Use, Control & Documented Proof Are The Prime Factors For Determining Ownership Of Social Media Accounts | Moritt Hock & Hamroff LLP
If a company terminates one of its officers, does that person or his ex-employer own the corporate social media accounts that person used? Specifically, if the officer’s posts directly or indirectly promoted the company’s products and his public image on those social media channels closely aligned with company marketing strategy, does the business properly claim ownership of the accounts? Or do they belong to the officer, if he also posted details of a strictly personal nature, such as family pictures?
The answers have obvious legal implications for any businesses — including equipment finance companies — whose employees use company-hosted social media accounts for business development. And, they can have financial and operational consequences, too.
A New Framework to Establish Ownership Rights
It turns out that a recent decision, from the United States Bankruptcy Court for the Southern District of Florida, answered those questions — in favor of the business — and in doing so established an entirely new framework for determining the ownership rights to corporate social media accounts.
Vital Pharmaceuticals, the maker of Bang energy drink, the third leading energy drink in the United States, is in Chapter 11 bankruptcy and is looking for a buyer. Vital operates more than 50 social media accounts for Bang and its other products. Vital attributes much of its success to social media marketing and believes access to its social media accounts is necessary to maximize the value of its assets.
Three months after it filed for bankruptcy, Vital fired its founder and CEO John H. Owoc. Owoc claimed ownership of the rights to three social media accounts related to Bang energy drink — @bangenergy.ceo (Instagram), @bangenergyCEO (TikTok) and @BangEnergyCEO (X, formerly Twitter). Owoc’s argument in favor of his ownership of these accounts was that the accounts “cultivate and market his persona as an explosive, high-intensity, unstoppable leader” and that he created or had the accounts created for him and posted messages and pictures to the accounts that were purely of a personal nature (e.g., posts about birthdays, anniversaries and holidays, among other things).
Vital, on the other hand, claimed the accounts belonged to it because they were clearly intended to generate revenue for Vital and the account names included the bangenergy name. Owoc countered that the accounts simply developed his identity, and were personal, pointing to details he posted about birthdays, anniversaries and holidays, among other things.
In its decision granting summary judgment, the court effectively said that determining ownership of social media accounts depended on three factors:
- Documented property interest, where a party can presume ownership if it has an agreement that documents or shows a property interest in the account;
- Control over access, where a party can show it has exclusive access to an account and prevent others from accessing, it can overcome the above presumption; and
- Use, where a party that satisfies both of the above factors owns the account. Absent that, the use of the account, including its name, its participation in product marketing and integration with marketing strategies, carries the greatest weight in deciding ownership.
Inasmuch as neither Vital nor Owoc could satisfy either of the first two criteria, the Use factor was decisive in Vital’s favor, where the court awarded it ownership because about 75% of the CEO account posts explicitly or implicitly promoted Bang products, while another 15% subtly did this by spotlighting what in Owoc’s persona was closely linked to company marketing strategy. Meanwhile, only 10% of the posts were exclusively personal.
What the tripartite-factor framework also did was invalidate a different standard, put in place eight years ago by another bankruptcy court in Texas, which held that a social media account bearing a company’s name presumably belongs to that company. But the Florida panel basically deemed that presumption obsolete, noting that the proliferation since 2015 of social media influencers like Owoc, who use their persona to market products, make it difficult to discern if an account is clearly a personal or a business account.
What Should Corporations Do Now, To Secure Ownership
The crucial takeaways from the Vital judgment, for intellectual property guardians, are threefold.
- Put it in writing. To lock down ownership of social media accounts, review all documents related to property interests in these accounts and finalize agreements for accounts where ownership isn’t absolutely clear.
- Know who controls your social media accounts. Even if you had drafted agreements governing account ownership, they could be worthless if you can’t prove you completely, exclusively control an account. To ensure that control, implement airtight control of passwords, usernames and other access-related data.
- Keep close tabs on the content in, and usage of, your social media accounts. How much of the content is promotional versus how much is personal could be crucial in determining the nature of an account and, therefore, who owns it.
By itself, an email address isn’t self-evident proof of account ownership. This is an important point for any company using social media to confirm information–even lenders who might reply upon such data in financing documentation processes or in business assessment and due diligence.
