Facebook's Misappropriation Problem: Selling Artist Names As Advertising Keywords

Facebook's Misappropriation Problem: Selling Artist Names As Advertising Keywords
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"Everyone has the right to the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author."

Article 27(2), Universal Declaration of Human Rights

What do Prince, The Beatles, The Chainsmokers, Celine Dione, Maroon 5, Jimi Hendrix and Rev. Martin Luther King, Jr. all have in common? Each of their names are for sale as advertising keywords on Facebook. You can confirm this by trying to "Boost" any Facebook post, choosing a custom audience, and then searching for the name under "Interests". Facebook has scraped "interest" data based on keywords including artist and celebrity names from its massive consumer data profiles. (Although we'll just look at Facebook today, it's highly likely that the same is true of Google and other advertising networks that profit from the sale of keywords.)

Why should we care? Because under the law of many states and of the United States, public figures (and some would say every person) have the right to protect the use of their name and likeness (including images) and often their voice, particularly when corporations seek to trade on their persona commercially without consent (or compensation for that matter).

This protection is typically called the "right of publicity". The right is, if anything, stronger the more famous you are, not weaker. This is particularly true in the commercial setting and especially when someone is actually selling the person's name like Facebook does with keywords. There is nothing abstract about that transaction. (Approximately 22 states recognize the right of publicity in some form including Alabama, Arizona, California, Florida, Hawaii, Illinois, Indiana, Kentucky, Massachusetts, Nebraska, Nevada, New York, Ohio, Oklahoma, Pennsylvania, Rhode Island, Tennessee, Texas, Utah, Virginia, Washington and Wisconsin.)

It's best to view the right of publicity as evolving from privacy rights that draws on but is distinct from other intellectual property rights. The right of publicity is distinct from copyright and is more like unfair competition and misappropriation, or as Professor Nimmer described it, "the reverse side of the coin of privacy." (A good place to start for further reading is "The Right of Publicity" by Professor Nimmer (19 Law & Contemporary Problems 203 (1954)), Professor McCarthy's treatise "The Rights of Publicity and Privacy" and of course the seminal right of publicity case, Haelan Laboratories v. Topps Chewing Gum, 202 F2d 866 (2d Cir. 1953).)

There is a long line of legal cases involving misappropriation of the right of publicity in the advertising setting, particularly cases where the infringer knew that the artist did not want to perform in a commercial and contrived to invoke the artist's persona by using a soundalike.

In two well known cases, the advertiser approached the artist to perform on a commercial, the artist declined, and the advertiser got a soundalike singer to invoke the artist's voice anyway. (Midler v. Ford Motor Co. 849 F.2d 460 (9th Cir. 1989) (misappropriation of Bette Midler's voice) and Waits v. Frito-Lay, Inc. 978 F.2d 1093 (9th Cir. 1992) (misappropriation of Tom Waits' voice.) The advertisers lost.

Rev. Martin Luther King, Jr.'s image was misappropriated in a similar situation where a company sought permission to manufacture a plastic bust of Rev. King and was denied by the King estate, but did it anyway. (See Martin Luther King, Jr. Center for Social Change, Inc. et al v. American Heritage Products, Inc. et al 296 S.E.2d 697 (Ga. 1982) and 694 F.2nd 674 (11th Cir. 1983).) The 11th Circuit held for the King estate based on the Georgia Supreme Court's interpretation of Georgia's right of publicity including the ability of heirs to assert the rights of a deceased person.

Another case along these lines that involved the misappropriation of a celebrity's persona was brought by the Wheel of Fortune personality Vanna White (White v. Samsung Electronics America, Inc., 971 F.2d 1395 (9th Cir. 1992)). The defendant in that case produced an ad featuring a robot that invoked the persona of Vanna White. (Query whether "Wheel of Fortune" producers should have sued as well, but leave that to one side.)

So what does this mean for Facebook? Facebook has evidently approached the problem Silicon Valley style--take, use, profit, IPO and then litigate if anyone complains.

Well, Bette Midler, Tom Waits, Rev. King and Vanna White should all feel included in the discussion as all of their names are available as keywords for sale on Facebook. Facebook clearly has significant misappropriation risk from infringing the right of publicity of a host of artists and celebrities, or, one might say a "class" of artists and celebrities (including estates). How do we know that?

One way we know is because Facebook says it does. In Facebook's 2015 annual report Facebook tells stockholders in the Risk Factors (at p. 6):

We are subject to a number of U.S. federal and state and foreign laws and regulations that affect companies conducting business on the Internet. Many of these laws and regulations are still evolving and being tested in courts, and could be interpreted in ways that could harm our business. These may involve user privacy and data protection, rights of publicity, content, intellectual property, advertising, marketing, distribution, data security, data retention and deletion, personal information, electronic contracts and other communications, competition, protection of minors, consumer protection, telecommunications, product liability, taxation, economic or other trade prohibitions or sanctions, securities law compliance, and online payment services. In particular, we are subject to federal, state, and foreign laws regarding privacy and protection of people's data. Foreign data protection, privacy, and other laws and regulations can be more restrictive than those in the United States. U.S. federal and state and foreign laws and regulations, which in some cases can be enforced by private parties in addition to government entities, are constantly evolving and can be subject to significant change.

Misappropriation of the right of publicity as practiced by Facebook is not "constantly evolving"--it's well settled law. It's unlikely that Facebook will be able to take advantage of the "Because Internet" defense, either. Doing an unlawful thing doesn't become lawful because you do it a lot. Like so many other offline transactions that are replicated online, the essential elements don't change. If anything, it's not even a close case in my view.

Facebook takes the artist's name and sells it without permission and they acknowledge that they have the risk (because their senior management and lawyers know that Facebook is doing it--they acknowledged the risk in Facebook's annual report to stockholders and the Securities and Exchange Commission). And Facebook's management has known about it for a long time--essentially the same language appears in the Facebook annual reports for 2014 (at p. 7), 2013 (at p. 10) and 2012 (at p. 13) which is the first year that Facebook filed a public annual report after its IPO. I would bet that the Facebook pre-IPO investor reporting to its private company investors probably had the same or similar language.

So Facebook's senior management does know what they are doing. And we haven't even mentioned the moral rights of artists yet.

For a company that is entirely unlicensed on its uses of music, Facebook is starting to look like a blatant infringer of a host of artist rights. Mark Zuckerberg recently announced he was planning on traveling to the 50 states to see how the 99.999% live. Before he packs a sandwich for the trip, he should look into his company's advertising practices--starting with one he acknowledges to his investors--the misappropriation of the right of publicity.

And then he could think about getting licenses for the music he uses on Facebook every minute of every day. But that's a story for another day.

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