The Real Cost of a Social Media Misstep

Money by Andrew Magill from Flickr (Creative Commons License)

Money by Andrew Magill from Flickr (Creative Commons License)

I was talking with some non-lawyer entrepreneurs lately, and I asked them what they thought would be the worst case scenario if their company broke the law via their social media, and they both responded that they would have to take responsibility for their mistake, apologize, and do some damage control. While I appreciate that these business owners appeared to have integrity and good intentions, I internally cringed that they both assumed that saying, “I’m sorry,” should be enough to fix a problem.

I want to share some numbers for the costs a business could easily face if they violate a law with their online posts.

Trademark Infringement – Cost of Rebranding
Think about how much time and money you’ve spent selecting the name for your business or product, your logos, your slogans, your domain, and your website. Now, how would you feel if you had to do it all again? That’s what could happen if you select a name for your business or product that’s already been registered by someone else in your industry. In the best case scenario, they’ll send a cease and desist letter and demand that you rebrand. In the worst case scenario, they’ll sue you for infringement, and you could be spending tens of thousands of dollars in legal fees and fines.

This is why I suggest companies check the U.S. Patent and Trademark Database for registered trademarks to verify the name or slogan they want to use hasn’t been claimed by someone else.   I’m also an advocate of registering your trademark as soon as you can afford it, so no one can restrict your use of your own name or steal it from you.

Illegal Social Media Policy – at least $10,000
Every company needs a social media policy, but employers need to understand that a federal law called the National Labor Relations Act (NLRA) that protect union activities also apply to employees talking about their work – even in public online forums. If you fire an employee for violating the company social media policy and it turns out your policy violates the NLRA, you could be ordered by the National Labor Relations Board (NLRB) to pay the ex-employee back wages, damages, and offer them their job back. My friend who works on these cases says if you have to pay the ex-employee $10,000, you got off easy.

Copyright Infringement – $150,000 per Work Copied
Many business owners don’t understand that they can’t use any image they find via a Google Image search. There are even marketing “professionals” who will tell you that you can use any image you find online as long as you give an attribution and a link to the original. Both of these are excellent ways to commit copyright infringement. And photographers are becoming more savvy about protecting their rights so if you use their work they may send you a bill or a lawsuit instead of a cease and desist letter or a takedown notice. In the worst case scenario, you may face a lawsuit for $150,000 per image you used without permission.

Be careful if you outsource your content creation that your contracts clear state that the writer or artist who creates your content also indemnifies you if you are ever accused of copyright infringement because of something they created for your site or posted to your social media.

Defamation – $2,500,000
Defamation generally requires making a false statement about a person to a third party that hurts the person’s reputation. When I do talks about social media horror stories, I talk about a case where a blogger was sued for defamation because of one blog post and was ordered to pay him $2.5 million. 1 blog post. $2.5 million. (The case is currently up on appeal but I don’t think it looks good for her.) This is when little words matter because it’s easy to think you’re stating an opinion but your phrasing creates a statement of a fact – and if it’s a lie, it could be defamatory. Think before you post and check your sources.

ruthcover smallerPlease note, these numbers do not include legal fees you could face in addition to damages if you’re sued because of your social media posts. The legal issues listed above only scratches the surface of what wrongs a person or company can commit online. The good news is most of these problems are preventable with education and diligence. I strongly recommend you stay abreast of what laws apply to your social media postings and developments in this area of law.

If you need a legal resource for laymen on this topic, I recommend my book, The Legal Side of Blogging: How Not to get Sued, Fired, Arrested, or Killed. It covers a lot of the major issues that apply to blogging and social media. If you want to chat more about this topic, feel free to connect with me on TwitterFacebookYouTubeLinkedIn, or you can email me. You can also subscribe to the Carter Law Firm monthly newsletter.
Please visit my homepage for more information about Carter Law Firm.

How To Get a Free Consultation with Ruth Carter

Photo by Don McPhee

Photo by Don McPhee

I’m excited to share that I’ve teamed up with Gangplank in Chandler to offer free legal mentoring services on the first Monday of the month from 1pm until 4pm. I can see 3 people for 45-minutes each every month at no charge.

Hello Beautiful by Gangplank HQ from Flickr

Hello Beautiful by Gangplank HQ from Flickr

My legal mentoring hours are a great opportunity to informally bat around your ideas and questions about your projects and business. Coming to my mentoring hours does not create an attorney-client relationship between us. We won’t have any ongoing obligations to each other unless we decide to create a formal working relationship.

Gangplank provides free collaborative workspaces in Arizona, Virginia, and Canada. They provide the physical and social infrastructure for creative people to launch their startups. These are wonderful places for freelancers and new business owners to work. In Arizona, Gangplank has locations on Chandler, Avondale, and Tucson.

I love working with Gangplank. They have a fantastic group of dynamic people who have an enormous amount of creativity and drive. They have a very informal environment and they do incredible work. It fits brilliantly with my desire to be the approachable lawyer who wears t-shirts.

Skulls & Stripes by Gangplank HQ from Flickr

Skulls & Stripes by Gangplank HQ from Flickr

Gangplank in Chandler is located at 260 South Arizona Avenue. Their events calendar shows their mentors’ availability and also all their other events like their weekly brown bag presentations, hacknights, and workshops. They have a wealth of other mentors too who provide assistance in the areas of business, leadership, marketing, design, finance, and technology.

Gangplank is in charge of scheduling the mentoring hours so please check their event calendar for my availability. You can book a mentoring appointment with me by emailing them at chandler@gangplankhq.com.

Please note: my mentoring hours at Gangplank are not for my ongoing clients with whom I’ve created an attorney-client relationship. These appointments are for people who think they might need a lawyer, people who just want some general legal information, law students, anyone else who wants to chat for an hour.

You can connect with me via TwitterGoogle+FacebookYouTube, and LinkedIn, or you can email me.
Please visit my homepage for more information about Carter Law Firm.

Celebrity Trademark Woes

Ivy Leaves by D H Wright from Flickr

Ivy Leaves by D H Wright from Flickr

In the last week there have been a few stories about celebrities running into trouble with prospective trademarks. I thought I’d break down the two major stories I’ve heard.

Blue Ivy
Jay-Z and Beyonce had a daughter earlier this year and named her Blue Ivy Carter. (Why do celebrities give their kids such stupid names?) According to the news report, Jay-Z filed an application to trademark her name within days of her birth. It seems very strange to me that a high priority of a new parent is starting a product line based on their kid’s name.

To have a trademark, you have to select a mark and the product or service you’re going to use it with. A mark can be anything that will differentiate your product or services from the competition – a word, a tag line, a color, a scent, a sound, etc. Its purpose is to inform consumers about the source and the quality of the goods they’re buying. Once you register a mark with the U.S. Patent and Trademark Office, no one can use a similar mark on similar goods and services because it might lead to consumer confusion.

Jay-Z’s trademark plan hit a bit of a snag. When he applied for the trademark, he was likely informed that there are several registered trademarks featuring the phrase “blue ivy.” One is an event and wedding planning service, another is an online furniture retailer, and another is a retail store that sells clothing, jewelry, accessories, and giftware.

Jay-Z and Beyonce could register “Blue Ivy Carter” as a trademark, but not to sell a good or service that was similar to one of the existing registered marks. It appears they’ve registered the mark for skin care products, baby products, ring tones, key rings, and accessories among other things. The list is disgustingly extensive.

The best part of the trademark record is where it says, “The name ‘BLUE IVY CARTER’ identifies a living individual whose consent is of record.” That’s funny.

Khroma
The other trademark story I heard recently involves the Kardashians. Apparently they plan to release a makeup line called Khroma Beauty that is expected to be sold in Sears and CVS Pharmacies. The problem they’re running into is the fact that there’s a salon called Chroma Makeup Studio in Hollywood that sells its own Chroma brand of makeup. I couldn’t discern in a quick search if the studio owner had registered the trademark.

The general rule in trademark is that it’s not enough to have a different spelling of the same word as your competition’s mark. For example, if someone owed an “Alligator Furniture Store” in your city, you probably couldn’t open a competing store called “Allig8tor Furniture.”

Even without registration, the owner of the Chroma mark gets the exclusive rights to use his mark in commerce wherever the market has been established. If nothing else, he might have a valid argument to keep Khroma makeup out of the stores near his studio. He’s asked the Kardashians to change the name of their makeup.

When selecting a potential mark, it’s a good idea to check the U.S. Patent and Trademark Office to see if someone has already registered the mark you want to use on similar goods and services. If they are, you’ll have to pick a new trademark.

It’s also prudent to run a simple Google search to see if someone is using the mark in commerce without registering it. If they are, you’ll have to consider whether it would be better to pick something new or use a similar mark knowing that the other user has the exclusive right to use the mark where they’re established. If you register your similar mark, you can use it everywhere in the country except the areas where your competition established itself prior to your registration.

Feel free to connect with me via TwitterGoogle+Facebook, and LinkedIn, or you can email me.
Please visit my homepage for more information about Carter Law Firm.