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Philip Nulud

Philip Nulud

Website URL: http://www.buchalter.com/attorneys/philip-nulud/ Email: This email address is being protected from spambots. You need JavaScript enabled to view it.
Philip Nulud

Philip L. Nulud is an Associate in the Firm’s Intellectual Property Practice Group. Mr. Nulud focuses his practice on counseling clients in all aspects of trademark, patent and copyright litigation, policy, procedure, portfolio management and protection domestically and worldwide.

 

Social media can be used in a multitude of ways for savvy brands to promote their products. A popular approach is providing “celebrity bloggers” with free or discounted items in exchange for a picture, post, tweet or “shout-out”, which creates “organic” exposure for their brand. While social media has its own methods of operation, the Federal Trade Commission (FTC) rules must be taken into account when handling these promotions.

Under Section 5 of the FTC Act, 15 U.S.C. § 45, the FTC is given the power to direct persons and companies away from using unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in affecting commerce. This includes advertising and social media.

One of the FTC’s main concerns is that consumers may be misguided into believing that an endorsement is the honest opinion of an endorser when in actuality there is a relationship between an endorser and a company and/or marketer. If relationship exists or an agreement has been made, the FTC requires that the endorser disclose this information.

It is common practice for companies or advertisers to provide products, services or discounts to individuals who have a broad reach on social media. For example, celebrity bloggers who have Instagram accounts with hundreds of thousands of followers are often given free merchandise and/or compensation in exchange for posting pictures of the product or themselves using the product to their accounts. The FTC is concerned that consumers are being deceived by these posts. As a result, the FTC has released guidelines that advise the endorsers, marketers and companies that they must disclose a relationship if the relationship is not apparent to consumers. (https://www.ftc.gov/tips-advice/business-center/guidance/ftcs-endorsement-guides-what-people-are-asking#contests) Thus, if a blogger is writing a review, they must disclose whether the product was provided to them by a certain manufacturer or to at least disclose their relationship (i.e. if they’re sponsored or employed by the manufacturer).

In some forms of social media such as Twitter, Pinterest and Instagram, there is a limited amount of space in which one can post something, which makes disclosing this information more difficult. Further, the FTC has not mandated the specific wording of disclosures. However, it advises that inserting short statements such as “#sponsored”, “#promotion”, “paid ad” or even “ad,” may be enough to disclose a connection between the endorser and company.

Many bloggers and social media users feel that having such tags or wording would make their social media accounts feel non-organic or worse, they would be labeled a “sell-out.” While the FTC may choose who they would like to pursue, their rules still apply to bloggers. However, as a practical matter, the FTC has indicated that their enforcement efforts will focus on the companies and/or marketers whose products are the subject of the blogs.

Thus, while it certainly takes away from their organic publicity, companies should make an effort to advise their endorsers that they must disclose their relationship or if they received a particular item from the company or its marketing firm. Particular hash-tags such as “#sponsored” can be used, or even perhaps much more obvious hash-tags such as “ProvidedToMeBy[insertcompanyname]forfree”.

Companies and marketers know that they cannot control what is said on social media and that their endorsers may not follow these guidelines, but they must be mindful of these FTC guidelines in order to prevent being subject to an enforcement action by the FTC. The FTC advises that companies educate and instruct endorsers of such guidelines, make periodic attempts to search for what is said and if there is a problem, follow-up on it. Thus, at a minimum, companies should make a concerted effort to expressly communicate to endorsers that they must adequately disclose the relationship to consumers. The companies should then monitor the posts. Further, if the company re-tweets, re-grams, or re-pins an endorsed post, they need to also disclose the relationship.

Thus, companies and marketers should take note of the FTC’s guidelines and integrate them into their marketing plans and make the appropriate disclosures.

 

Twitter®, Instagram®, Facebook®, Pinterest® and other social media websites and apps are great ways to interact with friends, family and potential customers. They are great avenues for advertising and promotion of one’s business and brand. A brand owner can share their latest offerings, get people excited about new products, develop brand awareness, etc.—the possibilities are endless.

However, in using social media to promote one’s business, there are a number of pitfalls that one must avoid. Using social media in relation to a business is not the same as using it for personal, non-commercial use. While it may seem like everything online is fair game, it is not. Just because something is found online does not mean that it is ok to use. Trouble can and does arise rather quickly…

There are three primary legal considerations when using social media and they fall within the realm of intellectual property—copyrights, right of publicity and trademarks. Often times, it is difficult to distinguish whether you are using someone else’s intellectual property—one must be cautious not to do so when posting on social media. The issues with using someone else’s copyright, likeness and trademark in social media to promote one’s business is that one is profiting off of someone else’s property that does not belong to them and that can and does create a significant amount of conflict. Profiting from another’s property is what separates the use of social media in business from just personal use.

Copyrights protect works of authorship that are original and fixed in a tangible form or medium. This includes photographs, pictures, drawings, designs, songs, poems and other works. Many times, brand owners see pictures of celebrities out in public wearing their clothes on various blogs and websites. Although this can be extremely exciting for the brand owner, it is unwise to share these photos on social media without clearing it first.

Often times, those pictures found online are copyrighted. The photographers obtain copyright registrations for those photos and retain attorneys to protect their intellectual property. Attorneys have been known to use reverse image search software to find where those photos were posted online. If the photos appear on a business’s social media account, they will often times send a cease and desist letter and request compensation of $7,000 – $14,000. If you refuse to submit to their demands you will most likely be threatened with a lawsuit against you, or worse, they will just go ahead and file a lawsuit against you. Sadly, while it does seem disingenuous, many times they have a colorable case since their client has a copyright registration and their client’s photo was used without authorization for commercial purposes.

How does one avoid these situations? Determine where the photo came from. Get a license for the photo. Look to see if the photo is in the public domain. Do not just repost the photo. This happens not only with celebrity photos, but also with photos that appear to be stock photos online. Unless there is a license that comes with a photo, you should not use what you find online. Feel free to post all the photos you take, but be cautious when it comes to posting photos from unknown sources.

In addition to a potential copyright claim over the use of a celebrity’s photo, there could be a right of publicity claim. Right of publicity is the right to use one’s name, likeness or identity for a commercial purpose. It applies when someone uses a celebrity’s name, likeness or voice and can range anywhere from a picture or silhouette to a well-known quote. Thus, if you post a picture of a celebrity wearing your goods, a quote from them or anther item that would refer to them, it may create a false and misleading impression that they are endorsing your product. A famous person does not need to be alive for a claim to be made, their estate can still make the claim for them. The laws vary from state to state and the applicable law is determined by where the celebrity resides or died. In general, you should not use the image, name, likeness or even quotes from a celebrity to promote your products as it may cause a false impression that they have an affiliation with your company. If you would like to do that, contact them, speak with their agent and try to obtain a license or endorsement.

The last social media concern is trademarks. Trademarks protect brands and their identity. Trademarks can be a simple word, slogan, logo, design or even sound. Trademarks are used as source identifiers to help consumers identify where a particular product originates from.

Ideally, one does not wish to cause any confusion with another brand owner. Thus, in using social media, be aware of the potential trademarks of others. Do not use anyone’s brand name.1 There may be a funny slogan or brand name that you want to make a play on, but if there is a possibility consumers will immediately think of the other brand owner and be confused, then do not do it. It could cause the other brand owner to bring forth trademark infringement claims. It does not take much for someone to send a cease and desist letter.

In sum, while social media is a great marketing tool, exercise caution when using it. One must look to where they are obtaining their posts, pictures and inspiration from and one must review whether their post would cause any confusion with or false association with another. If there are any questions or potential confusion in one’s commercial use of social media, then it is best simply not to do it, but if you must, consult with an experienced attorney.

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