Marketing and Pinterest

Heralded as the next big thing in social media, Pinterest presents new legal risks for companies engaged in social media marketing. By sharing images and encouraging others to re-pin them, Pinterest users may inadvertently engage in copyright or trademark infringement, violate licensing agreements, or run afoul of U.S. Federal Trade Commission (FTC) rules for commercial endorsements. Naturally, marketing departments are very interested in Pinterest ' but before you start, consult with your corporate counsel to prevent activity that poses such risks.

Pinterest encourages its users to “organize and share all the beautiful things you find on the web.” Unfortunately for Pinterest users, the images of many of these beautiful things are protected by copyright. Courts have found that merely reproducing works, even without distribution to the public, can constitute copyright infringement if the user has neither obtained permission to pin, nor paid a licensing or royalty fee for use of a copyrighted image. If a copyrighted work is infringed, the copyright holder is entitled to damages, the infringer's profits, and possibly statutory damages ranging from $200 to $150,000 depending on the innocence or willfulness of the infringer, according to 17 U.S.C. ' 504.

Licensing and Contributory Copyright Infringement Risk

Marketing companies and graphic designers, for example, typically purchase licenses for use of images owned by third parties to use in advertising. However, license permissions vary widely, and licensees often have no right to transfer or sublicense a non-exclusive license without authorization from the licensor. A company may have rights to use an image on its corporate website, for instance, but not the right to allow third parties to pin or repin the image on Pinterest. A company risks copyright infringement or contributory infringement if one or more of its employees or agents knowingly encourages others to reproduce or display a copyrighted image without authorization. Thus, even if an image is licensed, do not assume that the license includes every potential use.

Fair Use

Pinterest fans often claim that pinning images from around the Internet onto their virtual pin boards constitutes fair use and is thus protected from charges of infringement. Unfortunately, the U.S. Supreme Court has ruled that the fair use analysis requires a highly fact-intensive inquiry on a case-by-case basis. Therefore, a fair-use question should be framed in specific terms, e.g., “Is it fair use to pin an image of a boat, with a link to the copyright owners' website, on our corporate Pinterest board titled 'Outboard Motors Company,' which promotes my company's outboard motors?” The specific facts surrounding the pin will determine whether it constitutes a fair use.

Four factors are particularly relevant in guiding the determination of fair use:

1. Purpose and Character of the Use

In general, making copies of a copyrighted work for commercial or profitmaking purposes is presumptively unfair, whereas a noncommercial, nonprofit activity may be considered fair use. If the image has been highly transformed, e.g., into a parody, courts are more likely to find that such use is fair.

2. The Nature of the Copyrighted Work

For the most part, courts grant greater copyright protection to creative rather than factual works. For instance, fictional stories typically receive a broader scope of copyright protection than do scholarly works, and motion pictures for entertainment typically receive more protection than news broadcasts. The more protection afforded a copyrighted work, the less likely it is that fair use will be found.

3. The Substantiality of the Portion Used in Relation to the Copyrighted Work As a Whole

In several lawsuits involving Google, the courts ruled that displaying low-resolution “thumbnail” images in search-engine page results was fair use because the purpose was to direct users to the image source, rather than to serve as a substitute for the actual image. On Pinterest, any image arguably serves the same purpose as the original image and, therefore, is less likely to be considered fair use.

4. The Effect on the Potential Market for or Value of the Copyrighted Work

The Supreme Court has on multiple occasions identified this factor as the single most important element in determining fair use. Often, in cases of commercial use, courts will presume harm to the market value of the copyrighted work when the infringing use is merely a replacement in the market for the copyrighted work ' but not always. For instance, the Supreme Court found 2 Live Crew's parody of Roy Orbison's song “Pretty Woman” to be a fair use even though, like Pretty Woman, the parody was a song sold to consumers for profit.

Pinterest will no doubt raise new issues because of its dual capacity to drive traditional fair use of copyrighted material, such as criticism and commentary, while also creating significant opportunities for commercial activity such as marketing and e-commerce. As a company's presence on Pinterest will largely be commercial ' i.e., building brand equity, selling products and services ' the fair use justifications for pinning unlicensed images will need to be particularly compelling.

Risk of Infringement

All new social media sites risk the possibility of third parties establishing false or misleading celebrity or company brand accounts. The major sites have methods for distinguishing official brand sites. While Pinterest, like Facebook and Twitter, does provide a method for reporting trademark infringement, it does not have a method for indicating that a brand's account is “official.”

To prove trademark infringement, a plaintiff must establish the likelihood of confusion between the source of the goods or services at issue and the defendant's use of the mark at issue. Each circuit court has adopted its own test for trademark infringement, but the factors considered are fairly similar, including similarity of the marks, similarity of the goods or services provided under the marks, strength of the plaintiff's mark, the trade channels involved, the care exercised by consumers in purchasing the parties' goods and services, and any actual confusion.

Under the U.S. Trademark Act, 15 USC ' 1125, owners of famous brands can also risk trademark dilution by blurring or tarnishment, when the similarity between a mark or trade name and a famous mark impairs the distinctiveness or reputation of the famous mark. The U.S. Trademark Act specifically excludes those engaging in noncommercial uses, fair uses, and news reporting and commentary from liability for dilution.

Firms establishing corporate Pinterest accounts to advertise their brands and products will have a difficult time convincing a court that their use is noncommercial. Accordingly, as a general rule, corporate pages should not pin images containing other brands, including images of people, as the unauthorized use of a person's image or likeness outside of the scope of a license is likely to be found to be a misappropriation of that person's right of publicity. Before pinning such images, a firm should obtain the permission of those individuals for all proposed uses of the individual's image.

One exception to this general rule is comparative advertising. The use of a competitor's trademark in comparative advertising is permissible under 16 C.F.R. ' 14.15, but only to the extent that the use of the competitor's mark does not mislead consumers into presuming some kind of affiliation between the advertiser and the trademark holder.

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