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Social Media Marketing and Copyright Law Part Two: Copyright Risks for Business Owners

January 21, 2010

This article is part two of the article Social Media Marketing and Copyright Law: A Background on Copyright Law.

Many businesses are using or contemplating the use of social networking Web sites (sometimes called “social media marketing”) as part of their strategic marketing programs. Now that we have some background on copyright law, we can see why social networking Web sites present copyright risks for the business owner.

Social networking Web sites are often treated as somewhat informal marketing channels for business. As a result, less care may be taken in the web presence on those sites than in other areas such as the business’ formal Web site. Further, businesses using social media marketing often allow users of the businesses social media page to post material on the business’ page. While the informality and customer interaction can cultivate customer goodwill, companies should take precautions to guard against any copyright problems.

The most likely front on which a business can run into problems with copyrighted works on a social networking Web site is when third parties are able to post materials in the business’ area on that site. For example, a business may have a Facebook page that it uses to promote its products and services. If the business allows users to post comments, photographs and videos concerning its products, it runs the risk that the users may be posting material in violation of a third party’s copyright.

A common way in which copyrights are violated in this context is the use of copyrighted music in home videos. In this situation, the home videographer makes an entertaining video featuring the business’ product or service and then feels compelled to spice it up by adding some music from his collection as a soundtrack for the video. Of course, the videographer never considers the fact that using music in this fashion is copyright infringement. When the video is posted on the company Facebook page, the videographer’s problem can become the company’s problem if it rises to the level of contributory copyright infringement.

Contributory infringement occurs where an infringing activity is taking place, and the contributing infringer induces, causes or materially contributes to it. There are two elements required to prove contributory infringement:

  • The infringer knew or had reason to know of the infringing activity (which differs from direct infringement, where the infringer does not have to have any knowledge or intent)
  • Active participation in the infringement (which can include inducing, causing or contributing to it)

For example, your customer posts a video featuring your product with a U2 song. You like it so much that without inquiring as to whether they have any right to use the song, you feature it on your Facebook page, you are likely liable for contributory copyright infringement.

Companies must also take care to ensure that they have the permission of the copyright holder for use of any materials that they are placing on a social networking Web site. For example, a business commissions a local photographer to take a photograph of its new corporate office building for use in its corporate lobby, on the cover of its annual report and for posting on the homepage of its Web site. There is no discussion between the business and the photographer about ownership of the copyright in the photograph, but they have an understanding about use of the work that is confirmed in email exchanges.

Under the copyright law, the creator of the work (the photographer) is the owner of the copyright and has the exclusive right to control the use of the work. Clearly the photographer has granted a license to the business to use the photograph in the corporate lobby, on the cover of annual report and on the homepage of the company’s Web site. It is also relatively clear that no license has been granted to the business for general use of the photograph on the Internet. If the business decides to use the photograph in its marketing efforts on a social networking Web site, it runs a significant risk that the photographer will find this to be an infringing use of the photographer’s copyright in the photograph. This is the case even though the photograph is of the company’s building, and the company has permission to use to photograph on its Web site. There is a good legal argument to be made that the agreed upon permitted uses do not imply a license from the photographer for use of his photograph on a social networking Web site (although, as an attorney I could make an argument that there is a license for such use, it would be a stretch and much better, as always, to have permission for what you want to do in writing).

The take away lesson here is (beyond the one I always stress to clients about having a written agreement concerning the copyright) that anything that a company posts on a social networking or other Internet Web site should be reviewed to make certain that the company has all of the rights it needs to use the material as intended without violating any third party copyrights.

If a business gets into hot water for some actions related to copyrights and the Internet, there is at least some hope. The principal protection for businesses against liability for copyright infringement is the Online Copyright Infringement Liability Limitation Act, passed in 1998 as part of the Digital Millennium Copyright Act (DMCA). The DMCA creates four “safe harbors” for online service providers (OSPs) against copyright infringement liability:

  • One related to transitory digital network communications of allegedly infringing content
  • One for the transient storage of such content
  • One for the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider
  • One related to links and the like that the provider may provide to such content

In order to obtain protection under one of the safe harbors, a business must be an online service provider (OSP). OSP is defined in the statute as “a provider of online services or network access, or the operator of facilities therefor” among other things. If the business is an OSP, it must also show that it has clean hands related to the infringing conduct. The statute provides that the OSP must show that:

  • It does not have actual knowledge that the material or an activity using the material on the system or network is infringing
  • It is not aware of facts or circumstances from which infringing activity is apparent or, when it becomes aware it acts expeditiously to remove, or disable access to, the material
  • It does not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity
  • Upon notification of claimed infringement, it responds expeditiously to remove or disable access to the material that is claimed to be infringing or to be the subject of infringing activity

OSPs have some additional responsibilities in order to qualify under one of the four safe harbors. They must adopt, reasonably implement, and inform subscribers and account holders of the OSPs system or network about a policy that provides for the termination in appropriate circumstances of subscribers and account holders of the service provider’s system or network who are repeat infringers of the policy. The OSP must also establish a designated agent on record with the U.S. Copyright Office to receive notifications of claimed infringement.

While Facebook qualifies as an OSP because of the nature of its business, for most companies that are simply using social networking Web sites as a means to market their products and services, it is an open question as to whether the DMCA would provide any protection against liability for online copyright infringement. It is likely that many will not. At a minimum, companies that are conducting social media marketing should ensure that they have the rights they need to use the materials that they are posting on such sites. If the company allows users to post content on its page, then the company would be wise to take the added steps to put into place policies and procedures that comply with the DMCA, including adding a DMCA Notice and Takedown provision to the company’s social marketing Web site page as well as establishing a registered agent on record with the U.S. Copyright Office to receive notification of claimed infringement. The company has at least a basis for arguing that it is covered by the DMCA should the situation arise.

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