Lawyers Take Hold Of Blogging

After more than our share of public blood lettings in the blogsphere as a result of employee bloggers running afoul of their corporate parents, it is not surprising that companies are starting to issue blogging guidelines. The issue is a real one but until recently it was a small and isolated problem. But if ever there was an indication of the increasing prevalence of corporate blogging, it can be found in the email alert I just received from the Howard Rice law firm. The email alert was entitled "Corporate Blogging: Seize the Opportunity, but Control the Risks" and it laid out both the legal risks raised by corporate bloggers and some "practical guidance" for dealing with those risks. In fact, when I spoke with the Howard Rice lawyers who issued the alert, they said that they were rapidly developing an "expertise" in the law surrounding blogging and would be issuing additional blogging alerts in the future.

Blogging is indeed mainstream when legal practices emerge around it -- which is not to say that the advice Howard Rice gives isn't well taken. As a former lawyer, I couldn't help but spend a bunch of time thinking about the legal implications of blogging on my professional life before we started VentureBlog. As a result, I ended up drafting one of the first blog Terms of Service out there (who knows, maybe it was the first -- I couldn't manage to find anyone else's to plagiarize at the time I was drafting VentureBlog's). More importantly, we also spent a chunk of time talking with the whole August Capital partnership about blogging and how it might implicate the partnership either directly or indirectly. While we obviously concluded that the benefits of blogging greatly outweighed the risks, it was extremely helpful to go into it with eyes wide open and clearly set expectations within my "company."

Given all that, let me share with you Howard Rice's Risks and Guidance around corporate blogging:

While corporate blogs offer novel opportunities, they also present significant legal risks. Companies that anticipate these issues and plan accordingly can reap the benefits of corporate blogging while reducing the risk of litigation. Among the legal issues raised by corporate blogging are:

Defamation and Privacy Torts. Companies may be held liable if their employees post content to the corporate blog that defames or invades the privacy of third parties.

Intellectual Property Infringement. Posts that include a third party's intellectual property, such as copyrighted material or trademarks, may expose the company to liability for infringement.

Trade Libel. False or misleading statements made on a corporate blog about the goods or services of a competitor that cause or are likely to cause the competitor harm may be grounds for a trade libel action.

Trade Secrets. Inadvertent disclosure of company trade secrets on a company blog can destroy the "secret" status of such information, rendering it ineligible for trade secret protection, and disclosure of a third party's trade secrets could expose the company to liability for trade secret misappropriation.

Securities Fraud. Material misstatements made on a company blog could expose a publicly traded company to liability for securities fraud under Rule 10b-5.

Gun-Jumping. While a company is in registration, statements made on a company blog "hyping" the company could be deemed a prohibited offer of the company's securities, in violation of federal securities laws.

Selective Disclosure. Disclosure of material nonpublic information on a publicly traded company's blog could be deemed a prohibited selective disclosure under federal securities laws.

Forward-Looking Statements. Failure to include appropriate cautionary language accompanying a forward-looking statement on a reporting company's blog could cause the statement to fall outside the statutory safe harbor for such statements.

Employment Issues. Companies that terminate employees for posting inappropriate content to corporate blogs may be sued for wrongful termination, with plaintiffs claiming that the employer authorized the posting is discriminating against them for exercising their right to organize, or is violating their free speech rights. (Similar issues arise when an employee is terminated based on the content of the employee's personal blog, or the content of instant messages or email sent by the employee.)

User Privacy. Companies that collect personal information from individuals who visit or post comments to the blog may be required to comply with state, federal and foreign privacy regulations.

Discovery. Companies can be sanctioned in the course of discovery for failure to produce archived blog content.

Practical Guidance

To minimize the risks, companies should carefully consider their blogging strategy and take proactive steps to minimize potential exposure. Such steps may include:

Creating a written policy for employees that sets out clear guidelines for corporate blogging and raises awareness about possible pitfalls. Companies may wish to have separate guidelines for employees' discussion of the company in their personal blogs.

Establishing terms of use for the corporate blog and posting appropriate disclaimers that limit the company's liability for third-party statements and other claims.

Regularly monitoring the corporate blog for content that violates terms of use, employee policies or applicable laws.

Taking the steps required to qualify for the safe harbors available under the Digital Millennium Copyright Act.

Ensuring that any personal information gathered from users via the corporate blog is handled in compliance with applicable privacy laws and the applicable privacy policy.

Archiving corporate blog content in a well-organized and readily available form."

All fine advice for sure (particularly in light of the not insignificant perils corporations clearly face with bloggers). That said, the problem for corporations is that blogging isn't under centralized control. Much like the problem of rogue access points in an enterprise, bloggers can pop up anywhere on the grid and, despite clearly stated policies, create risks for the corporation. Even in those circumstances where a company is fully aware of a blogger in its midst, it can run significant political, competitive or legal risks from the things that the blogger chooses to write. I'm sure I'm not the only one who keeps waiting for the other shoe to drop on our good friend Mr. Scoble. Despite all that, it is clear that blogging is here to stay, so I'm sure we'll be seeing a lot more advice from the folks at Howard Rice and every other law firm for that matter. When the stakes are high, the lawyers come rolling in from all directions.

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[D Posadas]

A better way might be to adopt a set of generally accepted principles for blogging.

by Dennis Posadas

author, Rice Bowl & Chips

How Asian countries are using the Silicon Valley

model to develop technology startups

(ISBN 0-595-34583-2)

http://www.ricebowlandchips.com

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