Food For Thought: What Legal Issues May Impact Your Social Media Activities?

The Internet is transforming the way in which companies communicate with customers. That transformation is accelerating at an astonishing pace as a result of social networking sites, such as Facebook®, Twitter® and blogs. More than ever consumers are sharing their experiences and opinions, good and bad, with global audiences on blogs, social networks and consumer review sites at the touch of a button. Those opinions have the potential for shaping, controlling and redefining advertising messages, not to mention companies' reputations. Many companies are still unaware of the benefits of social media marketing. While others have been caught off guard and unable to adapt to the speed at which social media marketing is revolutionizing the way in which companies communicate with customers and potential customers and the way in which consumers are voicing their opinions about companies and their products.

The ever-increasing number of social networking sites is making it difficult, if not seemingly impossible, for companies to adequately manage their advertising message, reputation, intellectual property assets and legal risks. That difficulty will undoubtedly intensify as the number of participants of user-generated content sites explodes to an estimated one billion by 2012. It is estimated that there will be thirty to forty billion “tweets” by the end of 2010. Clearly, the pace at which people are using social media networks to connect with friends and seek out online relationships with business is exploding, which is why some companies see social media as an opportunity to connect with consumers that they could not otherwise reach with traditional marketing efforts.

The question being asked by social media experts is whether companies that have not already done so will embrace this potentially golden opportunity to reach tens of thousands, if not hundreds of thousands, of traditionally unattainable consumers with the strike of a computer key or be immobilized by fear. The trepidation surrounding social media marketing stems from companies not understanding its intricacies and their concerns over legal ramifications for doing so.

Company concerns include losing control of the branding message, return on time investment, costs, posting of negative comments or feedback by customers, employees and ex-employees, defamation liability, vicarious liability, losing control of copyrighted materials, unauthorized use of their copyrights and trademarks, employees engaging in copyright and trademark infringements and other illegal activities, employment law issues, loss of trade secrets and proprietary information, violations of certain state and federal laws and regulations, including Federal Trade Commission laws, and potential litigation impact. To minimize those legal risks, companies should develop social media policies that reflect corporate culture, take into account a company’s brand and risk tolerance.

An important aspect of a social media policy is minimizing the risks associated with brand and trademark hijacking, trademark and copyright infringement and damage to brand reputation. Those policies should include reserving company names and key permutations of company names with social networking sites, developing a presence in social networking communities, assigning key employees to handle social media activities, developing a monitoring and enforcement process and understanding the terms of use for each of the major social networks. Social media policies should also include a consistent enforcement program for handling misuse of company brands, trademarks and copyrights and for handling other damaging activities of third parties, including trade libel. The policies should also set forth guidelines for employee conduct in social media environments, including guidelines for minimizing the risks of harassing and defamatory conduct. Developing of an enforcement program and committing to systematically monitoring for potentially damaging activities can go a long way toward making sure that online social networking sites remain free of content that is damaging to company brands, reputation and intellectual property.