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American Bar Association

Commercial & Business Litigation

Brand Enforcement on Social Networking Sites

By Darin M. Klemchuk and Roxana Sullivan

In today’s Web 2.0 world, businesses have inexpensive and far-reaching mechanisms through which to promote their brands and advertise their goods and services. Businesses are exploring new ways to advertise online that go beyond merely buying ad space on popular search engines and other informational sites to actively engaging with their consumers in conversations and sharing information. Today, social networking sites in particular are seeing exponential growth in memberships. Facebook, for example, is estimated to have more than 350 million active users. Twitter now boasts around 32.1 million users. MySpace attracts about 115 million people to its site each month.

With such a wide consumer base at their fingertips, how have businesses used these social networking sites to their advantage? Better yet, how can businesses best protect their brands on social networking sites?

Social Media as a Marketing Tool
Facebook, the largest of the social networking sites, is a good example of how social networking sites have become an effective marketing tool for businesses. Facebook has developed its website to allow for “Pages,” customizable mini-sites geared toward organizations, products, or public personalities and that enable them to communicate with Facebook users. A Page essentially allows fans to become brand advocates. It allows users to post comments, view news and information about a certain product, and learn more about a company.

Facebook now has more than 1.6 million active Pages. In fact, it is estimated that Pages have created more than 5.3 billion fans. The Page form on Facebook requires the creator of the Page to be the official representative of an organization, business, celebrity, or brand. As such, the representative becomes the Page Organizer, able to add and remove content, manage the information appearing on the site, and increase the viral effects of the advertising. For example, each Page (depending on the type of organization selected) comes equipped with preselected formatting options, such as tabs for discussion boards, events, information about the organization, and photos. The Info tab lets you share key information about your company such as website, mission, overview of the business, and products. Fans can post comments on a company’s “Wall,” view videos, and read about upcoming events or promotions. Information about your fans regarding their activities on your Page also becomes available for their friends to view, causing others to become fans of your Page, creating viral advertising. Businesses can capitalize on this market and gain valuable information from tools such as the Facebook Insights tool, which includes data on fans’ engagement with posts from a business’s Page.

Similar to using Facebook, businesses have “opened up shop” on Twitter and MySpace, finding both websites valuable marketing tools for their goods and services. Some businesses have even created official Twitter accounts and allow employees to post tweets of daily or weekly promotions and events. Nevertheless, questions arise as to what a business will be able to do if the angry “fan” or follower posts negative comments on its wall, if a disgruntled former employee opens a page in the business’s name, or if someone poses as a representative of a business claiming the company name or brand as his or her user name.

Lanham Act Considerations
Under the Digital Millennium Copyright Act (DMCA), website operators, including advertisers, that post unauthorized copyrighted works of others may be liable for copyright infringement. However, the DMCA provides a safe harbor for online service providers who take certain steps such as establishing a notice and take-down procedure and register a copyright agent that receives copyright infringement complaints. The DMCA safe harbor does not, however, provide protection from claims of trademark infringement. While few cases concern Web 2.0 social networks, the following landmark cases discuss secondary trademark liability for websites that can be applied to social networking sites.

In Tiffany (NJ) Inc. v. eBay, Inc., 576 F. Supp. 2d 463 (S.D.N.Y. 2008), Tiffany tried to hold eBay liable for direct and contributory trademark infringement on the grounds that eBay allowed and facilitated counterfeit items to be sold on its website. Tiffany essentially wanted eBay to police its site for counterfeit Tiffany products and take them down. However, the court held that it was Tiffany’s responsibility, as the trademark owner, to police its brand. Further the court stated that where liability is premised on the conduct of a user of a venue, an initial threshold showing must be made that the defendant had direct control and monitoring over the means of infringement. Liability must be premised on specific knowledge, not generalized knowledge.

In the Tiffany case, eBay had removed the counterfeit seller from its site every time Tiffany had sent notice to eBay. However, in Louis Vuitton Malletier v. Akanoc Solutions, Inc., No. C 07-03952 JW (N.D. Cal. Dec. 23, 2008), the jury returned a verdict granting plaintiffs $32 million in judgment against the web-hosting companies because they had received multiple notices from the trademark owners regarding counterfeit products on hosted sites but failed to take action.

For social networking sites, it is unlikely that courts will find secondary trademark liability for mere awareness that infringing conduct may take place. Specific knowledge is required for a finding of secondary liability. However, as in the Louis Vuitton case, if a social networking website receives multiple notices regarding counterfeit products or infringing use of the marks, a court may rule on the side of the trademark owner and hold the social networking site liable. However, it is the brand owner’s responsibility to monitor such use.

Cases on Trademarks and Social Networking
Case law pertaining to trademark infringement on social networking sites is sparse. Most cases settle early or are resolved through dispute resolution mechanisms within the social networking website, such as the following cases revolving around the social networking site Twitter.

In LaRussa v. Twitter, Tony LaRussa, a well-known baseball manager who currently manages the St. Louis Cardinals, sued an unknown party for registering a user name on Twitter using Tony LaRussa’s name and making comments about the Cardinals players that were in poor taste. LaRussa claimed trademark infringement, cybersquatting, and violation of the right of publicity. However, the case settled shortly after the complaint was filed, the user name was disabled, and Twitter transferred the domain name to LaRussa.

In Oneok, Inc. v. Twitter, Inc., Case No. 4:2009cv00597 (N.D. Okla. Sept. 15, 2009), Oneok, an energy services company that owns the registered trademark for ONEOK, filed a complaint in the Oklahoma Northern District Court claiming trademark infringement after an unknown user registered the user name Oneok on Twitter and posted information about the company. The complaint alleges that Oneok, Inc., had asked Twitter to transfer the user name to the company and to give the company information about who the user for the Twitter account was. However, Twitter allegedly refused. The complaint was dismissed by Oneok the day after the complaint was filed. The user name was transferred to the company.

Courts’ Views of Web 1.0 Domain Name Issues
In Knight-McConnel v. Cummins, 2004 U.S. Dist. LEXIS 14746 (S.D.N.Y. July 29, 2004), the defendant had devoted a significant amount of time writing on her own website about the plaintiff, calling her a securities fraud, a criminal, and insane. The defendant also had a link on her website to the plaintiff’s website that she included without the plaintiff’s permission. The complaint alleged defamation and privacy violations. The plaintiff further claimed that the defendant was violating federal intellectual property law by linking her website to the plaintiff’s website without permission or authorization and by using the plaintiff’s name in the post-domain path of the universal resource locator (URL). (An example of a post-domain path of a URL is www.facebook.com/apple; post-domain paths can be of various lengths and include numbers, letters, and symbols.) The court found that “Defendant’s use of the plaintiff’s name in the post-domain path of a URL and placement of URLs using the plaintiff’s name in the post-domain paths on chat forums, discussion boards, and search engines do not give rise to any source confusion.”

In a similar case, Interactive Products Corp. v. a2z Mobile Office Solutions, Inc., 326 F.3d 687 (6th Cir. 2003), the 6th Circuit held that the post-domain path is not likely to create confusion. The court held that the post-domain path was being used in a non-trademark way and that the post-domain path of a URL “merely shows how the website’s data is organized within the host computer’s files” and does not suggest an association between the page and the mark holder.

It is also unlikely, in conformity with these cases, that the post-domain path of a URL would be deemed a domain name as used under the Anti-Cybersquatting Consumer Protection Act, 15 U.S.C. § 1125(d). Technically, the post-domain path is not a registered domain with a registrar and is merely, as the Interactive Products court explained, the way that a website’s data are organized within the host computer’s files. Therefore, it is unclear whether the registration of user names on social networking sites could gain protection under the Anti-Cybersquatting Consumer Protection Act and whether the use of user names alone would give rise to a likelihood of confusion.

Emerging Regulation of Social Media
The Federal Trade Commission (FTC) has introduced revisions to its Testimonial and Endorsement Guides effective on December 1, 2009. The guides clarify that advertising messages presented as the opinions of findings of a party other than the advertiser, regardless of the type of media used, will be considered endorsements for the purposes of the FTC. This will have a significant impact on bloggers who may be given compensation for reviewing certain products or who have other material connections with the manufacturer of a product. These bloggers will need to disclose that they receive payment or other compensation in exchange for their reviews or that they received the product free of charge.

A valuable source of rules regarding social networking sites is the Word of Mouth Marketing Association’s (WOMMA) Ethics Code, which was cited 18 times in the recent FTC Guidelines for Endorsement and Testimonials. The code and other valuable information can be found at www.womma.org.

Protecting Brands on Social Networking Sites
A presence on social networking sites can hold tremendous value for companies, but protecting one’s brand is not easy. Below is a checklist of what a company should do and think about when embarking on Web 2.0 endeavors.

  • Register your brand. The simplest of actions can prevent a loss of time and expense in trying to reclaim your mark once someone else has registered it.
  • Have a monitoring system in place. Websites such as KnowEM.com (which checks trademark
    “availability” on social networking sites), TweenBeep.com (which receives alerts when people are tweeting about your company), and Adgooroo.com (which provides reports about who is bidding on keywords that tie in to your trademarks) are effective tools that can be used internally and with minimal expense.
  • Take an active role in social networking sites. It may be beneficial to create your own positive press and benefit from the viral effects of promoting your brand on social networking sites.
  • Determine your pain tolerance. What type of infringement are you willing to tolerate and to what extent are you willing to tolerate it? When will you be motivated to act? Will you send out stern cease-and-desist letters or take a gentler approach?
  • Implement an employee policy that addresses social networking conduct.

Keywords: litigation, commercial and business litigation, social networking, brand enforcement

Darin M. Klemchuk is a partner and Roxana Sullivan is an associate with Klemchuk Kubasta, LLP, in Dallas, Texas.

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