Internet Legal Issues

While we love to get caught up in the details of lawsuits and specific legal issues, it’s helpful every now and again to step back and realize just how vast the world of the internet and the law is. Thus, I give you a general list of topics that relate to the legal environment of the internet generally — and some notes on where social media issues tie in.

  • Contract formation and validity (was a contract “signed” when it was attached to an e-mail that contained the phrase “I agree”? How do we piece together tweets or text messages to prove that a contractual relationship did or did not exist?)
  • Intellectual property (if you obtain common law rights to a trademark for an online store, how far geographically do those rights extend? What happens when a European firm and an American firm independently adopt trademarks on the same day but end up competing against one another online? Can you use Madonna’s face as your Facebook profile picture? Is it okay to create a website mocking a famous brand?)
  • Jurisdiction (I tweet about you in Ohio. The tweets are read by you in Montana. You live in China. Where can I be sued?)
  • Free speech (and its limiters — like defamation, invasion of privacy, regulation of hate speech, regulation of pornographic speech, etc.)
  • Access (what rights do you have to gain access to the Internet? Do you have a right to access at a certain data speed?)
  • Domain name ownership
  • Criminal prosecution
  • Employment law (can your employer force you to turn over your Facebook password if you access Facebook on a company computer? What regulations apply if you work virtually for an overseas company?)
  • Property law (does someone “trespass” on your computer if they hack into it using virtual means?)
  • Privacy rights (are there basic online privacy rights you should have against private companies, regardless of the language in privacy policies? How far can the government reach into your online activity without a warrant?)
  • Liability for third party activity (e.g., in the US, section 230 of the Communications Decency Act provides protection for websites that allow users to post content, but do not have a practice of editing or creating that content)

Many of these issues are not new to society — property rights, contract disputes and the like have been around since the dawn of organized societies — but they do require new ways of evaluating legal tests and boundaries.

Not too much of a soapbox here — just wanted to create general awareness of the very vast set of legal issues that are intertwined with living, working and playing online.

Stop worrying about keeping your idea a secret. Start worrying about making it happen.

“It’s a chance to have some fun. Let Sparkle have all of our stale, secondhand, grody ideas.” 13 Going on 30

Why you shouldn’t worry about keeping your idea secret.

I hear it from students and from new entrepreneurs — “I have a great idea, but I can’t share it because someone will steal it.”

It’s hard to say it, but…your idea may not be that great. And if you don’t share it in order to get feedback and refine it, it may never be great.

5 reasons why you should stop worrying about secrecy, and start worrying about innovation

1. You want investors. As with anyone involved in your business, you should definitely be cautious about who you talk to about investing. That said, most venture capitalists and angel investors will not sign an NDA (non-disclosure agreement). They hear so many ideas that possibly overlap (like the 90th and 99th pitch about the newest Groupon knockoff) that it could quickly look like they disclosed even when they didn’t. This is true of most good advisors you will encounter.

2. Your idea is original. If the mere mention of your idea is enough to spur a hundred copycats to action so quickly that you can’t even get off the ground, your idea is probably not that great.

3. You can describe your idea without revealing the Secret Sauce. We talk about KFC and Coca-Cola all the time without needing to discuss the seven secret herbs and spices or the (allegedly) secret formula. Your idea needs to have a story that can be told without revealing your secret sauce. Practicing your story will better enable you to convince customers, partners and investors why it’s fantastic.

4. The value in your idea is in the execution. We’ve all had that friend who, usually after drinking a few beers, says, “you know what this world needs, man? A TV that prints out a pizza you can eat.” And we’ve all had that moment of seeing something on the market and slapping our foreheads with “I had that idea 4 years ago!” Pizza-printing TVs might be a great idea, and that thing you thought of 4 years ago might be fantastic, but without execution, they are just ideas. There is a reason that IP laws only protect the embodiment of ideas and not the ideas themselves — society only benefits when implementation happens.

5. You know innovation is a constant race. Even if you have the best idea ever, you will always have to keep refining, refreshing and reinventing to stay ahead. You will also have to accept that your idea will never be all things to all people, and that you may have to allow competitors to take your idea to other markets. Think of the Herman Miller Aeron chair or the Dyson vacuum. Curt Bailey, president of the product development firm SundbergFerar points out in his talks that both of those firms truly innovated something new in their product arenas. What happened next was really no surprise: their competitors saw the reaction and decided that they needed not to do something very different, but to copy Dyson and Herman Miller. The difference? Dyson vacuums sold for $600; Aeron chairs sold for $700. Dyson knockoffs sold for $175 and Aeron copies sold for $220. And of course the knockoffs don’t match the quality of the originals. Not only does Dyson especially continue innovating, but it isn’t trying to serve the upscale market and the deep discount market, at least not with the same product. This is where you have to be.

Yes, sometimes it makes sense to keep your idea close to the vest. But overall, it’s better to get to work and start finding out what the market thinks. Don’t worry about keeping your idea secret as much as you should worry about getting it to the right people at the right time in the right place.

NCIIA — Connecting Innovation, Universities and Students

I’m spending a few hours today at the National Collegiate Inventor and Innovators alliance. Wishing I could stay for the entire weekend! I talked today about structuring IP policies to encourage student innovation.

NCIIA is attended by faculty, administrators and students from schools worldwide. During my session, I shared the projector with faculty from Baylor University’s Technology Entrepreneurship program and from the National University in Singapore.

NCIIA itself offers VentureWell, and is creating an angel investment arm. VentureWell helps student teams jump the “valley of death” — the process of transferring research into new ideas.

I sat with two Boston U students at lunch who are launching a company that will provide continuous painless glucose monitoring to diabetes patients and their doctors. Another person at my table is Rashmir Balasubramanian, who is launching nsansa, which will help launch and consult social businesses.

Our lunch keynote speaker was Kristina M. Johnson, former undersecretary of the Department of Energy. Her main points:
-The best research (the research that DOE funds) is use-inspired research. Louis Pasteur and Marie Curie did fundamental research, but were able to use that research to solve real world problems — be a Pasteur.
-Think about things from a systems perspective. CFL bulbs are so energy efficient — that users figure, “I can leave it on all the time!” And energy use increases. And they’re energy efficient, so they burn cooler — but now your heating system has to work harder to make up for the loss of heat the bulbs contributed to the space.
-Staying Power: Cash is king. The valley of death (hers defined as the time from startup to cash positive) can be short (software) or long (pharma). Angel, VC, and SBIR funding together can help a company bridge that valley, but alone none of the three will probably be enough.
-Solve problems that need to be solved, instead of working on finding problems for the solutions you’ve developed.
-Entrepreneurs can help government agencies work together!

The one constituent it would be good to see at NCIIA is industry. What knowledge of innovation can we glean from them, and what can we give them? What do they want our grads to know about innovation and putting it into practice?

The-late-aughts: The green years

In working on some research, I found the following data interesting: An average of 499 trademark applications containing the word “green” were filed each year between 1999-2003. Between 2003-2007, the average doubled to 2000 per year. Between 2008-2010, the average increased to 3,000 annually.

How companies brand themselves — which can be reflected in trademark applications — can illustrate broader trends. It would be interesting to cross-reference these dates with instances in the news of “green” consumer trends or coverage of environmental issues.

It appears so far that 2008 was the peak in green branding, with 3,232 applications including the word “green” in some respect. As coverage of the down economy exploded in 2008 and beyond, it may be that marketers who wanted to be green had already staked out that area. Of course, 2009 (with 2,793 green apps) and 2010 (with 2,129) don’t exactly illustrate a complete abandonment of the green marketplace — just a decline from the ’08 levels.

Research is preliminary — it could be that I am unaware of a Greenleaf family taking over the world — but the jump in “green” apps from 760 in 2005 to 2,461 by 2007 certainly seems to track with the trends in identifying goods and services as being environmentally friendly that have been anecdotally observed.

This raises an interesting issue to explore next: greenwashing — painting products as “green” that either are not or that are, but to a negligibly improved degree (using 15% recycled material in packaging up from 14.5%, for instance).

Did you notice an uptick in “green” products after 2008? Do you see companies continuing to pursue that line, or are consumers becoming more concerned with frugality than with being green?

Image of green cubicle, created by the coworkers of an employee who was out of the office for a month, AttributionNoncommercialNo Derivative Works Some rights reserved by kroo2u

“It’s on like Donkey Kong”(TM)(R)

Trademark Tuesdays: Dilution at the Hard Rock Hotel

MTV’s original reality show “The Real World” is coming back to Vegas (sidebar: They’ve already been there twice — wasn’t Detroit supposed to get a turn?). 8 years ago, the twentysomethings partied at the Palms hotel, but this time they’re headed to Vegas’ Hard Rock Hotel, according to the Las Vegas Review-Journal.

The Journal also notes that the Hard Rock Hotel is having some hard times of its own — it’s being sued by the Hard Rock Cafe for trademark dilution. Which might raise the question — what’s the difference between trademark infringement and trademark dilution?

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Conversing negatively about the boss on Facebook? It might be okay

Amplify’d from
Company Accused of Firing Over Facebook Post

In what labor officials and lawyers view as a ground-breaking case involving workers and social media, the National Labor Relations Board has accused a company of illegally firing an employee after she criticized her supervisor on her Facebook page.

This is the first case in which the labor board has stepped in to argue that workers’ criticisms of their bosses or companies on a social networking site is generally a protected activity and that employers would be violating the law by punishing workers for such statements.

The labor relations board announced last week that it had filed a complaint against an ambulance service, American Medical Response of Connecticut, that fired an emergency medical technician, accusing her, among other things, of violating a policy that bars employees from depicting the company “in any way” on Facebook or other social media sites in which they post pictures of themselves.

That act gives workers a federally protected right to form unions, and it prohibits employers from punishing workers — whether union or nonunion — for discussing working conditions or unionization. The labor board said the company’s Facebook rule was “overly broad” and improperly limited employees’ rights to discuss working conditions among themselves.

Lafe Solomon, the board’s acting general counsel, said, “This is a fairly straightforward case under the National Labor Relations Act — whether it takes place on Facebook or at the water cooler, it was employees talking jointly about working conditions, in this case about their supervisor, and they have a right to do that.”

Moreover, the board faulted another company policy, one prohibiting employees from making “disparaging” or “discriminatory” “comments when discussing the company or the employee’s superiors” and “co-workers.”

American Medical Response of Connecticut denied the labor board’s allegations, saying they were without merit. “The employee in question was discharged based on multiple, serious complaints about her behavior,” the company said in a statement. “The employee was also held accountable for negative personal attacks against a co-worker posted publicly on Facebook. The company believes that the offensive statements made against the co-workers were not concerted activity protected under federal law.”

The case involves Dawnmarie Souza, who had to prepare a response to a customer’s complaint about her work. Ms. Souza, the board said, was unhappy that her supervisor would not let a representative of the Teamsters, the union representing the company’s workers, help prepare her response.

Ms. Souza then mocked her supervisor on Facebook, using several vulgarities to ridicule him, according to Jonathan Kreisberg, director of the board’s Hartford office, which filed the complaint. He also said she had written, “love how the company allows a 17 to become a supervisor” — 17 is the company’s lingo for a psychiatric patient.

An administrative law judge is scheduled to begin hearing the case on Jan. 25. Marshall B. Babson, a member of the National Labor Relations Board in the 1980s, said a broad company rule that says one cannot make disparaging comments about supervisors is clearly illegal under labor law. But he said an employee’s criticizing a company or supervisor on Facebook was not necessarily protected activity.

“There will arguably be cases where it is not concerted activity,” Mr. Babson said, suggesting that if a worker lashed out in a post against a supervisor but was not communicating with co-workers, that type of comment might not be protected.

But employees might cross the line into unprotected territory if they disparage supervisors over something unrelated to work — for instance, a supervisor’s sexual performance — or if their statements are disloyal.

If the Facebook conversation involves several co-workers, however, it is far more likely to be viewed as “concerted protected activity,” he said.

Courts often view workers’ statements as disloyal when they are defamatory and are not supported by facts. Mr. Babson cited a case upholding the firing of airline workers who held signs saying their airline was unsafe. But, he said, if employees held signs accurately saying their airline or restaurant had been cited for dozens of safety violations, that would most likely be protected.