The New Frontier: How Employers Can Respond to Employee Use of Technology and...
Social Media: The Good, the Bad, and the Lucky
1. SOCIAL MEDIA:
The Good, the Bad, and the Lucky
Written By:
Cheryl P. Leb
Kelly Hart & Hallman LLP
201 Main Street, Suite 2500
Fort Worth, Texas 76102
Presenters:
HON. SUSAN CRISS, Galveston
CHERYL LEB, Fort Worth
MARICELA SIEWCZYNSKI, Dallas
State Bar of Texas
19th ANNUAL
TEXAS MINORITY COUNSEL PROGRAM
September 7-9, 2011
Austin, Texas
CHAPTER 7
2. Cheryl Poulin Leb
Kelly Hart & Hallman LLP
201 Main Street, Suite 2500
Fort Worth, Texas 76102
(817) 878-3547 ■ Cheryl.Leb@kellyhart.com
EDUCATION Southern Methodist University School of Law, Dallas, Texas
Juris Doctor, May 1998, Order of the Coif
Florida State University, Tallahassee, Florida
Bachelor of Science, Magna Cum Laude, April 1995
EMPLOYMENT Partner, Kelly Hart & Hallman LLP, Fort Worth, Texas
June 1998 to present.
PROFESSIONAL
ACTIVITIES Member, American Law Institute
Fellow of the Texas Bar Foundation, 2008-Present
Named ―40 Under 40‖ Fort Worth Business Press, 2011
Texas Rising Star, honored in the 2005-2010 Rising Stars Edition of Texas Monthly
magazine, and individually featured for work with the
Estate of Ben Hogan in the 2006 edition
Listed among the top Intellectual Property lawyers in Fort Worth, Texas magazine's
Top Attorney Guide, 2005-2010
Listed among the top Technology lawyers in Fort Worth, Texas magazine's Top
Attorney Guide, December 2002
2010-2011 Chair, Tarrant County Bar Intellectual Property Section
2009-2010 Vice Chair, Tarrant County Bar Intellectual Property Section
SPEECHES AND
PUBLICATIONS Lecturer, 2009 Tarrant County Bar Intellectual Property Section: Copyright Update
Lecturer, 2006 14th Annual Texas Minority Counsel Program:
―Negotiation Strategies: Issues Faced in the Negotiation of Intellectual Property
Licenses and Entertainment Industry Agreements.‖
Author, ―Dying a Slow E-Death: Don‘t Give Away Your Company‘s Intellectual
Property,‖ Fort Worth Business Press, June 14, 2002
3. SEC Bio
Judge Susan Criss presides over a criminal and civil trial court in Galveston, Texas. For twelve
years she has served as the elected judge of the 212th District Court of Galveston County. She is
a former prosecutor and criminal defense lawyer.
Judge Criss is frequent lecturer on handling high profile cases and social media for trial attorneys
and judges. She has presided over several high profile trials including the Robert Durst murder
trial and the 2005 Texas City British Petroleum explosion cases.
She won the Telly Award in 2005 for producing the video “The Color of Justice,”. The film
features minority lawyers and judges and encourages minority children to pursue careers in the
law and judiciary.
Judge Criss’s guest columns and opinion editorials have been published in The Galveston
County Daily News, Beaumont Examiner, The Police News-Galveston, In Chambers magazine
and her former blog As The Island Floats. She has appeared on 48Hours, The Today Show,
Dateline, The John Walsh Show and The Abrams Report.
Judge Criss is board certified in Criminal Law by the Texas Board of Legal Specialization.
Judge Criss has served on the Board of Directors of the National Association of Women Judges.
She also chairs Gulf Coast Task Force on Jail Diversion for the Mentally Ill.
She is a co-founder of the Galveston County Child Advocacy Center and the Galveston County
Child Abuse and Neglect Task Force.
4. Maricela Moore Siewczynski
Practice Areas
Employment Law and Litigation Mediation
Bilingual (Spanish/English)
Bar Admissions
Texas, 2001
Education
J.D., George Washington University Law School, 2001.
B.S., magna cum laude, Boston College, Carroll School of Management.
Biography
Maricela Siewczynski practices primarily in the areas of employment and business litigation
defense. Before joining the firm, Ms. Siewczynski was a solo plaintiff's employment litigator;
and she was formerly a litigation defense associate with Baker & McKenzie LLP. Maricela is
bilingual (English-Spanish) and is a trained mediator.
Maricela Siewczynski is the President of the Mexican American Bar Association of Texas and
President of the Dallas Hispanic Bar Scholarship Foundation. In 2007, she served as the
President of the Dallas Hispanic Bar Association. Ms. Siewczynski has also served on the Board
of Directors of the Girl Scouts of Northeast Texas, and she is the first Hispanic to serve on the
Board of Trustees of Dallas County Schools. Maricela volunteers as a mediator and translator at
Dallas Dispute Mediation Services.
Mediator Training:
● Dispute Mediation Services Mediator Training Course
● Dispute Mediation Services Course on Mediation of Employment Cases
● Dispute Mediation Services Course on Mediation of Car Accident Cases
Professional Memberships and Awards:
● Mexican-American Bar Association of Texas, President
● Dallas Hispanic Bar Association Scholarship Foundation, Past President
● Dallas Hispanic Bar Association, Past President (2007)
● Mac Taylor Inn of Court, Associate Member
● Patrick E. Higginbotham American Inn of Court, Associate Member (2005-2006)
● Texas Bar Foundation, Fellow
● Dallas Bar Foundation, Fellow
●Dallas Association of Young Lawyers Foundation, Fellow
●Dallas Association of Young Lawyers, Judicial Intern Co-Chairperson (2005)
● Dallas County Associate Judge Selection Committee (2004)
● Dallas Association of Young Lawyers Leadership Class (2004)
● Recipient of Texas Monthly "Rising Star" Super Lawyer Award (2005, 2011)
5. Social Media Chapter 7
TABLE OF CONTENTS
I. SOCIAL MEDIA 101 ................................................................................................................................ 1
A. What is Social Media?..........................................................................................................................1
1. Facebook ..........................................................................................................................................1
2. Twitter ..............................................................................................................................................1
3. YouTube ...........................................................................................................................................1
4. LinkedIn ...........................................................................................................................................1
5. MySpace ...........................................................................................................................................1
6. Google+ ............................................................................................................................................1
B. Why Social Media? ..............................................................................................................................2
1. Global Audience Reach and Low Cost ............................................................................................2
2. Ease of Use .......................................................................................................................................2
3. Instantaneous Publishing ..................................................................................................................2
C. What Can Social Media Do For Businesses? .......................................................................................2
II. POLICING TRADEMARKS ON THE SOCIAL MEDIA AND THE WEB ...........................................2
A. Policing Trademarks on Social Media .................................................................................................2
B. Infringing Domain Names ....................................................................................................................3
C. Future of Domain Names .....................................................................................................................4
1. What is a gTLD? ..............................................................................................................................4
2. How Do Businesses Protect Their Trademarks Under the New gTLD System? .............................5
III. USE OF SOCIAL MEDIA TO CONDUCT BUSINESS PROMOTIONS ...............................................5
A. Sweepstakes Defined ............................................................................................................................5
B. State and Federal Sweepstakes Law .....................................................................................................6
C. Official Rules .......................................................................................................................................7
APPENDIX A ..................................................................................................................................................9
APPENDIX B ................................................................................................................................................10
APPENDIX C ................................................................................................................................................11
APPENDIX D ................................................................................................................................................12
APPENDIX E .................................................................................................................................................13
i
6. Social Media Chapter 7
SOCIAL MEDIA: Tweets. Each Tweet is 140 characters in length,
but don‘t let the small size fool you—you can
The Good, the Bad, and the Lucky share a lot with a little space. Connected to each
Tweet is a rich details pane that provides
Ok, I‘ll admit it. I may be the lone holdout on additional information, deeper context and
Facebook. I don‘t get it. Well, I get it in so far as I embedded media. You can tell your story within
know how it works, but I don‘t get the appeal of it. your Tweet, or you can think of a Tweet as the
This is not to say that I don‘t spend a lot of time on headline, and use the details pane to tell the rest
social media sites. In fact, sometimes I spend hours a with photos, videos and other media content.2
day playing detective and documenting infringing
uses of my clients‘ intellectual property. As an 3. YouTube: YouTube is a video-based social
attorney, maybe I‘m just a little jaded after spending media platform. The following description is found on
hours tracing infringers through an invisible web or YouTube‘s site: ―Founded in February 2005,
reading case after case where information posted on YouTube allows billions of people to discover, watch
Facebook or tweeted on Twitter gets people in trouble. and share originally-created videos. YouTube
At any rate, despite my aversion to having my own provides a forum for people to connect, inform, and
Facebook profile or letting my kids post videos on inspire others across the globe and acts as a
YouTube, I can appreciate the fact that social media distribution platform for original content creators and
will only expand in the coming years. Therefore, for advertisers large and small.‖3
all of those who don‘t ―Like‖ Facebook, twiddle away
Tweeting on Twitter, or just simply do not practice in 4. LinkedIn: LinkedIn is a platform for exchanging
areas of the law that are impacted by social media, I professional information, such as where you work and
hope this paper provides some background and useful where you went to school. Launched on May 5, 2003,
information on social media, business, and the law. ―LinkedIn operates the world‘s largest professional
network on the Internet with more than 100 million
I. Social Media 101 members in over 200 countries and territories.‖4
A. What is Social Media?
5. MySpace: MySpace touts itself as ―the leading
Social media is a relatively inexpensive means of
social entertainment destination powered by the
disseminating information, pictures, video, and news
passion of fans. MySpace drives social interaction by
through electronic media. Social media is different
providing a highly personalized experience around
from traditional media, such as newspapers and
entertainment and connecting people to the music,
television, because of the relatively low cost to use
celebrities, TV, movies, and games that they love.‖5
social media outlets and the worldwide audience.
Popular social media sites include:
6. Google+: On June 29, 2011, Google launched its
own social media site in an attempt to compete with
1. Facebook: Facebook is an online platform that
Facebook. Google+ (Google Plus) is designed to tie
lets individuals and businesses keep others updated on
together all of Google‘s existing functionality for a
what‘s going on in their lives or with their businesses.
user, including Gmail. Google+ is structured similarly
Facebook ―helps you connect and share with the
to Facebook, allowing the user to post and share
people in your life.‖1 Specifically, Facebook allows
profiles, pictures, and news feeds. There is, however,
you to post information, pictures, and videos and
one significant difference between Google+ and
share them with your Facebook ―Friends.‖ Appendix
Facebook---unless a Facebook user reads all of the
A shows an example of how Justin Brands, the
privacy setting information closely and sets up ―Lists‖
famous boot manufacturer, uses Facebook to increase
(not a commonly used feature), all ―Friends‖ are
its marketing and media exposure.
placed in the same classification (i.e., all Friends can
see the same information). Understanding the privacy
2. Twitter: The following description of Twitter is
settings and designating certain ―Lists‖ of people has
found on Twitter‘s site:
proven difficult for many users. On the other hand,
Twitter is a real-time information network that
Google+ is designed for a user to designate certain
connects you to the latest information about
people in certain ―Circles‖ from the outset using a
what you find interesting. Simply find the
user-friendly drag and drop feature. This is significant
public streams you find most compelling and
follow the conversations. At the heart of
2
Twitter are small bursts of information called http://twitter.com/about.
3
http://www.youtube.com/t/about_youtube
4
http://press.linkedin.com/about
1 5
www.facebook.com http://www.myspace.com/Help/AboutUs
1
7. Social Media Chapter 7
because Google+ encourages and makes it easy for so fresh, not even the disseminator knows its
users to place college friends in one Circle, close relevance.
friends in another Circle, and business contacts (e.g.,
your boss) in yet another Circle. This makes it easier C. What Can Social Media Do For Businesses?
to prevent your business contacts from accidently Social media can increase communication to
learning about what you did (or shouldn‘t have done) customers and can foster brand awareness. Social
over the weekend. Another feature that is a bonus on media can also greatly decrease the cost of marketing
Google+ is the ―Hangout‖ feature, which allows up to campaigns and provide a relatively inexpensive
ten users to chat simultaneously and through the use platform for organizations to expand product
of video. I anticipate the ease of the ―Circles‖ and the knowledge and goodwill. For example, Twitter
functionality of the ―Hangout‖ feature will be huge permits a business to promote itself and its products in
selling points for Google+. real time to consumers on an individual level for
virtually no cost. Specifically, Tweeting allows a
B. Why Social Media? business to send short messages about a product or
Social media has become an integral part of promotion directly to a follower‘s home page.
communication in the digital age. Like it or not, use Because of the brevity of the messages, the
of social media is here to stay, and even if you are not information is more likely to be read by the individual
yet convinced of its usefulness or necessity, the fact is and capture his or her attention. Even though Tweets
that peer pressure (both on individuals and businesses) are short, they can provide links to the business‘s
spurs on its use. While there are a plethora of reasons website, Facebook profile, or videos on YouTube, so
why people and businesses use social media, the that the individual can learn more about the company
following three reasons are at the crux of any or its products with the click of button or touch of a
explanation of the success of social media: finger.
1. Global Audience Reach and Low Cost. Social Unlike Twitter, Facebook profiles are more detailed
media technology provides a person or company with and can contain more information, pictures, and
the ability to reach a global audience for a relatively videos about a business‘s product. Facebook pages
low cost. When a US company posts information on can show videos of the product being used, as well as
its Facebook page, it is able to share that information testimonials and feedback from other users. Like
with not only US consumers, but also consumers Twitter, Facebook can also provide links to other
around the world. If traditional forms of media were social media sites, such as Twitter or YouTube.
used (e.g., newspapers or TV commercials) to Finally, while YouTube may not contain as much
communicate to people worldwide, the cost would written information about a business or its product,
likely be prohibitive for most individuals and YouTube is the perfect outlet for showcasing products
businesses. On the other hand, social media outlets and how they are used via video. Businesses
allow the same breadth or scope circulation with little frequently use Facebook, YouTube, and Twitter in
cost to the individual or business. complementary ways to provide information and
showcase products.
2. Ease of Use. Unlike publishing a newspaper or
running a television station, which most individuals II. Policing Trademarks on Social Media and
don‘t have the requisite knowledge or capital to do, an the Web
individual can create and control his or her own social
A. Policing Trademarks on Social Media
media site. Social media is readily available to the
With the advent of social media, protecting your
public and requires very little skill or training to
business‘s trademarks is a full time job. With the
operate. Anyone with access to the Internet can use
expanse of the Internet, it may not be possible to find
social media, and it is also easy to edit and update.
all possible infringements of your marks, but a
trademark owner still needs to put forth the effort to
3. Instantaneous Publishing. While this feature of
find and police infringing uses of its trademarks.
social media can be both good and bad, social media
Finding infringing uses is the easy part—what to do
allows a user to publish information almost
once you find them is another matter.
instantaneously and posts can be updated in seconds,
thus bringing news to millions almost instantaneously.
Once you find an infringing use, you need to
As we recently learned from Mr. Sohaib Athar, the
determine what type of infringement it is and what
―tweeter‖ who unknowingly tweeted about the Osama
governing authority, if any, would apply. For sake of
Bin Laden operation as it was being carried out,
discussion, we will use Company X as an example.
sometimes information published on social media is
Company X is a designer jean manufacturer, and its
2
8. Social Media Chapter 7
official website is www.CompanyX.com. Company 6. You will not use our copyrights or
X realizes that someone has registered the Facebook trademarks (including Facebook, the
profile ―Company X‖ and is advertising Company X‘s Facebook and F Logos, FB, Face, Poke,
jeans at a discount or even worse, advertising jeans Wall and 32665), or any confusingly
from competitors on the Facebook page. similar marks, without our written
permission.
Often an infringer will use not only domain names, 7. If you collect information from users,
but social media platforms to squat on trademarks. you will: obtain their consent, make it
When an unauthorized use of your client‘s name or clear you (and not Facebook) are the one
trademark occurs on a social media site, the first thing collecting their information, and post a
you should do is go to that specific site and read all of privacy policy explaining what
the applicable user terms and conditions. information you collect and how you will
use it.
Among many other terms of use and rules, Twitter 8. You will not post anyone's
provides the following: identification documents or sensitive
financial information on Facebook.
•Impersonation: You may not impersonate 9. You will not tag users or send email
others through the Twitter service in a invitations to non-users without their
manner that does or is intended to consent.7
mislead, confuse, or deceive others. If you experience an infringement on a social media
•Trademark: We reserve the right to site, the first step should be to notify the site pursuant
reclaim user names on behalf of to its reporting policies. For Facebook, trademark
businesses or individuals that hold legal owners can report infringements using Facebook‘s
claim or trademark on those user names. Notice of Intellectual Property Infringement (non-
Accounts using business names and/or Copyright Claim) form (at
logos to mislead others will be http://www.facebook.com/legal/copyright.php?noncop
permanently suspended.6 yright_notice=1). (See Appendix C for the form of
Facebook‘s Notice of Intellectual Property
Similarly, Facebook provides the following within its Infringement (non-Copyright Claim)). On Twitter,
terms of use: you will want to take advantage of Twitter‘s
Trademark Policy, which can be found at:
We respect other people's rights, and http://support.twitter.com/groups/33-report-a-
expect you to do the same. violation/topics/148-policy-information/articles/
1. You will not post content or take any 18367-trademark-policy. (See Appendix D). If the
action on Facebook that infringes or infringement occurs on YouTube, trademark owners
violates someone else's rights or are encouraged by YouTube to contact the infringer
otherwise violates the law. directly through YouTube‘s private messaging
2. We can remove any content or feature.8 If the infringer ignores the trademark
information you post on Facebook if we owner‘s communication or refuses to comply with the
believe that it violates this Statement. trademark owner‘s requests, then YouTube allows
3. We will provide you with tools to help owners to submit their trademark claims through
you protect your intellectual property YouTube trademark complaint form, which can be
rights. To learn more, visit our How to found at:
Report Claims of Intellectual Property http://www.google.com/support/youtube/bin/request.p
Infringement page. y?contact_type=legal2&hl=en. (See Appendix E).
4. If we remove your content for
infringing someone else's copyright, and B. Infringing Domain Names
you believe we removed it by mistake, we Often an infringement occurring on a social media site
will provide you with an opportunity to will link to an unauthorized domain name as well.
appeal. Let‘s use Company X again as an example in the
5. If you repeatedly infringe other domain name context. Company X‘s official website
people's intellectual property rights, we is www.CompanyX.com. Company X realizes that
will disable your account when someone has not only created an unauthorized
appropriate.
7
http://www.facebook.com/terms.php
8
http://www.google.com/support/youtube/
6
http://support.twitter.com/articles/18311-the-twitter-rules bin/answer.py?answer=151655.
3
9. Social Media Chapter 7
Facebook profile, but has also registered the domain proceeding), you may at least get the infringing site
name www.CompanyXjeans.com and is selling and the illegal activities conducted through that site
Company X‘s jeans at a discount or possibly even shut down. Given that most of these non-ICANN-
selling counterfeits or jeans from competitors through accredited registrars are in remote areas outside the
this site. In this case, the first step would be to find U.S., we have actually had surprising success with
out who registered the domain name contacting the registrar directly and getting infringing
www.CompanyXjeans.com. You can usually do this websites disabled.
by going to the Whois database and searching for the
registration records for that domain name. I say As a final note about domain name infringement,
usually because sometimes you find the information Benjamin Franklin‘s old adage ―[a]n ounce of
given is inaccurate or incomplete. Once you find the prevention is worth a pound of cure‖ certainly rings
registration information for the domain name, you true. Try to remind your clients that they should
have the option of contacting the registrant directly or purchase all close variations of their brand name on as
filing a Uniform Domain Name Dispute Resolution many of the top level domains as possible. Spending
Policy (―UDRP‖) proceeding.9 a few hundred dollars upfront to prevent a domain
name squatter is undoubtedly less expensive than
The UDRP is a policy between a registrar and the paying an attorney thousands of dollars to initiate a
domain name registrant, and is included in registration UDRP proceeding later.
agreements for all Internet Corporation for Assigned
Names and Numbers (―ICANN‖) accredited domain C. Future of Domain Names
name registrars. As long as the registrar is an On June 20, 2011, ICANN voted to approve the
ICANN-accredited registrar, a party will be able to addition of potentially thousands of new Generic Top
bring a UDRP proceeding against the infringing Level Domains (gTLDs). If your company is like
domain name registrant. For a party based in the most, it has not given much thought to whether or how
United States, the proceeding is usually filed with the new gTLDs will affect it. Given the short timeline
either the World Intellectual Property Organization that ICANN has set for implementation (January
(―WIPO‖) or the National Arbitration Forum, both of 2012), companies need to begin thinking about their
whom are listed as approved dispute resolution gTLD strategies now.
providers on ICANN‘s website. For information on
UDRP proceedings visit the following ICANN and 1. What is a gTLD?
WIPO sites: First, you need to understand what a gTLD is and how
http://www.icann.org/en/udrp/#proceedings or it could affect your company. Many of us are so
http://www.wipo.int/amc/en/domains/resources. accustomed to using .com, .net, .gov, etc. that we
rarely think of them as top level domains, but that is
Occasionally, an infringing use appears on a domain what they are. When a company adds their name or
name sold through a non-ICANN-accredited registrar. trademark in front of the top level domain, you have a
When this occurs, we have had success in using the second level domain. For example, CompanyX.com--
registrar‘s own stated terms and conditions to enlist -―.com‖ is the top level domain and ―CompanyX‖ is
the registrar‘s help in taking down the website. Often the second level domain. Companies have
the registrar‘s own terms for URL registration have traditionally only had to police their marks on the
the registrant certify that their requested domain name popular top level domains (e.g., .com, .net, .biz);
will not infringe upon or otherwise violate the rights however, when ICANN opens up new gTLD
of third parties and that their use of the domain name possibilities, companies will have to expand their
will not violate any laws. Unfortunately, in cases policing to include all of the new top level domains as
where you have to appeal to the registrar directly, the well.
remedies available to your client are highly dependent
on the terms and conditions that the registrant agreed Again using www.CompanyX.com as our example,
to when it purchased the domain name. So, while you what happens if an applicant applies for and receives
may not be able to get the domain name transferred to any one or more of the following gTLDs: .clothes,
your client (as is the typical remedy in a UDRP .jeans, .apparel, etc. or even .companyX? In this case,
not only will Company X have to monitor all new
9 gTLD applications approved by ICANN, but then
The Uniform Domain-Name Dispute Resolution Policy
(UDRP) has been adopted by ICANN-accredited registrars
once those gTLDs are up and running, Company X
in all gTLDs (.aero, .asia, .biz, .cat, .com, .coop, .info, .jobs, will need to police use of its mark on the approved
.mobi, .museum, .name, .net, .org, .pro, .tel and .travel). A gTLDs.
copy of the policy can be found at
http://www.icann.org/en/dndr/udrp/policy.htm.
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10. Social Media Chapter 7
2. How Do Businesses Protect Their Trademarks jeans on May 31! Retweet to enter to
Under the New gTLD System? win!
If you are a large corporation and have a significant
trademark portfolio, one option would be to apply for The promotion contains no disclaimers, disclosures, or
your own gTLD. For example, we could see gTLDs Official Rules concerning the promotion. Participants
like ―.Apple‖ or ―.Coke‖ in the near future. So, one must have a Twitter account to participate, and
method of protecting your mark would be to purchase ―Retweeting‖ consists of simply hitting a ―Retweet‖
your own gTLD. If, however, your company finds the button on the promotion‘s ―Tweet‖ of the Company X
$185,000 (yes, $185,000) proposed application fee Twitter page.
and the cost of maintaining your own gTLD cost
prohibitive, then you may want to consider registering So, is a promotion that allows participants to
your trademarks with ICANN‘s Trademark ―Retweet‖ the promotion details over Twitter in order
Clearinghouse in an effort to at least keep a would-be to be entered for a chance to win a free [insert prize],
infringer from purchasing your trademark as a gTLD. considered a sweepstakes? If so, what state and
federal laws govern the promotion? And, is the
ICANN‘s gTLD Applicant Guidebook10 provides the promotion required to have a set of Official Rules?
framework for a Trademark Clearinghouse, through The short answer is, yes, the ―Retweet‖ described
which companies can provide copies of their above would be considered a sweepstakes and there
registered marks11 in order to alert ICANN of its should be Official Rules (even if not required by law
rights in the trademark and to prevent an infringing specifically).
gTLD from being issued in the first place. ICANN
has also provided for procedures to oppose gTLDs A. Sweepstakes Defined
that have been published for approval, as well as a Sweepstakes are regulated by both state and federal
dispute resolution mechanism for contesting gTLDs law. In Texas, a sweepstakes is a ―contest that awards
that have been issued. one or more prizes based on chance or the random
selection of entries.‖13 Federal law defines a
III. Use of Social Media to Conduct Business sweepstakes as a ―game of chance for which no
Promotions12 consideration is required.‖14 The most important
aspect of any sweepstakes is that the contest must
Businesses now commonly use social media to offer
eliminate the element of consideration to avoid being
prizes and conduct contests via the Internet. Where
classified as an illegal lottery.15 Consideration can be
participants used to have to mail in postcards to
either monetary (requiring an entry fee, purchase, etc.)
register for a sweepstakes, in many cases, all a person
or non-monetary (requiring considerable time/effort or
has to do these days is ―Retweet‖ a message to
highly sensitive information); however, many states
register. These giveaways have become a very
ignore non-monetary consideration for lottery
popular way for businesses to attract its customer base
purposes.16
to follow the business online. The problem is, while
most lawyers know that there are laws governing
As stated in the example above, one of Company X‘s
sweepstakes and contests, most advertising agents and
many promotions requires participants to ―Retweet‖
marketing personnel responsible for social media
the promotion in order to be entered for a chance to
marketing for businesses do not.
receive a free pair of jeans. The promotion provides
no other information or rules. Assuming the prize is
For purposes of legal analysis, we will continue with
awarded based on chance or random selection, the
our Company X example. Company X currently
promotion would fall under the definition of a
carries out promotions over Twitter that allow
sweepstakes; however, simply being a sweepstakes
participants to ―Retweet‖ the promotion in order to be
entered for a chance to win a free pair of jeans. An
example of one of the promotions states:
Want #freecompanyxjeans? We're 13
Tex. Bus. & Com. Code Ann. § 622.002[4] (Vernon
giving away a pair of Company X 2009).
14
Deceptive Mail Prevention and Enforcement Act § 109,
39 U.S.C.A §§ 3001[k][1][D] (2010).
10 15
At this time, ICANN has only issued the gTLD Applicant Gabrial Karp, Complying with State-by-State
Guidebook in Proposed Final form. Requirements in Online Sweepstakes & Contests,
11
There are also some narrow exceptions for unregistered Practicing Law Institute Order No. 19051 (2009); see also
marks. G2, Inc., v. Midwest Gaming, Inc., 485 F.Supp.2d 757, 769
12
The information in this section was researched with the (W.D. Tex. 2007).
16
assistance of Chad Smith, Kelly Hart & Hallman LLP. Id.
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11. Social Media Chapter 7
does not automatically make a sweepstakes conducted Thus, in Texas, sweepstakes conducted over the
via social media subject to federal and state laws. Internet using social media platforms do not appear to
be subject to the provisions of the Texas Business and
B. State and Federal Sweepstakes Law Commerce Code. Therefore, under our Company X
Sweepstakes can be regulated by both state and example, neither Texas nor federal sweepstakes
federal laws. Federal sweepstakes regulations are regulations would govern the Company X
aimed at sweepstakes conducted through the United sweepstakes. Nevertheless, Company X will still need
States mail or over the phone.17 The Federal to consider other states‘ laws when conducting online
Deceptive Mail Prevention and Enforcement Act sweepstakes.
characterizes any sweepstakes material that does not
fit the requirements listed in the statute and that is Sweepstakes must be conducted in accordance with
distributed through the mail as a non-mailable matter, the laws and regulations in every state for which the
and thus not subject to the law.18 While sweepstakes sweepstakes is carried out. This issue is particularly
conducted through social media do not fall within the important for sweepstakes carried out over the
parameters of the Federal Deceptive Mail Prevention Internet, because the sweepstakes may be subject to
and Enforcement Act, the Federal Trade Commission the laws and regulations of every state and country in
is authorized to prescribe rules prohibiting deceptive which the host web site is accessible.22 For this
telemarketing acts, including sweepstakes conducted reason, companies are usually advised to include a
over the phone.19 Therefore, while the Federal clause in the Official Rules to limit eligibility to U.S.
Deceptive Mail Prevention and Enforcement Act is residents unless they want to conduct a state-by-state
not applicable to social media sweepstakes,20 it is and country-by-country analysis of sweepstakes law.
possible that the Federal Trade Commission could Moreover, sweepstakes promoters should expressly
expand its scope or even create a new law. deny eligibility to residents of any states in which the
Furthermore, sponsors of sweepstakes conducted over promoter would like to avoid compliance with the
the Internet, through Facebook, Twitter, or other local laws and regulations.23
social media, still need to be cognizant of other
federal regulations governing unfair or deceptive trade There are several states that have sweepstakes laws
or advertising practices. that may govern sweepstakes carried out through
social media and other internet mediums.24 For
In Texas, sweepstakes are regulated under §§ 622.001 example, Connecticut sweepstakes law25 requires any
to 622.206 of the Texas Business and Commerce ―person advertising a sweepstakes‖ in the state
Code.21 However, Section 622.051 states: (regardless of the medium) to disclose in ―immediate
(a) This chapter applies only to a sweepstakes proximity to and in at least the same size and face
conducted through the mail. type:‖
(b) This chapter does not apply to a (1) the retail value of the prize,
sweepstakes for which the only use of the mail is for a (2) the odds of winning, and
consumer to return an entry form to the sweepstakes
sponsor.
22
See Don’t Take Chances with Internet Sweepstakes,
Southeast Tech Wire, July 23, 2002 (available at
17
See Deceptive Mail Prevention and Enforcement Act § http://www.wcsr.com/filefolder/ad100509.pdf).
23
109, 39 U.S.C.A § 3001[k][1][D] (2010); and 16 C.F.R. § For instance, a company conducting a sweepstakes may
310 (2010). want to restrict eligibility for citizens in New York and
18
39 U.S.C.A § 3001. Florida. Both states require sweepstakes with an aggregate
19
15 U.S.C.A. 39 U.S.C.A § 6102 (2010); see also 16 total prize value over $5,000 to be registered and bonded
C.F.R. § 310 (2010) (concerning the Federal Trade with the state. See Fla. Stat. Ann. § 849.094[3] (West
Commission‘s regulations on sweepstakes telemarketing). 2010); and N.Y. Gen. Bus. Law § 369[e][1] (McKinney
20
The express language of the Deceptive Mail Prevention 2010).
24
and Enforcement Act does not rule out the possibility of a The scope of the analysis of state laws governing
court interpretation that mail was intended to encompass sweepstakes is based on the research gathered by Thomson
email. However, because the Act is included under Title 39 Reuters/West in a survey of sweepstakes laws in all 50
Postal Service and because the Act continually refers to the states. Civil Laws: Gaming – Rules for Sweepstakes
Postal Service, this interpretation is unlikely. (Statutes) (West 2009). Extensive research into the
21
Sweepstakes concerning certain industries may also be sweepstakes laws of all 50 states was not conducted.
regulated or expressly authorized by other Texas Code Moreover, the paper focuses on state laws that may have an
sections. See Tex. Alcoholic Beverage Code Ann. § impact on sweepstakes conducted over the internet–not
108.061 (Vernon 2010) (authorizing sweepstakes state sweepstakes laws in general.
25
promotions for alcoholic beverages). Conn. Gen. Stat. Ann. §42-297 (West 2010).
6
12. Social Media Chapter 7
(3) whether the receipt of the prize is include this statement in its promotion nevertheless.
restricted or qualified. Other states, with sweepstakes regulations that are
Advertising a sweepstakes in Connecticut includes the specifically applicable to an online sweepstakes, still
―use of the media, mail, computer, telephone or do not require promotions to include Official Rules of
personal contact to offer… the opportunity to the contest, but do require that certain disclosures or
participate in a sweepstakes.‖ statements be provided.29 The required statements and
disclosures of these states were discussed in the
In Illinois, Minnesota, and South Dakota sweepstakes proceeding section.
or ―written promotional prize offers‖ must contain:
(1) name & address of the sponsor, Despite the analysis on applicability of law, most legal
(2) retail value of the prize, commentary on sweepstakes law suggests that
(3) disclosure that ‗no purchase is necessary,‘ sponsors should still include Official Rules to avoid
(4) disclosure that a purchase will not improve possible liability with the continually changing
chances of winning, sweepstakes laws and deceptive trade regulations of
(5) the odds of receiving a prize, all 50 states.30 A properly drafted set of Official Rules
(6) disclosure of any requirement to pay shipping & constitutes ―the contract between the sponsor and the
handling upon winning, consumers participating in the promotion.‖31
(7) description of any restrictions on receipt of prize, Moreover, these commentators suggest that the
(8) any limitations on eligibility, and Official Rules should include at least the following
(9) a statement of the maximum number of people disclosures:
included in a group of enhanced likelihood of (1) No purchase necessary & purchase will not
winning, if the sponsor represents to a participant that improve chances of winning,
they are ―specially selected,‖ etc.26 (2) Name/Address of the promoter,
(3) Accurate description of the prize(s),
These statutes do not address or define ―written (4) The odds of winning,
promotional prize offers,‖ and it is unclear as to (5) Eligibility requirements (e.g., residency and age),
whether these statutes apply to sweepstakes and (6) Opening/closing dates of the contest,
promotional offers carried out over the internet. (7) How the prizes will be awarded,
Moreover, some states require all sweepstakes (8) How the winners are selected, and
sponsors, regardless of how the sweepstakes is carried (9) Whether there are any special requirements.32
out, to provide contestants with their prize within 30
days after giving notice that the contestant has won.27 Moreover, promoters of sweepstakes conducted over
the Internet via social media sites may want to include
C. Official Rules special statements to account for technical problems,
While Texas law does not specifically apply to online situations unique to the Internet, and requirements
sweepstakes, it would be wise for sponsors to follow
the regulations as much as possible. Texas regulations
29
require that sweepstakes materials include the See Conn. Gen. Stat. Ann. §42-297 (West 2010); 815 Ill.
language: Comp. Stat. Ann. 525/25 (West 2010); Minn. Stat. Ann. §
Buying Will Not Help You Win. Your 325F.755 (West 2010); S.D. Codified Laws § 37-32-3
chances of winning without making a (2010).
30
See Don’t Take Chances with Internet Sweepstakes,
purchase are the same as the chances of
Southeast Tech Wire, July 23, 2002 (available at
someone who purchases something. It is http://www.wcsr.com/filefolder/ad100509.pdf); and
illegal to give any advantage to buyers in Gabrial Karp, Complying with State-by-State Requirements
a sweepstakes.28 in Online Sweepstakes & Contests, Practicing Law Institute
As discussed above, the Texas sweepstakes regulation Order No. 19051 (2009); and Julia A. Archer, Sweepstakes
does not directly apply to a sweepstakes conducted and Skill Contests – The Basics, Enns & Archer LLP (2003)
over Twitter, but it would be wise for Company X to (available at
http://www.ennsandarcher.com/s_basics.html).
31
Julia A. Archer, Sweepstakes and Skill Contests – The
26
815 Ill. Comp. Stat. Ann. 525/25 (West 2010); Minn. Basics, Enns & Archer LLP (2003) (available at
Stat. Ann. § 325F.755 (West 2010) (does not include http://www.ennsandarcher.com/s_basics.html).
32
requirements (3) & (4)); S.D. Codified Laws § 37-32-3 Id; See also Don’t Take Chances with Internet
(2010) (does not include requirements (3) & (4)). Sweepstakes, Southeast Tech Wire, July 23, 2002 (available
27
See Minn. Stat. Ann. § 325F.755 (West 2010); see also at http://www.wcsr.com/filefolder/ad100509.pdf); and
N.D. Cent. Code § 53-11-03 (2010). Gabrial Karp, Complying with State-by-State Requirements
28
Tex. Bus. & Com. Code Ann. § 622.101[a][3] (Vernon in Online Sweepstakes & Contests, Practicing Law Institute
2009). Order No. 19051 (2009).
7
13. Social Media Chapter 7
imposed by the social media site through which the
sweepstakes is conducted.33
In conclusion, while there is no federal or state law
that requires a sweepstakes conducted through social
media to include a list of all Official Rules, the
general consensus among legal commentators on
sweepstakes law is that all sweepstakes sponsors
should include the Official Rules of the contest and
that those rules should contain the disclosures required
by the states to avoid liability.
33
For instance, internet sweepstakes may want to include
rules such as: (1) a disclaimer for entries that are corrupted
or otherwise not received due to technical malfunction, etc.,
(2) reserve the rights to cancel the promotion in the event
that computer malfunction, etc., are encountered, and (3) a
provision stating any dispute as to the winner‘s identity will
be attributed to the holder of the email/Twitter account
associated with the entry. Don’t Take Chances with
Internet Sweepstakes, Southeast Tech Wire, July 23, 2002
(available at http://www.wcsr.com/filefolder/ad1005
09.pdf).
8