Owning Social-Media Accounts

Does a business or organization-related social media account belong to the business entity or to the individual who created it?

The Second Circuit has held that this novel legal question should be answered based on whether the person who created the social media account used her personal information and for her personal use. JLM Couture Inc. v. Gutman, Nos. 21-2535 and 22-1694, — F.4th — (2d Cir. Jan. 17, 2023). If so, then the social media account belongs to her, “no matter how the Disputed Accounts may have been used later.” Id.

The next question would be whether the business entity subsequently took ownership such as by operation of a contract.

Traditional principles of property law guide this analysis. Thus, the fact that Gutman transferred some or all of her rights in particular content posted on the Disputed Accounts does not by itself support an inference that she transferred ownership of the Disputed Accounts themselves.  Nor should it ordinarily matter to the question of ownership whether an account owner permits others to assist in managing the account, or whether one or the other party holds itself out as owning it. See, e.g., Meisels v. Meisels, 630 F. Supp. 3d 400, 411 (E.D.N.Y. 2022) (management of rental property not probative of ownership); Porter v. Wertz, 53 N.Y.2d 696, 698 (1981) (permitting suit for recovery of a painting purchased from a middleman who lacked authority to sell the painting). Determining ownership by reference to such principles would promote transfer by surprise and complicate contractual arrangements under which an account owner might agree to advertise another’s goods on his or her platform.

The Court noted that the contract at issue between JLM and Gutman identified “designs, drawings, notes, patterns, sketches, prototypes, samples, [and] improvements to existing works” as the property of JLM and not Gutman. But the Court noted that these terms pertain to “the process of fashion design and capture much (if not all) of the creative output that Gutman might produce in her role as a designer” which appear to be presumptively copyrightable—and that social media accounts “by contrast share none of these core attributes.”

            To summarize: the analysis of social-media-account ownership begins where other property-ownership analyses usually begin—by determining the account’s original owner. The next step is to determine whether ownership ever transferred to another party. If a claimant is not the original owner and cannot locate their claim in a chain of valid transfers, they do not own the account.

The Court noted that two other cases in other jurisdictions had adopted a six-factor test—In re CTLI, LLC, 528 B.R. 359 (Bankr. S.D. Tex. 2015), and International Brotherhood of Teamsters Local 651 v. Philbeck, 464 F. Supp. 3d 863 (E.D. Ky. 2020). The CTLI and Philbeck courts’ analyses focused on common factors pertinent to the determination of whether a business or organization-related social media account belongs to the entity or to the individual who created it. Those factors include: (1) whether the account handle reflects the business or entity name; (2) how the account describes itself; (3) whether the account was promoted on the entity’s advertisements or publicity materials; (4) whether the account includes links to other internet platforms of the entity; (5) the purpose for which the account was used, including whether it was tied to promotional or mission-oriented activities of the entity; and (6) whether employees or members of the entity had access to the account and participated in its management. But this six-factor test did not apply New York law and was not adopted by the Second Circuit.

PS: Professor Eric Goldman noted that “a decade ago, a number of states passed laws banning employers for asking for employees’ social media login credentials–without defining when an account was the employee’s or the employer’s. A decade later, we still have no clue even how to decide who is the proper owner of the account.”

 

Thomas P. Howard, LLC litigates nationwide including in Colorado.