Food for thought: some legal considerations when developing social media products

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By Bradley J. WalzCode

It’s obvious that social media is here to stay as people are rapidly giving and receiving information about everything from companies to products to people. If you are developing social media applications that facilitate this form of interaction (to one degree or another), there’s some practical protections to consider.

Social media has been defined as a group of Internet-based applications that build on the ideological and technological foundations of Web 2.0, and that allow the creation and exchange of user-generated content.  This is not to be confused with social networking which is a social structure made of individuals (or organizations) aka “nodes” that are connected by one or more specific types of common interest-although the two often go hand in hand.

For the developer of social media tools, three key agreements need to be in place to protect against liability:  Terms and Conditions of Use Agreement, Privacy Policy, and Software License Agreement.  The Terms and Conditions of Use Agreement and Privacy Policy are necessary for the developer that intends to operate a social media Web site, service or application.  The Software License Agreement is necessary for the developer that plans to create a social media Web site for others or allow another party to use the proprietary software to create a social media product.

The Terms and Conditions of Use Agreement should contain the following key provisions:  (1) Prohibited Use of the Web site and End User’s Responsibility for Content; (2) Removal and Termination of Access (this will require appointing a Digital Millennium Copyright Agent (“DMCA”) with the U.S. Copyright Office); (3) Ownership of Intellectual Property; (4) Indemnification; and (5) Limitation on Liability.  The Privacy Policy should explain:  (1) what personal information is collected; (2) how the personal information if protected; and (3) how the personal information will be used.  The Privacy Policy should also be incorporated by reference in the Terms and Conditions of Use Agreement.

The Software License Agreement should explain in detail exactly what the licensee can do with the software.  For example, will the licensee be able to modify the software or only be able to combine it with other software.  The Agreement should also draw distinct lines between what software is owned by the licensor and what software is owned by the licensee.  Clearly drawing these lines can be tricky, but are essential for the licensor to preserve its intellectual property rights.  Finally, the licensor should make sure that the licensee indemnifies it for any improper use of the social media software, and the licensor should limit its liability for the use of the software by the licensee.

An ounce of prevention is worth a pound of cure-make sure the necessary agreements are in place before entering into any type of relationship with another (virtual) party.

Bradley J. Walz is an attorney with the law firm of Winthrop & Weinstine, P.A., and is a member of the corporate and intellectual property groups. He may be reached at bwalz@winthrop.com.

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