Updating Your Outdated Terms of Use

You just looked at your business website’s Terms of Use and Privacy Policy (I’ll use the word Terms to refer to both of them together) for the first time in ages and realized that they have been in place since the (first?) Clinton Administration. It’s time for an update. What do you need to consider?

Don’t copy and paste. Terms should be tailored to your website. Your site will need different terms depending on whether you accept posts from users, how you want users to be able to use the site, what kinds of information you collect from users, whether you wish to allow sharing, and more. If you merely find a website similar to your own and copy its Terms, you risk creating Terms that you do not wish to bind your users, let alone your business.

Follow any requirements for your industry. If you are in an industry that is subject to regulations, you should make sure that your site’s Terms allow you to follow those regulations. For example, some industries are required to keep certain records about customer interactions for a certain amount of time. Make sure that your Terms disclose that you are keeping those records, and for how long.

The FTC regulates privacy policies. The Federal Trade Commission has been very aggressive about enforcement of privacy policies for the past few years, and it updates its regulations fairly regularly. Make sure your attorney looks at the latest regulations in drafting your Privacy Policy.

State laws. If your website is aimed at residents of more than one state, make sure you are complying with the laws of every state you are doing business in. California has generally been the most aggressive state in terms of legal regulation of website Terms.

Consider your timing. Pinterest has recently become a very popular site. If you want to, for example, update your Terms to allow you to share your users’ content via Pinterest, you will have to choose your timing carefully. If your current Terms do not grant the license needed for such sharing, you will need to make sure that your users are bound by your updated Terms before you add a “Pin It!” button or other means of sharing to your site. Otherwise, you may be risking a law suit for facilitating the violation of your users’ copyrights.

Inform your users of the update—email them if you can. It has become more and more common for websites to provide some notice before changes to their Terms go into effect. One might even say it is swiftly becoming a standard practice in the industry, especially for social sites. Facebook has a Site Governance Page where users can learn about and weigh in on changes before they are made. Pinterest gave its users more than two weeks’ notice, both by email and by notice on the Pinterest website, that it was going to make changes to its Terms of Service (and still makes the old terms available on the site in case users want to know how they have changed). Google gave users more than a month to review the changes it made to the Terms for its many services, informing them via pop-up when they visited a Google site as well as via email. If at all possible, you should take similar steps to inform your users of your changes. You don’t want your business to be left behind, if for no other reason than your users will expect this level of service.

Updating your Terms requires some consideration, but can be a painless process with the proper planning.

Star Trek v. Axanar: Copyright Infringement or Permissible Fan Work?

Star Trek vs Axanar: CBS and Paramount sue Axanar Productions
Star Trek vs Axanar: CBS and Paramount sue Axanar Productions

If you are a Star Trek fan, know a Star Trek fan, or are merely vaguely aware that you need to be very careful about whether you call Star Trek fans “trekkies” or “trekkers,” you are probably aware of the Axanar project and the litigation surrounding it.

For those who spend slightly less of their time contemplating the wonders that Gene Roddenberry created than I do, here is the nickel summary: In 1966, the television show Star Trek first aired. It was cancelled after three seasons but went on to gain popularity in syndication. From these humble beginnings, the property has ultimately expanded into multiple spinoff television series, movies, books, websites, merchandising, and pretty well any kind of copyrightable work you can think of. In terms of the depth and breadth of the copyrighted properties and the fictional geography, it can only properly be called a “universe.” Today, there are two companies that own the copyright rights to Star Trek, CBS and Paramount. CBS owns the television rights and Paramount owns the movie rights, though according to Axanar Productions’ attorneys, this may not be the full picture due to the ways in which the copyright ownership has changed hands over time. CBS and Paramount have, according to numerous news articles, allowed fans to make short films, written fictional works, elaborate and accurate costumes, and other tributes, all without pursuing legal action against the fans. Corroborating this claim is the fact that Paramount lists Star Trek fan sites on its official website for the Star Trek movies. CBS and Paramount could have taken legal action against these fan uses at any time because these fan works are derivative works, meaning copyrightable works that are based on another copyrighted work. Only the owner of a copyright has the right to create or authorize creation of derivative works of the original copyrighted material; if anyone else creates a derivative work, that constitutes copyright infringement.

But Axanar, unlike many fan films before it, has drawn legal action from CBS and Paramount. Theories on why Axanar is different range from timing (CBS has just announced another new Star Trek television show to begin airing in 2017, and Paramount has the next reboot movie coming out in summer 2016) to money (the crowdfunded Axanar raised an unprecedented $1 million for production online) to quality (Axanar is using professionals to make the film, while most prior fan films did not) to sour grapes (the studios fear that Axanar will be more popular than the reboot movies, which many fans felt failed to capture the spirit of Star Trek). The Axanar Productions legal team has taken the strategy of insisting that the plaintiff explain in great detail exactly which copyrights have been violated and exactly which plaintiff owns which copyrights. They are asking, essentially, that CBS and Paramount give the exact coordinates of the conflict within the Star Trek universe. The disconnect is that CBS and Paramount are contending that Axanar Productions is in essence violating (almost) the entire universe all at once. And such insistence on a detailed list of the exact elements that have been violated (which the amended complaint does provide) gives the appearance of being the refuge of an infringer that knows it has been caught and has no solid grounds for defense.

One concept I have seen repeatedly throughout news articles and fan website discussions is that CBS and Paramount have always been fine with fan works as long as they didn’t make any money–and that a lack of profits is a defense to infringement. The Axanar creators themselves have repeated this idea and are fighting hard in the court of public opinion to turn the fan community to their side. Both Prelude to Axanar, a 20-minute trailer to the new movie, and Axanar itself will be released to the public for free (assuming the movie ever does get released). This does not, however, mean that the movie is not a for-profit enterprise in any sense that would matter for a legal defense of Axanar. The professional production staff, producers, and others are certainly being paid, regardless of whether the money comes from donations to a Kickstarter campaign or from purchase of tickets, electronic files, or DVDs. This is also not a real legal test for whether a work is infringing. It is part of the legal test for the fair use defense to infringement, but it is only part of the test. Axanar likely wouldn’t make it past the first question in a fair use analysis, specifically whether the purpose of the use is “criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research.” Even if it did, there is a serious question about whether it would harm the market for the copyrighted works, another of the elements of the fair use test. The fact that fans have posited that Axanar better captures the spirit of the original Star Trek than the reboot movies certainly adds weight to CBS and Paramount’s position on that question.

Another defense of Axanar Productions that I have seen often is that CBS and Paramount have never sued before, so they should be barred from suing now. Legally speaking, this would be a defense for Axanar Productions in a trademark case, but it is not a defense in a copyright case like the one CBS and Paramount have filed. Trademark owners must police their trademarks to ensure that the marks do not become so diluted that they no longer serve as source identifiers; copyright owners have no such obligation and are perfectly free to pick and choose which infringers to take action against. This means that the fan theory that the money is the motivation may be at least a partial explanation: why bother pursuing an infringer who has no money? Hiring big-name litigation lawyers is quite expensive, and if you win an infringement case, the other side must pay your attorneys’ fees. If the other side has no money, you’re out your attorneys’ fees.

The other major defense of Axanar Productions I have seen is that CBS and Paramount have slapped fans in the face by bringing this lawsuit. The fan community is the lifeblood of Star Trek, the thinking goes, and for CBS and Paramount to bring a suit without so much as sending a cease and desist letter will only alienate fans. While I do understand this sentiment, and I enjoyed Prelude to Axanar as much as the next fan, I also appreciate that CBS and Paramount are businesses. They have a bottom line to consider, and when fans are saying things like “this captures the spirit of Star Trek better than the reboot movies!” that shows that Axanar is realistically a threat to their bottom line. Should they have explored a license agreement first? Maybe. But they also don’t want to encourage the “it’s better to beg forgiveness than to ask permission” approach from fan works. In addition, Axanar Productions is able to do things that older fan works have not: technology has been changing in ways that make fan works a realistic threat to the market for canon/copyright-owner-created works. CBS and Paramount may be navigating the changing landscape badly, but they are hardly alone in needing to find ways to deal with the changes.

What do you think? Are there other alternatives CBS and Paramount should have explored? Can fan films coexist with canon works without hurting the market for canon works? Will you stop watching new Star Trek because of the lawsuit?

Cloud Computing Basics for Lawyers

Internet Law - Trade Secret - Protect My Idea

I am a (very!) active member of Minnesota Women Lawyers, so I was pleased when offered a chance to write for the current issue (Volume XXXVI, Issue IV) of the organization’s publication, With Equal Right. I wrote about basic cloud computing concepts for attorneys:
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[box]As technology evolves, law firms’ and legal departments’ use of technology changes, too. The hot topic lately has been cloud computing. You may be familiar with cloud computing but wonder what you can do to protect your business and your clients; or you may wonder what precipitation has to do with computers. This article will give you some basic information to help you get your bearings….Read more[/box]

What Do Pinterest’s Updated Terms of Service Mean for Business Users?

Pinterest for Business

By now you are probably aware that Pinterest has updated its Terms of Service and Privacy Policy as of March 23, 2012. The changes will be effective April 6, 2012. The site has been sending emails to users informing them of the update and has posted the email regarding the changes to its blog as well.

Before diving into the changes, I want to note that Pinterest has joined what is apparently becoming a trend in the approach to updating the Terms. It has, like Facebook and Google before it, made sure its users have notice of the changes (via email and/or notifications in several places within the site) and an opportunity to decide whether or not they should continue using the site in light of the changes. For over a decade, it has been standard practice for sites reserve the right to make changes without notice, or with only a very small notice at the bottom of the page near the link to the Terms, and bind users to the updated terms merely by visiting the site, whether or not they have viewed the updated terms. As more and more sites make it their standard practice to notify users and give them time to decide whether to accept an updated policy, the courts may change their approach to this topic. It is worth keeping an eye on and considering in choosing how to notify users of policy updates.

Now, moving on to the meat of the changes.

One of the major changes for business users is that it is now one hundred percent clear that Pinterest makes its users responsible for any violation of copyright caused by their re-pins. The Terms specifically state that “It is important that you understand that you are in the best position to know if the materials you post are legally allowed. We therefore ask that you please be careful when deciding whether to make User Content available on our Service, including whether you can pin or re-pin User Content on your boards” (emphasis added). The disclaimer section also provides that “you agree that we are only acting as a passive conduit for your AND OTHER USERS’ online distribution and publication of your AND THEIR User Content.” In other words, a user cannot simply rely on an assumption that other users have legitimately pinned any content to Pinterest; they need to verify that content is legitimately on the site before re-pinning. (For tips on how to get your business’s content onto Pinterest and assure users that you want them pinning and re-pinning your content, check out my post “Do You Like Free Advertising? Or, How to Make Pinterest Work for Your Business.”)

Pinterest is also making a nod to copyright fair use in its modified Terms; users are now granted a license “to use the Service, including accessing and viewing Pinterest Content, for your personal, noncommercial use to allow you to express yourself, discuss public issues, report on issues of public concern, engage in parody and as expressly permitted by the features of the Service.” Pinterest has likely added this to its Terms to bolster its claims that it is not encouraging its users to violate copyright law; it is only providing a forum for them to make fair use of others’ images. Pinterest does not want to be the next Napster. Business will want to bear in mind how fair use is different from other uses when pinning or re-pinning content.

Unfortunately, the updated Terms have some problems. For example, the license granted by the new Terms is limited to “personal, non-commercial use” in Section 2(b); but in Section 4(b), business users are granted the right to create an account so long as the individual creating the account has the authority to create it and bind the business to the Terms of Service. It is not clear whether pinning a business’s own content along with some commentary or an invitation to interact, one of the more logical ways for businesses to use the site, could be considered “commercial.” The original Terms of Service had similar terms about non-commercial use, though, and web searches did not turn up any Pinterest actions against business users.

Pinterest has also added a binding arbitration clause at Section 11, along with a limitation on class-action law suits. Whether a company is comfortable submitting to binding arbitration by using the site is largely a business decision but should definitely be brought to the attention of the company’s lawyer.

Also potentially problematic from the standpoint of the business user is that the Terms, including all rights and licenses assigned by them, cannot be transferred by users. One of those rights is the right to have and use an account. At least for the moment, there is only one account type, and an account opened by any individual on behalf of a company appears to be owned jointly by the company and the individual so far as Pinterest’s Terms are concerned. Businesses will want to make sure that their employment policies or agreements are clear on the subject of who owns social media accounts (although this is a best practice in general).

What do you think? Will your business begin or continue using Pinterest in light of these changes?

Do You Like Free Advertising? Or, How to Make Pinterest Work for Your Business

Pinterest for Business

The hot new social site is Pinterest, alternately referred to as a threat to Facebook and Twitter and the biggest threat to copyright since Napster. I hardly need link it, as by now you have surely seen the blog post by distraught attorney-and-photographer Kirsten Kowalski, who deleted her account after reading the site’s Terms of Service.

I won’t weigh in on the controversy over Kowalski’s understanding of Pinterest’s Terms of Service, or how they compare to other sites’ terms. It hardly matters; she has ignited the public interest in, and fear of, the potential for violating copyright by using the site. The real question is, what will you, as a business owner and content creator, do about it?

Pinterest, like so many other social media sites, is great for small businesses. It is yet another method of getting people—the people who make the purchasing decisions—interested in and looking at your products. You should be especially interested in the site if your products fall within one of the major categories (Architecture, Art, Cars & Motorcycles, Design, DIY & Crafts, Education, Film, Music & Books, Fitness, Food & Drink, Gardening, Geek, Hair & Beauty, History, Holidays, Home Décor, Humor, Kids, My Life, Women’s Apparel, Men’s Apparel, Outdoors, People, Pets, Photography, Print & Posters, Products, Science & Nature, Sports, Technology, Travel & Places, and Wedding & Events). If your product falls into the Other category, the site may be slightly less useful to you, but it is still an avenue for free advertising. If you, like many businesses, are less concerned about protecting the copyright in the photographs of your products than you are about selling the products themselves, Pinterest is probably a great move.

I, however, am not a marketing expert, so I cannot tell you how best to use the site. I’ll leave that to the experts. What I do know is that if you want people to “pin” your products, you may have to reassure them that you do not intend to chase them down a la RIAA. To ensure that you aren’t sending mixed signals:

  • Make sure that your own site’s Terms of Use are not preventing people from sharing your content. Your linking policy should be clearly link-friendly, within reason. You do not want people linking your content in a way that implies a relationship that does not exist, for example, but your policy should clearly allow a Pinterest pin with a note about how much the user loves your new software product, clothing line, or music album.
  • Join Pinterest and pin as many of your own products as you have time to pin, in as exciting and attractive a format as possible. This will reassure people that you do not mind pinning, and give them the opportunity to re-pin from an unquestionably legitimate source.
  • Put a link to your Pinterest page on your company’s website. Again, this will reassure people that you are fine with social sharing.
  • Make use of Pinterest’s “Goodies” and put a “Pin It!” button on your company website.

If you are not sure whether your website’s current Terms of Use are pin-friendly, but want to make sure to get it right, feel free to contact me for help.

Update March 24, 2012: Pinterest has updated its site Terms of Service and Privacy Policy. The new documents will be effective as of April 12, 2012. These changes to not affect the information provided in this blog post, as Pinterest cannot grant users a license to your business’s content; only your business can do that.

Pinterest logo courtesy of the “Goodies” section on Pinterest. The Pinterest logo was designed by Michael Deal and Juan Carlos Pagan.