Wednesday, February 18, 2009

Facebook Terms of Use

Welcome to my inaugural post. I hope you find my blog entertaining, informative, and interactive. My desire is not just to send my thoughts out into the world. I look forward to many engaging exchanges with those of you who are similarly interested in copyright and the music industry. As a practicing lawyer and professor of music business and law, I do not intend this blog to be geared exclusively toward lawyers or those with legal problems. I hope to draw many of my non-attorney colleagues from academia, the music industry, as well as all the other persons who own or use copyrights. That last group, as I will point out often, includes almost everyone--whether they know it or not.

This week I was drawn into a very interesting new event: a mass uprising of the Facebook nation. I have found Facebook users to be an extremely devoted (read obsessed) group. I was entertained to read and hear about how many of them became incensed at Facebook’s decision to take away their right to revoke the dangerously broad license they willingly granted Facebook to their photos,text posts, and even music. Facebook, being the responsive company that it is, immediately relented and reinstated such revocation rights.

To give you some contextual background, let me briefly explain. Prior to the change in its terms of use, Facebook members could revoke the license they granted to Facebook simply by removing the content from the member's Facebook page. That system, however, created a major problem for Facebook. You see, when a member removes their content from their Facebook page, the content very often remains as postings on other members' Facebook pages. The removal of such content by the member, while terminating the license, does not remove the content from the entire Facebook system. This creates unlicensed displays and reproductions of copyrighted material, both of which constitute possible copyright infringement.

Yet, what intrigued me most in the surge of dissent that followed this change was that the very same members seem to be perfectly happy to continue to grant a license that is overly broad and exposes them to possible copyright infringement suits. This is, in my opinion, just further proof of the obvious: people don’t read terms of use on the internet—even when they are protesting such terms. Considering the stakes of defending a copyright infringement suit (if you are unaware of such stakes Google “Capitol Records v. Jammie Thomas”) you ignore such legal agreements at your own peril.

My biggest issue with Facebook has always been that the terms of use are both too narrow and too broad to meet their expressed needs. The narrowness issue can now easily be seen in the current problem Facebook was attempting to address by taking away members’ rights to revoke the license. The problem of the content's license being revoked even when the content still exists on other members' Facebook pages clearly demonstrates the inadequacies of the Facebook terms of use.

What I have been waiting for, however, is the protest to extend to the breadth of the license and the warranty language. For example, many aspiring recording artists (both bands and solo artists) are now marketing their music on Facebook by posting their recorded songs. If such artist is also a songwriter who happens to have an exclusive songwriter agreement with a publisher, they do not own the copyright to the musical compositions they just licensed to Facebook. If you have done this, you have breached your contract with your publisher and your contract with Facebook

A more common example of this problem I have seen on many of my friends Facebook pages is when they post their wedding, graduation, and other event photos. Many of these photos were taken by professional photographers who retain their copyrights to the photos. Many of these photographers grant a license to post such photos on the Internet. But that is it--such licenses only allow the person to post the photographs for personal use on the Internet. Those licenses are very narrow. I have reviewed and drafted several such licenses and never have I seen or included the right to create derivative works or use such works for third-party advertising purposes.

Facebook, however, has always reserved the rights "to use, copy, publicly perform, publicly display, reformat, translate, excerpt (in whole or in part) and distribute such User Content for any purpose, commercial, advertising, or otherwise, on or in connection with the Site or the promotion thereof, to prepare derivative works of, or incorporate into other works, such User Content, and to grant and authorize sublicenses of the foregoing."

Facebook also requires members to warrant that they, the member, have the right to grant such broad rights to Facebook--and of course, often they do not. This creates potentially disastrous exposure to substantial liability for members. In the two examples above those members could face multiple copyright infringement and breach of contract suits from both their music publisher or photographer and also Facebook. All simply to market their music or share their wedding photos with some friends. Facebook needs to narrow their licensing language to meet the needs of the business's purpose.

Considering that the Copyright Act allows a plaintiff to recover statutory damages of $150,000.00 plus attorney's fees for willful infringement of a copyright, members should insist on a more tailored licensing regime.