Out-Law Legal Update
Individuals advised to check whether they can still claim entrepreneurs' relief
Out-Law Guide | 07 Mar 2007 | 9:16 am | 16 min. read
This guide focuses on companies that have staff who run a blog for the company. Many of the issues raised are common to all user-generated content sites.
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Many major companies have seized the opportunities presented by blogging. They have recognised the benefits which internal blogs bring to communication and culture across a corporation, or in the case of external corporate blogs, the scope for improved marketing, branding and PR. High profile users of corporate blogs include: General Electric, McDonald's, PwC and Time Warner. In Sun Microsystems, the CEO and the General Counsel are among the company's 2,000 bloggers. IBM has even more.
Corporate blogs can be an effective means of providing commentary or news on a company and its products. The instantaneous nature of blogging can allow companies to react quickly to breaking news stories, helping them to manage publicity, both good and bad. Blogging is also seen as a way of humanising a company, allowing the personality of employees to emerge in an informal setting.
The best-known example of how a blog can improve a company's image is Robert Scoble's Scobleizer blog, begun when Scoble was an employee of Microsoft. He is credited with changing the public view of Microsoft by his blogging on life and events inside and outside Microsoft, becoming its unofficial corporate voice. Scobleizer is widely seen as helping to humanise Microsoft and shift its stance from arrogant and aloof to one which is more inclusive and accepting of criticism. One of the keys to achieving this softer image was Scoble's neutrality and readiness to point out Microsoft's mistakes, as well as praise for its rivals. (Scoble has since left Microsoft for a start-up, but continues Scobleizer).
In contrast, a blog created by Vichy, a division of cosmetics giant L'Oreal, initially backfired. The blog was part of a marketing campaign for a new anti-ageing product. It was based on the diaries of a flawless-looking character called Clare who lamented the onset of age. Clare's youthful looks turned out to be too good to be true: Clare was a character invented by the advertising agency. Vichy narrowly escaped a PR disaster by admitting its mistake, apologising and introducing the real Vichy team. Customers were invited to post unedited comments about their experiences of the Vichy product on the blog.
These two examples demonstrate one of the keys to successful corporate blogging: authenticity. The blog posts must be genuine – a key part of blogging's success has been the fact that people believe it side-steps the "spin" that permeates marketing material, or the reporting of news. The authors must also be allowed at least a degree of autonomy in generating and selecting content. However, in fostering authenticity in a blog companies undoubtedly introduce risks to the process.
The main risks of external corporate blogging (some of which will be common to internal blogging) are:
Liability may arise from content posted by the company's employees or, where a site is more widely accessible, from comments posted by members of the public using the website.
A company's risks and exposure to liability will depend on the type of blog which the company operates and the capacity in which its employees are posting to that blog.
A company may set up a blog as a marketing tool, under which employees post material during the course of their employment, in their capacity as employees of the company and on behalf of the company. In this case the company and the employee will be treated as one and the same and the company will be responsible for the statements made by the employee as if they had been made by the company itself. This is vicarious liability. It makes the employer liable for the actions of its employees made in the course of their employment.
Some companies provide employees with the ability to create individual blogs, without them being specifically tied to a particular product or marketing campaign. IBM, for example, has over 3,000 employees who blog. Many of them use their blogs to explain a technology they are working on or to discuss issues faced by the business. Others simply use their blogs to comment on the state of the industry, or to discuss day-to-day aspects of their jobs. These type of blogs aren't typically used by the company to promote any particular products. However, like the Scobleizer blog, they can help generally improve the image of the company.
In these situations, even though the employee isn't writing "on behalf of the company", the fact that the blog is hosted or funded by the company may still make it liable for the content of the posts. Of course, this raises some difficult practical issues: no company has the resource to supervise 3,000 blogs. This is when good operational policies and effective employment controls will become crucial.
It is possible that an employee could make what is known as a statutory grievance whilst blogging which would require the employer to follow the statutory grievance procedure. This is most likely on an internal blog – i.e. one used and read only by staff. A statutory grievance is any complaint which is capable of forming a claim before an employment tribunal when it has been put in writing and sent to the employer. This definition of a statutory grievance was drafted very widely in the legislation and has been interpreted very widely by employment tribunals largely on policy grounds as an individual can be barred from bringing a claim if they have not first raised a grievance internally.
Arguably if an employee posts a complaint on an internal corporate blog which relates to an unlawful act, such as discrimination or bullying, then this could amount to a statutory grievance, which has been sent to the employer when posted on the blog. The employer would then be required by law to invite the employee to a meeting to discuss the grievance, within a reasonable time. Following the meeting the employer is obliged to write to the employee communicating the outcome of the meeting or any decision reached. The employee must also be offered an appeal against any decision. The employee is entitled to be accompanied to both the grievance meeting and the appeal by a trade union representative or a workplace colleague.
If the employer misses the very existence of the statutory grievance, because it does not monitor the content of the blog and an employee subsequently took a case to an employment tribunal and was successful the tribunal must award an uplift in damages of between 10% and 50% for the employer's failure to follow the statutory procedure.
It would be advisable for companies who do provide an internal blog, or other internet-based technology where employees can post individual comments, to make it clear that this is not the appropriate forum for raising a grievance and that the company's internal grievance procedure should be used instead. A notice on the blog would be appropriate.
However, this issue has never been tested before a court or tribunal. There is still a risk for employers that they become liable where an employee chooses to raise a grievance via the internal blog. Therefore, cautious employers will either monitor internal blogs or forbid them. Monitoring a blog can raise other issues: the monitoring of all internet-based communications should only take place with the knowledge of employees. Employers should familiarise themselves with the Employment Practices Code, which deals with monitoring of communications.
If you are starting a corporate blog, you must decide who will contribute and when. Will it be someone's full-time job? Or, more likely, will it be something they do in addition to existing duties? Choose your bloggers carefully: they will be representing your organisation.
While this guide is all about helping you to understand and manage the legal risks, bear in mind also that good blogs thrive on spontaneity and they can suffer if each posting has to be approved by a manager. If supervision isn't possible or appropriate, or you think it might stifle content, then a buddy system may be a suitable compromise: before posting anything, the author checks his posting with a fellow blogger in your organisation. Lastly, remember that blogs are easy to start and difficult to maintain: do not underestimate the drain on resource that they can present.
Staff should be given guidance as to what the business considers appropriate blogging, which could take the form of a blogging policy.
Some of the issues that you might want to address in such a policy include:
The policy should also set out some guidance as to how blogs should be managed internally. This might include details of who the blogger should approach if they have any questions about whether particular content is suitable, what the blogger should do if they receive a complaint, and what they should do if they are concerned about the content of any comments posted to the blog.
The Terrorism Act 2006 creates offences relating to the encouragement of acts of terrorism and the dissemination of terrorist publications. The Act has potentially serious implications for companies or individuals hosting electronic media, whether in text or multimedia form.
It contains a notice and takedown regime that applies to website operators. A police constable may serve a notice requiring the modification or removal of offending material within two days.
The effect of any failure to remove or modify the materials within the two-day period, in the absence of "reasonable excuse," is that the service provider will be deemed to have endorsed the offending materials and faces a maximum penalty of seven years in prison.
The notice and takedown regime also applies to any "repeat statement" which "is for all practical purposes, to the same effect as the statement to which the notice related". The two-day time limit for removal of the statement will begin to run from the date of re-publication.
The Act says a person is not deemed to endorse a repeat statement if he "is not aware of the publication of the repeat statement" or where he has taken "every step he reasonably could to prevent a repeat statement" becoming available to the public. However, the explanatory notes to the Act provide no guidance as to what is reasonable for the host of a website, blog or message board.
Technically, you could block postings from a particular username and IP address; you could also monitor for the use of particular phrases that might constitute a repeat statement. If a site finds itself subjected to the Terrorism Act's notice and takedown regime, it would be advised to discuss its method of operation and proposals for preventing repeat statements with the police.
This section sets out the basics of copyright and trade mark infringement: how another person's copyright or trade marks can be infringed, and the remedies which are available to them for infringement.
Where a party's intellectual property rights are infringed it can bring a claim for damages or, in certain circumstances, seek a share in the profits which resulted from the infringement. The owner of the intellectual property rights may also be able seek an injunction to prevent further misuse of its intellectual property rights (e.g. injunctions which permit the seizure of infringing goods).
Care must be taken if the author of a blog wishes to refer to a third party's trade marks, since this carries with it a risk of infringing trade marks.
Trade mark law in the UK is governed by the Trade Marks Act 1994. A registered trade mark is infringed if, without the consent of the proprietor, a person "uses in the course of trade a sign which is identical with the trade mark in relation to goods or services which are identical to those for which it is registered". It is also an infringement to use an identical trade mark in relation to similar goods and services, and a similar trade mark in relation to identical or similar services provided, where, in each of these two cases, there exists a "likelihood of confusion".
In many cases, reference in a blog to a third party trade mark will not amount to use "in the course of trade" or "in relation to" the goods or services for which the mark is registered. If the words "Coca Cola", for example, are used in a blog discussing the merits of various brands of fizzy drinks and the blogger is not using the blog as a way of advertising his services as a manufacturer or retailer of fizzy drinks then, even if the use of the trade mark is somehow "in the course of trade", it is unlikely to be "in relation to" any trade in the goods for which the Coca Cola trade mark is registered.
On the other hand, if the reference to "Coca Cola" were included in a blog operated by or associated with a rival fizzy drinks manufacturer, then the position would be likely to be different and the blogger would need to avail himself of one of the exemptions from trade mark infringement, such as the exemption for use in relation to the "genuine" goods of a trade marks proprietor. This is allowed provided such use is "in accordance with honest practices in industrial or commercial matters". Thus if a Pepsi corporate blog wished to refer to Coca Cola in a discussion of the relative merits of the two products (by way of a form of comparative advertising) it would have to ensure that the comparison was entirely fair in order to avoid infringing Coca Cola's mark.
See also: Legal info about trade marks
Even if there is no infringement of a registered trade mark, bloggers referring to third parties need to ensure they are not liable for "passing off".
This can occur if the following ingredients are present:
This might arise if a trader's blog included reference to a third party brand in such a way that a reader of the blog might mistakenly believe that the trader's product, or the blog, in some way originated from or was associated with or approved by the third party, resulting in actual or potential loss of business (for example by the diversion of customers) or damage to reputation (through, for example, association with the views expressed in the blog).
Copyright protects 'original' works expressed in a variety of material forms. The expression of an idea is eligible for copyright protection but the idea itself is not unless and until it is expressed.
As such copyright protects literary, dramatic, musical and artistic works, databases, recordings, films, broadcasts, cable programmes, typographical arrangements of published editions, digital works computer programs and the preparatory materials used in creating them.
Because of the different types of material which copyright protects, it is possible for there to be different copyrights existing in respect of the same work. For example, a song will involve separate copyrights in the music, lyrics, recording and performance of it, and each of these copyrights may be owned by a different person.
Copyright law in the United Kingdom is governed by the Copyright Designs and Patents Act 1988 (the CPDA) and allows the author of a work to control the copying or exploitation of the work. UK copyright protected work can also qualify for protection in other countries due to a number of international treaties to which the UK is a signatory.
The material which is posted onto a blog can come from a variety of different sources. In most instances it is written by and originates from the person who posted the material on the blog. However sometimes that person may copy content, graphics or music across from another website, or take it from another source altogether such as a book or magazine. It is likely that this content will be copyright protected: for example, the content of another website will consist of text, photographs, graphics (including logos), sounds, films and databases, which as indicated above attract copyright protection.
Copyright automatically comes into existence when a work is recorded in some way, such as in writing or when it is drawn onto paper. Do not make the common mistake of thinking a work is 'public domain' or free to copy just because there is no copyright symbol (©).
A work must be original in order for copyright to exist in it. However, in the UK, the threshold for originality is not high: the work must not be a copy of a previous work and must involve some skill and effort. There is no novelty requirement, so that if two identical works are created independently both will be entitled to copyright protection.
Some copying is allowed but the examples are limited and the exemptions should be relied upon with considerable caution.
Under the Copyright, Designs and Patents Act of 1988, fair dealing with a work for the purpose of criticism or review of that or another work or of a performance of a work, does not infringe any copyright in the work provided that it is accompanied by a sufficient acknowledgement. Sufficient acknowledgement means that the author of the work being reproduced must be acknowledged by name.
Criticism of a single aspect of a work (such as a book, article or film as opposed to the work as a whole), is capable of constituting fair dealing for the purpose of criticism or review. The criticism and review need not be of the work in question, but can be criticism of the ideas expressed in the work. Thus, the inclusion of third party material in a television documentary on the subject of "cheque book" journalism has benefited from the fair dealing exemption, as has a television programme criticising the decision to withdraw the film A Clockwork Orange from circulation, which included extracts from the film.
The exemption for fair dealing with a work for the purpose of criticism or review cannot apply if the work being criticised or reviewed has not yet been made available to the public.
Fair dealing with a work – other than a photograph – for the purpose of reporting current events does not infringe any copyright in the work provided that it is accompanied by a sufficient acknowledgement. No acknowledgement is required in connection with the reporting of current events by means of a sound recording, film, broadcast or cable programme where this would be impossible for reasons of practicality or otherwise.
Whether dealing is "fair" is often difficult to judge, because there is no statutory guidance. The cases indicate however that the test is an objective one: would a fair-minded and honest person have dealt with the copyright work for the relevant purposes? Ultimately, the decision must be a matter of impression. The main factors which tend to be taken into account in judging fairness are:
In 1997, News Group Newspapers was sued by a photographer, François-Marie Banier, for publishing his photograph of Princess Caroline of Monaco without prior permission, albeit the newspapers included an acknowledgement.
The court decided that the photograph was not used in The Sun to review or criticise the photograph itself; instead, it was plain copying and competing use with an attempt to disguise it as review and criticism. The court rejected The Sun's argument that it was common practice for newspapers to publish photographs in the event that the copyright owner was not contactable, with licence fees being paid afterwards.
There are also fair dealing exemptions for non-commercial research or private study and in relation to educational use. These will rarely be relevant to blogs.
See also: Legal info about copyright
Out-Law Legal Update
Individuals advised to check whether they can still claim entrepreneurs' relief