Protecting the IP in Social Media

In 2008, Mattocks created a Facebook fan page for The Game, a television show about professional football players and their significant others. The show had previously aired on the CW Television Network until it was cancelled in May 2009. Even though it was cancelled, Mattocks continued to maintain the page.

Mattocks had generated 750,000 likes by the time BET picked up the show in April 2010. Six months later, the page had approximately 1.3 million likes. BET reached out to Mattocks at that point to coordinate promotion for the new episodes, which began airing in January 2011.

According to the lawsuit, BET initially attempted to work with Mattocks in the maintenance of the page. The network offered her various compensation plans, from paying her $30 per hour to work as a social media freelancer, to hiring her as a “social media specialist” for three years that would pay her $4,166 per month, to purchasing the page and her related Twitter account outright for $15,000. The parties signed an agreement in February 2011 in which Mattocks agreed to give BET administrative access to the page. This arrangement allowed BET to update the content on the page. The agreement, however, also stated that BET would not change the administrative rights to exclude Mattocks from the page.

Despite this agreement, Mattocks rejected all of BET's compensation offers. She alleges that she was making more from the page than what BET had offered. The lawsuit describes how Mattocks had an arrangement with Sulia, a subject-based social network, which paid her “$2,000 to $3,000 per week based on how many users were directed to Sulia from links” on the page and Twitter. Sulia also paid her between $300 and $500 per post for approximately 10 to 20 Facebook and Twitter posts per week.

During these negotiations, the page's likes continued to increase. The page had 3.3 million likes by the show's premier in January 2011, 5 million likes by June 2011, and 7.7 million likes when the complaint was filed in July 2013. For a comparison, Mattocks noted that in 2010, Starbucks had 8 million, Coke had 5.5 million, and Skittles had 4.4 million likes.

When the parties could not agree on a financial arrangement, Mattocks demoted BET's page access from “manager” to “moderator.” In response, BET sent Mattocks a letter terminating the February 2011 agreement regarding maintenance of the page, rescinding any intellectual property rights previously granted, and ordering her to cease and desist from using all BET intellectual property. BET also contacted Facebook to remove the page.

At that point, Mattocks sued BET for tortious interference, breach of contract, breach of good faith and fair dealing, and copyright infringement. The parties, as of the time of this writing, were battling over the value of the page. Mattocks' expert pegs the value between approximately $300,000; the worth to Mattocks due to its revenue stream, and $8.7 million, the worth to BET due to the number of likes. In contrast, BET's expert argues that there is no value since a Facebook fan page has never been bought or sold.

Social Media Has Value

Interestingly, this dispute tracks a similar one unfolding in Europe. As reported by Bloomberg News on March 27, Ferrari is in a legal battle with a father and son who had created and maintained a Facebook fan page for Ferrari. The car company eventually took control of the administration of the fan page. The father and son, allegedly, are now seeking compensation for all of the time that they had previously spent on maintaining the Ferrari fan page and building up its likes.

Regardless of what dollar amount the court puts on Mattocks' Facebook page or whether Ferrari pays for its fan page, make no mistake about it, there is value in the creation of a Facebook page and the posts made to it. The same goes for someone's tweets on Twitter or pictures on Instagram. Social media has created a whole new world of intellectual property, and practitioners need to recognize this fact.

While there is an abundance of intellectual property issues related to social media, here are the three most important issues for practitioners: declare ownership rights, protect against IP infringement and treat social media like an asset.

Declare Ownership Rights

As seen in the battles discussed above, the creator of the social media retains the ownership rights. If a client's employee is maintaining the client's social media presence, the employee handbook or employment agreement should make it clear that all ownership rights to social media are transferred to the employer.

The same goes if the client hires an outside person to manage their social media presence. The client should have an agreement with the social media consultant that states that the client owns the rights to the social media creations and posts done for the client by the consultant.

Protect Against IP Infringement

As the disputes highlight, clients cannot appropriate someone else's social media, whether it is a Facebook fan page or a tweet about your client's new product. Clients need to make this clear to employees or consultants who manage their social media presence.

Treat Social Media Like an Asset

The more that clients treat social media like an asset, the less likely clients are going to run into IP issues related to social media. So, for example, when buying a business, make sure that all rights to the business's social media are included in the purchase.

Conclusion

By treating social media in the same way as traditional intellectual property, practitioners can help clients avoid potential legal battles. More importantly, your clients will avoid having to determine how much they would pay for a like on Facebook.

John M. Persinger is an associate with MacDonald, Illig, Jones & Britton and a former White House staffer. He represents individuals, businesses and nonprofits in their dealings with federal, commonwealth and local government entities.

How much would your company pay for a “like” on Facebook?

That is the central question at the heart of a lawsuit between Stacey Mattocks, an insurance agent from Florida, and Black Entertainment Television (BET).

Case Background

In 2008, Mattocks created a Facebook fan page for The Game, a television show about professional football players and their significant others. The show had previously aired on the CW Television Network until it was cancelled in May 2009. Even though it was cancelled, Mattocks continued to maintain the page.

Mattocks had generated 750,000 likes by the time BET picked up the show in April 2010. Six months later, the page had approximately 1.3 million likes. BET reached out to Mattocks at that point to coordinate promotion for the new episodes, which began airing in January 2011.

According to the lawsuit, BET initially attempted to work with Mattocks in the maintenance of the page. The network offered her various compensation plans, from paying her $30 per hour to work as a social media freelancer, to hiring her as a “social media specialist” for three years that would pay her $4,166 per month, to purchasing the page and her related Twitter account outright for $15,000. The parties signed an agreement in February 2011 in which Mattocks agreed to give BET administrative access to the page. This arrangement allowed BET to update the content on the page. The agreement, however, also stated that BET would not change the administrative rights to exclude Mattocks from the page.

Despite this agreement, Mattocks rejected all of BET's compensation offers. She alleges that she was making more from the page than what BET had offered. The lawsuit describes how Mattocks had an arrangement with Sulia, a subject-based social network, which paid her “$2,000 to $3,000 per week based on how many users were directed to Sulia from links” on the page and Twitter. Sulia also paid her between $300 and $500 per post for approximately 10 to 20 Facebook and Twitter posts per week.

During these negotiations, the page's likes continued to increase. The page had 3.3 million likes by the show's premier in January 2011, 5 million likes by June 2011, and 7.7 million likes when the complaint was filed in July 2013. For a comparison, Mattocks noted that in 2010, Starbucks had 8 million, Coke had 5.5 million, and Skittles had 4.4 million likes.

When the parties could not agree on a financial arrangement, Mattocks demoted BET's page access from “manager” to “moderator.” In response, BET sent Mattocks a letter terminating the February 2011 agreement regarding maintenance of the page, rescinding any intellectual property rights previously granted, and ordering her to cease and desist from using all BET intellectual property. BET also contacted Facebook to remove the page.

At that point, Mattocks sued BET for tortious interference, breach of contract, breach of good faith and fair dealing, and copyright infringement. The parties, as of the time of this writing, were battling over the value of the page. Mattocks' expert pegs the value between approximately $300,000; the worth to Mattocks due to its revenue stream, and $8.7 million, the worth to BET due to the number of likes. In contrast, BET's expert argues that there is no value since a Facebook fan page has never been bought or sold.

Social Media Has Value

Interestingly, this dispute tracks a similar one unfolding in Europe. As reported by Bloomberg News on March 27, Ferrari is in a legal battle with a father and son who had created and maintained a Facebook fan page for Ferrari. The car company eventually took control of the administration of the fan page. The father and son, allegedly, are now seeking compensation for all of the time that they had previously spent on maintaining the Ferrari fan page and building up its likes.

Regardless of what dollar amount the court puts on Mattocks' Facebook page or whether Ferrari pays for its fan page, make no mistake about it, there is value in the creation of a Facebook page and the posts made to it. The same goes for someone's tweets on Twitter or pictures on Instagram. Social media has created a whole new world of intellectual property, and practitioners need to recognize this fact.

While there is an abundance of intellectual property issues related to social media, here are the three most important issues for practitioners: declare ownership rights, protect against IP infringement and treat social media like an asset.

Declare Ownership Rights

As seen in the battles discussed above, the creator of the social media retains the ownership rights. If a client's employee is maintaining the client's social media presence, the employee handbook or employment agreement should make it clear that all ownership rights to social media are transferred to the employer.

The same goes if the client hires an outside person to manage their social media presence. The client should have an agreement with the social media consultant that states that the client owns the rights to the social media creations and posts done for the client by the consultant.

Protect Against IP Infringement

As the disputes highlight, clients cannot appropriate someone else's social media, whether it is a Facebook fan page or a tweet about your client's new product. Clients need to make this clear to employees or consultants who manage their social media presence.

Treat Social Media Like an Asset

The more that clients treat social media like an asset, the less likely clients are going to run into IP issues related to social media. So, for example, when buying a business, make sure that all rights to the business's social media are included in the purchase.

Conclusion

By treating social media in the same way as traditional intellectual property, practitioners can help clients avoid potential legal battles. More importantly, your clients will avoid having to determine how much they would pay for a like on Facebook.

John M. Persinger is an associate with MacDonald, Illig, Jones & Britton and a former White House staffer. He represents individuals, businesses and nonprofits in their dealings with federal, commonwealth and local government entities.