March 13, 2013
Ex-Employer's Hijacking of a LinkedIn Account Is a Publicity Rights Violation--Eagle v. Morgan
[By Venkat with comments from Eric]
Eagle v. Morgan, 11-4303 (E.D. Pa. Mar. 12, 2013)
We’ve previously covered this dispute over a LinkedIn account. (See Another Set of Parties Duel Over Social Media Contacts; Battle Over LinkedIn Account Between Employer and Employee Largely Gutted.) Surprisingly, the case went to trial! Although the court finds that plaintiff adequately proved several of her claims (an impressive feat, given that she proceeded pro se), she ultimately loses the case. The court declines to award damages, finding that she did not prove any with reasonable certainty.
Background: Eagle founded Edcomm with Clifford Brody. In 2010, a company bought Edcomm. Although the purchaser retained the three founders of Edcomm, they were ultimately terminated. The present dispute focuses on Edcomm’s use of Eagle’s LinkedIn account following her termination.
The court discusses, in some detail, Edcomm’s approaches to LinkedIn accounts. During Eagle’s tenure, the company encouraged the creation and use of LinkedIn accounts. Interestingly, although the executives were aware of and discussed the ownership issues surrounding use of these accounts, Edcomm did not adopt any policy that would advise employees that LinkedIn accounts were the property of Edcomm. [The court cites to a fascinating email exchange where the principals debate the merits of the ownership arguments, and whether the company policy that it would own all data on company hardware would adequately resolve the issue of account ownership (answer: no).]
Interestingly, Eagle provided her LinkedIn password to other Edcomm employees who assisted with responding to invitation requests and maintaining the account. This came back to haunt her, as the employees who remained with the company following Eagle’s termination continued to use the account and locked her out of it. Edcomm (sans Eagle) had control of the account between June 20, 2011 (the date of Eagle’s termination) and July 6, 2011. LinkedIn then took control of the account, presumably at Eagle’s request, and she regained control of the account by July 14, 2011.
During the time period when Edcomm used the account following Eagle’s termination, it did not overtly state via the LinkedIn account that Eagle was no longer with the company. However, Edcomm swapped out the bulk of Eagle’s information for the details of Sandi Morgan, the interim CEO of Edcomm. Eagle’s custom URL remained, and the profile was accessible “via linkedin.com/in/lindaeagle.” Therefore, people who were looking for "Linda Eagle" via LinkedIn (or perhaps even a search engine) would be directed to Eagle's account which now contained largely Morgan's information.
Unauthorized use of name under 42 Pa. C.S. 8316: The court says that Eagle adequately states a claim under the Pennsylvania statute that protects a person’s commercial interest in their name or likeness. The court says that Eagle's name clearly has commercial value, given that she has wide acclaim and appears to be a thought leader in the space. The court also says that Edcomm “used” her name:
[a]n individual conducting a search . . . for Dr. Eagle . . . by typing in “Linda Eagle,” would be directed to a URL for a web page showing Sandi Morgans name, profile and affiliation with Edcomm Group Banker’s Academy. In other words, by looking for Dr. Eagle, an individual would unwaringly be put in contact with Edcomm despite the fact that Dr. Eagle was no longer affiliated with Edcomm and did not consent to Edcomm’s use of her name.
Invasion of privacy/misappropriation of identity and misappropriation of publicity: The court largely relies on similar reasoning to find that Eagle adequately states a claim for invasion of privacy by “misappropriation of identity” and for misappropriation of publicity:
[the search results] clearly provided promotional benefit for Edcomm and constitutes misappropriation of [Eagle's] name for commercial use.
Identity theft: Identify theft under the Pennsylvania statute requires “possession or use [of] identifying information or another person . . . to further any unlawful purpose.” The court says that Edcomm only used information that was publicly available. Interestingly, the court does not discuss whether use of the password constitutes identity theft. Also, the court points out that the “honors and awards” portion of Eagle’s LinkedIn page could not be identifying information. In the process, the court states:
in all logic, a person directed to [Dr. Eagle’s page] could not reasonably believe that the page was intended to identify Dr. Eagle. Rather, a reasonable individual, while perhaps confused as to how he or she arrived at this page, would have no doubt that the page belonged to Ms. Morgan and was describing Ms. Morgan’s resume.
[Every now and then I come across language that seems like it’s judicially trolling Professor Goldman. This is a prime example of this.]
Conversion: The court says that the tort of conversion is somewhat limited under Pennsylvania law when it comes to intangible property. While other courts have held that things like domain names (and even Twitter accounts) can be converted, the court says that under Pennsylvania law conversion is only available where the intangible rights are “customarily merged in, or identified with, a particular document (for example, a deed or a stock certificate).” This is not the case here. (Again, the court does not discuss the possibility of the password being converted.)
Interference with contract: The court says that Eagle has established the elements of interference with contract (the contract between her and LinkedIn). The only problem is that she fails to satisfy the element of damages. In discussing this cause of action, the court also notes that the agreement was between her in her individual capacity and LinkedIn, and not between Edcomm and LinkedIn.
Damages: After finding that Eagle adequately proved the bulk of her existing causes of action, the court concludes that she has not proven her entitlement to compensatory damages. First, the court says that she has not established damages with reasonable certainty. She relied on an interesting formula that apportioned the total (historical) revenue she generated across her LinkedIn accounts, and like the parties in the Twitter account case, came up with a per month per “connection” damage figure. However, the court says that she falls short in failing to show that she actually generated the revenues through her contacts:
Aside from her own self-serving testimony that she regularly maintained business through LinkedIn, Plaintiff failed to point to one contract, one client, one prospect, or one deal that could have been, but was not obtained during the period she did not have full access to her LinkedIn account. Indeed, the very real possibility exists that even with full access to her LinkedIn account, she would have not made any deals with any of her contacts during the time period in question.
The court says that she fails to show a reasonably fair basis for calculating her damages. She did not retain an expert, and only presented the testimony of her co-founder Clifford Brody. He admitted to “guestimating” on the damages, and more importantly “failed to connect Dr. Eagle’s successful sales with any use of LinkedIn . . . “
The court also declines to award punitive damages, saying that it was just as reasonable to conclude that Edcomm was acting to protect its property (or what it perceived as its property) rather than acting to harm plaintiff. On this basis, the court says Eagle fails to satisfy her burden on entitlement to punitives.
Edcomm’s counterclaims: The court also rejects Edcomm’s counterclaims.
First, it argued that Eagle committed misappropriation when she continued to use her account. The court says no:
Edcomm never had a policy of requiring that its employees use LinkedIn, did not dictate the precise contents of an employee's LinkedIn account, and did not pay for its employees' LinkedIn accounts. Indeed, as noted above, the LinkedIn User Agreement expressly states that Plaintiff's account is between LinkedIn and the individual user. Edcomm did not itself maintain any separate account. Moreover, Edcomm failed to put forth any evidence that Eagle's contacts list was developed and built through the investment of Edcomm time and money as opposed to Eagle's own time, money, and extensive past experience . . . .
The court also rejects its unfair competition claim, saying that apart from misappropriation (that the court rejects) Edcomm does not identify any other basis for how she unlawfully or improperly competed by using the LinkedIn account.
This is a pretty interesting end to a wide-ranging dispute that spanned several lawsuits and jurisdictions.
There is so much to take away from this dispute:
- it’s a demonstration again of the difficulty of slotting things like LinkedIn accounts into existing regimes of intellectual property.
- It’s also a good illustration of how helpful an employer's social media policy can be, although policies may not always resolve the issues.
- Personality rights and trademarks are a good hook for plaintiffs, and continuing to use the name of an ex-employee (if you are a company) or mark of a company (if you are a contractor) in an account can be risky, absent contractual authorization.
- Possession of the password is important, and password-sharing is risky activity, no matter what the context.
- Would social media password legislation have resulted in a different resolution? Tough to say, although Edcomm would likely have been reluctant to ask for and use the password post-termination.
- As Eric mentions below, identify theft statutes can be broadly worded. The court correctly rejects plaintiff's argument in this case that Edcomm violated the statute, but I expect plaintiffs will continue to rely on this argument.
I’m curious about two things factually that the court does not delve into. First, how easy would it have been for Edcomm to have changed the vanity URL? Second, I’m curious about the process through which Eagle regained control of her account.
The court’s finding that Eagle adequately asserted a publicity rights claim is interesting in that it relies on the fact that end users would be routed to her account while searching for her. On the one hand, the court says that users will be "unwaringly" directed to her profile, but on the other hand, the court says that there’s no way users will be confused, since Edcomm replaced the bulk of Eagle’s account details. The court does not cite to the recent Wisconsin decision involving keyword ads and personal names (nor does it discuss the Stayart case). The Wisconsin case is slightly distinguishable since there the name was an invisible trigger (and deals with Wisconsin’s statute, which probably differs from Pennsylvania’s), but still somewhat analogous I thought. The court could have just found that she did not state a claim to begin with, but perhaps took the “no damages” route as this rationale would better insulate the court’s decision against appellate review. Either way, the court’s ruling shows the broad reach of personality and publicity type statutes and claims and their possible applicability to these types of disputes. (See also Maremont v. Fredman Design Group.)
Above all, perhaps it's a good illustration of the fact that these lawsuits may not be worth it from an economic standpoint. The extent to which Eagle overstated the economic importance of her LinkedIn account was also interesting, almost bizarre. There is some value in being able to get in touch with someone and for a person to advise their network on what is going on with them professionally, but the likelihood of actually depending on LinkedIn and using it to generate revenue seems like a stretch to me. In any event, the court was not sold, based on the available evidence, that this was the case for Eagle's account. It's worth mentioning again that the account was under Edcomm's control for a relatively short period of time, and this could have driven the ruling on damages. It's possible the outcome may have been different if it took over and continued to use the account.
A final follow-up thought. In the old days, non-competes were a classic term that should be addressed by the parties in the context of any acquisition. I would probably add treatment of social media assets and accounts to this. I wonder if the acquisition agreement contained a non-compete agreement. I'm guessing the answer is no, given that the court did not mention it.
Although I have some quibbles, overall I think Judge Buckwalter did a commendable job with this case. Having recently raised some questions about a prior ruling of his, I thought he deserved props for his navigation of the issues.
Some highlights from the case:
1) One of the most shocking things I read in a judicial opinion recently: "As the CEO at the time, Brody found that "LinkedIn was awesome" for marketing, and he testified enthusiastically about it." Holy cow, someone actually found a good use for LinkedIn!!! Just kidding, I actually find LinkedIn quite useful in a number of contexts, and I certainly like it better than Facebook.
2) David Shapp, the company's senior vice president, tried to play junior lawyer and failed miserably--twice! Shapp first took the position that the company owned Eagle's LinkedIn account because it "owns all data on its hardware, including email archives." This isn't true, and it's factually inapplicable as LinkedIn is a pure cloud-based server. When Brody noted the latter point, Shapp then argued a former employee "cannot use [the LinkedIn] account because she does not own the email address that opened it." Also not true legally or factually. These kinds of mistakes are common when folks play junior lawyer. However, Shapp was closer to the truth when he says that the company can use a former employee's LinkedIn account so long as "we do not pretend to be her." Which is exactly what Edcomm did with Eagle's account when it edited the profile with Morgan's data. Whoops.
3) The judge says "the LinkedIn User Agreement clearly indicated that the individual user owned the account." In support of this, the judge cites the following language: "If you are using LinkedIn on behalf of a company or other legal entity, you are nevertheless individually bound by this Agreement even if your company has a separate agreement with us." Am I missing something? I don't see this language as saying the employee owns the account. I see it as LinkedIn trying to hold both the employee individually and the company accountable for any misuse.
4) I was pleased to see the judge reject the identity theft claim. We've previously complained about overexpansive interpretations of identity theft laws (see, e.g., Rolando S and State v. Madrigal) but the court steers clear of the pitfalls. However, the case turns on the legitimacy of Edcomm's possession of the LinkedIn log-in credentials--a potentially perennial issue under California's restriction of employers' ability to ask for employee log-in credentials.
5) I was also pleased to see the judge reject the conversion claim. We've seen other judges misunderstand the interplay between conversion, IP protection and chattels vs. intangibles, but Judge Buckwalter nails it.
6) Although the opinion doesn't say this so expressly, the opinion implicitly concludes that Dr. Eagle's LinkedIn profile is advertising for publicity rights purposes, such as that misusing the profile constitutes a commercial use of her personality. This gets into some sticky areas. For example, some state bars are taking the position that a lawyer's profile on LinkedIn is attorney advertising. If so, then the new LinkedIn feature allowing for "endorsements" of a person's "skills and expertise" could constitute unlawful attorney advertising (see this discussion from South Carolina). It's not automatic that a finding that a LinkedIn profile is advertising for publicity rights purposes means that it will be advertising under other legal doctrines, but still, that issue isn't going away any time soon.
7) We've maintained all along that litigation battles over social media accounts are economically irrational. This case provides further support for that proposition. Here, Dr. Eagle makes a prima facie showing of a publicity rights violation and still gets nothing.
Added: a post from Jeffrey Gross, who represented Eagle in an earlier phase of the case "Court Rules That LinkedIn Account Belongs to Employee, and not Employer"
Previous posts on this case:
Posts on other social media ownership cases:
Employer Fails to State Stored Communications Act Claims Absent Allegations That Employees Interfered With Company Accounts – Castle Megastore v. Wilson
Facebook Posts and Twitter Invites Don't Violate Non-Solicitation Clause -- Pre-Paid Legal v. Cahill
Employee/Ex-Employer Lawsuit Over Twitter Account Settles – Phonedog v. Kravitz
Court Denies Kravitz’s Motion to Dismiss PhoneDog’s Amended Claims -- PhoneDog v. Kravitz
An Update on PhoneDog v. Kravitz, the Employee Twitter Account Case
Employee's Claims Against Employer for Unauthorized Use of Social Media Accounts Move Forward--Maremont v. SF Design Group
Courts Says Employer's Lawsuit Against Ex-Employee Over Retention and Use of Twitter Account can Proceed--PhoneDog v. Kravitz
Ex-Employee Converted Social Media/Website Passwords by Keeping Them From Her Employer--Ardis Health v. Nankivell
Court Declines to Dismiss or Transfer Lawsuit Over @OMGFacts Twitter Account -- Deck v. Spartz, Inc.
Employee's Twitter and Facebook Impersonation Claims Against Employer Move Forward -- Maremont v. Fredman Design Group
MySpace Profile and Friends List May Be Trade Secrets (?)--Christou v. Beatport
Eric’s talk notes: "Social Media and Trademark Law"
Posted by Venkat at March 13, 2013 12:30 PM | Publicity/Privacy Rights