Rebecca Emerson-6 by nuhman10

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									THE RISKS AND REWARDS OF CORPORATE BLOGGING



                       Written By

                  Rebecca F. Emerson

             A Third Year Law Student at
         Temple University Beasley School of Law
                                            Introduction

          For better or worse, blogs1 are changing the face of corporate marketing. Debbie Weil,

author of BlogWrite for CEOs, states that “(i)t‟s the end of marketing, advertising and corporate

communications „as usual.‟” Weil posits that blogs are no longer an optional part of the

corporate marketing mix.2 Blogs can surpass traditional forms of marketing, advertising, and

corporate communications at informing, influencing, and persuading people both inside and

outside a company.3 Business blogs also provide a less expensive and less time consuming way

to reach existing and potential new customers than traditional advertising methods.4 They level

the playing field by giving both larger established corporations and smaller newer companies an

equal opportunity to connect to their audiences on a personal level, build relationships, and

collect valuable feedback.5 Successful blogs can be very influential and have enormous

readership.6




1
 “A blog is a website where entries are made in a journal style and displayed in a reverse
chronological order.” Blog, Wikipedia, http://en.wikipedia.org/wiki/Blog (last visited Oct. 11,
2006). The term blog is a contraction of web and log. Id.
2
    Id.
3
    Id.
4
 Rich Ord, The Blog Marketing Explosion, WebProNews.com,
http://www.webpronews.com/2004/1005.html (Oct. 10, 2004).
5
 Corporate Blogging: Is it Worth the Hype?, Backbone, http://www.backbonemedia.com/
blogsurvey/index.html (last visited Oct. 14, 2006).
6
    About Technorati, Technorati, http://www.technorati.com/about/ (last visited Oct. 12, 2006).



                                                  1
           Blogs are not just for techies anymore; they have become a popular means for

disseminating factual information.7 Wikipedia8 tells us that modern blogs evolved in the 1990s

from early forms of online diaries, where people kept a running account of their personal lives.9

By 2001, blogging had grown into such a phenomenon that people published how-to manuals on

blogging.10 In 2002, bloggers showed their political clout when they broke the story about

United States Senate Majority Leader Trent Lott‟s comments that appeared to sanction racial

segregation.11 Bloggers dug up old documents and recorded interviews and helped create the

political pressure that forced Lott to step down as majority leader.12 The power of blogs was

apparent again in 2004 when blogs were the driving force behind the “Rathergate” scandal.13



7
 Debbie Weil, We’re at the Inflection Point for Corporate Blogging, BlogWrite for CEOs,
http://www.blogwriteforceos.com/blogwrite/2006/10/the_inflection_.html (Oct. 10, 2006). See
also Blog, supra note 1 (stating that the role of blogs became increasingly mainstream in 2004 as
political consultants, news services and candidates began using them as tools for outreach and
opinion forming).
8
 “Wikipedia is a multilingual, Web-based free content encyclopedia project. The name
Wikipedia is a blend of the words wiki and encyclopedia. Wikipedia is written collaboratively by
volunteers, allowing most articles to be changed by almost anyone with access to the website.”
Wikipedia, Wikipedia, http://en.wikipedia.org/wiki/Wikipedia (last visited Oct. 19, 2006).
9
    Blog, supra note 1.
10
     Id.
11
  Lott praised United States Senator Strom Thurmond by suggesting that the United States
would have been better off had Thurmond been elected president, which Lott‟s critics saw as
approval of racial segregation because Thurmond had advocated it in his 1948 campaign. Id.
12
     Id.
13
  Id. Television journalist Dan Rather presented documents on 60 Minutes (CBS television) that
appeared to conflict with accepted accounts of United States President George W. Bush‟s
military service record, but bloggers presented contrary evidence declaring the documents were
forgeries, and CBS was forced to retract the story and apologize for inadequate reporting
techniques; Dan Rather retired in the wake of the story. Id.



                                                  2
Blogs have gained credibility through these stories.14 In fact, blogs are so widespread and

popular today that a news station advertises its sports blog,15 a tourist blogs from space,16 a

princess blogs,17 and CEOs blog.18 Courts are even beginning to cite to blawgs19 as persuasive

authority.20 Millions of blogs exist today21 in what is often called the blogosphere.22 Blogs are



14
     Blog, supra note 1.
15
  Eagles Blog, NBC10.com, http://www.nbc10.com/eaglesblog/index.html (last visited Oct. 19,
2006).
16
  Anousheh Ansari Space Blog, Yahoo! Picks, http://picks.yahoo.com/picks/i/
20060930.html (Sept. 30, 2006).
17
   Thai Crown Princess Launches Royal Blog, Telecomasia.net, http://www.telecomasia.net/
article.php?type=article&id_article=1965 (Oct. 4, 2006).
18
   See e.g. Sun Brings the Cheap Revolution to Supercomputing, Jonathan‟s Blog,
http://blogs.sun.com/jonathan/ (Oct. 4, 2006) (blogging of Jonathan Schwartz, CEO Sun
Microsystems, Inc.); John Mackey, The CEO’s Blog – John Mackey, Whole Foods Market,
http://www.wholefoodsmarket.com/blogs/jm/ (last visited Oct. 14, 2006) (blogging of John
Mackey, CEO of Whole Foods Market).
19
  Blawgs are blogs written by lawyers about legal issues. Patrick Robben, Welcome to the
Blogosphere, A Primer for Business Lawyers, 15-JUN BUS. L. TODAY 43, 43 (2006).
20
   As of September 29, 2006, nine different legal blogs have been cited in 27 different cases for a
total of 34 citations to legal blogs. Addendum to Cases Citing Legal Blogs, 3L Epiphany,
http://3lepiphany.typepad.com/3l_epiphany/definitions/index.html (Sept. 29, 2006).
21
   On October 12, 2006, Technorati reported that there were 56.7 million blogs worldwide and on
October 19, 2006, one week later, they reported the number to be 57.4 million blogs, an increase
of 700,000 blogs in one week. About Technorati, Technorati, http://www.technorati.com/about/
(last visited Oct. 19, 2006). Technorati is the Google of blogs; it is an internet search engine
focused on helping people search for, find, and organize blogs. Id.
22
   Robben, supra note 19, at 43. Wikipedia defines Blogosphere as “the collective term
encompassing all blogs as a community or social network. Many weblogs are densely
interconnected; bloggers read others' blogs, link to them, reference them in their own writing,
and post comments on each others' blogs. Because of this, the interconnected blogs have grown
their own culture.” Blogosphere, Wikipedia, http://en.wikipedia.org/wiki/Blogosphere (last
visited Oct. 19, 2006).



                                                  3
the most explosive new development in the information world since the internet23 and businesses

ignore them at their peril.24

           Marketing executives are touting the benefits of corporate blogging, however, even if a

business chooses not to sponsor an official corporate blog, chances are many of its employees are

already blogging, either at work or at home. Businesses may or may not like what employees are

saying.25 Disgruntled employees may be anonymously posting “critical, false, disparaging, or

confidential information” on the internet with potentially expensive consequences.26 Anti-

employer blogging may create negative publicity damaging the company‟s stock price, trade

secrets maybe disclosed leading to lost profits, and a company may be liable for an employee‟s

disparaging statements if the employee was blogging on company computers.27 Many

businesses are beginning to address these concerns by monitoring employee blogs28 and by




23
   Stephen Baker and Heather Green, Blogs will Change your Business, BusinessWeek Online,
http://www.businessweek.com/magazine/content/05_18/b3931001_mz001.htm (May 2, 2005).
24
   Blogs fill the spectrum from widely read and trusted commentary to useless silly banter.
However, because the number of blogs is so huge, even if 99.99% of blogs are meaningless, that
still leaves 5,740 useful blogs or about five posts an hour that could be talking about a given
business‟ new products, a poisonous e-mail from the CEO, or a leek about an upcoming merger
or acquisition. Id.
25
  Konrad Lee, Anti-Employer Blogging: Employee Breach of the Duty of Loyalty and the
Procedure for Allowing Discovery of a Blogger’s Identity Before Service of Process is Effected,
2006 DUKE L. & TECH. REV. 2, *9 (2006).
26
     Id.
27
     Id.
28
 Id.; Elizabeth R. Rita and Eric D. Gunning, Navigating the Blogosphere in the Workplace, 35-
MAY COLO. LAW. 55, 60 (2006).



                                                   4
proactively creating blogging policies.29 Companies that choose to create an official corporate

blog should also address the potential that the CEO blogger or other executive bloggers may

inadvertently infringe a competitor‟s copyright, blurt out a trade secret, defame an industry

insider, misrepresent a product, make inappropriate forward-looking statements or release

company information in violation of strict securities regulations. The law has not caught up with

technology yet in these areas so the rules of the game are unclear.

       This paper addresses the legal issues associated with corporate blogging;30 Part I provides

a brief background on the history of blogging and explains the benefits of corporate blogging.

Part II discusses the key legal risks associated with corporate blogging and suggests company

policies that may help minimize the risks. Part III looks at the big picture and considers what

role the courts and the legislature should play in the development of the law in this area. And,

Part IV concludes with predictions and recommendations for the future of blogging as a

marketing tool.




29
  Id.; Henry Hoang Pham, Bloggers and the Workplace: The Search for a Legal Solution to the
Conflict Between Employee Blogging and Employers, 26 LOY. L.A. ENT. L. REV. 207, 234
(2005-2006).
30
   The legal journals contain numerous articles addressing concerns about employees illicitly
blogging in the workplace or at home. See e.g. William H. Floyd III and James T. Hedgepath,
The Electronic Workplace, 17-MAY S.C. LAW. 37 (2006); Rafael Gely and Leonard Bierman,
Workplace Blogs and Workers’ Privacy, 66 LA. L. REV. 1079 (2006); Paul S. Gutman, Say
What? Blogging and Employment Law in Conflict, 27 COLUM. J.L. & ARTS 145 (2003); Rita,
supra note 39; Matthew E. Swaya and Stacey R. Eisenstein, Emerging Technology in the
Workplace, 21 LAB. LAW 1 (2005); see also Charles Duhigg, World Wide Water Cooler, 2004-
APR LEGAL AFF. 8 (2004) (suggesting that blogging “technology allows gripes about employers
to reach well beyond the water cooler, offering individuals almost unlimited opportunities to rant
publicly about the most mundane topics”). There have also been several articles on the
discovery issues surrounding unmasking negative anonymous bloggers. See e.g. Julie China,
Blogger’s Anonymous, 53-APR FED. LAW 6 (2006); David L. Hudson, Blogs and the First
Amendment, 11 NEXUS 129 (2006). These issues are not the focus of this paper.



                                                 5
                    Part I - Background on Corporate Blogging as a Marketing Tool

           Blogs may revolutionize the way companies communicate with their customers, vendors,

and employees. The marketing industry is evolving dramatically as technological advances offer

new ways to reach customers.31 In fact, marketing concepts are changing so rapidly that there

are daily publications devoted entirely to chronicling the advances.32 Blogs are one of the latest

developments.33 In the words of one commentator, “blogs were the original soapbox on the

web.”34 Marketers have been drawn to blogs because they have the immediacy of broadcast and

the accessibility of print.35 Blogs are cheaper and more fluid than web sites and the content is

quicker and easier to update and manage.36 In addition, authors and fans can archive their ideas

on blogs in ways that e-mail and list serves do not allow.37 Business leaders who use public

speaking to build credibility for themselves and their companies find that blogging presents a

31
   JAY CONRAD LEVINSON, GUERRILLA MARKETING 1 (3rd ed. 1998). In the late 1970s,
marketers spent seventy-five percent of their budgets on traditional advertising such as television
spots, newspaper and magazine advertising, billboards and transit signage. Id at 3. However,
over the next twenty years, marketers reduced spending on traditional advertising to only twenty-
five percent of their budgets with fifty percent going to trade promotions and twenty-five percent
to consumer promotions. Id. The increasing popularity of cable and satellite television, fax
machines, internet connections and e-mail have opened up many new methods for reaching
existing and potential new customers. Id at 2.
32
     Id at 1.
33
  Sarah Kellog, Do You Blog?, DCBar, http://www.dcbar.org/for_lawyers/Washington_lawyer/
april_2005/blogs.cfm (April 2005).
34
     Id.
35
  Just What is a Blog, Anyway?, 3L Epiphany, http://3lepiphany.typepad.com/3l_epiphany/
definitions/index.html (Feb. 20, 2006) (quoting Eric Zorn, Just What is a Blog, Anyway?, USC
Annenberg Online Journalism Review (Sept. 29, 2005)).
36
     Id.
37
     Id.



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less time consuming and less expensive way to reach a broader audience.38 In addition, blogs

offer the power for large and small companies alike to connect with an increasingly message

wary and message weary public in a new and engaging way.39

           Technological advances have increased blogging‟s attractiveness as a marketing tool.

Tech savvy users created early web logs by manually updating regular websites.40 Over time,

technological developments simplified the publishing process and made it available to the

average user.41 Today, blogs use browser-based software and are either hosted by a dedicated

blog hosting service or are run using special blog software on a regular web hosting service. 42

Web feeds, such as really simple syndication (RSS), have the ability to transform home

computers into information hubs.43 In addition, using RSS can improve a website or blog‟s



38
   Blog Marketing Explosion, supra note 4. In fact, blogs may be most closely analogous to a
mega version of Speakers Corner in London‟s Hyde Park, a traditional site for public speeches
and debate. Speaker’s Corner, London Travel and Tourism Guide, http://www.travellondon.com
/templates/attractions/gallery_Speakerscorner.html (last visited Oct. 11, 2006). Anyone can turn
up unannounced and speak on any subject, although they may be heckled by the regulars. Id.
Only discussions of the British Royal Family and the overthrow of the British Government are
forbidden. Id. Tens of thousands of people come to Speaker‟s Corner each year from every
walk of life, every class, and almost every country. Id.
39
   Bill Flitter, Weblogs are Redefining the Traditional Ps of Marketing, Pheedo,
http://www.pheedo.info/archives/000069.html (May 26, 2004 23:53).
40
     Blog, supra note 1.
41
     Id.
42
     Id.
43
   Kellog, supra note 33. The RSS technology allows users to subscribe to their favorite blogs or
even to certain key words and then receive all the relevant postings. Baker, supra note 26.
News aggregators, also known as feed readers, check the RSS feeds and display any updated
articles it finds. Id. Because creating feeds is relatively simple, the ability to present on-page
information to subscribers has been embraced by both business websites and bloggers. Chris
Richardson, RSS Ads A Growing Trend?, WebProNews.com, http://www.webpronews.com/
2004/1028.html (Oct. 28, 2004).


                                                  7
visibility and ability to reach new readers.44 Because of their viral nature, blogs can have a

powerful word-of-mouth effect quickly creating marketing buzz for a product or company.45

           Blogs are here to stay. Experts say that the confluence of technology and current events

this century has “guaranteed the blog‟s superstar status in cyberspace.”46 After the events of

9/11 and the invasion of Iraq, blogs became a popular way for regular citizens to find unfiltered

news and express their views.47 Business Week dubbed the blogosphere the “biggest coffee

house on earth” and Jeff Weiner, Yahoo‟s Senior Vice President of Search, has said that “(n)ever

in the history of market research has there been a tool like this.”48 Bloggers writing on

technology, publishing, advertising, marketing, public relations, and business blogging are

already influencing business decisions.49 The blogosphere is a phenomenon that businesses

cannot afford to ignore, postpone, or delegate.50

           CEOs and other business executives are choosing to blog in ever increasing numbers.51

Currently many of the business executives who have begun blogging come from either




44
     Richardson, supra note 43.
45
   Flitter, supra note 39. Links that appear within subscription feeds are given more importance
in the search engine ranking system. Id.
46
     Kellog, supra note 33.
47
     Id.
48
     Baker, supra note 23.
49
   Rich Ord, Blogs: Influencers First, Businesses Next, WebProNews.com,
http://www.webpronews.com/2004/1102.html (Nov. 2, 2004).
50
     Baker, supra note 23.
51
  In the last ten months, the number Fortune 500 companies who publish blogs have more than
doubled. Rachel Konrad, Sun CEO Among the Few Chiefs Who Blog, Yahoo! News,


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technology companies52 or public relations firms.53 The technology companies are interested in

evangelizing the new technology and the PR firms have a vested interest in teaching their

business clients new communication methods.54 However, this is rapidly changing as more and

more companies from other industries begin to blog.55 John Mackey, CEO of Whole Foods

blogs,56 as does Bob Lutz, Vice Chairman of General Motors Corporation,57 and recently

Verizon kicked off a new blog, called PoliBlog, on which nine company executives are blogging

on broadband public policy issues.58



http://news.yahoo.com/s/ap/20060917/ap_on_hi_te/blogging_sun?microsystems&printer=1
(Sept. 16, 2006, 22:45 ET) (citing “the Fortune 500 Blogging Wiki, a collabortive tracking site”).
52
  Jonathan Schwartz, CEO of Sun Microsystems, Inc., is a good example of a CEO from a
technical company who is at the vanguard of the corporate blogging trend. In September, he
became “un blogeur” when he expanded his popular blog by publishing it in French and nine
other languages. Konrad, supra note 51. Schwartz hopes that “going international will generate
new customers and attract prospective employees in Europe, China, and elsewhere. Id.
Schwartz‟s blog attracts approximately 50,000 viewers each month. Id. It can be found at:
Jonathan‟s Blog, http://blogs.sun.com/jonathan/ (last visited Oct. 4, 2006).
53
   Tom Steinert-Threlkeld, CEOs: Blog or Die, Baseline, http://www.baselinemag.com/
article2/0,1397,1775058,00.asp (Mar. 17, 2005).
54
     Id.
55
  Debbie Weil, author of BlogWrite for CEOs, has declared that “We‟re at the inflection point
for corporate blogging” and suggests that “something new is happening and there‟s no going
back. No more „business as usual.‟” Debbie Weil, We’re at the Inflection Point for Corporate
Blogging, BlogWrite for CEOs, http://www.blogwriteforceos.com/blogwrite/2006/10/
the_inflection_.html (Oct. 10, 2006).
56
   John Mackey, The CEO’s Blog – John Mackey, Whole Foods Market,
http://www.wholefoodsmarket.com/blogs/jm/ (last visited Oct. 14, 2006).
57
  Bob Lutz, L.A. Story, GM Fast Lane Blog, http://fastlane.gmblogs.com/archives/bob_lutz/
(Nov. 29, 2006).
58
  Tom Tauke, Welcome Aboard!, PoliBlog, http://poliblog.verizon.com/PoliBlog/Blogs/
poliblog/TomTauke9/88/Welcome-Aboard-.aspx (Oct. 2, 2006). Interestingly, Verizon did not
use traditional old-media, such as a press release, to launch their blog, instead choosing to


                                                9
           Executives and CEOs start blogging for a number of different reasons. According

to a survey by Backbone Media, the top three reasons for starting a corporate blog are

that blogs (1) offer another way to publish content and ideas; (2) create thought

leadership; and (3) help build an online community.59 Corporate bloggers have said that

a blog is “more casual [and] less stuffy than a traditional „business‟ website,” a blog

makes it easy to “get content up and running immediately, without involving web

experts,” and a blog helps “put a „human‟ face on [the] company” and “connect directly

with stakeholders.”60 Blogs can remove barriers between top executives and the general

public.61 And, for many companies, the potential power of viral marketing62 is too

rewarding to pass up. Executives hope to build communities of product fans around their

brands who will talk together and reach out to others about the wonders of the company‟s




announce it by leaving a comment on a widely-read blog titled Micro Persuasion, authored by
Steve Rubel, Senior Vice President of PR firm Edelman. Inflection Point for Corporate
Blogging, supra note 55.
59
   Corporate Blogging: Is it Worth the Hype?, Backbone, http://www.backbonemedia.com/
blogsurvey/index.html (last visited Oct. 14, 2006). One corporate blogger has commented that a
blog allows a company to: “[c]ommunicate, interact, discuss, share, build and grow [its]
relationships with customers and prospects and thought leaders in [its] industry. A website is
static, rigid. By comparison a blog is flexible, modifiable, [and] current. That precipitates a
conversation, a sharing of ideas and knowledge with peers. A website kills the conversation. It
says „here‟s the information, take it or leave it.‟ A blog allows discussion, a partnership.” Id.
60
     Id.
61
     Konrad, supra note 51.
62
   Viral marketing is similar to word of mouth advertising channeled through pre-existing social
networks on the web such that it replicates quickly like a computer virus. Viral marketing has
many benefits, including the ease of executing a campaign, accurate targeting, low cost in
comparison to direct mail, and a high and quick response rate. Viral Marketing, Wikipedia,
http://en.wikipedia.org/wiki/Viral_marketing (last visited Oct. 25, 2006).



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products.63 Companies also choose to blog because they fear that they will be left behind

by their more tech savvy competitors if they do not participate.64 Some marketing and

PR firms feed these fears by using their own blogs to tell their business clients how

important it is to have a blog.65 Thus, many companies are jumping into the blogosphere

without much thought for the potential negative ramifications.

           There is a dark side to the blogosphere.66 Blogs can be a powerful marketing tool, but

they can be dangerous, too.67 Bloggers live by a code of their own and if offended they tend to



63
  The online brand manager of Coca-Cola, Mark Dooley is quoted as saying that “consumer
generated marketing is going to become a must have marketing tactic” for the future. Rich Ord,
The Blog Marketing Explosion, WebProNews.com, http://www.webpronews.com/
2004/1005.html (Oct. 10, 2004).
64
  As one commentator put it, “[i]deas circulate as fast as scandal. Potential customers are out
there, sniffing around for deals and partners. While you may be putting it off, you can bet that
your competitors are exploring ways to harvest new ideas from blogs, sprinkle ads into them, and
yes, find out what you and other competitors are up to.” Stephen Baker and Heather Green,
Blogs will Change your Business, BusinessWeek Online, http://www.businessweek.com/
magazine/content/05_18/b3931001_mz001.htm (May 2, 2005).
65
   See e.g. Debbie Weil, We’re at the Inflection Point for Corporate Blogging, BlogWrite for
CEOs, http://www.blogwriteforceos.com/blogwrite/2006/10/the_inflection_.html (Oct. 10, 2006)
(concluding that blogs are not optional, Weil exhorts her readers to start using blogs today);
Burson-Marsteller, Guideposts for the New Communications Ecosystem a.k.a. The Blogosphere
Survival Guide, http://www.efluentials.com/documents/UGM_Seminar.pdf (Jan. 27, 2005)
(telling readers that they are already in the blogosphere because their customer, employees,
suppliers, and partners are already blogging) ; Edelman and Intelliseek, Trust “MeDIA” How
Real People Are Finally Being Heard, http://www.edelman.com/image/insights/content/
ISwp_TrustMEdia_FINAL-2.pdf (Spring 2005) stating that the blogging phenomenon has
drastically changed the landscape and challenged traditional beliefs about the control of
messaging by corporations, the media, and government); Fredrik Wachå, Beginners’ Guide to
Corporate Blogging, CorporateBlogging.Info, http://www.corporateblogging.info/basics/
corporatebloggingprimer.pdf (last visited Nov. 14, 2006) (stating that blogs produce stronger
relationships with important target customer groups).
66
     Id.
67
   Jory Des Jardins, When Blogs Go Bad, INC. MAGAZINE, Nov. 2005, at 40, available at
http://www.inc.com/magazine/20051101/handson-technology.html.


                                                  11
speak up and discuss the offending blog on their blogs,68 which can quickly turn into a powerful

negative blogswarm.69 For example, retail giant Wal-Mart was recently discovered to be running

a flog70 or phony blog.71 So far, most bloggers appear to be giving Wal-Mart a pass, saying that

they will figure out social media marketing sooner or later, and instead are focusing their wrath

on Wal-Mart‟s well known public relations firm, Edelman, for creating the fake blog as a profit

generating publicity stunt and for not addressing the criticism immediately.72 Marketing

mistakes, such as this, in the blog world can whip up a negative blogswarm in a matter of

minutes, and this is just one of the dangers.73 Corporate blogs come with a host of legal risks,




68
     Id.
69
   A blogswarm is a new term referring to a plague of locust (bloggers) descending on a news
item, story, or blog in such large numbers that the story is catapulted to national consciousness
for a day or week and often resulting in change. Leon, Understanding the Power of Blogs, All
About Nothing, http://leongreen.wordpress.com/2006/07/06/ (July 6, 2006).
70
  Flogs are stealth PR blogs. Blogs, Splogs, & Flogs: Edelman & the Wal-Mart Fiasco,
Bizhack, http://www.sparkplug9.com/bizhack/index.php/2006/10/12/blogs-splogs-flogs-
edelman-the-wal-mart-fiasco/ (Oct. 12, 2006).
71
   Id. Wal-Mart‟s PR firm, Edelman, set up a flog called Wal-Marting Across America with a
sweet story about a couple, Jim and Laura, who were RV-ing across America staying in camper
friendly Wal-Mart parking lots overnight. The problem was that Laura and Jim were a freelance
writer and professional photographer, respectively, who were employed by Wal-Mart to take
photos and create the blog. Wal-Mart even outfitted the RV. Id.
72
   Id. Debbie Weil, author of The Corporate Blogging Book, says that the Wal-Mart PR strategy
would have been much more effective if they had been upfront and simply said that they were
sending two people around the country to talk with people at Wal-Mart, rather than going with
the “whole Madison Avenue lie that everything is perfect.” Some bloggers are already calling
flogging, “Wal-Marting.” Debbie Weil, Flogging, Wal-Marting and Edelman’s Non-Response,
BlogWrite for CEOs, http://www.blogwriteforceos.com/blogwrite/2006/10/
flogging_walmar.html (Oct. 10, 2006).
73
  For example, when GourmetStation, a web-based retailer of high-end food, started a blog
written from the perspective of the company‟s mascot, a fictional character named T. Alexander,
their brand became publicly ridiculed. When Blogs Go Bad, supra note 67. One highly regarded


                                                12
including, but not limited to, liability for copyright infringement, defamation, false advertising,

and unfair competition.



                     Part II – Legal Risks Associated with Corporate Blogging

          There is no “blogging law” per se; instead, a variety of familiar, existing laws apply to

different blogging situations.74 For instance, corporate blogs are likely to be held to the same

standards for copyright and trademark infringement, false advertising, and unfair competition as

other corporate communications, with which businesses are already familiar. Because blogging

is an internet tool, disputes arising around blogs would be subject to many of the same

jurisdictional issues that arise in the internet setting. Corporations may feel comfortable with

these familiar legal risks because they have been dealing with them in other settings, and

overlook the differences.

          Corporate blogs present new risks because of the way they are created. Effective

corporate blogs are authentic communications directly from the individual blogger, not carefully

scripted marketing communications. Thus, the informal nature of the blog creates uncertainty

about what an individual author might say or publish on a corporate blog. The risk of the

publication of legally troubling statements in blogs is significant, including the risk of release of




blogger decided that the GourmetStation blog deserved special recognition and awarded it the
“Beyond Lame Award.” Another blogger wrote, “Horrible. Stupid. Insane. Worthless.
Ineffective. The ultimate in false advertising.” The GourmetStation blog quickly became the
talk of the marketing blogs. They successfully changed some minds and eventually the
blogswarm moved on to other topics. In retrospect, the company said that they had no regrets
because traffic to their website almost doubled as a result of the controversy. GourmetStation
did a good job of responding to the negative blogs with an honest, even toned answer that
allowed a conversation to develop. Des Jardins, supra note 67, at 40.
74
     See discussion infra text Part II.


                                                   13
trade secrets.75 With blogs, the corporate marketing group no longer controls the message.

Usually blogs do not pass through an approval process before publication and the corporation

must trust the employee blogger to make wise choices about what to publish. However, these

employee bloggers are usually not lawyers and often have not been formally trained in the risks

of blogging. Smart corporations create employee blogging policies to provide information,

training, and guidelines to help corporate bloggers publish blogs that will enhance the

corporation‟s reputation, while minimizing the risk of legal complications.76



a. Risk: The Potential Loss of Trade Secrets

          A very real risk of corporate blogging is that trade secrets will be disclosed inadvertently.

Trade secrets are protected under state common law77 and can be even more valuable than

patents, which only last for a given period of time. Compare the ongoing value of the secret

formula for Coca-Cola to the likely value today if the company had chosen to get a patent on the

Coca-Cola formula, which would have run out decades ago. However, trade secrets must remain

75
     See discussion infra text Part II.
76
  There has been some discussion in the legal journals about whether companies take on liability
by creating employee blogging policies, rather than taking a head-in-the-sand approach,
however, any company planning to initiate a corporate blog would definitely benefit from a
clear, well drafted employee blogging policy.
77
   Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470 (1974) (citing 4 Restatement of Torts § 757,
comment b (1939) as providing a widely relied-upon definition of trade secret as follows: “[a]
trade secret may consist of any formula, pattern, device or compilation of information which is
used in one‟s business, and which gives him an opportunity to obtain advantage over competitors
who do not know or use it. It may be a formula for a chemical compound, a process of
manufacturing, treating or preserving materials, a pattern for a machine or other device, or a list
of customers.”). The law also provides trade secret protection, in the form of liability for
disclosure or use, when the information was gained by “improper means,” such as theft,
wiretapping, or aerial reconnaissance. Id. (citing 4 Restatement of Torts § 757(a)). Discovery
by fair and honest means is allowed, such as by reverse engineering, invention, or accidental
disclosure. Id.



                                                   14
secret to maintain their protected status, information that is public knowledge or general trade

knowledge is not protected.78 While it is not very likely that an employee blogger would blurt

out the secret formula for Coca-Cola or the famous secret sauce recipe on a corporate blog, an

employee might inadvertently discuss working information that includes valuable trade secrets,

such as product or marketing strategies, the landing or losing of a key client or customer, or

progress towards financial objectives.

           Before blogs, practical limitations allowed trade secret doctrine to work effectively.79 In

today‟s busy world, it is not uncommon for co-workers to discuss business whenever they have

an opportunity, in person or on cell phones, in restaurants, airports, planes, and cabs.80 However,

only those in immediate proximity are exposed to the information and, while they might find it

interesting, the lack of relevance to their own activities makes its unlikely that they would use or

disclose the information to others.81 Courts generally find that these sorts of inadvertent

disclosures do not destroy the trade secret from a legal perspective.82



78
     Id.
79
  Vincent Chiappetta, Employee Blogs and Trade Secrets: Legal Response to Technological
Change, 11 NEXUS 31, 36 (2006).
80
     Id. at 35.
81
     Id. at 36.
82
  Id. Common law trade secret protection is implemented through the doctrinal triad of
“secrecy-reasonable efforts-misappropriation.” Pre-blogging courts could generally be counted
on to find a self-help program, consisting of the use of formal non-disclosure agreements,
employee training on confidentiality requirements (especially when an employee is leaving
employment), appropriately labeling and professionally handling documents, and in certain
limited contexts securing access to certain work areas, to be reasonable. Before blogging, the
loss of trade secrets usually occurred through a bad act, such as the breach of a non-disclosure
agreement, through industrial espionage, or by knowingly obtaining information from a new
employee. Even a company that was very sloppy in the way they handled their trade secrets
(such as allowing employees to discuss them casually in public places), could still win with an


                                                    15
            Blogs are risky because they dramatically increase the likelihood of a legally catastrophic

trade secret disclosure. There are two main factors contributing to the scale of this problem.

First, blogging technology has made it possible for every employee to become a publisher of

their own thoughts, without editing from the marketing communications group or a journalist

who might be more familiar with and wary of the possibility of trade secret misappropriation.83

Once a blogger pushes the publish button, the information is out there for the entire world to

read. Second, internet technology has radically expanded the audience for those employees‟

communications, where sophisticated search tools and direct feeds allow competitors and the

trade press to easily access the no longer secret information.84 Vincent Chiappetta, Professor of

Law at the Willamette University College of Law, has said that “[b]logs have transformed

employee disclosures from flotsam in an ocean of casual social conversation into part of a

networked world‟s permanent reference collection.”85 It is likely that if an employee or CEO

were to inadvertently publish trade secret information in a blog, a court would hold that the

“ready ascertainability” of the intellectual property would destroy the trade secret protection. 86



argument of “unclean hands” and related “fairness” issues, so long as they did not treat their
trade secrets with wanton disregard. Id.
83
     Id. at 37.
84
     Chiappetta, supra note 79, at 37.
85
     Id..
86
  Id. at 37-38 (citing Religious Technology Center v. Lerma, 908 F. Supp. 1362 (E.D. Va. 1995)
(“holding that a posting of Scientology scriptures for 10 days on the internet making them
“potentially” available to millions of internet users made them part of the public domain.”).
Some companies must also deal with malicious exposure of trade secrets by disgruntled
employees. In an effort to avoid discovery, these employees are more likely to publish
anonymously on outside blogs that on a corporate blog, complicating matters for companies who
must often fight Internet Service Providers in court to gain access to the employee‟s identity.
The best case scenario outcome is often simply the removal of the offending blog. Id. at 39.


                                                    16
Although if the company has a strongly worded policy on the protection of trade secrets that is

well implemented through training, it is possible that a court might hold that a competitor who

gained access to the trade secret through an employee‟s violation of the corporate blogging

policy had used improper means and, thus, was not entitled to use the information, under the

policy of discovery by fair and honest means.87

           Trade secrets are more costly to protect in the age of blogging and meaningful remedies

may be more difficult to obtain. In the past, a business could sue the offending competitor for

misappropriation to force them to stop using the trade secret and perhaps find deep pockets for

damages.88 Now, a trade secret inadvertently released by an employee blogger would probably

be considered lost by publication and the only one the company may be able to hold liable would

be the now fired, former employee.89 The best way to protect against this outcome is a good

employee blogging policy and rigorous (and potentially costly) employee training on the proper

handling of trade secrets in the blogging context. The business should consider including a

paragraph on trade secret protection in their employee blogging policy, reminding employees to

think before they write and to keep trade secrets confidential.90




87
     Kewanee Oil, 416 U.S. at 470 (citing 4 Restatement of Torts § 757(a)).
88
     Chiappetta, supra note 77, at 40.
89
     Id.
90
   In their corporate blogging policy, Sun Microsystems, Inc. instructs employee bloggers to use
common sense and not to tell secrets. The Sun policy states that “it‟s perfectly OK to talk about
your work and have a dialog with the community, but it‟s not OK to publish the recipe for one of
our secret sauces.” They acknowledge that even though they have a separate policy on
protecting Sun‟s proprietary and confidential information, there are still going to be gray areas
where it is better to get management approval before publishing. Sun Policy on Public
Discourse, Sun Microsystems Inc., http://www.tbray.org/ongoing/When/200x/2004/05/02/Policy
(last visited Oct. 11, 2006).


                                                  17
b. Risk: Potential Liability for Defamation

       Potential liability for defamation91 is a significant risk in corporate blogging, where the

massive reach of the blogosphere is in the hands of untrained employee publishers. Bloggers

have a vested interest in writing interesting and thought provoking posts so people will read

them. At some point, the inexperienced blogger may have difficulty drawing the line between

valid criticism and a defamatory statement and end up cybersmearing someone, also known as e-

defaming or virtually abusing. And, while an individual blogger may not be a target for a

defamation suit, the deep pockets of a large business may increase the likelihood of litigation.92

       A corporation is likely to be held liable for defamatory statements authored by employee

bloggers on the corporate blog, but not for defamatory statements posted by outside visitors to




91
   Defamation is a state tort law so there can be variations depending on the jurisdiction. RONALD
J. MANN AND JANE K. WINN, ELECTRONIC COMMERCE 142 (2d ed. 2005). “Under Pennsylvania
law, a defamatory statement is one that „tends so to harm the reputation of another as to lower
him in the estimation of the community or to deter third persons from associating or dealing with
him.‟” U.S. Healthcare, Inc. v. Blue Cross of Greater Philadelphia, 898 F.2d 914 (3rd Cir. 1990),
cert. denied, 498 U.S. 816 (quoting Birl v. Philadelphia Elec. Co., 167 A.2d 472 (1960)). The
Restatement (Second) of Torts § 559 defines defamation as a false and defamatory statement
concerning another person that causes harm to the person. Some statements, such as falsely
accusing someone of having committed a crime, are so bad that they are considered defamatory
“per se.” MANN, supra, at 142. In a cause of action for defamation, the plaintiff has the burden
of proving the following five essential elements: “(1) the defamatory character of the
communication; (2) its publication by the defendant; (3) its application to the plaintiff; (4) an
understanding by the reader or listener of its defamatory meaning; and (5) an understanding by
the reader or listener of an intent by the defendant that the statement referred to the plaintiff.”
U.S. Healthcare, 898 F.2d 914 (citing 42 Pa. Cons. Stat. § 8343(a)(1)-(5) (1988)).
92
  Emma Scanlan, Bigger Fish, Deeper Pockets: Business Blogs, Defamation and the
Communications Decency Act, 2 SHIDLER J.L. COM. & TECH. 4 (2005).



                                                18
the blog. Some companies fear the comment section,93 but most corporate blogs accept response

comments from outside blog visitors because that is an excellent way to develop a conversation

with customers94 and because, otherwise, the blog is likely to become more of a PR exercise than

the blogosphere will tolerate.95 However, the use of a comment section can create a situation

where defamatory statements, generated by outside bloggers, end up in the corporate blog.96

Corporate blogs fit the description of interactive computer services for the purposes of section

230 immunity, under the Communications Decency Act of 1996, because they provide multiple




93
  Because of fears that disgruntled employees or malicious pranksters will post negative or
offensive messages directed at the company on the corporate blog comment section, companies
are often reluctant to include a comments section.
94
   Some companies fear the comment section, but most corporate blogs allow comments.
Allowing both positive and negative comments is part of building credibility for a corporate
blog, otherwise the blog is likely to become more of a PR exercise than the blogosphere will
tolerate. The Rise and Rise of Corporate Blogs, CNN.com, http://edition.cnn.com/2005/
BUSINESS/12/20/company.blogs/ (Dec. 20, 2005 14:26 GMT). Mike Dillon, Senior Vice
President, General Counsel and Corporate Secretary, Sun Legal Department, Sun Microsystems,
Inc., admits that others advised him to disable the comments function on his Sun Microsystems
blog, not because of potential liability, but rather to avoid negative comments about Sun, him, or
lawyers in general. Kevin O‟Keefe, Legal Issues on Comments on Corporate Blogs, Real
Lawyers have Blogs, http://Kevin.lexblog.com/2006/09/blog-policies-and-ethics/legal-issues-on-
comments-on-corporate-blogs/ (Sept. 15, 2006) (quoting Michael Dillon of Sun Microsystems,
Inc.). His view is that while it might be safer to disable the comments feature, it would reduce
the value of the blog because one of the main benefits is to create a conversation and make
connections. Id.
95
 The Rise and Rise of Corporate Blogs, CNN.com, http://edition.cnn.com/2005/
BUSINESS/12/20/company.blogs/ (Dec. 20, 2005 14:26 GMT).
96
  Under section 581 of the Restatement (Second) of Torts, defamation is committed not only by
the author who originally published the defamatory statement but also by anyone who knowingly
republished the statement. MANN, supra note 89, at 142. With the advent of the internet, Internet
Service Providers or ISPs became the republishers and Congress felt that it was inappropriate for
ISPs to be held responsible for the material posted by their customers and included important
protections for ISPs in the Communications Decency Act of 1996. Id.



                                                19
users with access to a computer server and usually include a searchable database of posts.97

Thus, businesses are probably not subject to liability for defamatory comments posted by

visitors, even if they do not remove the offending material.98

          A company is likely to be held liable, on the other hand, for defamatory content posted by

employee bloggers on the corporate blog. In 2003, the Ninth Circuit clarified the

Communications Decency Act protections holding that section 230(c) provides immunity to both

providers and users of interactive computer services so long as the information has been

provided by another information content provider.99 If employee bloggers post their own

original content or content from a non-electronic medium (such as a local newsletter), the

corporation is likely to be held liable, if a court determines the content to be defamatory.100

          At least one court has questioned whether statements in blogs should be considered

defamatory. The Supreme Court of Delaware has questioned the viability of a cause of action

for defamation based on a blog post, likening blogs to chat rooms and stating that no reasonable

person would rely on statements in a blog.101 However, as we have seen the blogosphere is

changing rapidly and many blogs are written by serious journalists, commentators, lawyers, and




97
     Scanlan, supra note 92.
98
  “A business that does not remove from its blog a defamatory comment posted by a third party
will probably not be liable for its contents because the decision to remove the comment is an
editorial function.” Id. (citing Zeran v. America Online Inc., 129 F.3d 327, 332 (4th Cir. 1997)).
99
     Batzel v. Smith, 333 F.3d 1018 (9th Cir. 2003).
100
      Scanlan, supra note 92.
101
   Doe v. Cahill, 884 A.2d 451, 465 (Del. 2005) (stating that “blogs and chat rooms tend to be
vehicles for the expression of opinions; by their very nature, they are not a source of facts or data
upon which a reasonable person would rely).



                                                  20
business people and can have a significant impact in the world.102 In addition, commercial

speech is often held to a different standard than the anonymous political speech that the

Delaware Court addressed.103 Thus, defamatory content posted on a company blog, such as

negative statements about the character or reputation of a competitor or industry figure, is likely

to subject the business to liability.104

          Corporations should use a blogging policy to coach employee bloggers on ways to avoid

making defamatory statements, thereby reducing the risk to both the employee and the

corporation. The easy, informal, and instantaneous nature of blogs tends to make people feel

free to gossip and discuss subjects as if they were talking with friends. The seriousness and time

for reflection associated with the ritual of submitting an article for publication with a newspaper

or magazine is missing in the blog setting. Thus, it is important to remind employees to think

before they write and to avoid posting about customers, clients, or suppliers without their

permission.105 Sun Microsystems includes a disclaimer statement that “Sun does not necessarily



102
      See supra notes 7-24 and accompanying text.
103
   Compare Cahill, 844 A.2d at 465-466 with Central Hudson Gas & Electric Corp. v. Public
Service Commission of New York, 447 U.S. 557, 563 (1980) (holding that the Constitution
provides less protection to commercial speech than other constitutionally guaranteed expression).
104
   Defamation is different from commercial disparagement in the defamation protects a
company‟s interest in its character and reputation, whereas commercial disparagement
compensates a company for losses suffered due to negative statements about the company‟s
products that have reduced their marketability. U.S. Healthcare, 898 F.2d at 924.
105
   See e.g. Sun Policy on Public Discourse, Sun Microsystems Inc., http://www.tbray.org/
ongoing/When/200x/2004/05/02/Policy (last visited Oct. 11, 2006) (reminding employee
bloggers that “balance is called for; a blog is a public place and you should try to avoid
embarrassing your readers or the company,” to “think about consequences,” and use good
judgment stating that “using your weblog to trash or embarrass the company, our customers, or
your co-workers, is not only dangerous but stupid”); IBM Blogging Guidelines, IBM Blogroll,
http://www.ibm.com/blogs/zz/en/guidelines.html (last visited Dec. 12, 2006) (exhorting
employees not to “cite or reference clients, partners, or suppliers without their permissions” and


                                                21
agree with the contents of the blogs” at the bottom of the Sun blogs website to help reduce

liability.106 This statement may not be sufficient to avoid litigation in all jurisdictions, but it

shows that Sun is actually addressing the risks.107



c. Risk: Potential Liability for Copyright Infringement

            Another substantial risk associated with corporate blogging is the risk that employee

bloggers will borrow content from other sources, subjecting the company to possible liability for

copyright infringement. Employees may remember the concept of plagiarism from their school

days but may not understand copyright laws108 and may fail to attribute another author‟s work

properly or gain permission to use someone else‟s work. The 1998 Digital Millennium

Copyright Act109 provided a safe harbor from liability for website operators;110 however, if the

business is not merely the website operator but provides the infringing content, then the safe


to respect their audience, stating “Don‟t use ethnic slurs, personal insults, obscenity, etc., and
show proper consideration for others‟ privacy…”).
106
   Kevin O‟Keefe, Legal Issues on Comments on Corporate Blogs, Real Lawyers have Blogs,
http://Kevin.lexblog.com/2006/09/blog-policies-and-ethics/legal-issues-on-comments-on-
corporate-blogs/ (Sept. 15, 2006) (citing http://blogs.sun.com/).
107
      Id.
108
   Copyright infringement occurs under sections 106(1) and (3) of the Copyright Act whenever a
work is copied or distributed without the owner‟s permission, whether or not the publisher
knows that the material is protected. MANN, supra note 91, at 156.
109
  Digital Millennium Copyright Act, Pub. L. No. 105-304 (codified as section 512 of the
Copyright Act, the safe harbor protects service providers who store copyrighted material).
110
   In 2004, the Fourth Circuit clarified the implementation of the Digital Millennium Copyright
Act in CoStar Group Inc. v. LoopNet, likening LoopNet to a shop owner with a copy machine,
and found no liability. 373 F.3d 544 (4th Cir. 2004). These safe harbor provisions also require
that the service provider remove any alleged infringing material once notified of the problem.
MANN, supra note 91, at 157.



                                                    22
harbor immunity does not apply.111 Thus, the corporate blog owner may be liable for copyright

infringement initiated from within the company, unless the company can claim fair use.112

          Section 107 of the Copyright Act provides a defense to infringement for fair use of the

copyrighted work, which may apply to blogs.113 Section 107 attempts to balance the monopoly

in a creative work granted by the copyright with the public good associated with education,

technology, and the First Amendment through the evaluation of four factors.114 A corporate blog

would probably fail on the first factor because it would be considered a commercial use;

although depending on the content of the particular blog, the company may be able to argue that

the purpose and character of the blog is educational. This would be particularly true if the blog

were product oriented and provided helpful “how-to” information to end users. On the second

factor, if the allegedly infringed copyrighted work is from another blog, a company may be able

to argue that the nature of a blog deserves less protection, although that type of argument could

come back and haunt the company if it ever needs to protect copyrighted information on its own

blog. If only a small amount of material has been used and it is insubstantial relative to the entire

original work, then the third factor may be met. However, recently, courts have given the most



111
  Id. at 156. Although the safe harbor provision may provide protection liability for infringing
comments posted on the corporate blog by outside bloggers.
112
      Copyright Act, 17 U.S.C. §§ 106, 107.
113
    Copyright Act, 17 U.S.C. § 107. The four factors to be considered in determining if a use of
copyrighted material is a fair use are: “(1) the purpose and character of the use, including
whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the
nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation
to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or
value of the copyrighted work.” Id.
114
  Britton Payne, Imperfect 10: Digital Advances and Market Impact in Fair Use Analysis, 17
FORDHAM INTELL. PROP. MEDIA & ENT. L.J. 279, 280 (2006).



                                                  23
weight to the fourth factor in digital fair use cases, expanding the monopoly granted to creators

in their works.115 Thus, if the alleged infringement is based on digital content with a present

market value, then this important factor will weigh against fair use, whether or not the alleged

infringing use has a negative impact on the market.116

            To reduce the likelihood of copyright infringement liability, companies should train

blogging employees about basic copyright and fair use laws and the benefits of linking rather

than copying material. It is much safer for bloggers to link to articles and information from other

sources that they wish to discuss in their blogs than to reproduce the content.117 Using lots of

links also helps with search engine optimization.118 Finally, employee blogging policies should

remind potential bloggers to respect copyrights.119




115
   Id. at 281 (citing Perfect 10 v. Google, 416 F. Supp. 2d 828 (C.D. Cal. 2006) (holding that
creating and displaying thumbnail versions of an artist‟s photos is not fair use).
116
      Id.
117
   A link provides access to the information the blogger wishes to convey without copying it,
thus avoiding any risk of copyright infringement.
118
   Search engine optimization is “marketing by appealing to machine algorithms to increase
search engine relevance and ultimately web traffic.” Search Engine Optimization, Wikipedia,
http://en.wikipedia.org/wiki/Search_engine_optimization (last visited December 5, 2006). Thus,
the more back links a blog has, the higher it will rank in the search engines and the more people
will see and potentially connect to the site, which will add more back links and further improve
search engine presence, etc.
119
   See e.g. IBM Blogging Guidelines, IBM Blogroll, http://www.ibm.com/blogs/zz/en/
guidelines.html (last visited Dec. 12, 2006) (stating “Respect copyright and fair use laws. For
IBM‟s protection [as] well as your own, it is critical that you show proper respect for the laws
governing copyright and fair use of copyrighted material owned by others, including IBM‟s own
copyrights and brands. You should never quote more than short excerpts of someone else‟s
work. And it is good general blogging practice to link to others‟ work. Keep in mind that laws
will be different depending on where you live and work.”).



                                                    24
d. Risk: Potential Liability for Trademark Infringement

       Since the commercialization of the internet, heated battles have ensued regarding how

and by whom trademarks can be used in cyberspace.120 Some have been more typical trademark

complaints that could be settled through the application of existing laws, others have required

legal innovation, and some areas remain unsettled.121 Trademark infringement 122 seems less

likely to occur in the blogging scenario. Although one could envision a scenario where a blogger

set up a flog purporting to be run under a competitor‟s trademark, this is not an area of the law

where a legitimate corporate blogger is likely to accidentally incur liability.

       A more likely area of trademark infringement for a blogger would be the

misappropriation of trademark tags. Courts have held that the use of a competitor‟s trademark in

the metatags123 or hidden code on a website can cause initial interest confusion, which



120
   PETER B. MAGGS AND ROGER E. SCHECHTER, TRADEMARK AND UNFAIR COMPETITION LAW
543 (6th ed., West Group 2002) (1950).
121
   Id. For example, the earliest internet trademark disputes centered on the use of trademarks in
domain names. The Lanham Act, 15 U.S.C. § 1072 (1999). In this area, the Commerce
Department has set up a private non-profit entity to oversee the implementation of the Shared
Registration System. The Commerce Department designated the Internet Corporation for
Assigned Names and Numbers (ICANN) to oversee the transition to competition under SRS.
MAGGS, supra note 118, at 544. ICANN, in turn, has set up a multi-national alternative dispute
resolution mechanism. Congress has implemented legislation to deal directly with domain-name
trademark issues. Anticybersquatting Consumer Protection Act (ACPA), Pub. L. No. 105-113
(1999). Traditional trademark theories also may apply. MAGGS, supra note 120, at 544. All
three systems coexist. Id.
122
    “(T)rademarks are symbols that merchants use to attract customers.” MAGGS, supra note 120,
at 543. The Lanham Act or 1946 protects trademarks. Section 1072 provides nationwide
protection for registered marks and provides that registration of a trademark on the principle
register is a constructive notice of ownership. The Lanham Act, 15 U.S.C. § 1072 (1999).
123
   “Metatags are HTML code not visible to Web users but used by search engines in
determining which sites correspond to the keywords entered by a Web user.” Brookfield
Commc‟ns, Inc. v. W. Coast Entm‟t Corp., 174 F.3d 1036, n. 23 (9th Cir. 1999).



                                                 25
improperly benefits the user of the metatags with the competitor‟s goodwill under the Lanham

Act.124 The Ninth Circuit has likened the use of a competitor‟s trademark in one‟s metatags to

putting a billboard on the highway with the competitor‟s trademark name indicating that it‟s

store could be found two miles ahead at exit seven when really the competitor is at exit eight and

the only similar store the consumer will find at exit seven is the company‟s own store.125

Consumers may metaphorically pull off the internet superhighway at the company‟s site looking

for the competitor.126 The consumer may be able to tell it is not the site they are looking for but

give up trying to find the one they originally wanted and accept what is offered, thus allowing

the first competitor to misappropriate the competitor‟s goodwill.127 Because most bloggers list

general tags or Technorati tags128 at the end of their blogs for use by search engines, a similar

liability could be imposed on bloggers who misappropriate a competitor‟s tags. Although, the

fair use doctrine may allow the blogger to truthfully identify the competitor‟s products and use

the tags as descriptive terms to fairly and accurately describe the blog in a good faith effort to

index the blog.129 This is another area where corporate bloggers need to be aware of the rules so

as to avoid unintentional infringement.




124
      Id.
125
      Id.
126
      Id.
127
      Id.
128
  See e.g. Flogging, Wal-Marting and Edelman’s Non-Response, supra note 72 (listing
“Technorati Tags”); Blogs, Splogs, & Flogs, supra note 70 (listing “Tags”).
129
   See Brookfield, 174 F.3d at 1066 (citing Playboy Enterprises v. Terri Wells, 7 F. Supp. 2d
1098, 1100 (1998)).



                                                 26
       Contributory trademark infringement is another area where bloggers may need to be

concerned. The Supreme Court has observed that “if a manufacturer or distributor intentionally

induces another to infringe a trademark, or if it continues to supply its product to one whom it

knows or has reason to know is engaging in trademark infringement, the manufacturer or

distributor is contributorially responsible for any harm done as a result of the deceit.”130 While

this statement does not appear to directly apply to blogging, it may imply that a corporate

blogger could be held liable if it links to a blog where someone else is infringing or if another

blogger, who is infringing, links to the corporate blog. The concept of contributory trademark

infringement raises questions about how much responsibility a corporation will have for

monitoring the links or threads traveling to and from its blog and the impact of potentially

negative blogosphere conversations initiated by the corporate blog.



e. Risk: Potential Liability for Unfair Competition

       Claims of unfair competition present another area of potential liability that business

bloggers will want to avoid. Business blogs are often filled with interesting thoughtful issues of

interest to the marketplace, which sometimes can involve the mention of a competitor‟s name or

products. After all, if a blog is filled with sanitized commentary from the PR department after

having been thoroughly vetted by legal, no one will read it, except perhaps to jeer. There are

three main areas where businesses can get hit with unfair competition claims131 for statements on



130
   MAGGS, supra note 120, at 333 (quoting Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844,
855 (1982)).
131
   Unfair competition claims arise when a company becomes overzealous and uses underhanded
or dishonest tactics to mislead consumers and disadvantage competitors. MAGGS, supra note
120, at 2.



                                                 27
their blogs. These are (1) false advertising;132 (2) commercial disparagement;133 and (3)

misappropriation.134 In 1998 Congress rewrote section 43(a) of the Lanham Act to include the

words “or another person‟s” products, effectively federalizing the state law of commercial

disparagement.135

       If a corporate blogger makes false advertising statements that are likely to cause a

significant portion of the blog‟s readers to change their purchase decisions to the detriment of a

competitor, under provisions of section 43(a) of the Lanham Act,136 the blogger may be liable to



132
   False advertising is the “tortious and sometimes criminal act of distributing an advertisement
that is untrue, deceptive, or misleading.” BLACK‟S LAW DICTIONARY 272 (Bryan A. Garner ed.,
2nd pocket ed., 2001). Misrepresentation of a business‟s products or services is generally
considered to be false advertising.
133
   Disparagement is “a false and injurious statement that discredits or detracts from the
reputation of another‟s property, product, or business.” BLACK‟S LAW DICTIONARY, supra note
132, at 210. Commercial disparagement is generally the misrepresentation of another business‟s
products or services.
134
   Misappropriation is “the application of another‟s property tor money dishonestly to one‟s one
use.” BLACK‟S LAW DICTIONARY, supra note 132, at 449. In business, misappropriation is
generally the intentional appropriation of a rival‟s various intangible assets.
135
   MAGGS, supra note 120, at 802. Commercial disparagement is also referred to as product
disparagement, trade libel, injurious falsehood, disparagement of goods, or slander of goods. Id.
136
    “The statute provides that anyone who uses a false description or representation in connection
with goods placed in commerce „shall be liable to a civil action by [anyone] . . . who believes
that he is or is likely to be damaged by the use of . . . such false description or representation.‟”
Coca-cola Co. v. Tropicana Products, Inc., 690 F.2d 312, 314 (2nd Cir. 1982) (citing 15 U.S.C. §
1125(a) (1976)). Under the Lanham Act, false advertising requires the following elements: (1) an
express or implied misrepresentation of fact by a defendant in a commercial advertisement about
its own or another‟s product; (2) the statement actually deceived a statistically significant portion
of the commercial audience (dicta suggests 20% would be enough) or if only injunctive relief is
desired, a finding of a tendency to deceive will be sufficient; (3) the deception is likely to
materially influence the purchase decision, although the standards for materially are not well
defined; (4) the defendant must cause the advertising (not a product) to enter interstate
commerce; and (5) the plaintiff must show that they have been or are likely to be harmed by the
false advertising either through a diversion of sales or a loss of goodwill. MAGGS, supra note
120, at 770-772.


                                                 28
the competitor for damages or may be enjoined from making those statements in future and be

forced to take down sections of their blog.137 Because of the global nature of the blogosphere,

even a business that only sells its products or services locally in one state may be deemed to be

engaging in interstate commerce under the fourth element of the section 43(a), if they publish a

blog. Corporate blogging policies should remind bloggers to be honest and truthful in their

statements and avoid the tendency to extol the virtues of the company‟s products or services

beyond the bounds of reality.

          The right of publicity138 is another intangible asset protected under unfair competition

laws139 that bloggers may encounter. Many states provide a legal remedy when a famous

person‟s name or face is used by others who seek to capitalize on that fame for commercial

purposes without permission.140 The belief is that the famous person gained the magnetism and

selling power of their image by some combination of natural talent, luck, and hard work and,



137
   In addition to false advertising claims from a competitor, a company could be hit with a claim
of unfair or deceptive acts or practices under the Federal Trade Commission (FTC) regulations.
Federal Trade Commission Act, 15 U.S.C. § 41 et seq.
138
   The right of publicity is also referred to as the tort of misappropriation of one‟s name or
likeness and is described in the Restatement of Torts as, “[o]ne who appropriates to his own use
or benefit the name or likeness of another is subject to liability to the other for invasion of his
privacy.” Henley v. Dillard Dept. Stores, 46 F. Supp. 2d 587, 590 (N.D. Tex. 1999) (quoting
Restatement (Second) of Torts § 652C (1977)).
139
      MAGGS, supra note 120, at 613.
140
   Id. The courts have identified a three-part test for the right of publicity: “(1) the defendant
appropriated the plaintiff‟s name or likeness for the value associated with it, and not in an
incidental manner or for a newsworthy purpose; (2) the plaintiff can be identified from the
publication; and (3) there was some advantage or benefit to the defendant. Henley, 46 F. Supp.
2d at 590 (citing the fifth circuit decision in Matthews v. Wozencraft, 15 F.3d 432, 437 (5th Cir.
1994)). The concept of name or likeness is generally interpreted broadly to include the use of “a
name, nickname, voice, picture, performing style, distinctive characteristics, or other indicia
closely associated with a person.” Id.



                                                  29
thus, based on policy goals of fair dealing and economic efficiency, they should have the right to

control the commercial use of their own image.141 Thus, for example, if a CEO blogging on a

corporate blog were to discuss a famous personality such as Tiger Woods or Steve Irwin in a bid

to increase blog readership and search engine presence, the corporation may be liable for

infringing their right of publicity, especially if the CEO inserted a photo of the famous

personality. The grey area would be if the CEO was discussing a ProAm golf tournament he or

she participated in over the weekend with Tiger Woods. Under these facts, an argument could be

made that the use was non-commercial. A good corporate blogging policy would include

reminders not to discuss famous personalities without their permission.



f. Risk: Potential Liability for Violation of Securities Regulations

          Publicly traded companies face the additional burden of complying with strict federal

securities regulations regarding the timing, content, and method of delivery of company

statements.142 For example, Securities and Exchange Commission (SEC) Rule 10b-5 on

misleading statements to investors requires information on company websites be up to date.143

The SEC has imposed fines on companies for violations like leaving outdated and now

misleading press releases on their web sites.144 This does not appear to have come up in the

blogging arena yet, but it is likely that the SEC would expect a public corporation to keep their



141
      Id. at 613-614.
142
      MANN, supra note 91, at 172.
143
   Securities and Exchange Commission, Employment of Manipulative and Deceptive Devices,
17 C.F.R. 240.10b-5 (2006).
144
      MANN, supra note 91, at 172.



                                                 30
blog up to date as well.145 Rule 10b-5 also covers forward looking statements such as copies of

speeches and recent presentations by executives, which often include forward-looking statements

about the company‟s business plans which often turn out to be inaccurate and could mislead the

public.146 In addition, it is likely that this aspect of the rule would apply to forward looking

statements on business blogs, however, the Private Securities Litigation Reform Act of 1995

created a statutory safe harbor for corporations if they present the information with the proper

disclaimer.147 To take advantage of the provision, the disclaimer must appear with the forward-

looking statement in the website,148 which may present special challenges for blogs where the

inclusion of disclaimers may disrupt the atmosphere of informal discussion.

            Some critics predict that CEOs of public companies will not write anything worth reading

in their corporate blogs (from an investor or analyst‟s perspective) because of the fear of

violating securities regulations.149 In his zeal to promote the company, Sun Microsystems, Inc.

CEO, Jonathan Schwartz, has crossed paths with his legal department over blog posts that could

be considered risky and they have asked him to include “safe harbor” provisions on any blog




145
   In addition to the burden of removing old forward-looking statements from the publicly
accessible portions of the blog in a timely fashion, a corporation may also have a discovery
burden to archive all old blogs indefinitely, requiring an ever increasing amount of storage space.
146
      Id. at 173 (citing 17 C.F.R. 240.10b-5).
147
      Id. (citing 15 U.S.C. 78u-5).
148
      Id.
149
   CEO Blogs, A VC Musing of a VC in NYC, http://www.avc.blogs.com/a_vc/2004/10/
ceo_blogs.html (Cot. 28, 2004) (comment posted October 28, 2004 (9:55:40 AM).



                                                   31
statements that discuss future business strategies and products.150 Although there may be trade

offs, companies should strongly consider including safe harbor disclaimer provisions.



g. Jurisdiction

           Before any dispute can be adjudicated in the courts, a plaintiff must establish jurisdiction,

which can be significantly more challenging in an internet or blogging case.151 Although courts

in the United States initially began developing internet specific laws for determining when

personal jurisdiction over a defendant could be achieved, more recently the courts have returned

to the general principles of personal jurisdiction.152 Recent decisions have relied on a case-by-

case evaluation of the internet activity in question, evaluating whether or not it had a substantial

effect in the forum state.153 When an internet company is selling a product over its website, the

contacts or “substantial effect” may be easier to identify, than with a blogger who is simply

posting commentary.154



                            Part III – Role of the Courts & the Legislature

           At first glance, there seem to be an overwhelming number of different laws, rules, and

regulations that a company must navigate to avoid liability in the blogosphere. However, no

company has been sued or prosecuted for anything written on a corporate blog yet; this probably

150
      Konrad, supra note 51.
151
      MANN, supra note 91, at 6.
152
      Id. at 7.
153
      Id. These issues become much more problematic in the global context. Id. at 6.
154
      Id. at 7.



                                                    32
also explains why relatively few companies have formal blogging policies at this time.155

However, there have been numerous lawsuits arguing that companies are complicit in the

creation of hostile work environments when they allow employees to use corporate e-mail to

send harassing, sexual, or offensive messages to co-workers.156 Blogging raises similar liability

issues to e-mail and yet can have a much broader audience. Corporations may be avoiding the

creation of blogging policies out of a fear that if they have a policy and fail to properly police it,

they may be liable for what employees say in their blogs.157 They may also believe that if they

have no policy, they may be able to claim ignorance as a defense.158 This thinking runs counter

to public policy, which would be better served if corporations educated employee bloggers on

how to blog properly without violating the law.159 Thus, courts may view companies that ignore

the reality of blogging disfavorably.

            Courts are likely to face corporate blogging cases eventually and when they do, jurists

should reward companies that have fully implemented, thorough blogging policies to encourage

this behavior, which is consistent with public policy goals. Clear, well thought out corporate

blogging policies, that are properly implemented and enforced, will provide benefits to the

155
      Charles Duhigg, World Wide Water Cooler, 2004-APR LEGAL AFF. 8 (2004).
156
      Id.
157
      Id.
158
      Id.
159
   Sun Microsystems, Inc. has a very thorough, readable, and educational blogging policy that
provides a roadmap for positions that other companies may want to consider when developing
their own blogging policies. Sun Policy on Public Discourse, Sun Microsystems Inc.,
http://www.tbray.org/ongoing/When/200x/2004/05/02/Policy (last visited Oct. 11, 2006).
Sun‟s blogging policy acknowledges right up front that the company is accepting greater risk by
encouraging employees to speak directly to the world without management approval but
provides advice on how to communicate well and minimize the risks. Id.



                                                    33
general public because they will improve the quality of blogging posts and reduce the number of

posts that infringe on the rights of others. They also provide a corporate self-policing

mechanism, which should reduce the number of disputes that need to be litigated, supporting

court efficiency. For these policy reasons, courts should provide an incentive to companies to

create and implement good blogging policies.

          One way to create an incentive for companies to implement effective blogging policies

would be for the courts or the legislature to create a McDonnell Douglas160 burden shifting

analysis type of structure where: (1) the plaintiff would have the burden of proving that

something defamatory or infringing had been posted on the corporate blog, shifting the burden to

the corporate blogger to show that they were not responsible, (2) if the corporation can show that

it had a thoughtful blogging policy in place, then the burden would shift back to the plaintiff; (3)

the plaintiff would have to show that the corporate blogger‟s intent was willful or that the

corporation‟s steps were not reasonable under the circumstances. This type of lessened liability

reward will encourage more corporations to create and implement high quality blogging policies.

          In the meantime, companies engaging in corporate blogging may want to consider

investigating the outside limits of their insurance coverage. Liability insurance can provide

valuable protection for a business, particularly when entering new unfamiliar territory. Although

there are currently coverage gaps in certain new technology areas, some insurers are beginning to

come out with specialty insurance products designed to cover technology risks.161 Since the

potential liability is not well understood, purchasing extra protection in the form of added

liability coverage would probably be a wise investment.



160
      McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802 (1973).
161
      See e.g. Insure Trust, http://www.insuretrust.com/ (last visited Dec. 5, 2006).


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                          Part IV – The Future of Marketing as a Blogging Tool

          In conclusion, businesses are likely to continue to blog in greater and greater numbers.

All businesses should implement employee blogging policies, whether or not they decide to

operate a corporate blog, b-blog,162 or blawg,163 because it is likely that their employees are

already blogging. The advent of blogs has dramatically changed the speed and reach of

employees‟ communications with the world, creating many new legal risks and challenges for

companies. However, blogs also represent a vast opportunity. Smart companies will educate

themselves about blogs quickly and start educating their employees before problems develop.

Then, of course, good liability insurance coverage for their blogging activities would be ideal.

Going forward, as more blogging related cases come before the courts, jurists should use the

power of the judiciary to encourage companies to draft blogging policies by implementing

employer liability incentives that reward companies who provide well considered guidelines for

employee bloggers and follow through with employee training and appropriate policy

implementation.




162
      A b-blog is a business blog.
163
      A blawg is a blog written on legal topics by and for lawyers.



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