SOCIAL MEDIA:   The Good, the Bad, and the Lucky             Written By:            Cheryl P. Leb      Kelly Hart & Hallma...
Cheryl Poulin Leb                              Kelly Hart & Hallman LLP                              201 Main Street, Suit...
SEC BioJudge Susan Criss presides over a criminal and civil trial court in Galveston, Texas. For twelveyears she has serve...
Maricela Moore SiewczynskiPractice AreasEmployment Law and Litigation MediationBilingual (Spanish/English)Bar AdmissionsTe...
Social Media                                                                                                              ...
Social Media                                                                                                 Chapter 7    ...
Social Media                                                                                                 Chapter 7beca...
Social Media                                                                                                         Chapt...
Social Media                                                                                                          Chap...
Social Media                                                                                                    Chapter 72...
Social Media                                                                                                      Chapter ...
Social Media                                                                                                  Chapter 7   ...
Social Media                                                         Chapter 7imposed by the social media site through whi...
Social Media                Chapter 7               Appendix A                   9
Social Media                Chapter 7               Appendix B                   10
Social Media                Chapter 7               Appendix C                   11
Social Media                Chapter 7               Appendix D                   12
Social Media                Chapter 7               Appendix E                   13
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Social Media: The Good, the Bad, and the Lucky

  1. 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 ANNUALTEXAS MINORITY COUNSEL PROGRAM September 7-9, 2011 Austin, Texas CHAPTER 7
  2. 2. Cheryl Poulin Leb Kelly Hart & Hallman LLP 201 Main Street, Suite 2500 Fort Worth, Texas 76102 (817) 878-3547 ■ Cheryl.Leb@kellyhart.comEDUCATION 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 1995EMPLOYMENT Partner, Kelly Hart & Hallman LLP, Fort Worth, Texas June 1998 to present.PROFESSIONALACTIVITIES 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 magazines Top Attorney Guide, 2005-2010 Listed among the top Technology lawyers in Fort Worth, Texas magazines Top Attorney Guide, December 2002 2010-2011 Chair, Tarrant County Bar Intellectual Property Section 2009-2010 Vice Chair, Tarrant County Bar Intellectual Property SectionSPEECHES ANDPUBLICATIONS 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. 3. SEC BioJudge Susan Criss presides over a criminal and civil trial court in Galveston, Texas. For twelveyears she has served as the elected judge of the 212th District Court of Galveston County. She isa former prosecutor and criminal defense lawyer.Judge Criss is frequent lecturer on handling high profile cases and social media for trial attorneysand judges. She has presided over several high profile trials including the Robert Durst murdertrial 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 filmfeatures minority lawyers and judges and encourages minority children to pursue careers in thelaw and judiciary.Judge Criss’s guest columns and opinion editorials have been published in The GalvestonCounty Daily News, Beaumont Examiner, The Police News-Galveston, In Chambers magazineand 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 CountyChild Abuse and Neglect Task Force.
  4. 4. Maricela Moore SiewczynskiPractice AreasEmployment Law and Litigation MediationBilingual (Spanish/English)Bar AdmissionsTexas, 2001EducationJ.D., George Washington University Law School, 2001.B.S., magna cum laude, Boston College, Carroll School of Management.BiographyMaricela Siewczynski practices primarily in the areas of employment and business litigationdefense. Before joining the firm, Ms. Siewczynski was a solo plaintiffs employment litigator;and she was formerly a litigation defense associate with Baker & McKenzie LLP. Maricela isbilingual (English-Spanish) and is a trained mediator.Maricela Siewczynski is the President of the Mexican American Bar Association of Texas andPresident of the Dallas Hispanic Bar Scholarship Foundation. In 2007, she served as thePresident of the Dallas Hispanic Bar Association. Ms. Siewczynski has also served on the Boardof Directors of the Girl Scouts of Northeast Texas, and she is the first Hispanic to serve on theBoard of Trustees of Dallas County Schools. Maricela volunteers as a mediator and translator atDallas 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 CasesProfessional 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. 5. Social Media Chapter 7 TABLE OF CONTENTSI. 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? .......................................................................................2II. 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? .............................5III. USE OF SOCIAL MEDIA TO CONDUCT BUSINESS PROMOTIONS ...............................................5 A. Sweepstakes Defined ............................................................................................................................5 B. State and Federal Sweepstakes Law .....................................................................................................6 C. Official Rules .......................................................................................................................................7APPENDIX A ..................................................................................................................................................9APPENDIX B ................................................................................................................................................10APPENDIX C ................................................................................................................................................11APPENDIX D ................................................................................................................................................12APPENDIX E .................................................................................................................................................13 i
  6. 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 canThe Good, the Bad, and the Lucky share a lot with a little space. Connected to each Tweet is a rich details pane that providesOk, I‘ll admit it. I may be the lone holdout on additional information, deeper context andFacebook. I don‘t get it. Well, I get it in so far as I embedded media. You can tell your story withinknow how it works, but I don‘t get the appeal of it. your Tweet, or you can think of a Tweet as theThis is not to say that I don‘t spend a lot of time on headline, and use the details pane to tell the restsocial media sites. In fact, sometimes I spend hours a with photos, videos and other media content.2day playing detective and documenting infringinguses of my clients‘ intellectual property. As an 3. YouTube: YouTube is a video-based socialattorney, maybe I‘m just a little jaded after spending media platform. The following description is found onhours 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, watchFacebook or tweeted on Twitter gets people in trouble. and share originally-created videos. YouTubeAt any rate, despite my aversion to having my own provides a forum for people to connect, inform, andFacebook profile or letting my kids post videos on inspire others across the globe and acts as aYouTube, I can appreciate the fact that social media distribution platform for original content creators andwill only expand in the coming years. Therefore, for advertisers large and small.‖3all of those who don‘t ―Like‖ Facebook, twiddle awayTweeting on Twitter, or just simply do not practice in 4. LinkedIn: LinkedIn is a platform for exchangingareas of the law that are impacted by social media, I professional information, such as where you work andhope 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 millionI. Social Media 101 members in over 200 countries and territories.‖4A. What is Social Media? 5. MySpace: MySpace touts itself as ―the leadingSocial media is a relatively inexpensive means of social entertainment destination powered by thedisseminating information, pictures, video, and news passion of fans. MySpace drives social interaction bythrough electronic media. Social media is different providing a highly personalized experience aroundfrom 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.‖5social 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 with1. Facebook: Facebook is an online platform that Facebook. Google+ (Google Plus) is designed to tielets individuals and businesses keep others updated on together all of Google‘s existing functionality for awhat‘s going on in their lives or with their businesses. user, including Gmail. Google+ is structured similarlyFacebook ―helps you connect and share with the to Facebook, allowing the user to post and sharepeople 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+ andshare them with your Facebook ―Friends.‖ Appendix Facebook---unless a Facebook user reads all of theA 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‖ areits marketing and media exposure. placed in the same classification (i.e., all Friends can see the same information). Understanding the privacy2. Twitter: The following description of Twitter is settings and designating certain ―Lists‖ of people hasfound 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/about1 5 www.facebook.com http://www.myspace.com/Help/AboutUs 1
  7. 7. Social Media Chapter 7because Google+ encourages and makes it easy for so fresh, not even the disseminator knows itsusers 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 tolearning about what you did (or shouldn‘t have done) customers and can foster brand awareness. Socialover the weekend. Another feature that is a bonus on media can also greatly decrease the cost of marketingGoogle+ is the ―Hangout‖ feature, which allows up to campaigns and provide a relatively inexpensiveten users to chat simultaneously and through the use platform for organizations to expand productof video. I anticipate the ease of the ―Circles‖ and the knowledge and goodwill. For example, Twitterfunctionality of the ―Hangout‖ feature will be huge permits a business to promote itself and its products inselling points for Google+. real time to consumers on an individual level for virtually no cost. Specifically, Tweeting allows aB. Why Social Media? business to send short messages about a product orSocial 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, theof social media is here to stay, and even if you are not information is more likely to be read by the individualyet convinced of its usefulness or necessity, the fact is and capture his or her attention. Even though Tweetsthat peer pressure (both on individuals and businesses) are short, they can provide links to the business‘sspurs on its use. While there are a plethora of reasons website, Facebook profile, or videos on YouTube, sowhy people and businesses use social media, the that the individual can learn more about the companyfollowing three reasons are at the crux of any or its products with the click of button or touch of aexplanation of the success of social media: finger.1. Global Audience Reach and Low Cost. Social Unlike Twitter, Facebook profiles are more detailedmedia technology provides a person or company with and can contain more information, pictures, andthe ability to reach a global audience for a relatively videos about a business‘s product. Facebook pageslow cost. When a US company posts information on can show videos of the product being used, as well asits Facebook page, it is able to share that information testimonials and feedback from other users. Likewith not only US consumers, but also consumers Twitter, Facebook can also provide links to otheraround 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 muchcommunicate 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 productsbusinesses. On the other hand, social media outlets and how they are used via video. Businessesallow the same breadth or scope circulation with little frequently use Facebook, YouTube, and Twitter incost to the individual or business. complementary ways to provide information and showcase products.2. Ease of Use. Unlike publishing a newspaper orrunning a television station, which most individuals II. Policing Trademarks on Social Media anddon‘t have the requisite knowledge or capital to do, an the Webindividual can create and control his or her own social A. Policing Trademarks on Social Mediamedia site. Social media is readily available to the With the advent of social media, protecting yourpublic and requires very little skill or training to business‘s trademarks is a full time job. With theoperate. Anyone with access to the Internet can use expanse of the Internet, it may not be possible to findsocial 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 to3. 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 doallows 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 toAs 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 ofBin 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. 8. Social Media Chapter 7official website is www.CompanyX.com. Company 6. You will not use our copyrights orX realizes that someone has registered the Facebook trademarks (including Facebook, theprofile ―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 confusinglyfrom 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 itWhen an unauthorized use of your client‘s name or clear you (and not Facebook) are the onetrademark occurs on a social media site, the first thing collecting their information, and post ayou should do is go to that specific site and read all of privacy policy explaining whatthe 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 anyonesprovides 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 PropertySimilarly, 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 peoples 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 elses 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 elses 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 peoples 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. 9. Social Media Chapter 7Facebook profile, but has also registered the domain proceeding), you may at least get the infringing sitename www.CompanyXjeans.com and is selling and the illegal activities conducted through that siteCompany 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 thethis site. In this case, the first step would be to find U.S., we have actually had surprising success without who registered the domain name contacting the registrar directly and getting infringingwww.CompanyXjeans.com. You can usually do this websites disabled.by going to the Whois database and searching for theregistration 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 ofgiven is inaccurate or incomplete. Once you find the prevention is worth a pound of cure‖ certainly ringsregistration information for the domain name, you true. Try to remind your clients that they shouldhave the option of contacting the registrant directly or purchase all close variations of their brand name on asfiling a Uniform Domain Name Dispute Resolution many of the top level domains as possible. SpendingPolicy (―UDRP‖) proceeding.9 a few hundred dollars upfront to prevent a domain name squatter is undoubtedly less expensive thanThe UDRP is a policy between a registrar and the paying an attorney thousands of dollars to initiate adomain name registrant, and is included in registration UDRP proceeding later.agreements for all Internet Corporation for AssignedNames and Numbers (―ICANN‖) accredited domain C. Future of Domain Namesname registrars. As long as the registrar is an On June 20, 2011, ICANN voted to approve theICANN-accredited registrar, a party will be able to addition of potentially thousands of new Generic Topbring a UDRP proceeding against the infringing Level Domains (gTLDs). If your company is likedomain name registrant. For a party based in the most, it has not given much thought to whether or howUnited States, the proceeding is usually filed with the new gTLDs will affect it. Given the short timelineeither 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 theirwhom are listed as approved dispute resolution gTLD strategies now.providers on ICANN‘s website. For information onUDRP proceedings visit the following ICANN and 1. What is a gTLD?WIPO sites: First, you need to understand what a gTLD is and howhttp://www.icann.org/en/udrp/#proceedings or it could affect your company. Many of us are sohttp://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 isOccasionally, an infringing use appears on a domain what they are. When a company adds their name orname sold through a non-ICANN-accredited registrar. trademark in front of the top level domain, you have aWhen 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‖ isthe registrar‘s help in taking down the website. Often the second level domain. Companies havethe registrar‘s own terms for URL registration have traditionally only had to police their marks on thethe 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 gTLDof third parties and that their use of the domain name possibilities, companies will have to expand theirwill not violate any laws. Unfortunately, in cases policing to include all of the new top level domains aswhere you have to appeal to the registrar directly, the well.remedies available to your client are highly dependenton 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 receivesmay 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 new9 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 Xin 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 athttp://www.icann.org/en/dndr/udrp/policy.htm. 4
  10. 10. Social Media Chapter 72. How Do Businesses Protect Their Trademarks jeans on May 31! Retweet to enter toUnder the New gTLD System? win!If you are a large corporation and have a significanttrademark portfolio, one option would be to apply for The promotion contains no disclaimers, disclosures, oryour own gTLD. For example, we could see gTLDs Official Rules concerning the promotion. Participantslike ―.Apple‖ or ―.Coke‖ in the near future. So, one must have a Twitter account to participate, andmethod 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 costprohibitive, then you may want to consider registering So, is a promotion that allows participants toyour trademarks with ICANN‘s Trademark ―Retweet‖ the promotion details over Twitter in orderClearinghouse 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 theICANN‘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‖ describedwhich companies can provide copies of their above would be considered a sweepstakes and thereregistered marks11 in order to alert ICANN of its should be Official Rules (even if not required by lawrights in the trademark and to prevent an infringing specifically).gTLD from being issued in the first place. ICANNhas also provided for procedures to oppose gTLDs A. Sweepstakes Definedthat have been published for approval, as well as a Sweepstakes are regulated by both state and federaldispute resolution mechanism for contesting gTLDs law. In Texas, a sweepstakes is a ―contest that awardsthat have been issued. one or more prizes based on chance or the random selection of entries.‖13 Federal law defines aIII. Use of Social Media to Conduct Business sweepstakes as a ―game of chance for which noPromotions12 consideration is required.‖14 The most important aspect of any sweepstakes is that the contest mustBusinesses now commonly use social media to offer eliminate the element of consideration to avoid beingprizes and conduct contests via the Internet. Where classified as an illegal lottery.15 Consideration can beparticipants 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 orhas to do these days is ―Retweet‖ a message to highly sensitive information); however, many statesregister. These giveaways have become a very ignore non-monetary consideration for lotterypopular way for businesses to attract its customer base purposes.16to follow the business online. The problem is, whilemost lawyers know that there are laws governing As stated in the example above, one of Company X‘ssweepstakes 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 tomarketing for businesses do not. receive a free pair of jeans. The promotion provides no other information or rules. Assuming the prize isFor purposes of legal analysis, we will continue with awarded based on chance or random selection, theour Company X example. Company X currently promotion would fall under the definition of acarries out promotions over Twitter that allow sweepstakes; however, simply being a sweepstakesparticipants to ―Retweet‖ the promotion in order to beentered for a chance to win a free pair of jeans. Anexample of one of the promotions states: Want #freecompanyxjeans? Were 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-StateGuidebook 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 alsomarks. G2, Inc., v. Midwest Gaming, Inc., 485 F.Supp.2d 757, 76912 The information in this section was researched with the (W.D. Tex. 2007). 16assistance of Chad Smith, Kelly Hart & Hallman LLP. Id. 5
  11. 11. Social Media Chapter 7does not automatically make a sweepstakes conducted Thus, in Texas, sweepstakes conducted over thevia 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 andB. State and Federal Sweepstakes Law Commerce Code. Therefore, under our Company XSweepstakes can be regulated by both state and example, neither Texas nor federal sweepstakesfederal laws. Federal sweepstakes regulations are regulations would govern the Company Xaimed at sweepstakes conducted through the United sweepstakes. Nevertheless, Company X will still needStates mail or over the phone.17 The Federal to consider other states‘ laws when conducting onlineDeceptive Mail Prevention and Enforcement Act sweepstakes.characterizes any sweepstakes material that does notfit the requirements listed in the statute and that is Sweepstakes must be conducted in accordance withdistributed through the mail as a non-mailable matter, the laws and regulations in every state for which theand thus not subject to the law.18 While sweepstakes sweepstakes is carried out. This issue is particularlyconducted through social media do not fall within the important for sweepstakes carried out over theparameters of the Federal Deceptive Mail Prevention Internet, because the sweepstakes may be subject toand Enforcement Act, the Federal Trade Commission the laws and regulations of every state and country inis authorized to prescribe rules prohibiting deceptive which the host web site is accessible.22 For thistelemarketing acts, including sweepstakes conducted reason, companies are usually advised to include aover 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-statenot 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 expresslyexpand its scope or even create a new law. deny eligibility to residents of any states in which theFurthermore, sponsors of sweepstakes conducted over promoter would like to avoid compliance with thethe Internet, through Facebook, Twitter, or other local laws and regulations.23social media, still need to be cognizant of otherfederal regulations governing unfair or deceptive trade There are several states that have sweepstakes lawsor advertising practices. that may govern sweepstakes carried out through social media and other internet mediums.24 ForIn Texas, sweepstakes are regulated under §§ 622.001 example, Connecticut sweepstakes law25 requires anyto 622.206 of the Texas Business and Commerce ―person advertising a sweepstakes‖ in the stateCode.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 faceconducted 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, andconsumer to return an entry form to the sweepstakessponsor. 22 See Don’t Take Chances with Internet Sweepstakes, Southeast Tech Wire, July 23, 2002 (available at17 See Deceptive Mail Prevention and Enforcement Act § http://www.wcsr.com/filefolder/ad100509.pdf). 23109, 39 U.S.C.A § 3001[k][1][D] (2010); and 16 C.F.R. § For instance, a company conducting a sweepstakes may310 (2010). want to restrict eligibility for citizens in New York and18 39 U.S.C.A § 3001. Florida. Both states require sweepstakes with an aggregate19 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 bondedC.F.R. § 310 (2010) (concerning the Federal Trade with the state. See Fla. Stat. Ann. § 849.094[3] (WestCommission‘s regulations on sweepstakes telemarketing). 2010); and N.Y. Gen. Bus. Law § 369[e][1] (McKinney20 The express language of the Deceptive Mail Prevention 2010). 24and Enforcement Act does not rule out the possibility of a The scope of the analysis of state laws governingcourt interpretation that mail was intended to encompass sweepstakes is based on the research gathered by Thomsonemail. However, because the Act is included under Title 39 Reuters/West in a survey of sweepstakes laws in all 50Postal Service and because the Act continually refers to the states. Civil Laws: Gaming – Rules for SweepstakesPostal Service, this interpretation is unlikely. (Statutes) (West 2009). Extensive research into the21 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 ansections. See Tex. Alcoholic Beverage Code Ann. § impact on sweepstakes conducted over the internet–not108.061 (Vernon 2010) (authorizing sweepstakes state sweepstakes laws in general. 25promotions for alcoholic beverages). Conn. Gen. Stat. Ann. §42-297 (West 2010). 6
  12. 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 areAdvertising 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 ofpersonal contact to offer… the opportunity to the contest, but do require that certain disclosures orparticipate in a sweepstakes.‖ statements be provided.29 The required statements and disclosures of these states were discussed in theIn 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 changingchances 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 thehandling 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 notwinning, 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, andsponsors, regardless of how the sweepstakes is carried (9) Whether there are any special requirements.32out, to provide contestants with their prize within 30days after giving notice that the contestant has won.27 Moreover, promoters of sweepstakes conducted over the Internet via social media sites may want to includeC. Official Rules special statements to account for technical problems,While Texas law does not specifically apply to online situations unique to the Internet, and requirementssweepstakes, it would be wise for sponsors to followthe regulations as much as possible. Texas regulations 29require 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 InstituteAs discussed above, the Texas sweepstakes regulation Order No. 19051 (2009); and Julia A. Archer, Sweepstakesdoes 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 – The26 815 Ill. Comp. Stat. Ann. 525/25 (West 2010); Minn. Basics, Enns & Archer LLP (2003) (available atStat. Ann. § 325F.755 (West 2010) (does not include http://www.ennsandarcher.com/s_basics.html). 32requirements (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 (available27 See Minn. Stat. Ann. § 325F.755 (West 2010); see also at http://www.wcsr.com/filefolder/ad100509.pdf); andN.D. Cent. Code § 53-11-03 (2010). Gabrial Karp, Complying with State-by-State Requirements28 Tex. Bus. & Com. Code Ann. § 622.101[a][3] (Vernon in Online Sweepstakes & Contests, Practicing Law Institute2009). Order No. 19051 (2009). 7
  13. 13. Social Media Chapter 7imposed by the social media site through which thesweepstakes is conducted.33In conclusion, while there is no federal or state lawthat requires a sweepstakes conducted through socialmedia to include a list of all Official Rules, thegeneral consensus among legal commentators onsweepstakes law is that all sweepstakes sponsorsshould include the Official Rules of the contest andthat those rules should contain the disclosures requiredby the states to avoid liability.33 For instance, internet sweepstakes may want to includerules such as: (1) a disclaimer for entries that are corruptedor otherwise not received due to technical malfunction, etc.,(2) reserve the rights to cancel the promotion in the eventthat computer malfunction, etc., are encountered, and (3) aprovision stating any dispute as to the winner‘s identity willbe attributed to the holder of the email/Twitter accountassociated with the entry. Don’t Take Chances withInternet Sweepstakes, Southeast Tech Wire, July 23, 2002(available at http://www.wcsr.com/filefolder/ad100509.pdf). 8
  14. 14. Social Media Chapter 7 Appendix A 9
  15. 15. Social Media Chapter 7 Appendix B 10
  16. 16. Social Media Chapter 7 Appendix C 11
  17. 17. Social Media Chapter 7 Appendix D 12
  18. 18. Social Media Chapter 7 Appendix E 13

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