March 2011 Archives

Don't Jack Jill's Pages

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The U.S. District Court for the Northern District of Illinois has held that a company's alleged use of an employee's Facebook and Twitter pages without her permission to post marketing messages that looked like they were written by the employee may be liable under the Illinois Right to Publicity Act and the Lanham Act for false endorsement.

In this case, the employee, Jill Maremont, worked for an interior design firm in Chicago.  As part of her job, Maremont created a work-related blog that was hosted on her employer's website. She also frequently posted to both her Facebook page and Twitter, which both included her picture and were, according to her, personal accounts. 

In September 2009, Maremont was in an automobile accident and was seriously injured. During Maremont's convalescence, her employer posted company messages to Maremont's Facebook page and Twitter account, writing posts that claimed to be from Maremont.

When Maremont found out about the substitute posts, she asked her employer to stop because, among other things, it made it seem like she was already back and work and her injuries were less severe than they actually were. However, the posts allegedly continued until Maremont changed the passwords to her Facebook and Twitter accounts.

The court held that those allegations were sufficient to proceed under the theories of false endorsement and breaches of her right to publicity. However, the court dismissed the plaintiff's common law misappropriation of likeness claim, noting that the tort was replaced by the state's Right to Publicity Act, and rejected the plaintiff's unreasonable intrusion upon seclusion claim.

Full text of the court's opinion in Maremont v. Susan Fredman Design Group, N.D. Ill., No. 10-7811, 3/15/11, is available at Maremont v Fredman 110315.pdf.

This case deals with something employers should deal with in their social media policy - personal social media accounts. Like most other issues regarding social media, how a given employer deals with a given question depends a lot on the employer, its industry and its culture. Some businesses prohibit employees from having personal work-related social media accounts, while some encourage it. Consider what the right position is for your business, discuss it with your employees who are active in social media, and document the decision in your social media policy.

Restaurant, Food & Beverage Legal Briefing Series: Top Social Media Legal Issues

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Leveraging social media technologies and applications is critical to the success of any marketing campaign, consumer outreach program or research plan.

Social media tools can be used to shed light on your target market and consumer decision making process. These tools can also be used to engage in a two-way conversation with your consumers and allows customers to communicate your messaging on your behalf. Restaurants are ahead of the curve:  81% are currently using social media, compared with 60% in other industries. Companies in these industries cannot ignore the powerful impact of social media. Companies in this space also face a host of new legal risks and concerns from virtually all sides. The key to success is staying on top of these laws and emerging trends.

On March 22, 2011, Jim Gatto delivered an exciting webinar presentation on top social media legal issues targeted to the restaurant, food and beverage industries. For a copy of his presentation, please click RFB Legal Briefing Series.pdf.

AMEX "Serves" Up Digital Payments

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American Express today unveiled Serve, a digital payment and commerce platform that gives consumers a new way to spend, send and receive money with services that go beyond the existing global payment networks. Some interesting points from the press release issued today include the following:
 
  • With Serve, consumers can make purchases and person-to-person (P2P) payments online (serve.com), via mobile phones, and at millions of merchants who accept American Express cards. Serve unifies multiple payment options into a single account that can be funded from a bank account, debit, credit or charge card, or by receiving money from another Serve account.
  • Serve accounts can be accessed via Serve Apple iOS and Android applications, at Serve.com and through Facebook. Through Serve, American Express aims to expand into new segments of the market that do not rely on traditional charge and credit cards to manage their day-to-day finances.
  • Consumers set up an online account at Serve.com or through a smartphone app. Funds can be added from bank accounts, debit cards, credit and charge cards, or other Serve accounts. Customers can use those accounts to send and receive money to friends, pay bills and make purchases online. Serve bridges online and offline commerce - each customer will be issued a Serve reloadable prepaid card linked to their Serve account that can be used at any merchant or ATM that accepts American Express cards. 
  • Serve offers users the ability to easily create, manage, and specify sub-accounts for their friends, family members or colleagues. Sub-accounts are linked to the master account and allow users to set spending profiles for everything from children's allowances to dog walker fees.
  • Serve is partnering with five major charities - Autism Speaks, Best Friends Animal Society, Malaria No More, Save The Children and Stand Up For Kids - to enable each organization to raise funds via a donations widget. Widgets can be downloaded on Serve.com and at facebook.com/paywithserve, and shared on other Web sites, including Facebook, to encourage donations. Serve will match all contributions via the widget up to $100,000 for each charity.
  • In the coming months, Serve will offer selling widgets that give customers the ability to sell items through their own social networks. 

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Bad App - There's a Lawsuit for That!

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In the fast and furious world of app development, time is of the essence. So claims the Plaintiff YoHolla in a lawsuit against an app developer Pinwheel Designs Corp. and its subcontractor Burton Design Group (BDG). Allegedly the defendants' inability to produce a bug-free app in a timely manner delayed YoHolla's launch of its social network.

This case involves a classic fact pattern of a development contract gone awry. YoHolla claims that BDG missed several deadlines for completion of an Iphone and Android app, that what BDG produced was riddled with bugs and required additional payments well beyond the initial estimates. YoHolla further alleges that the contract stated that TIME WAS OF THE ESSENCE and that these delays caused delay of YoHolla's planned launch of its social network and over $550, 000 in delay damages.

After things escalated, YoHolla went elsewhere to get the development finished and formally terminated the development contract.

BDG demanded final payments and ordered YoHolla to cease and desist from use of any source code developed by BDG, alleging that such use would constitute copyright infringement (despite an apparent assignment of all rights to YoHolla in the contract).

Where this gets more interesting is that BDG contacted Apple and alleged that YoHolla's iphone app infringes BDG's copyrights. After 3 or so rounds of "he said, she said" regarding copyright ownership, to no avail, YoHolla filed suit.

The Yohalla Complaint raises claims for declaration of ownership of copyright and non-infringement, breach of contract, tortious interference with a business relationship (for BDG's allegedly false notices to Apple), defamation and a claim for indemnification against Pinwheel.

This will be an interesting case to watch.  


 

 
 


Around the Virtual World

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A weekly wrap up of interesting news about virtual worlds, virtual goods and other social media.

Crowdsourcing Company Introduces the 'Game-ification' of Dull Labor

Like other taskmaster companies before it, Microtask, a Finnish startup, is using a crowdsourcing model to distribute mind-numbing, repetitive work across a network of laborers -- actually, volunteers for now. "Pure monetary compensation is a 20th-century concept," Miettinen told The New York Times last October. At the time, he envisioned the "game-ification" of dull clickwork, which could pay players with virtual currency or other rewards valued by gamer culture. It's now a reality.

Zynga Thief Jailed for Two Years

An IT businessman has been jailed for two years after pleading guilty to stealing around $12 million in online game currency.

Facebook to Develop Financial Systems, Payment Operations

Last December, Facebook filed incorporation documents with the Florida Department of State, Division of Corporations, for a company called Facebook Payments Inc. The company has subsequently been registering Facebook Payments Inc. in various states.

Virtual Add-Ons Draw Real-World Lawsuits

As computer games create more and more "virtual worlds" online with their own rules and economies, developers who create add-ons, guides and real-world markets for game content are finding themselves at legal odds with game makers.Companies like Blizzard Entertainment, the creators of "World of Warcraft," are turning to courts and copyright claims to stop those who would sell in-game objects and currency for real-world money, or those who make their own add-ons to exploit the game, legal experts say.

Augmented Reality Games Coming to a Device Near You

Augmented reality (AR) is quickly taking over gamification as the hottest new trend in entertainment marketing, with a number of new applications and games slated for release in the coming weeks and months.

The Latest Cereal Box Prize: Augmented Reality

Years ago, the best prize kids could hope for in their cereal box was a plastic toy, but an international promotion from Nestle for the film Rio, which uses augmented reality, opens up some new possibilities.

Mobile By The Numbers

Mobile is a rapidly developing sector. According to some projections, mobile internet usage will overtake desktop usage before 2015. In preparation, companies are developing new mobile commerce platforms, strategies, and marketing efforts.

Upcoming Events:

Socialize East

March 31-April 1, 2011

9:00am-5:00pm (both days)

The New Yorker Hotel, New York City

Jim Gatto, leader of the Social Media, Entertainment and Technology team and Virtual Worlds and Video Game team, will be speaking on March 31, from 11:30am-12:30pm about the following topic: "Small and Medium Social Games Developers - Strategies for Success"

Pillsbury is also a sponsor of the event and will have a booth on display during the conference. Please stop by!

Social media is changing the way we do everything - from the way we communicate, interact with games and entertainment, to how we promote and market our businesses. The wave of always-connected consumers, location-aware mobile apps and services, and gaming platforms are making business and entertainment more social than ever. The big question is: how do you leverage social media to drive revenue?

Socialize unites business leaders in gaming, virtual goods, mobile, marketing, and media for two days of learning, connecting, and sharing about all things social. Attendees come to Socialize for the real-world insight that our unique blend of industry heavyweights, business visionaries and results-oriented practitioners bring to the table.  Through two days of comprehensive learning, focused discussion and diverse perspectives, our experts show you how all the social media pieces fit together to create a unified business strategy. Whether your most pressing issues are strategic, tactical, or, more likely, a complex combination of both, you'll benefit from the valuable guidance gleaned at Socialize.


Ides of March Brings Another Stab at Facebook, Google, by Wireless Ink

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On March 15, hours after its asserted patent was issued (U.S. Patent No. 7,908,342), Wireless Ink Corp. filed a complaint for patent infringement against Facebook, Google, YouTube, and MySpace in the U.S. District Court for the Southern District of New York, Case No. 1:11-cv-01751-PKC. Wireless Ink is a mobile content management and social networking software company that operates Winksite.com.

If this scenario sounds familiar, it's because Wireless Ink has a pending lawsuit against Facebook and Google in the same court, before the same judge, and for infringement of a related patent (U.S. Patent No. 7,599,983), Case No. 1:10-cv-01841-PKC (filed Mar. 9, 2010). 

In this newest action, Wireless Ink alleges that each Defendant directly infringes several claims of its '342 patent (titled Method, Apparatus and System for Management of Information Content for Enhanced Accessibility over Wireless Communication Networks) by, among other things, (i) providing a user-accessible content management website, (ii) generating a mobile website that is accessible independently of the content management website via a mobile device, (iii) where the mobile website is configured to receive data automatically from external data sources designated by the user at the content management website, and (iv) where the content management website permits the user to upload information items and enter messages which are included in the mobile website.

Wireless Ink also alleges that Defendants' infringing activities are willful, and that Defendants have induced infringement by actively encouraging their users to use their mobile websites, even after having knowledge of Wireless Ink's patent rights. As characterized in the complaint, the Defendants' alleged infringing activities "involve hundreds of millions of users and potentially billions of acts of infringement."

Interestingly, in exhibits to its complaint, Wireless Ink points out that all of the known relevant prior art to the related '983 patent produced by Facebook and Google in the 2010 litigation was disclosed by Wireless Ink to the U.S. Patent & Trademark Office during prosecution of the application that issued as the now-asserted '342 patent. The '342 patent's application was a continuation of the '983 patent's application. Whether this has any impact on the validity of the '342 patent remains to be seen. 

This action is currently scheduled to have its initial pretrial conference on May 9, 2011.