Most companies have embraced social media as a viable and effective marketing tool to engage with customers and potential customers. Not only companies, but even individuals are now obsessing over their own “personal brand”. The lines between personal and professional social media personas are now starting to blur, particularly for public facing employees like those in sales, marketing, and communications, and also more senior employees, like VPs and senior executives, whose corporate identities are virtually indistinguishable from their personal ones.
All this blurring on social media may leave you wondering who actually owns the social media account and its contents - the employer or the employee? While this is still a developing area of law, there are some interesting cases worth noting.
PhoneDog, LLC v. Noah Kravitz [Case No. 3:11-CV-03474-MEJ (N.D. Cal. 2011)]
In this battle over Twitter followers, the main issues revolved around whether Twitter accounts and their passwords could be company property or trade secrets.
PhoneDog is an interactive mobile news and review web resource that reviews mobile products and services. The company uses a variety of social media, including Twitter, Facebook and YouTube, to market and promote its services.
Noah Kravitz began working for PhoneDog in April 2006. He was given access to the Twitter account “@PhoneDog_Noah” which eventually amassed 17,000 followers. Noah Kravitz left PhoneDog in 2010 and refused to turn over the Twitter account. Instead, he changed the Twitter handle from “@PhoneDog_Noah” to “@noahkravitz and the Twitter account to promote his new employer, a PhoneDog competitor.
PhoneDog claimed that the Twitter accounts used by its employees, as well as the passwords and other information associated with all “@PhoneDog_NAME” Twitter accounts, constituted proprietary, confidential information. PhoneDog argued that Kravitz’s continued use of PhoneDog’s property to promote a competitor was illegal and harmful to its business. PhoneDog sued for misappropriation of trade secrets and interference with economic advantage, and asserted the value of the Twitter followers at $2.50 per follower each month that Kravitz used the account, and sought damages of $340,000 ($2.50 x 17,000 x 8 months). Kravitz argued that PhoneDog had no ownership rights over the account because all Twitter accounts are the exclusive property of Twitter and its licensors (as per the terms of use).
On November 8, 2011, the U.S. District Court for the Northern District of California denied Kravitz’ attempt to dismiss the case, holding that the Twitter account and its password could constitute a trade secret under California law and that Kravitz’s actions could constitute misappropriation.
Although the parties ultimately reached a settlement agreement and Kravitz was allowed to retain custody of “@noahkravitz” as a Twitter handle, the case illustrates that some courts recognize the value of social media. In particular, Twitter accounts and their passwords could constitute trade secrets and that failure on behalf of the employee to relinquish an account could constitute misuse of a trade secrete or “trade secret misappropriation”.
Eagle v. Morgan [Case No. 2:11-CV-4303-RB (E.D. Pa. 2011)]
In this case involving an alleged stolen identity and personality rights on LinkedIn, the court found in favour of the employee, but the victory was a relatively hollow one.
Dr. Linda Eagle was the CEO of a banking education company called Edcomm. After Eagle’s termination, the company allegedly changed the password of her LinkedIn account, preventing her from accessing it, and then replaced her name and photo with that of Eagle’s replacement.
Dr. Eagle sued her former employer for its continued use of her LinkedIn account after her employment had been terminated. She brought forward a number of other causes of action.
In October 2012, The US District Court for the Western District of Pennsylvania dismissed all of the federal claims and only addressed the state claims finding in favor of the plaintiff on her claims of unauthorized use of her name, invasion of privacy by misappropriation of identity, and misappropriation of publicity. Unfortunately for Dr. Eagle, the court awarded $0 in damages because she was unable to prove she lost any contracts or deals.
Although the company had urged employees to create LinkedIn accounts and had guidelines covering on-line content, the court noted that the company hadn’t informed employees that their LinkedIn accounts were the property of the employer.
The court found in favor of Edcomm on the remaining causes of action. The court similarly found conversion did not apply, as the LinkedIn profile was intangible property. The court did not award punitive damages, as the lack of an ownership agreement meant it was just as likely that Edcomm was acting to protect its property rather than acting to harm Eagle.
Thoi Bao Inc. v. 1913075 Limited (Vo Media) (2016 FC 1339)
Meanwhile, here in Canada, in this brazen intellectual property infringement by a former employee, the court recognizes the value of social media and offers sweeping remedies that include the transfer of social media accounts.
Mr. Vo was employed by Thoi Bao Inc., a Vietnamese language news company, as a TV cameraman, editor, supervisor, and webmaster from August 31, 2013 to July 31, 2014. Thoi Bao Inc.’s main website is www.thoibao.com. While still employed with Thoi Bao, Mr. Vo registered the domain name “www.thoibaotv.com” and offered Vietnamese programming from the site.
Thoi Bao sued its former employee and The Federal Court ordered damages and an injunction for trade-mark and copyright infringement. The infringement matter may seem obvious, but it was interesting that the court also ordered all of the social media accounts to be transferred to Thoi Bao. The court ordered that Mr. Vo transfer to Thoi Bao ownership and all rights of access, administration and control for and over the domain name “www.thoibaotv.com”, together with “any other domain name, Facebook account, Twitter account, or other social media accounts registered to or in control of Mr. Vo containing “Thoi Bao”, “TBTV” or “Thoi Bao TV” or any confusingly similar trade-mark”.
Best Practices: Avoiding A Potential Misappropriation of Your Social Media Accounts
This may leave you wondering what to do if your company or your clients’ companies have employees who are responsible for posting on the company’s social media accounts? In light of the increased use of social media, and considering these cases, it’s important that employers protect the company’s social media accounts. In order to mitigate the risk of misappropriation of a company’s social media accounts, consider the following best practices and tips:
1. Have a social media policy: The employer’s social media policy should address the ownership of, and access to, the employer’s social media accounts, as well as all information and communications associated with those accounts. The policy should prohibit employees from conducting official business through social media using personal accounts held in their own name. General employment policies should also clarify that whatever the employee creates on company time or with company resources belongs to the employer.
2. Have clear employment agreements: Particularly for employees who are asked to use social media to market and promote the company’s products or services, have employment agreements that make it clear that the company owns the social media accounts, including friends and followers, and that the employee waives any rights to those accounts.
3. Register and administer the social media accounts in the name of the company: Register and use social media accounts in the company name (e.g. “ABC Inc” is better than “ABC Inc – Employee Name” or “Employee Name of ABC Inc”). This will help to create a clear distinction between the company’s and the employee’s social media accounts. If the social media platform requires the name of an individual prior to registration, use the name of a senior marketing person. Keep the account information and passwords stored in a central database, accessible by the employer, in order to avoid orphaned accounts. Also, limit administrative control over the accounts.
4. Consider the social media accounts when purchasing another business: If acquiring another business, consider the ownership of the social media accounts in the due diligence process. Ensure that the other business will be able to transfer the relevant social media accounts.
This doesn’t necessarily mean that an employer should attempt to own all of its employees’ social media accounts. One must consider each employee’s role and the applicable industry standards. In fact, in certain industries, an employee may be hired specifically for his or her social media followers, and expecting to own that employee’s social media accounts may not be appropriate. The main point is not to underestimate the value of social media and remember to consider the parties’ expectations in advance.
About the author
Dan Ciraco is director of Business Law for the Canadian Broadcasting Corporation.