the corporate defendant violated the FTC Act by providing its customers with the “means and instrumentalities” to commit deceptive acts or practices.  That is, the company’s sale and distribution of fake indicators allowed those customers “to exaggerate and misrepresent their social media influence,” thereby enabling them to deceive potential clients, investors, partners, employees, viewers, and music buyers, among others.  The corporate defendant was therefor charged with violating the FTC Act even though it did not itself make misrepresentations directly to consumers.

The settlement banned the corporate defendant and its owner from selling or assisting others in selling social media influence.  It also prohibits them from misrepresenting or assisting others to misrepresent, the social media influence of any person or entity or in any review or endorsement.  The order imposes a $2.5 million judgment against its owner – the amount he was allegedly paid by the corporate defendant or its parent company.

The aforementioned case is not the first time the FTC has taken action against the commercial misuse of bots or inauthentic online accounts.  Indeed, such actions, while previously involving matters outside the social media context, have been taking place for more than a decade.

For example, the Commission has brought three cases – against Match.com, Ashley Madison, and JDI Dating – involving the use of bots or fake profiles on dating websites.  In all three cases, the FTC alleged in part that the companies or third parties were misrepresenting that communications were from real people when in fact they came from fake profiles.

Further, in 2009, the FTC took action against am alleged rogue Internet service provider that hosted malicious botnets.

All of this enforcement activity demonstrates the ability of the FTC Act to adapt to changing business and consumer behavior as well as to new forms of advertising.

Although technology and business models continue to change, the principles underlying FTC enforcement priorities and cases remain constant.  One such principle lies in the agency’s deception authority.

Under the FTC Act, a claim is deceptive if it is likely to mislead consumers acting reasonably in the circumstances, to their detriment.  A practice is unfair if it causes or is likely to cause substantial consumer injury that consumers cannot reasonably avoid and which is not outweighed by benefits to consumers or competition.

The Commission’s legal authority to counteract the spread of “bad” social media bots is thus powered but also constrained by the FTC Act, pursuant to which the FTC would need to show in any given case that the use of such bots constitute a deceptive or unfair practice in or affecting commerce.

The FTC will continue its monitoring of enforcement opportunities in matters involving advertising on social media as well as the commercial activity of bots on those platforms.

Commissioner Rohit Chopra issued a statement regarding the “viral dissemination of disinformation on social media platforms.” And the “serious harms posed to society.”  “Social media platforms have become a vehicle to sow social divisions within our country through sophisticated disinformation campaigns.  Much of this spread of intentionally false information relies on bots and fake accounts,” Chopra states.

Commissioner Chopra states that “bots and fake accounts contribute to increased engagement by users, and they can also inflate metrics that influence how advertisers spend across various channels.”  “[T]he ad-driven business model on which most platforms rely is based on building detailed dossiers of users.  Platforms may claim that it is difficult to detect bots, but they simultaneously sell advertisers on their ability to precisely target advertising based on extensive data on the lives, behaviors, and tastes of their users … Bots can also benefit platforms by inflating the price of digital advertising.   The price that platforms command for ads is tied closely to user engagement, often measured by the number of impressions.”

Click here to read the Report.

© 2020 Hinch Newman LLP

Thieves Breach Twitter Security to Commandeer Famous Accounts

The Twitter accounts of major companies and individuals were briefly taken over as part of a bitcoin scam. Former and current heads of states, global corporations, and presidential candidates had their twitter accounts compromised. The tweet from many of the twitter account said similar things, for example Kanye West’s feed stated that he is “giving back to my fans”; the message from Bezos’, Barack Obama, and Joe Biden’s account said that they had “decided to give back to my community”; while Elon Musk’s account said “feeling greatful” and provided a link to a Bitcoin wallet to send money to. The tweets would indicate that they would send double the money back to a limited number of contributors.

Twitter, through its Twitter Support account notified users that an internal investigation was conducted into the matter. The investigation revealed that several employees who had access to internal systems had their accounts compromised in a “coordinated social engineering attack.” Twitter’s internal system was then exploited to tweet from high-profile accounts. The attack was at least moderately successful considering the Bitcoin wallets promoted in the tweets received over 300 transactions and Bitcoin worth over $100,000.

These tweets began at about 4 P.M. (Eastern Standard Time) on Wednesday, July 16. The first wave of attacks hit the Twitter accounts of prominent cryptocurrency leaders and companies, but expanded quickly after that. Along with Vice President Biden, President Obama, Kanye West, Bill Gates, Michael Bloomberg, and Elon Musk, large company accounts were also targeted including Uber and Apple. Twitter’s initial response was to take down the offending tweets, but those were quickly replaced by new ones – – an indication that the hackers maintained access to the individual accounts.

The persistence of the attacks led to Twitter disabling some the platform services including the ability of blue-checked (verified) twitter users to tweet. The services were restored around four and a half hours after the suspicious tweets began. However, that shutdown period was not insignificant. Several National Weather Service Twitter accounts were shut down as a line of severe weather and possible tornadoes moved across the Midwest. The National Weather Service felt severely hampered in its ability to communicate with people about the impending storm.

In a tweet, Twitter’s CEO Jack Dorsey said that the company feels  “terrible this happened” and that they are “diagnosing and will share everything we can when we have a more complete understanding of exactly what happened.” The nature of this attack is yet to be determined. The legal implications will hinge on the findings of the investigation, including whether there were sensitive direct messages accessed by the attackers. Considering the compromised accounts includes current and former heads of state (Prime Minister Benjamin Netanyahu, President Obama, and Vice President Biden), there are also questions of national security involved.

The United States does not have a comprehensive federal data breach notification scheme. These obligations are provided by the fifty states and sector-specific laws. More than 40 of the state breach notification laws contain a harm threshold pursuant to which notification is not required unless harm to affected individuals has occurred or is reasonably likely to occur. The EU’s GDPR also includes a similar assessment. As more information is disclosed, we will get a better understanding of Twitter and the attacked users’ incident response processes.

Copyright © 2020 Womble Bond Dickinson (US) LLP All Rights Reserved.

Consumer Perception is Key to Registration of Generic “.com” Marks

In an 8-1 decision, the Supreme Court held in U.S. Patent and Trademark Office v. Booking.com that “generic.com” marks may be registered trademarks or service marks when consumers do not perceive them as generic.

Booking.com is a travel company that provides hotel reservations and other services under the brand “Booking.com,” which is also the domain name of its website. Booking.com filed applications to register four marks in connection with travel-related services, each containing the term “Booking.com.”

A United States Patent and Trademark Office (USPTO) examining attorney and the USPTO’s Trademark Trial and Appeal Board (TTAB) both concluded that the term “Booking.com” is generic for the services at issue and is therefore unregistrable. According to the TTAB, “Booking” means making travel reservations and “.com” signifies a commercial website. The TTAB ruled that customers would understand the term “Booking.com” primarily to refer to an online reservation service for travel, tours, and lodging. Alternatively, the TTAB held that even if “Booking.com” is descriptive, it is unregistrable because it lacks secondary meaning.

Booking.com sought review in the US District Court for the Eastern District of Virginia. Relying in significant part on new evidence of consumer perception, the district court concluded that “Booking.com”—unlike “booking”—is not generic. The “consuming public,” the court found, “primarily understands that BOOKING.COM does not refer to a genus, rather it is descriptive of services involving ‘booking’ available at that domain name.” The Court of Appeals for the Fourth Circuit affirmed the district court’s judgment.

During oral argument at the Supreme Court, the USPTO argued that the combination of a generic word and a “.com” must also be generic. The Court rejected this per se theory, ruling that whether “Booking.com” is generic turns on whether that term, taken as a whole, signifies to consumers the class of online hotel reservation services. According to the Court, if “Booking.com” were generic, one might expect consumers to understand Travelocity—another such service—to be a “Booking.com.” Additionally, one might similarly expect that a consumer, searching for a trusted source of online hotel reservation services, could ask a frequent traveler to name her favorite “Booking.com” provider. However, as noted even by the USPTO and the dissent, only one entity can occupy a particular Internet domain name at a time, so a “consumer who is familiar with that aspect of the domain-name system can infer that BOOKING.COM refers to some specific entity.”

The Court further opined that the USPTO’s fears that trademark protection for “Booking.com” could exclude or inhibit competitors from using the term “booking” or adopting domain names like “ebooking.com” or “hotel-booking.com” are unfounded. According to the Court, this is an issue for any descriptive mark and comes down to a likelihood of confusion analysis.

Justice Sotomayor’s Concurrence

In a concurring opinion, Justice Sotomayor agreed that there is no per se rule against trademark protection for a “generic.com” mark. However, she cautioned the use of surveys as they can have limited probative value depending on the survey design.

Justice Breyer’s Sole Dissent

Justice Stephen Breyer, the sole dissenting justice, argued that the majority disregarded important trademark principles and sound trademark policy. According to Justice Breyer, “[t]erms that merely convey the nature of the producer’s business should remain free for all to use.” Thus, under the majority’s approach, many businesses could obtain a trademark by adding “.com” to the generic names of their products, which Justice Breyer claimed could have widespread anticompetitive effects, and the majority’s reliance on the need to prove confusion and the statutory descriptive use privilege to protect competitors, underestimates the threat of costly litigation.

Implications

The decision in Booking.com expands trademark protection for seemingly generic marks simply by adding “.com” to the mark. A registrant need only rely on the consumer’s perception of the mark, which can be shown by the use of surveys. Thus, even with Justice Sotomayor’s caution against the use of surveys, surveys are likely to become more important during the registration process and in any subsequent litigation.

Copyright © 2020, Hunton Andrews Kurth LLP. All Rights Reserved.

For more on the Booking.com case, see the National Law Review Intellectual Property Law section.

COVID Quarantine + Surge in eCommerce = … ADA Discrimination Claims?!

While much about COVID-19 and its long-term impact on businesses and the economy is unknown, its effect of a worldwide increase in a reliance on digital means to engage in business transactions is undeniable and unlikely to decrease as we move forward.

This means all organizations – commercial businesses, nonprofits, educational institutions, healthcare entities, and professional organizations – need to consider whether this new reliance on digital means of consumer interactions creates previously unconsidered risks and liabilities to their operations.

What?! – Website Discrimination Regulations?

The Americans with Disabilities Act (ADA), which was enacted to prevent discrimination against people with disabilities in locations generally open to the public, applies to websites and other digital communication means, such as mobile sites and mobile applications.

Organizations, institutions, businesses, and other establishments with websites, mobile sites, and mobile applications that are subject to the ADA must provide accommodations to people with disabilities so that they can have the same level of access to the online digital content and services as everyone else.

Which Businesses are Subject to ADA?

Organizations, institutions, businesses, and other establishments that have either (i) 15 or more employees (Title I Employers) or (ii) offer public accommodations (regardless of the number of employees) to consumers (Title III Public Accommodations) must maintain ADA compliant websites (traditional and mobile) and mobile applications.

Many businesses with more than 15 employees are aware of the requirement to be ADA compliant in its spaces of brick and mortar public accommodations, but are unaware of the requirement and risk of not having an ADA compliant digital presence.  If an organization has more than 15 employees (public accommodations offered or not), it must have an ADA compliant website.

It is Title III – Public Accommodations – that often ensnares smaller businesses such as healthcare providers, law offices, and small or start-up businesses that have fewer than 15 employees and do not offer the traditional public accommodations (such as retail space) yet have other public accommodations such as offices or conference meeting areas.  If an organization maintains a public accommodation for its patrons (regardless of the number of employees), it must have an ADA compliant website.

What Does Compliance Require?

There is no legislation that directly sets out the technical requirements of website accessibility.  There are, however, the WCAG private industry standards, developed by technology and accessibility experts, which have been widely adopted, including by federal agencies. The current guidelines are the WCAG 2.1 Guidelines, and it contains three levels of accessibility –A, AA, and AAA accessibility.  Federal websites are required to meet level AA accessibility.

There are four Principles to WCAG accessibility for those with disabilities (e.g., hearing impairment, seeing impairment, cognitive impairment, mobility issues, etc.):

  1. Perceivable: Information and user interface components must be presented in a way that allows a user to perceive the content (e.g., recognize photos).

  2. Operable: User interface components and navigation must be operable (e.g., dropdowns identifiable).

  3. Understandable: Information and the operation of the user interface must be understandable (e.g., form completion).

  4. Robust: Content must be robust enough that it can be interpreted by a variety of user agents (e.g., assistive technologies)

It is worth noting that it is not the use or inclusion of specific technologies, such as those that amplify words or offer audible versions of content, which is required for compliance.  The requirement for compliance is that businesses offer websites and other digital platforms that are robust enough to provide equally perceivable, operable, and understandable access to all consumers through the consumer’s use of these technologies (i.e., digital platforms that will interact with these specific technologies as provided and used by the consumer).

Is Compliance Enforced?

ADA website compliance litigation is a regular occurrence and is expected to rise as all consumers become more and more reliant on websites and mobile applications to conduct business.  These cases of enforcement span a number of industries – Real Estate (Zillow), Retail (Banana Republic), Entertainers (Beyoncé), and Restaurants (Domino’s Pizza) to name a few recognizable, well-defended defendants – and many resulted in federal fines and compulsory ADA compliance.

Most recently, a case against Domino’s Pizza made clear:

  • ADA applies to websites and mobile applications as public accommodations.
  • Businesses have been “on notice” since 1996 that their websites must be in ADA compliance and effectively communicate with people with disabilities.
  • The lack of specific requirements does not absolve a business from its obligations.

What are the Best Ways to Mitigate Risk?

When building a website, or assessing an existing one for compliance, use the WCAG 2.1 Guidelines and its four principles.  Many marketing professionals and website hosting platforms can provide templates that will assist with ADA compliance.  There are also companies that specialize in accessibility compliance that can review and test the website, mobile site, and application.  Businesses should regularly assess their website for compliance as it is updated, and content and features are added.

© 2020 Ward and Smith, P.A.. All Rights Reserved.

For more on website ADA compliance, see the National Law Review Communications, Media & Internet law section.

Reasons for Communicating Clearly With Your Insurer Regarding the Scope of Coverage Before Purchasing Cyber Insurance

Purchasing cyber insurance is notoriously complex—standard form policies do not currently exist, many key terms setting the scope of coverage have not been analyzed by courts, and cyber risks are complicated and constantly evolving.  Given these complexities, prospective policyholders should consider, before purchasing a cyber policy, communicating their expectations for coverage in clear and specific terms to their insurer.  Such communications, which can be conducted through an insurance broker, can help a policyholder obtain policy terms that accurately reflect their desired coverage.  Additionally, these communications create a written record of the contracting parties’ understanding, which may prove useful should the insurer later contend that coverage is not available consistent with these discussions and the policyholder’s expectations.

Singling out a key policy provision and examining the coverage issues that provision can present helps illustrate the potential value of such communication.  Currently, the high-profile Mondelez International, Inc. v. Zurich American Insurance Co. litigation provides an excellent opportunity to examine the coverage issues that can arise from one such provision:  the so-called “war exclusion.”  This exclusion, a variant of which is included in almost every insurance policy by insurers seeking to limit their exposure to potentially catastrophic losses that might result from war, may sound straightforward but can be difficult to apply, as the line between war and other conflicts is often fuzzy and fact-specific.  Compare In re Sept. 11 Litig., 931 F. Supp. 2d 496, 508 (S.D.N.Y. 2013), aff’d, 751 F.3d 86 (2d Cir. 2014) (concluding that the September 11, 2001 attack by Al Qaeda was an “act of war”), with Pan Am. World Airways, Inc. v. Aetna Cas. & Sur. Co., 505 F.2d 989, 1015 (2d Cir. 1974) (holding that the hijacking of an airplane by the Popular Front for the Liberation of Palestine was not the result of “war”).  This is especially true in the cyber context, where understanding the precise nature and purpose of a cyber attack is often difficult.  While the Mondelez case does not involve a dedicated cyber insurance policy—it concerns a property insurance policy that includes coverage for “physical loss or damage to electronic data, programs, or software, including physical loss or damage caused by the malicious introduction of a machine code or instruction”—it is still instructive because the insured seeks coverage for a cyber attack and the insurer disputes coverage based on the war exclusion, which almost all cyber insurance policies contain in some fashion.

The dispute in Mondelez arose when the policyholder suffered over one hundred million dollars in losses due to network disruptions caused by the NotPetya ransomware attack and sought coverage under their property insurance policy for “physical loss or damage to electronic data, programs, or software . . . .”  See Complaint, Mondelez International, Inc. v. Zurich American Insurance Co., No. 2018L011008, 2018 WL 4941760 (Ill. Cir. Ct., Oct. 10, 2018).  In response, the insurer denied coverage based on the war exclusion that precluded coverage for “loss or damage directly or indirectly caused by or resulting from . . . hostile or warlike action in time of peace or war, including action in hindering, combatting or defending against an actual, impending or expected attack by any:  (i) government or sovereign power (de jure or de facto); (ii) military, naval, or air force; or (iii) agent or authority of any party specified in i or ii above.”  In short, the policyholder believed it bought broad coverage for ransomware attacks, but now must litigate whether the NotPetya attack was a “warlike action” by a government “agent,” under circumstances where numerous sources link the cyber attack to Russia and its armed forces (though Russia denies any involvement).  While the Mondelez case is still in the early stages, and details of any communications among the parties regarding the wording and meaning of the war exclusion are not publicly known, the mere existence of this litigation highlights the challenges that can face a policyholder who learns only after a substantial loss that their insurer reads a key policy provision to preclude coverage that the policyholder expected to be available.

As noted above, communication prior to policy placement can be a valuable tool to secure clear wording for key policy provisions and potentially avoid this kind of situation.  While this may seem obvious, such communication is often overlooked by policyholders more focused on other policy details like limits and premiums.  A close review of the war exclusion helps illustrate the potential benefits of these communications.  While the precise phrasing of the war exclusion at issue in Mondelez is more typical of property policies than cyber policies, war exclusions in many cyber policies arguably apply to conduct not only by state actors but also by quasi-state actors or groups with political motives.  For this reason, policyholders may want to seek language specifying that the exclusion only applies to acts by a military force or a sovereign nation, as many cyber attacks are attributed to quasi-state actors or non-state groups with political ends, or are the subject of debated attribution.  Similarly, some war exclusions apply not only to specified conflicts such as war, invasion, and mutiny, but also to more amorphous conduct like “warlike actions”—policyholders seeking greater certainty may wish to avoid such language.  Further, as with any exclusion, avoiding overbroad introductory language (like that excluding any loss “in any way related to or arising out of” war) is generally in a policyholder’s interest.  And even if a war exclusion is broadly worded, some insurers will include a carve-back creating an exception for losses due to attacks on computer systems or breaches of network security, thus preserving cyber coverage even when the war exclusion might otherwise apply.  Given the impact that small changes in wording can have on the scope of coverage, communicating clearly—with respect to the war exclusion or any other key policy provision—can play a crucial role in assuring that a policyholder secures wording that provides the coverage they desire.  Of course, an insurer may respond to a policyholder by refusing to revise a policy term or insisting that a desired coverage is unavailable, in which case the policyholder has the benefit of understanding a policy’s purported scope prior to purchase and the opportunity to investigate coverage from other insurers.

In addition, communication allows a policyholder to make a record of their expectations as to the scope of coverage, which may prove useful if an insurer later refuses to provide coverage consistent with the expectations that the policyholder conveyed.  Many courts interpreting disputed policy language put substantial weight on an insured’s reasonable expectations and often rely on communications between policyholders and insurers to support a policyholder’s reading.  See, e.g., Monsanto Co. v. Int’l Ins. Co. (EIL), 652 A.2d 36, 39 (Del. 1994); Celley v. Mut. Benefit Health & Acc. Ass’n, 324 A.2d 430, 435 (Pa. Super. 1974); Ponder v. State Farm Mut. Auto. Ins. Co., 12 P.3d 960, 962 (N.M. 2000); Michigan Mutual Liability Co. v. Hoover Bros., Inc., 237 N.E.2d 754, 756 (Ill. App. 1968).  As the recently-issued Restatement of The Law of Liability Insurance observes, where “extrinsic evidence shows that a reasonable person in the policyholder’s position would give the term a different meaning” than the one advanced by the insurer, the policyholder’s proposed meaning will often control.  Another recent case addressing a war exclusion (completely outside the cyber context) demonstrates the role such communications may play in interpreting disputed policy provisions, as the court’s analysis of the exclusion included a review of the communications during the underwriting process between the insured, the broker, and the insurer and an examination of what those communications indicated about the parties’ intent for the exclusion’s application.  Universal Cable Prods., LLC v. Atl. Specialty Ins. Co., 929 F.3d 1143 (9th Cir. 2019).  While contested coverage provisions should generally be read in an insured’s favor so long as that reading is reasonable—even in the absence of favorable underwriting communications—the cases above underscore the potential value in establishing during the underwriting process a record of the insured’s expectations as to the scope of coverage (especially in an area such as cyber insurance, where guidance like prior court decisions is limited).

For these reasons, policyholders should consider clearly communicating their intentions to their insurer when purchasing cyber insurance—this may include communicating not just questions about the scope of coverage and requests for modifications to the policy, but also the concerns animating those questions and the goals behind those requested modifications.  When having such communications with cyber insurers, policyholders will generally want to work closely with an insurance broker knowledgeable about cyber insurance, and may also want to consult experienced coverage counsel.  Clear communication during the underwriting process can play an important role in helping policyholders obtain cyber coverage that will meet their expectations should they one day confront a cyber event.

© 2020 Gilbert LLP

ARTICLE BY Daniel I. Wolf at Gilbert LLP.

You Streamed What? Copyright Infringement Pitfalls During COVID-19

In the sudden transition from in-person to online presentation of content precipitated by the COVID-19 stay-at-home orders, some educators and other presenters have run headlong into the digital world without a thought to the application of copyright law to their online presentations.  Scrambling to provide content, did some consider the sufficiency of their internet bandwidth and the security of their video-conferencing platform while overlooking copyright infringement issues?  Caution.  Those office webinars, college lectures, music lessons, and club meetings can be fraught with legal pitfalls.

Although we are slowly emerging from our bunkers and cautiously lifting our masks while maintaining social distance, some have predicted that online meetings and classes are here to stay—at least in some form.  Thus, these copyright infringement pitfalls merit consideration.  Granted, any attempt to treat this matter comprehensively in a 1500 word article is a fool’s errand.  And when it comes to these highly fact-specific matters, there’s no substitute for an attorney’s legal advice.  But some basic education on copyright law and some understanding of the distinctions between copyright as applied to education versus other areas might assist those unaccustomed to the online stage from stumbling into a battle over copyright infringement.

What is Protected by Copyright?

A copyright is a collection of rights that protect original works of authorship.  These works can include literary, dramatic, musical and artistic works.  A copyright does not protect facts, ideas, systems or methods of operation, although it may protect the way these things are expressed.  In general, a copyright exists from the moment the work is created and fixed in tangible form.  Registering does not create the copyright; but registering the copyright allows the owner to bring a lawsuit to enforce it and bears on the recovery that a copyright owner can obtain in the lawsuit.  Similarly, under the current law, neither the “©” symbol nor any other marking on an original work of authorship creates the copyright; but the copyright symbol or other marking can put the public on notice that the copyright owner claims his copyright.

What is in the Public Domain?

Works in the “public domain” can be copied.  These fall generally into three categories.

  • Works deliberately dedicated to the public without copyright protection.
  • Works for which the copyright has expired.
  • Works for which the copyright was not renewed.

The changes in the copyright legislation over the course of the past 40 years have made the rules about copyright expiration and renewal somewhat complex.  As of 2020, however, works published before January 1, 1925, entered the public domain.

What About Fair Use?

Most educators and presenters have some familiarity with the “fair use doctrine,” a defense to what is indisputably copying of an original work.  While some librarians have signed the “Public Statement:  Fair Use & Emergency Remote Teaching & Research” in which they boldly state that “making materials available and accessible to students in this time of crisis will almost always be a fair use”, as yet no legislature or court has carved out a “COVID-19” addendum or even a “public health emergency” addendum to the fair use doctrine.  Nevertheless, the fair use doctrine can provide a defense to presenters who exercise a modicum of discretion.

In considering an infringer’s reliance on the fair use doctrine as a defense to copyright infringement, courts consider the use made of the work in light of four factors:

1)   the purpose and character of the use, including whether the use is commercial or is for nonprofit educational purposes;

2)   the nature of the copyrighted work;

3)   the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

4)   the effect of the use upon the potential market for or value of the copyrighted work.

Consideration of these factors is highly subjective and fact-sensitive.  The first factor, besides asking whether the use is commercial or educational, looks at the purpose of the use.  Educational as opposed to commercial uses are favored.  But contrary to popular belief, educational use alone will not suffice as a defense to copyright infringement.  Generally, whether the use is commercial or educational, there must be something “transformative” about the use.  In other words, is there something new created?  Does the new work offer a new expression, meaning or message?  Is it serving as raw material for a new expression or insight?  In the education context, is the instructor adding something new such as commentary?  Is he tying the work into his own lesson or is he just using the work to replace his lesson?

While the first factor is often considered the “heart” of the fair use analysis, the other factors matter too.  Consider the second factor.  Is the original work creative or just an arrangement of facts?  Fair use has a broader scope where the original work is factual or informational.  Is it published or unpublished?  Greater latitude is afforded the alleged infringer claiming fair use where the work is published.

But even if the work is published, the third factor considers the portion used—in a quantitative as well as a qualitative sense.  Is the portion used a paragraph or several chapters?  The fair use defense will more likely shield copying a small portion of a work than a large section.  Despite efforts by advocates, courts have refused to specifically quantify how much is too much.  Furthermore, if a copier carves out the most memorable portion of the work, the “heart” of the work, no matter how small, fair use will offer no sanctuary—except in parody.  Where the new work is a parody of the original, the court has recognized that it is the heart of the work at which the parody takes aim.

Finally, how does the copied work impact the potential market for the original? If the copied work undermines the current or potential market for the original work, then this will undermine the use of the fair use doctrine as a defense.

In the education context, Congress has carved out some specific ways in which instructors can circumvent infringement.  House Report No. 94-1476, 94th Cong., 2d Sess. (1976) includes the Agreement on Guidelines for Classroom Copying in Not-For-Profit Educational Institutions (p.6).  Single copying of a chapter from a book or an article from a periodical, a chart or cartoon for use in teaching or preparing to teach, for example is considered fair use under the guidelines.  Multiple copying for the use of pupils in a class is similarly fair use where the copying meets tests of brevity and spontaneity (as defined in the guidelines), meets the cumulative effect test (as defined in the guidelines), and each copy includes a notice of copyright.  But copying cannot be used to replace anthologies or to replace books intended to be “consumable.”  Specific guidelines apply to music.  While there may be instances in which copying does not fall within the protection of the guidelines but nevertheless is permitted under the fair use criteria, compliance with the guidelines offers a safe harbor for educators.

Outside of this safe harbor, presenters employing copied works must navigate the more uncertain waters of fair use and consider other ways to avoid infringement.  But be forewarned that mere acknowledgement of the source material, while perhaps one factor to be considered in a fair use determination, will not absolve a copier for infringement.  Likewise, a disclaimer—effectively a “No Infringement Intended” notice—won’t work.

How Does the TEACH Act Apply in the Online Classroom?

Addressing more specifically the online environment for education, the Technology, Education, and Copyright Harmonization Act of 2002, better known as the TEACH Act, addresses digital teaching materials used in both the classroom and in distance learning settings in 17 USC § 110(2).  This exempts from infringement certain performances and displays of works in an online classroom transmission under certain conditions.

What can be transmitted?

  • Performance of a nondramatic literary or musical work.
  • Performance of reasonable and limited portions of any other work.
  • Display of a work in an amount comparable to what would typically be displayed in the course of a live classroom session.

Under what conditions?

  • The transmission is under the actual supervision of an instructor.
  • The transmission is part of the instructional activities of the institution.
  • The work is related to the teaching content of the transmission.
  • The transmission is made solely for and is limited to the students officially enrolled in the course (as much as is technologically feasible).

What is not authorized?

  • Use of pirated copies.
  • Use of works normally marketed primarily for performance or display as part of online instructional activities.
  • Conversion of print versions of works to digital formats unless there is no digital version available, and even then, conversion is limited to the portions authorized by the size restrictions in the Act.

In order for an instructor to rely on the provisions of the Act, the institution must comply with certain requirements regarding policies and education of faculty and students and application of technological measures to reasonably prevent retention of the works by recipients of the transmission or further dissemination.  Posting class lectures that include copyrighted works on YouTube won’t qualify.

What about showing films?  In the face-to-face environment of a brick and mortar classroom, showing an entire film, video or TV program for educational purposes is allowed (17 U.S.C. § 110(1)), but not when the classroom goes virtual.  Showing portions of a film in an online classroom, may be considered fair use depending on how much of the film is shown and for what purpose.  If fair use does not apply and if the film is not in the public domain, however, students should view the film through a licensed streaming film provider.

What About Licenses and Releases?

Obtaining an author’s permission to use his work obviates the need to engage in the fair use or other analyses described above.  Whether the permission takes the form of a license (permission to use the work) or a release (promise not to sue for unauthorized use), however, many licenses and releases are limited to in-person presentation or distribution and do not extend to online presentation or distribution.  Presenters must carefully consider the scope of permission granted by a license or permission.

In the COVID-19 world, some publishers are offering educators temporary expanded permissions.  The key words here are “educators” and “temporary.”  These permissions do not extend to non-educators, and they are provisional.  Once the days of stay-at-home orders end, educators cannot assume that they can use the same works in the same way online.  In addition, the use of these expanded permissions comes with strings attached.  There are certain requirements that the publishers impose on the user.

Some creators offer their work through Creative Commons licenses.  These give creators standardized ways to grant the public permission to use their work.  Again, however, a user of a work offered under a Creative Commons license should carefully consider the scope of the permission granted.  Not all Creative Commons licenses allow the same types of use.

Obtaining permission to use works may seem daunting, but there are various organizations available online that streamline the process.  The Copyright Alliance offers a list of resources to assist those seeking licenses for works such as literary publications, music, photographs, software and motion pictures.

Conclusion

When it comes to copyright and online meetings, many well-meaning and well-educated people don’t know what they don’t know—until they do.  Unfortunately, that epiphany sometimes comes in the form of a takedown notice or a demand letter.  Thus, presenters would be well advised to evaluate their use of another’s work before posting, streaming, sharing or tweeting.

Copyright 2020 Summa PLLC All Rights Reserved