By: L. David Russell
Los Angeles Daily Journal (August 16, 2012)
How does a person achieve Internet fame and online prosperity? One way is to collect a legion of online followers via social media. The math is simple: an online brand becomes more valuable with each additional Twitter follower and Face- book “like.”
Case study: Sarah J. Phillips. Sarah J. Phillips, the 22-year-old ESPN.com columnist and subject of a touted exposé by the sports website Deadspin.com, apparently under- stood this concept. Last year, Phillips was a columnist at the betting website Covers.com when she was approached by ESPN to write for its popular website. As a young female writer in the male-dominated online sports- writing world, Phillips had an opportunity to monetize her online brand by creating her own sports media website.
But growing a fan base for an emerging website is a tedious process. To shortcut this step, Phillips used promises of quick cash — which was never paid — to convince several popular Twitter users to give her access to their accounts. Once Phillips assumed control over the Twitter accounts, she vigorously promoted her new website to followers.
Phillips also set her sights on acquiring “NBA Memes,” a Facebook page featuring a collection of photographs of NBA players with humorous captions. NBA Memes had over 300,000 “likes” on Facebook and had generated a few hundred dollars through advertisements. Phillips and an associate reached out to the NBA Memes page’s creator, gained his trust, and soon deleted him as an administrator from the page. This effectively eliminated the creator’s control over his own webpage.
As part of its exposé on Phillips, Deadspin invited a couple of legal pundits to discuss what criminal charges could be brought against Phillips based on her misconduct. One sports and social media attorney spied a possible case for wire fraud, while another attorney suggested that the act of depriving victims of their social media passwords could have a real-space analogue to larceny. The attorney added, however, that anyone building a larceny case would have to put a value on social media accounts, which is a difficult task when the accounts belong to individuals.
Value of passwords. In Phillips’ home state of Oregon, the Court of Appeals has held that access passwords are subject to “theft” for purposes of the state’s computer crime laws, even though those passwords are not susceptible to exclusive possession in the same way as personal property. State v. Schwartz, 21 P.3d 1128, 1137 (Or. Ct. App. 2001). In Schwartz, the court explained that the statutory definition of theft only encompasses property that has value; of course, something of no value cannot be subject to “theft.” Be- cause the parties agreed that the passwords at issue had value, however, Schwartz did not decide whether passwords have intrinsic value. Thus, it remains unclear whether a password to a social media account, in and of itself, has sufficient “value” to satisfy the property element of theft.
Value of social media accounts. Rather than debating whether a password alone has value, the simpler exercise would be to attach an economic value to what the passwords unlock: control over the social media accounts and access to their followers. Precedent regarding the right of publicity — which requires claimants to show that their identities have calculable commercial value — is instructive in assessing the worth of such Internet assets. While the right of publicity is typically a cause of action invoked by celebrities, the 9th U.S. Circuit Court of Appeals has recognized that “the appropriation of the identity of a relatively unknown person ... may itself create economic value in what was previously valueless.” Motschenbacher v. R. J. Reynolds Tobacco Co., 498 F.2d 821, 824 n.11 (9th Cir. 1974).
Extended to social media, this principle suggests that the digital identity crafted by an online author has economic value when it attracts a commercial party who wishes to associate its brand with that online persona, regardless of whether the author is a celebrity in the traditional sense. Indeed, the Northern District of California recently explained: “In a society dominated by reality television shows, YouTube, Twitter, and online social network- ing sites, the distinction between a ‘celebrity’ and a ‘non-celebrity’ seems to be an increasingly arbitrary one.” Fraley v. Facebook, Inc.,
830 F. Supp. 2d 785, 808 (N.D. Cal. 2011). Accordingly, the Fraley court recognized that the right of publicity could extend to the creator of an online identity, so long as the creator can quantify the economic pull that his online persona has within his particular social network. In Fraley, a class of Facebook users brought a claim alleging that the “Sponsored Stories” feature on Facebook violated their right of publicity by failing to compensate them for the commercial use of their names and likenesses in advertisements targeted at their friends. When a Facebook user clicked on a “thumbs-up” button for an advertiser, Facebook generated an advertisement containing that user’s name, photo and the assertion that the user “likes” the advertiser. The advertisement then became visible to the user’s friends.
The Fraley court held that the plaintiffs’ right of publicity claim was sufficient to withstand a motion to dismiss. In doing so, the court distinguished the case from Cohen v. Facebook, Inc., 2011 U.S. Dist. LEXIS 124506, at *2, *11 (N.D. Cal. Oct. 27, 2011), which had held that Facebook’s use of user
names and likenesses to promote its “Friend Finder” service did not violate the right of publicity. Notably, the Fraley plaintiffs were able to identify specific statements by Face- book’s officers articulating how consumers are more likely to remember seeing an ad- vertisement bearing their friend’s name and then purchase the advertised product — in contrast, the Cohen plaintiffs did not provide such evidence.
Economic value of social media accounts in the Phillips matter. In light of Fraley and Cohen, an unsubstantiated assertion that Phillips used the popularity of the social media accounts to drive traffic to her own website would be insufficient on its own to show “calculable commercial value.” In this situation, however, Phillips herself affirmed that the accounts she hijacked had economic worth by offering to pay for the accounts (but failing to follow through). For example, Phillips told one of her Twitter marks that she would pay him $500 to take over his Twitter account, which had 2,000 followers. In Phillips’ words, the arrangement would be “a way for us to monetize the followings we’ve created on Twitter.”
As social media continues to gain more users, courts are likely to increasingly recognize that online personas can be branded and monetized — particularly when an online persona connects to a sizeable audience. This will have significant implications in the civil and criminal context; for example, the theft of social media passwords may be prosecuted as larceny in the near future.
—By L. David Russell, Christopher Chiou, and Nary Kim, former attorneys at Jenner & Block LLP
© 2012 Daily Journal Corporation.