From Ars Technica:
Trying to control customer opinions online is nearly always a losing game for a business, and there’s now a long line of cases where it has backfired on companies. We uncovered a new example this month, when a reader contacted Ars Technica to show us the “Social Media Addendum” that his Florida apartment complex, called Windermere Cay, included in his lease.
The Social Media Addendum, published here, is a triple-whammy. First, it explicitly bans all “negative commentary and reviews on Yelp! [sic], Apartment Ratings, Facebook, or any other website or Internet-based publication or blog.” It also says any “breach” of the Social Media Addendum will result in a $10,000 fine, to be paid within ten business days. Finally, it assigns the renters’ copyrights to the owner—not just the copyright on the negative review, but “any and all written or photographic works regarding the Owner, the Unit, the property, or the apartments.” Snap a few shots of friends who come over for a dinner party? The photos are owned by your landlord.
. . . .
Not only is such a contract unenforceable, but it could expose anyone promulgating it to legal repercussions, Santa Clara University Law Professor Eric Goldman explained.
“It would be a terrible idea to enforce this in court. A judge is going to shred it,” Goldman said in an interview. “If a person posts an Instragram photo of them having a party in their apartment, the landlord is saying they own that as well. The overreach reinforces that this clause is bad news, and it may be actionable just to ask.”
. . . .
It’s been clear that such contracts are legally questionable since at least 2003, when the New York v. Network Associates decision came out. In that case, a judge found that telling customers they couldn’t publish reviews of software “without prior consent” violated New York’s unfair competition law. In Goldman’s opinion, “no review” contracts like the one pushed by Windermere could also lead to legal trouble under federal law, since the FTC Act bars “unfair and deceptive” business practices.
Goldman has written about some of the most notable attempts by businesses to squelch customer reviews, although he said the Windermere Cay Social Media Addendum is the first time he has seen such an attempt in the landlord-tenant context.
Link to the rest at Ars Technica
PG hadn’t heard about New York’s Unfair Competition law, so he did a little research (a little research can be a dangerous thing for a lawyer assisting a client, not so much for a blogger).
From The New York Litigation Guide:
We have long recognized two theories of common-law unfair competition: palming off and misappropriation.” ITC Ltd. v. Punchgini, Inc., 9 N.Y.3d 467, 476 (2007).
- Defendant misappropriated the fruits of Plaintiff’s labor by obtaining access to plaintiff’s ideas through fraud or deception, or the abuse of a fiduciary or confidential relationship; and
- “(1) that the defendant’s activities have caused confusion with, or have been mistaken for, the plaintiff’s activities in the mind of the public, or are likely to cause such confusion or mistake; or (2) that the defendant has acted unfairly in some manner.”
KG2, LLC v. Weller, 105 A.D.3d 1414, 1415 (4th Dep’t 2013).
. . . .
Misappropriation is “[t]he principle that one may not misappropriate the results of the skill, expenditures and labors of a competitor has . . . often been implemented in [New York] courts.” ITC Ltd. v. Punchgini, Inc., 9 N.Y.3d 467, 477 (2007).
“‘While [t]here is no complete list of the activities which constitute unfair competition, [t]he general principle . . . is that commercial unfairness will be restrained when it appears that there has been a misappropriation, for the commercial advantage of one person, of a benefit or property right belonging to another.’” IDG USA, LLC v. Schupp, No. 10-CV-76S(F), 2012 U.S. Dist. LEXIS 151554, at *31-32 (W.D.N.Y. Oct. 21, 2012).
Link to the rest at The New York Litigation Guide
PG did a little research because he immediately thought about the non-compete clauses included in the contracts of every large New York publisher. Basically, these clauses say something like “author shall not publish any book that might compete with (the books subject to the contract).” These same contracts also specify that New York law will apply to them.
Since the non-compete clauses are included in contracts that last for the full term of the copyright – the rest of the author’s life plus 70 years in the US – PG wonders if such non-compete clauses represent “a misappropriation, for the commercial advantage of one person, of a benefit or property right belonging to another” or that the publishers have “acted unfairly” under the relevant law and cases.
PG will warn all and sundry visitors that this isn’t a legal opinion or even a legal speculation, just a blog post.