Social media law part one

What is social media law?

Many lawyers argue that there is no such thing. Other than specific legislation (like the Electronic Commerce Directive) the same laws of copyright, contract, defamation etc. apply to the Internet as in real life.

However, this depends on how you view social media. Is it simply a development of Internet technology? Or is it a paradigm shift, a completely new type of interaction which will eventually drive the evolution of a body of "social media law"?

I'm not saying which side I fall on quite yet, but this is the first of a series of posts in which I am going to look at how the law is adapting to social media.

Rather than writing about abstract theories, I will be looking at the ways my day to day practice is changing to incorporate social media and Web 2.0. In the last post I will round up with my views on how the law is likely to develop (and maybe even answer the paradigm shift question).

To start with, I am looking at something fairly simple: what I call the "social network clause".

This could be used in all kinds of commercial agreements, but a good example is franchise agreements.

Take a situation where you operate a chain of restaurants under the Taco Cottage brand and you want to expand into different cities by granting franchises to new operators.

As well as the usual provisions in your franchise agreement, it might be sensible to include a "social network clause" to set out how your franchisees are allowed (or encouraged!) to use social media to promote their Taco Cottage franchise businesses. This  will be different in each case, but some basic things to think about are:-

• Is the franchisee entitled to create and operate Twitter accounts, Facebook pages etc. using the franchise business name? Are you happy to see Taco Cottage Wolverhampton and Taco Cottage Shrewsbury on Twitter or do you want Twitter users to engage with your own @TacoCottage account?
• Alternatively, should franchisees be obliged to use social media to promote their franchise business? If so, should they be required to feed back details of any successful initiatives to the franchisor for use by other franchisees?
• Who will "own" these accounts and how will copyright in the updates and content provided be dealt with? (the Law Donut blog has an interesting post on the implications of this for employers, but similar issues apply in this kind of situation).
• What social media policies should franchisees have in place for their employees?
• What happens if the franchise is terminated (or sold)? Is there a provision for the social networking accounts to be transferred to a new operator or owner? (By the way, there are real practical issues with this if the login details are held by a franchisee... maybe a service like Hootsuite which allows team collaboration on your Twitter account, but under your control, would be useful).

Franchises are an obvious example, but the concept is just as relevant to dealerships and distributorships, operators of concessions in shopping malls and any other agreement where one party is promoting a business using elements of the other party's intellectual property rights and goodwill.

I have incorporated something like this into a number of contracts recently and I would suggest it to any client entering into this type of agreement.

Of course, if you are the client, and you are having this kind of agreement drafted, then ask your lawyer about including a suitable clause... if they look at you blankly then feel free to point them in the direction of this blog!

Coming up next time around:- social media in mergers and acquisitions.