As the Sun reminds us today: celebs are hot for Twitter and Facebook. Lady Gaga, Justin Bieber and Stephen Fry have massive fan/follower bases that hang on their every Tweet and update, a potential bonanza for brands with Twitter-savvy celeb spokespeople. Ah, but not so fast. New rules in the UK designed to protect the public from the celebrity-endorsed Tweet could impact this practice before it gets a chance to take off, explains Nick Phillips, Head of IP & IT at law firm Barlow Robbins LLP.

We find ourselves in a period of transition. Starting 1 March in the UK, the CAP Code is to be extended from advertising and marketing communications to the digital remit, incorporating advertisements and other marketing communications on companies’ own websites, or other free online space which is under their control. The Advertising Standards Agency (ASA), which enforces the Code, launched a cross media ad campaign in January to raise awareness of the extension of the Code to the digital remit. Here’s what we know:

In practice there is a period of grace for companies in which to get themselves in line and ensure that their websites and other non paid for space meets an acceptable standard of legal, decent, honest and truthful if they are not quite there already and indeed on 18 January the ASA . Historical advertising is “safe” and needn’t be modified but what of advertising through Facebook, YouTube or other social networking sites?  Any pure advert compiled by the company and placed in social networking sites will be paid for and as such already covered by the Code but consider the current craze of celebrity endorsement of products in their own personal tweets, for which they might be able to earn thousands of pounds per tweet.

The Office of Fair Trading (OFT) has recently communicated that this practice is a contravention of the Consumer Protection from Unfair Trading Regulations 2008 and successfully elicited undertakings from Handpicked Media, an operator of a commercial blogging site who engaged individuals to endorse their clients without adequately disclosing the fact that the tweets and other posts were financially impelled and not merely free speech. The OFT’s issue is not with the fact that such tweets may constitute marketing material but rather the potential deception.  The OFT appears to think that the danger is that the public could well believe that such tweets are expressions of personal belief and give them credence accordingly whereas they might pay less attention where the tweet is expressly stated to be essentially an advert.

It does now seem possible, if not probable, that come March this year, the Advertising Standards Agency will take their own actions against companies who pay celebrities and individuals to endorse their products but do not disclose the fact.  This does look, on the one hand, like rather a hysterical reaction to something which most people consider with a certain level of cynicism and therefore an over-protection of that minority of vulnerable persons who cannot differentiate between a genuine opinion and a contrived endorsement.  However, the standard of legal, decent, honest and truthful really should not be such a heavy burden for us to bear.  The law is changing and the absence of “These tweets are my own” is just not enough anymore.

About the author:

Nick Phillips is Head of IP & IT at law firm Barlow Robbins LLP.

Is your company a legal-savvy social media player? There may be more to it than you think. The digital legal experts at Pinsent Mason, publishers of Out-Law.com put together a few tips to keep you social media team out of court. Here’s what you should know.

It all comes down to conscious and responsible communication. Customers have expectations about how a company will interact with them, and they don’t like it when it surprises them. At the same time, customers have a big voice, so any mistake by a big brand could snowball into a potential PR disaster.

You can see the whole presentation here, but here are some of the key points:

• Have an internal social media policy. Keys here: respect the opinions of others, be transparent and respect confidentiality. Make the policy as organic and open as possible. And, if you use common sense you don’t need to have everything reviewed by the lawyers.
• Have an effective governance structure. Yes, governance. It’s good to have employees interacting with the public in the name of the company then there needs to be a structure in place to ensure a consistent corporate message. To wit, gross employee misconduct online has legal risks, and it should be made clear that unprofessional messages will be punished.
• Make sure your published material is updated and relevant. The UK’s Financial Service Authority has strict regulations to ensure customers aren’t mislead. The CAP Code, legislation that obliges companies to be truthful in their published materials, is being extended to company websites and social accounts in March 2011. The UK’s Office of Fair Trading, too, is promising a crack-down on paid-for content.
• Make privacy protection the default of everything you do. Make sure your customers know what they are revealing when they participate on your comment sections. If customers want to share more, then let them opt-in. Never force them.

The co-author of this report is Struan Robertson, a long-time collaborator in the SMI conference series. On occasion of this updated presentation, we thought we’d go back just a year to review his brilliant SMI presentation on the legal dangers of social media marketing and publishing. It’s still as timely as ever, maybe more so. Take a look:

By Brett Farrell & Katie Hill

Facebook is just a cat’s whisker away from acquiring a trade mark in the USA for the word FACE.  Fat Face, FaceTime and The North Face will be obliterated by The Social Networking Wizard!  Beauty products of the world will be annihilated!  My face is no longer my face! No. The sky is not falling in.

Having a trade mark for a particular word or logo gives the proprietor the exclusive right to use that mark in connection with the goods or services that they provide.  If another party makes an unauthorised use of that mark, (or one which is confusingly similar) then registered proprietor can take action against the infringer and seek delivery up, erasure or destruction and damages.  A registered trade mark does not however provide the proprietor with an unfettered monopoly over the mark for all time and to infinity and beyond but only offers exclusivity for a particular class(es) of goods or services and for the territory in which it is registered.

Unsurprisingly, Facebook have applied for FACE to be registered in class 38, which relates to “telecommunication services, namely, providing online chat rooms and electronic bulletin boards for transmission of messages among computer users in the field of general interest and concerning social and entertainment subject matter” so their protection is limited to this sphere only.  A point which is amply demonstrated by the fact that Honda has a US trade mark for FACE in respect of motorcycles and Spencerhall too have trade marked FACE for their lotions and potions.  In total there are 1,558 live trade marks which incorporate FACE.  Facebook is no pioneer here it would seem.

Fat Face et al can breathe again.

Though a registered trade mark can be a valuable asset, the use of a mark, even without registration will create some rights and protections against others using it.  If the person using the mark is feeling particularly confident, then it could bring an action for passing off against a third party.  This can be difficult (and costly) to prove as the claimant must show that they have built a goodwill and reputation in the mark, that the use of the mark by another causes confusion and that they have been damaged by that use.  My guess is that Facebook would experience no crisis of confidence here.  FACE is arguably the dominant element of this mark and it is likely that, even without a registered trademark, if another company set up a social networking or similar site incorporating the word FACE, Facebook would robustly defend what has become quite clearly “their territory” and would have a decent shot at success.  Indeed, Facebook have already applied commercial pressure on their business partners such that recently FaceBakers have “elected” to rebrand to SocialBakers.

In addition to essentially codifying protection that Facebook already possess by virtue of their phenomenal market recognition, it is not at all an unexpected move for Facebook, other than perhaps that they have not done it sooner.  Facebook Inc already possess community trade marks for the word marks FACEBOOK and FACE and trade marks in the USA for WALL, POKE, LIKE and FB.

So, it isn’t unexpected, nor is it surprising.  It’s a limited protective method that Facebook could have effectively utilised anyway and, thankfully, my face is still my face.

ABOUT THE AUTHORS

Brett Farrell

Brett is a specialist technology and media lawyer at Barlow Robbins. Joining us from Mitsubishi UFJ Securities International plc where he worked in the capital markets, Brett has accrued a wealth of experience in this sector, with previous appointments at companies including Electronic Arts and BMG Music Publishing.

Katie Hill

Trainee Solicitor in the IP/IT Department at Barlow Robbins.

The leash on the UK’s advertising watchdog is being loosened and it will finally get its teeth into social networks, with an expanded remit covering Facebook, Twitter and advertisers’ own websites. It’s a move which is long-overdue, though it won’t take effect for another six months.

Currently, the Advertising Standards Authority (ASA) has power over paid-for advertising and sales promotions on- and offline; but the extended remit will give it authority over unpaid-for space on company websites and in social networks, such as company pages on Facebook.

The move is likely to be popular with consumers – The Register points out that the ASA had to reject 3,500 complaints about websites in 2008-09 because they fell outside its remit. And, with online marketing growing so rapidly, the ASA looks set for busy times.

It will be able to demand the removal of paid-for links to pages hosting a banned ad, and will be able to post its own online ads highlighting an advertiser’s failure to comply with a ruling.

So who will pay for all this extra work? The voluntary 0.1% levy, which currently funds the ASA, will be extended to include all search-engine advertising, and in the meantime, Google is handing over £200,000 to get things started.

The ASA is now gearing up for its new role with a six-month preparation period. We’ll be interested to see who’s first to feel the watchdog’s bite when the new rules take effect next March.

The FTC investigation into retailer Ann Taylor’s blogger payola flap sent a jolting wake-up call to businesses looking to drum up some positive word-of-mouth buzz via the blogosphere. Ann Taylor may have gotten off lightly, but there are still some hard lessons for businesses to come out of this. Here’s five lessons we draw from this matter:

1) The FTC takes company engagement of social media seriously and is watching.

Don’t presume that because this is such new territory, that there are no rules.
To the contrary, there are tough customer protection rules in place in both Europe and America, and they will be enforced.  The FTC made this law late last year to make sure business were letting bloggers keep to the spirit of blogging: unbiased and grassroots reporting. So, now anytime a business gets involved with blogging correspondents the blogger needs to disclose that information with his readers.

2) Social Media regulations are still in their early days. Brace yourself for more confusion.

Ann Taylor only got a slap on the wrist for the incident, but they probably won’t be so lucky next time around. FTC attorney Douglas Wood commented:

“I’m speculating, but what the FTC is doing is not being aggressive intentionally, so they can set up a standard they think is appropriate. Maybe they’ll do this a few more times. It’s not an unusual way to begin the educational process. In a way, it’s always good to be the first one looked at. The second one might not fare so well.”

3) Blogger Payola tactics is a questionable practice anyway.

This Gawker post sums up the failed buzz-generation attempt quite well:

“Good coverage in exchange for chance to win gift cards? Are bloggers that pathetic? Apparently not: While the Feds, like Ann Taylor, thought the promotion might produce a tidal wave of glowing coverage, it turned out ‘only a small number of bloggers posted content about the [collection] and several of those disclosed the gifts.’”

Apparently bloggers aren’t easily bought.

4) The long arm of the law has a wide reach.

If you’re a respectable business in the Western world you are going to be under the watchful eye of both the US and the EU governments. In fact, the EU passed similar regulation in 2007 to protect consumers from un-virtuous blogging.

5) Get your lawyer to catch up on the latest do’s and don’ts of social media consumer engagement.

There is new red tape all the time surrounding the use of SM for business purposes. If you’re going to get into using it (wait, you haven’t already?!) you should get to know the rules.

Editor’s Note: Learn more how major brands are going beyond campaigns to have a more fruitful dialogue with consumers at the Social Media Influence conference. Register before May 1 to get the early bird rate for the Social Media Influence conference.

Is Facebook on a collision course with privacy watchdogs? There have been isolated complaints in the U.S. and in Europe to rein in the rapidly growing social network and how it handles user data, but so far regulators have remained on the sidelines. That could change with a new feature Facebook is due to introduce later this week at its F8 conference.

Marketers are telling the Financial Times that changes in store for the 400-million-strong social network include turning the “Become a Fan” button underneath various content offerings to “Like.” (That much we already knew). The new bit is that the new “Like” content-sharing feature will enable marketers to see what users are responding favorably to, for purposes of targeting them down the line with an ad.

Facebook isn’t saying much at the moment, waiting instead for Wednesday to unveil the full details. Mashable explains though that this new social media marketing feature shouldn’t be too prickly for users, saying:

Facebook already targets ads using information from your profile, and this new system will not track all of your browsing… Rather, Facebook will offer sharing buttons to interested websites. Readers will be able to click on them to share the links with their Facebook friends via Facebook Connect

By extending Facebook connectivity outside the network, marketers will be able to see how people are interacting with their content and then respond accordingly with a targeted ad. What’s not to like about that?, most marketers are no doubt thinking.

Every day, quick bursts of highly targeted medical information are pumped into the Twitterverse, oblivious to most of us goof-offs blithely in search of the latest iPad reviews and Justin Bieber gossip. Lucky us. But, for the relatively small number of people who suffer from, say, the rare medical condition of Erythropoietic protoporphyria, where even the slightest exposure to sunlight can trigger spasms of intense pain, these bulletins are eagerly anticipated. One 140-character bulletin could hold the clues to a new treatment and a little relief.

Australian drugmaker Clinuvel has built a Twitter feed to cater to this small community who suffer from EPP, as it’s called. The pharmaceutical company is trying to get regulatory go-ahead for its drug, afamelanotide. Yesterday, it reported to its 267 Twitter followers that the Food and Drug Administration finally granted it approval to proceed with afamelanotide clinical trials in the U.S. It may still be years before it hits the market, of course, in the U.S.

Not long ago drug makers would hold off on discussing drugs in development until regulatory approval seemed imminent. Not so today. The public is hearing about drugs barely out of the labs. And it’s not just small drug makers likeClinuvel. Swiss pharma giant Novartis is an enthusiastic Tweeter, regularly sending out dispatches about drugs in the R&D stage, or drugs only approved overseas.

What makes this more remarkable is that Tweeting drugmakers (they are also active on Facebook too) may be breaking the rules in telling us about potential cures long before they get the green light. That’s right. To regulators, too much information can be a bad thing for the consumer.

It’s left the pharmaceuticals industry stuck in an odd bind. Millions of people may be scouring the Net daily for details on potential new cures, but thatdoesn ‘t mean those working on a breakthrough can let them in on the latest results. In this age of surfing-for-wellness-tips on social networks and niche medical communities, regulators in the United States and Europe are literally trying to turn back the clock to keep the information flow about new drugs in the pipeline to an easily controllable trickle.

Meanwhile, spammers and dubious drug vendors, not shackled by such restrictions, pound the net daily with false medical claims.

Big Pharma of course is not alone. Financial regulators have been unwilling to confront the ramifications of how social media is already transforming the way companies can communicate with the public. The Security and Exchange Commission and, in the United Kingdom, the Financial Services Authority, repeatedly ignore calls from companies to relax the rules against blogging, Tweeting and posting market-moving information even as investors are combing the same channels looking for detail.

Last year, in a belated attempt to address this imbalance in the pharmaceuticals industry, the Food and Drug Administration convened a series of meetings with industry executives to try to reach some agreement on how social media could be used by BigPharma to market more effectively their drugs to a demanding public. So far, the process has been bogged down by sticking points over what can and cannot be disclosed – for example, should all the potential harmful side effects of a new medication be revealed in a single Tweet? And what about guidance on how to set up aFacebook fan page for some new HIV drug?

Not surprisingly, the medical community is exasperated. Joel Selzer, the co-founder of the physicians online network Ozmosis has issued a call to action demanding the regulators resolve this matter soon. “While holding the public hearings was a great step forward, the FDA needs to augment its social media expertise and it needs to do so quickly,” he argues.

The solution here need not be a complicated one. Instead of focusing on what cannot be communicated, what about trying the opposite approach? What about putting all the information – the promising, the worrisome and the unknown – out there in one place for a discerning public to consider? Regulators are always a few steps behind new technological innovations. That’s a given. But in this case it’s not the technology that needs to be better understood by regulators, it’s the public. Consumers are already combing patient forums, online support groups or physician networks to find and relay medical advice to others. Why deny them this?

Meanwhile, drug makers like Clinuvel see this revolutionary shift in the patient-doctor dynamic and are joining this discussion, not waiting for regulators to decide on the industry standard for aPharma Tweet or Facebook page. The clock is ticking. As one member of a Facebook Porph yria support group (where EPP is at times discussed) posted this week, “I’m 34 and just been diagnosed with HCP. Does anyone know of any specialists that treat porphyria in Canada? I can’t find anyone. Thanks for your help.”

Should drug makers be required to disclose up-front all the potential harmful side effects of new medications within a single, 140-character Tweet? And what about guidance on how to set up a Facebook fan page of some new HIV drug?

It’s amazing to think that regulators in the U.S. and Europe still haven’t figured out how Big Pharma can use social media to engage with potential patients, not to mention the friends and families of those afflicted with serious medical conditions. All too often, niche online medical forums are the first place people turn to learn more about new treatments when confronted with a confounding new malady. And still, regulators are forcing drug makers to remain on the periphery, forbidding most kinds of interaction with the public. To be sure, many of the world’s largest drug makers monitor healthcare social media forums to better understand how their customers or potential customers feel about certain types of treatment, but it’s just that: listening. Most forms of engagement are still verboten.

Under this backdrop, the Food and Drug Administration in America has convened hearings and is seeking input from the industry to determine rules of engagement. It’s been a slow process, indeed.

As Ad Age , the citing trade association Pharmaceutical Research and Manufacturers of America wants the FDA to speed up the decision-making process. It quotes the PhRMA as saying:

“At a time when more than half of adults first turn to the internet to find health information, the extraordinary volume of dangerous and inaccurate information about medicines on the web makes the FDA’s leadership on this topic all the more essential.”

It’s not just drug makers that want some guidance. Doctors too want clearance to use social media channels to start talking about novel new treatments. In a strongly worded post last November, Joel Selzer, the co-founder of the physicians online network Ozmosis issues a call to action demanding the regulators resolve this matter.

With thousands of physicians actively using social media every day to access and share medical information (see Rohit Bhargava’s post on “How Doctors Are Using Social Media“, one would expect pharmaceutical and medical device firms to salivate at the engagement possibilities…While holding the public hearings was a great step forward, the FDA needs to augment its social media expertise and it needs to do so quickly.

The Twitter advertizing platform isn’t even live yet and the UK’s advertizing standards watchdog already wants tighter controls. The same goes for Facebook.According to The Guardian, the ASA wants oversight of all forms of social media advertising, not just the digital remit it has today of banner and web site display ads. The ASA says tighter controls of social media marketing – i.e. governing how user profiles may be used by advertisers wishing to incorporate their fresh faces in real time into their promotions – is designed to protect children and minors on social networks.

The ASA’s push into social media marketing comes as little surprise. Any time members of the public knowingly (hopefully, knowingly) participate in a brand campaign it opens up a whole new set of advertising standards issues. For privacy scaremongers, take heart: most major brands tread with extreme caution when it comes to incorporating the public into their brand campaigns. Still, the sting of an ASA sanction/fine should make all marketers even doubly cautious.

Tag this one “kettle,” “pot,” “black.” The growing prospects of a Google antitrust probe on both sides of the Atlantic has drawn into the fray the search giant’s biggest nemesis: Microsoft. Not surprisingly, what’s shaping up to be the first major tech antitrust battle of the Twitter era is being fought in the public — and, yes, your input is wanted. Within hours of word leaking that Europe competition watchdogs were looking into Google’s dominance in the search market, Google fired back on its corporate blog, defending its image as the benign and innovative force in search. Its blog readers were largely supportive of Google, suspiciously seeing Microsoft’s fingerprints all over this complaint. Among the 15 replies left, one reader writes:

I do think this is backed by Microsoft, they are loosing ground because they have lost the competitive edge. I remember a company named Netscape that had similar complaints about Microsoft and unfair business practices. If I create a better mouse trap and people like it, then why would I change it. People have choices.

On Friday, it was Microsoft’s legal counsel Dave Heiner turn to weigh in on Microsoft’s corporate blog, saying, yes, they’ve been discussing with regulatory authorities Google’s dominance and even bemoaning that some of Google’s businesses “appear to raise serious antitrust issues.”

Three times as many people responded to Heiner’s blog post, nearly all with incredulity. Microsoft, a champion of the little guy?, they sputtered.

Make no mistake, antitrust battles are fought with high-powered lawyers and PR teams that spin, attack, then spin and attack some more. Fascinating to see these two giants to draw the public so quickly into the debate. Courting public opinion will be crucial as this titanic clash plays out. Where do you stand?