IP: Having Facebook fans doesn’t count as business expectancy

Facebook can take down your company’s page if another party complains of infringement

Online social media has transcended personal use and become a marketing mainstay for businesses across all industry sectors. Sites such as Facebook, LinkedIn, and Twitter allow businesses real-time direct access to consumers, and provide consumers with a voice and an audience for their opinions about products and brands.

While the opportunities for business use of social media are apparent, some of the challenges may not be. For example, it can be difficult for a business to acquire a desired social media user name because, unlike identical trademarks that can co-exist as long as there is no likelihood of confusion, e.g., Delta airlines and Delta faucets, there can be only one @thegreatestlawyer on Twitter. A business also faces the challenge of monitoring and managing its online reputation, which is made increasingly difficult by the proliferation and importance of user reviews. Finally, as with cloud computing, users of social media are dependent upon a third party to protect their data, to provide a stable platform from which they can spread their messages and to allow continued access to the their sites.

It was this last challenge with which Piggy Paint, LLC, was confronted recently. Piggy Paint sells nail polish and nail polish remover under the mark ”Piggy Paint Natural as Mud”, for which it owns a federal trademark registration. Lown Companies, LLC owns a federal trademark registration for the mark ”Piggy Polish” for use with “nail polish.” Lown sued Piggy Paint for trademark infringement, and it also complained to Facebook about Piggy Paint’s alleged trademark infringement on Piggy Paint’s Facebook page. In response to Lown’s complaint, Facebook took down Piggy Paint’s Facebook page. Piggy Paint had approximately 19,000 Facebook fans.

Internet service providers and providers of interactive computer services enjoy broad immunity from liability for restricting access to content and terminating user accounts. Rather than pursuing a claim against Facebook, Piggy Paint filed a counterclaim against Lown, alleging tortious interference with a business expectancy as a result of Lown’s complaint to Facebook and Piggy Paint’s Facebook page being taken down.

A claim for tortious interference under the laws of many states, including Michigan where the case was filed, contains as elements:

  1. The existence of a valid business relationship or expectancy
  2. An intentional interference by the defendant inducing or causing a breach or termination of the relationship or expectancy.

In holding there was no tortious interference, the court first reasoned that contacting a third party over a legitimate business concern cannot form the basis of a tortious interference claim. Rather than relying on the absence of an intentional interference to support its holding of no tortious interference, the court went on to conclude that Piggy Paint failed to show any valid business expectancy, despite its approximately 19,000 Facebook fans. It is this last rationale that is most concerning for businesses social media users.

There are numerous benefits to relying on a Facebook page as a company’s primary presence on the web. In making the decision to do so, however, the risk of having the account terminated must be taken into consideration as evidenced by the Piggy Paint case, which was not a clear case of trademark infringement. Conversely, the Piggy Paint case also illustrates the value of a federal trademark registration in attacking a third party site that contains allegedly infringing content. Most service provider complaint procedures require the complainant to establish it has valid intellectual property rights that form the basis of its complaint. A federal trademark registration is an effective means for doing so. 

Contributing Author

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Michael Smith

Michael T. Smith is of counsel at Birch Stewart Kolasch & Birch. He has practiced in the intellectual property field since 2001, focusing his practice...

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