Quick Legal Lessons on Facebook’s Policies

Rumors have been spreading around Facebook that since it is now a publicly traded entity, any information you post on Facebook can be infringed upon by anyone. The rumors continue that in order to protect yourself, you have to post a public declaration claiming your rights to your content.

Needless to say, these rumors are false. We decided to share some basic legal concepts to help you understand your relationship with Facebook.

  1.  What does it mean to be a publicly traded company?
    “Going public” is a term of art meaning that a company’s stock is bought and sold on a public exchange (such as the New York Stock Exchange, for example). This only affects the way the ownership of the company is held (and also brings many regulatory and legal burdens). However, it does not change the nature of the substantive business of the company. Since Facebook is now publicly traded, Facebook will now have to make several disclosures to the SEC and file quarterly and annual reports. It will also have to hold annual shareholder meetings and (in theory) anyone who owns a share has a vote. The manner in which the Facebook social media website operates is essentially unaffected.
  2. Does the legal [sounding] declaration in my Facebook status have any teeth?
    No. Business relationships (such as the one between you and Facebook) are governed by contract law and not unilateral declarations. Sounds obvious, right? Imagine signing a lease to rent an apartment for $1,200/month and then 5 days later, your landlord shows up at your doorstep and publicly declares to everyone that the rent shall now be $1,500/month. Yea, it doesn’t quite work.When you signed up for an account with Facebook you were asked to “agree” to their terms and conditions and privacy policy. When you clicked “Ok” or “I agree,” the contractual relationship was created. That contract governs everything between you and Facebook. Any unilateral declarations you make now are meaningless. If you want to alter the contract you agreed to, you have to use the means of contract modifications included in the original contract. In this case, the only way to change the relationship is to cancel your subscription to Facebook or contact Facebook’s legal department directly and negotiate modified terms and conditions. (Good Luck!)
  3. Who owns the rights to the intellectual property (photos, quirky statuses, notes, clever memes) I post on Facebook?
    You do. According to Facebook’s privacy policy that YOU AGREED TO, you own all of your content. Owning intellectual property is the same as owning real property (for example, a house). You can use the house yourself, you can rent the house to others, you can sell the house, you can pay others to rent the house for you, etc. In the realm of intellectual property, you can use your content yourself by posting pictures on your profile or share with friends or whatever and obviously you can sell the rights to someone else to use. The intellectual property equivalent of renting is licensing. You can keep your rights but allow others to use them by issuing them a license for use. The license can be broad or narrow based on whatever you want to do. Similarly, someone can rent just your basement or they can rent the whole house.

So, what does Facebook get out of your content? They get the following: “a non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to use any IP content that you post on or in connection with Facebook.” That’s a mouthful. This means Facebook can use any of your intellectual property (photos, text, etc.) however it wants for free AND if it wants, it can tranfser this right to a third party or even license other third parties to use it. Ironically, Facebook may sell a license to this very article to a third party. In our house analogy, this means that you own the house, but Facebook can come and go as it pleases and maybe crash with some friends and then you have to get up early to make breakfast for everyone. Okay, maybe that’s taking our analogy too far…

Does it sound like Facebook pretty much owns your intellectual property? Well don’t worry too much. You are still the owner and as owner you can terminate this broad license to Facebook by simply deleting the content from Facebook or deleting your account. Keep in mind that if you shared your status with your 9000 friends and then deleted your account, it may be still be floating around Facebook and subject to the license.

Lessons Learned:
READ the agreements you enter into!!!

Happy Facebooking Everyone!