From PLI’s Telephone Briefing , Bloggers, and the Corporation: Practical Steps to Avoid Liability #8189

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APPRAISAL OUTLINE

Paula Konikoff, JD, MAI Consultant

© 2004, Ira M. Millstein, Holly J. Gregory and David Murgio Blogs, Bloggers, and the Corporation: What You Need to Know (Telephone Briefing)

Michael F. Fleming

Larkin Hoffman Daly & Lindgren Ltd Minneapolis, Minnesota

Paul H. Arne

Morris, Manning & Martin, LLP Atlanta, GA 30326

----- Introduction and Glossary

The Web-Log, better known as the “”, has become an increasingly important phenomenon. Whether Blogs are here to stay, or are the pet rocks of the current decade, they have crept into our personal lives, political atmosphere and the news of the world. Inevitably, Blogs have also become an important consideration in the practice of law within the corporation.

A review of the legal issues surrounding Businesses and Blogging is largely a review of well- established law: The same horse in a different color. The major differences we see for the corporate lawyer arise out of ubiquitousness, speed and ease – Where before an author needed to own the printing press or the TV station to do any major damage, now anybody with a laptop and a phone line can have the most popular Blog in the world. So, while much of our discussion below is a repeated reminder that we are not inventing new law today, it is nonetheless important for the practitioner to be aware of the practices in order to avoid being blindsided.

Before getting underway – a few terms of art should be defined.1

“Blog” – The Web Log dates back to roughly 1997, although it is largely a variation on prior technology such as the e-mailing list, the news feed or , or the basic ‘personal Web page.’ In its infancy, Blogging was largely a manual process which created a long scrolling Web page, typically in reverse chronological order reading from the top – the author would add a new item, essentially in the form of a diary entry written to the world, scrolling down the older material as new items were added. The growth of Blogging into what it is today sprung largely from two things. First, automated technology allowed new Blog authors to create and post a Blog with little technical background, and often at no cost. Today, a new Blog can be up and running in

1 As with many Internet-related terms, any of these definitions are somewhat in flux, fuzzy and subject to argument amongst friends. Without trying to take a stand on how the rest of the world should view the words, we simply define these terms for purposes of discussion in this paper. less than a half hour from first thought to online. Second, the War Bloggers – Bloggers who focused largely on the Mid-East wars – caused a news sensation with their sometimes incendiary, sometimes fantastical, and sometimes insightful comments on the post 9/11 world. Suddenly, Blogs became water cooler topics for many of us. While politics was a big driver, the popularity burgeoned further as other topics came online – Technologists speaking of their favorite geeky toys, Hobbyists needing to consolidate their activities, Parents who wished to share their family stories, and so on. Today, Blogging hosts, software authors, aggregators, and Blogs about Blogging abound.

“RSS” or “” or “Syndication” or “Aggregation” “– Rather than use the traditional ‘bookmarks’ to go to individual Blogs, many people will use a technology that automatically rounds up a selected set of Blogs (or similar regularly altered content such as news sites) and presents them in a single point to the reader. The reader likes this for the simplicity and speed. Some Bloggers encourage the use of the technology. Others dislike this because the aggregator technology will frequently miss picking up certain content or formatting of the original site (including advertising the Blogger may be counting on having viewed by her readers).

“” – Podcast is a play on a broadcast meant to be heard on a portable player such as Apple’s iPod. The Podcaster may be no more than a person hooking up a $5 microphone to a home computer, or it may be a professionally produced radio-like production. Regardless, the main differentiation with true broadcasting is the intended time-shifting element. While VCRs and Tivo have allowed many to time shift traditional broadcasts (often to the broadcaster’s dismay), are distributed through Blogs or similar mechanisms with the intention of being heard at a time of the listener’s choice. Business Created Blogs

Can a business speak to its own public through a Blog? Absolutely. The Wall Street Journal reports that Chief Blogger has even become a job title.2 Companies see Blogs as yet another tool to speak to an interested audience. Some of this comes from the esoteric company that would not surprise us, such as Google’s googleblog.blogspot.com. But, the meat and potato industries are also involved, such as with General Motor’s fastlane.gmblogs.com. Each of these efforts are (more or less) officially sanctioned outlets of the corporations – but they take a perspective of an employee speaking directly to the interested outsider such as a customer, using a chatty style typical of the personal Blog. (How much of that is real, and how much is artifice, is often unstated. Caveant Lectores.3) Businesses might like the Blog because it is the hot new thing, or they may feel the Blog will reach certain people who might otherwise be less susceptible to traditional marketing. Regardless, it is no longer a question of Can We, rather it is Should We?

What considerations should the law department cover if the company chooses to use Blogs?

2 Sarah E. Needleman, “As Blogging Goes Corporate, It Becomes a Full-Time Job,” CareerJournal.com, May 31, 2005 (found at http://www.careerjournal.com/salaryhiring/industries/sales/20050531-needleman.html).

3 Let the Readers Beware. Take off the artifice of the Blog and the corporate Blog is just another corporate presentation to the world – Advertising to put the blunt term on it. The statements made in the name of the company in a Blog are subject to advertising and fair trade laws, and “It was just our Blog” will be no defense when the FTC comes knocking.

Blogs, by their nature, tend to encourage a less-than-formal review and vetting process. While that may be their charm, this can be a dangerous problem for the corporate Blog. Trademarks may be used incorrectly, corporate news might be released during periods of time that would be prohibited under investment statutes, or fair trade practices laws might be inadvertently breached.

Apart from the internal review concerns, there is the problem of how Blogs are more difficult to control once released to the world. Web feed aggregators can skim the corporate Blog and only pick out the text of postings, missing the trademark and copyright statements on the original page, or the disclaimers or terms of use the company may have posted, or cutting off a posting after a pre-set number of characters. Unlike some of the prior cases that involved aggregating somebody else’s content on a static Web site, the Web feed aggregators themselves are controlled at the individual user level – So there is probably no individual point of attack for a lawsuit. Corporate law departments should not presume that the entire Blog message will be delivered in the form it was intended. This counsels the company that it should not depend on disclaimers or other terms that may not be picked up by the reader, but rather should hope that any one of its postings could stand on its own without damage to the company.

What if the target audience is the company’s shareholders, potential investors or current users of company products and services? Using Blogs to directly speak to potential investors or shareholders, at least where the messages are specifically aimed at the investment aspect of the relationship, should be approached very cautiously. The somewhat informal nature of Blogs, the difficulty of presenting the typical investment boilerplate safe harbor language, the risks that might arise from unintended information releases, and even a desire to maintain a sense of stability and investment- worthiness, all argue against Blogging to investors. On the other hand, the same reasons that make a ‘regular’ corporate blog attractive could make the Blog attractive to the investment audience – particularly where the individual investor is at issue. Should a company choose to go this route, the presentation should get, at the least, a higher level of review and scrutiny, using the same approval methods that might apply to any corporate press release. Employees Personal Blogs

Can the company control what is said about it by its own employees? Speaking by way of a Blog should be analyzed essentially the same as what might be done by the employee standing on a soapbox in the middle of the city. If a corporation could control what is said via the soapbox, it should be able to control what the employee says in a Blog.

Which of course leads to the question of whether an employer can control what is being said on the soapbox by his own employees. Off-work behavior controls can be controversial, such as employers who demand that employees refrain from certain activities such as smoking whether on or off the job. Other concerns are relatively non-controversial, such as prohibitions on revealing company trade secrets.

The harder questions surround speech which is technically not the revealing of confidential information but which is nonetheless considered harmful to the corporate image. Once the individual employee has publicly disclosed his employer (or describes the employer anonymously but with so much detail that it is easy to identify it), the employer may have an interest in the statements such as use of trademarks or copyrighted material – but is equally burdened by basic rights of free speech as well as a typical desire to avoid seeming overly meddlesome in employee individual affairs. Striking the right balance is difficult.

Some employees have alleged to have angered their employers enough to lose their jobs – Famous examples include Heather Armstrong, better known by her pseudonym Dooce, who says she lost her job after posting her own parodies of her workplace experience on her personal Blog, leading to the terminology of being “dooced.” Ellen Simonetti, a Delta Airlines flight attendant, claims that she was terminated from her job as a result of posing in her uniform for pictures on her Blog queenofsky.com (the ‘Diary of a Fired Flight Attendant’).4 USA Today has even published an article detailing a number of examples.5

Of course, the soapbox versus Blog analogy does start to diverge once we factor in the elements of speed and breadth. A single man speaking on a soapbox is only going to have a limited ability to damage, since he can speak to only a limited number of persons and his speech is verbal rather than an easily portable format like a digital file. A Blogger revealing a corporate secret by posting a copy of a vital spreadsheet on her Blog can cause enormous damage in a few moments, leaving electronic records on millions of computers that will be effectively impossible to erase. So, while the underlying analysis of whether or not the speaker can be stopped (or should be prohibited) from engaging in the speech may be similar for the soapbox and the Blog, the potential damage quotient may lead to a more aggressive litigation stance to prevent or halt an employee Blogger.

What controls are needed to address the new phenomenon of Blogging by one’s own employees? The best control is simply making the corporate position clear to its own employees. Since Blogs are just another form of , it is likely unnecessary to have a Blog-specific policy. But, the employer might choose to list examples of how an employee could be speaking outside of the office and include Blogs as one of the examples. From there, most of the employees who have lost their jobs have said that they would have avoided the concern if they had simply known what was considered right or wrong.

4 The Simonetti case is in litigation, based on Simonetti’s claim that her firing was discriminatory because she was fired for doing things where male employees were not disciplined.

5 “Warning: Your clever little Blog might get you Fired,” USA Today June 14, 2005 (found at http://www.usatoday.com/money/workplace/2005-06-14-worker-blogs-usat_x.htm). Many companies , although probably only a small fraction of all employers, have created employee policies that are Blog-specific. The examples are usually for employers who either encourage or at least tolerate employee Blogs, but who still wish to impose a few rules. For example, the USA Today article noted above described one company’s employee Blog policy: “The policy says, in part, that employees can't violate the privacy or publicity rights of another, can't personally attack employees, authors, customers, vendors or shareholders and can't post material that is ‘hateful or embarrassing to another person.’ Employees who don't follow the guidelines can be fired.” Whether and how such a policy might apply to any one company, and how it might be communicated or enforced, is largely a matter of local and state employment law – and the large body of existing work on that topic should apply equally to Blogs as with any other form of communication. Third Parties

The third party who mentions the business is at least as privileged to speak as is a writer of a letter to the editor.6 No new law will likely be made that distinguishes Blogs from other media (although Blogs will certainly be the means at issue in many cases). Business libel, unfair competition, trademark and everything else continues to apply. Thus, apart from the discussion below concerning emergency tactics, there should be little else to learn arising out of Blogs. Intellectual Property

How does a company handle the potential disclosure of trade secrets by employees or third parties on their Blogs? With employees, it goes without saying that corporate policies on the use of confidential and trade secret information should be clearly applied for Blogs, just as with any other form of communication the employee might choose to engage in. If a third party is the discloser of the trade secrets, the analysis should be little different from what might happen in any other form of communication. For a publicly traded company, release of a corporate secret in a Blog would be just as much of a problem (if not worse) than any other form of unauthorized public release of corporate information – and securities counsel should be promptly consulted on how the company needs to respond to the disclosure.

Once the secret has been publicly disclosed, there is always the question of after-the-fact attempts to get the cat back into the bag. Whether that is wise, or if it would help, are matters for separate discussion. What we can say here though is that particular Blogs usually have a particular point of vulnerability for a quick injunctive action. Many Blogs are ‘hosted’ on free

6 Some would probably argue that Bloggers have a position more akin to the editor of the newspaper, with all of the First Amendment privileges that follow – We take no stand in this discussion on that degree of First Amendment protection. However, note that First Amendment privileges afforded even to newspaper editors can fall aside where the speech is more commercial than otherwise – and the same breakdown will probably apply to the Blogger. services – such as blogspot.com – and those free services are very easy to find for purposes of restraining orders or the like.7

Who owns Blog content, anyway? The usual rules continue to apply. If the employee is working within the scope of his employment in creating a corporate Blog, there is little doubt that the copyright in the work will automatically vest in the employer under the work-for-hire doctrine.8 If the corporate Blog- master is working under contract rather than employment, written work-for-hire agreements should be obtained (better sooner than later) to ensure that the copyright vests in the company rather than the contractor. If the outside contractor itself is sub-contracting the work out, the buying company should get written agreements from the individuals before work is permitted to go forward.

None of these rules are any different than they are for content created for any other media – Blogs do not change the rules. Of course, if companies were always good about following those rules, many lawyers would be out searching for new litigation practices. The risks of failing to follow through on the work-for-hire rules may be minimal for some off-handed Blog commentary, but it is a risk that is easily avoided by simple processes and discipline.

For the employee who is using his personal Blog to comment on his employer outside the scope of his own employment, the question gets murkier. If the company has expressly suggested that the employee do the Blog, there may be some argument for whether the Blog is already within the scope of employment. But, if the employee is doing the Blog without any corporate permission or encouragement, the copyright is more than likely going to be owned by the employee rather than the employer. In the case of the non-sanctioned Blog done outside of the scope of employment, by definition that cannot be a work-for-hire since there is neither scope of employment nor written agreements vesting copyright in the employer. And, many states prohibit or constrain an employer’s ability to demand automatic assignment of personally created works done outside of company time or using company resources.9 Again, the copyright may be of minimal value in most cases, but the potential is out there for an employee drafting something that could be valuable to the company. But, unlike the sanctioned Blog, the employee personal Blog is very difficult to control in this regard.

Trademarks that appear within a Blog, whether corporate, employee or third party, are probably less susceptible. The owner of the mark should be diligent in following its own trademark usage rules on its own site. Employees should be reminded to use the marks correctly if they choose to use them. Third parties should be monitored for use of the owner’s marks – and the appropriate

7 If the cause of action would sound in copyright, use of the DMCA takedown procedures may apply as well to the Blog hosting services. See 17 U.S.C. § 512. This will usually get quick results, although the hosting service may also have a safe harbor against its own liability as a copyright infringer. Similar safe harbors may apply to protect the hosting services in causes of action similar to libel or disparagement.

8 17 U.S.C. § 201(b).

9 For example, see Minn. Stat. § 181.78 (primarily concerning ‘inventions’ but probably applicable to any form of intellectual property). demands should be made if the marks are used incorrectly. In all, apart from creating yet another place for the trademark lawyers to monitor and review, the Blog does not present any particularly novel legal issues for trademark lawyers.