Rebranding or Misappropriation?

by Anna

My piece for HessConnect:

When a former employee takes a law firm’s social media accounts with them is this rebranding or misappropriation?

With their speed, convenience and efficiency, the blogs have become essential tools for most businesses. However, inappropriate use of a law firm’s internet social media accounts or blog can have serious consequences for both law firms and employees. Three attorneys formerly employed at leading law firm Stites & Harbison, PLLC learned this the hard way when they lost a fight over social media accounts to their previous employer in federal court this month.In Stites & Harbison, PLLC v. Michels, law firm Stites & Harbison claimed that the defendants inappropriately changed contact information and passwords related to social media accounts for a firm blog to promote their new enterprise.

“Trademarkology,” the professional trademark blog at issue, had been owned, operated, and used to advertise the services of the law firm since 2013. Blog content was republished through five linked social media accounts through Facebook, Twitter, Google+, Instagram, and Pinterest, which were created and maintained on firm time using firm IT networks to share blog content as well as to promote and advertise the firm. Containing hundreds of followers and connections, the blog topped the ABA Journal’s 2014 list of best law blogs in the category of Intellectual Property. The blog and social media accounts contained copyrighted material owned by the law firm that was generated by third-party service-providers and attorneys in the firm, including the three defendants, who were paid to create content.

Shortly before Attorney Michels’s last day of his more than thirteen year tenure at the law firm, the defendants’ allegedly changed the passwords, administrator privileges, and email addresses linked to each of the for the social media accounts. On January 6, 2015, Stites Chairman Robert M. Connolly emailed a cease and desist letter informing defendant Michels that he was in breach of his fiduciary duties and demanding that he immediately return the login credentials and passwords for the social media accounts. However, Michels responded in disagreement. While admitting that the five social media accounts had been “rebranded” using the name of the defendants’ new enterprise, he contended that the firm retained possession of the blog and blog posts and would be easily able to register newaccounts under the Trademarkology name.

Stites sued the three former firm attorneys for everything from breach of fiduciary duty to trademark infringement and unfair competition to tortious interference, conversion, and civil conspiracy based on the allegation that they “knowingly and deceptively took actions against the interests of the firm” by setting up a competing enterprise then conspiring to misappropriate social media accounts and intellectual property from the law firm upon their departure.

Was taking control social media accounts developed in the course of employment simply “rebranding” or did it constitute misappropriation? Could these actions rise to the level of a breach of fiduciary duty? Trademark infringement? Tortious interference, conversion, or civil conspiracy?

While the court left these questions unanswered, the Agreed Order of Permanent Injunction inStites & Harbison, PLLC v. Michels suggests that changing the administrator access, contact information, name, and publically-visible profiles for accounts created in the course of employment without authorization is a no-no.

On January 23, parties reached agreement on a permanent injunction, which lays out terms to which the defendants voluntarily consent. The agreement enjoins the former employees from using any designations confusingly similar to or identical to Stites’s service marks as well as all access the five social media accounts unless necessary to do so to carry out tasks specified in the injunction. The injunction further ordered the former employees to remove any keywords, metatags, or other source code from the defendant’s website and social media accounts within 30 days of the order.

Why not just make new social media accounts?

As a result of the “rebranding,” hundreds of connections associated with the Stites accounts previously “following”the firm were transferred to pages promoting the defendants’ new enterprise. Consequently, every individual post, update, tweet, retweet, and favorite appear as if they are promoting or endorsing the new enterprise. Consequently, any “retweets” of previous posts would link back to a Twitter account that promotes the defendant’s new enterprise.

What do the courts say?

Although law firms are notably absent from previous case law governing social media account ownership, other cases regarding disputes between employers and employees shines some light on this issue.

In Ardis Health, LLC v. Nankivell, the court looked to provision in the agreed to employment agreement which stated that all work created or developed by the defendant “shall be the sole and exclusive property” of the employer, concluding that the employer owned the rights to the login information for the social media accounts.”

In PhoneDog v. Kravitz, the employer sued the defendant, a former product reviewer and video blogger for the plaintiff, for control of a Twitter account the defendant used to promote the employer’s services at the direction of the employer as well as for personal use. In the absence of a written policy or contract governing social media ownership, the case settled out of court in 2012 for undisclosed terms with the former employee keeping the account.

In 2013, the court Eagle v. Morgan found in favor of an employee who sued her former employer for accessing and controlling her LinkedIn account after her termination. The court looked to four factors in determining ownership of the account:

(1) whether the employer had a policy of requiring its employees to use social media;

(2) whether the employer dictated the contents of an employee’s posts;

(3) whether the employer paid for its employees’ social media accounts or posts;

(4) whether the employee maintained a separate account for individual use;

(5) whether the connections were developed through the employer’s investment or the employee’s own time, money, and extensive past experience.

By identifying the absence of a policy as a factor weighing against the employer’s ownership of the social media account at issue, the Eagle case suggests that in the absence of a policy governing ownership of social media accounts, the owner of the LinkedIn profile is the individual who created and maintained it – even when an employer expressly encouraged creation or development of content.

Source: http://hessconnect.com/rebranding-or-misappropriation/