Online Social Media Strategy: Use Them Or Be Used By Them

LAS VEGAS – A frontline debate among many industry intellectual property lawyers in the United States is how to handle the explosion in use of online social networking media tools like Facebook, Twitter or FourSquare.

Some companies, especially consumer-oriented retailers or entertainment companies, argued at recent private-sector conference in Las Vegas that consumers and “fans” will create pages about your business anyway, so you might as well jump into the fray as a defensive move in order to try to have a positive impact. The issue was among the most-discussed at the IP Law Summit held from 12-14 September.

NBC Universal has some 100 Facebook sites, according to Gillian Lusins, company vice president for IP, many related to its popular television shows or stars. And the presence in these new forms of media is good for exposure, circulating the company’s trademark.

But it comes with risks as well. For instance, people can react negatively to overly company-sanitised information (though the Federal Trade Commission has recently set rules for disclosure if you post items as an individual member of the public but you are actually employed by the company). Others may still get away with it, such as celebrities who are being paid for product placement on fan pages.

Driving traffic to Facebook can also divert it from your traditional website. And if you allow user-generated content from your employees, you can get leakage of protected ideas. Lusins also said some so-called fan pages might just be businesses trying to make money off of your brands, selling ads on their sites. And she warned against using public Whois websites for tracking the IP addresses of people who post, as “pirates” can get the IP addresses.

Risk is the reason that some other companies, even very large ones, without direct consumer interaction (but rather largely business-to-business sales), have been slower to get into the social media game.

For instance, Dolby and Qualcomm make systems and infrastructure and do not have as much direct interaction with consumers who might blog or create Facebook pages. Companies like that might be more likely to have only a Facebook page for their internal staff, which might number in the tens of thousands. They typically develop a strategy for employees on what is acceptable on the page. And a representative from a consumer electronics company said on a panel they view social media as a useful communications mechanism – albeit mostly one way directed at the company, providing feedback about its behaviour and performance.

Some reluctant firms mentioned the fear of becoming the next case of the Hasbro toy company, maker of the famous word game Scrabble, which in recent years shut down Scrabulous, an online copy of the game originating in India that had become wildly popular. The plan backfired when Hasbro did not have an equally fun alternative as a replacement, making it look bad to its public and costing it an opportunity to capitalise on the fan base.

Companies also have varying strategies for addressing IP infringement on these sites. NBC Universal – which Lusins called “the biggest advocate of fair use you can get” (perhaps because of its NBC News sector) takes a gradual approach: they try an email or a call first before sending a heavy-handed takedown letter. And if you do send the letter, she said, word it carefully to seem “reasonable”: it is almost certain to end up posted online.

By contrast, the consumer electronics company making navigation systems that rely on easily reverse-engineered proprietary software acts much more swiftly and purposefully to take down copies and keep them from getting out, the company representative said.

The main test for whether to act against a fan site is whether it confuses people or harms your IP rights in any way, Lusins said. Companies set rules for use of their social media presence, especially for company employees. This can get complicated depending on the internal rules by which certain sectors within the company operate, ranging from theme park workers to executives.

But in the end, for the companies who are popular in the cybersphere or use these tools in the company, perhaps the best rule is not to put in place over-reaching rules that prove unenforceable. As Lusins put it: “Do not prohibit what you cannot prevent.”