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ANALYSIS: Big Social Media Has a Major Say Over User IP Rights

Sept. 22, 2021, 9:00 AM

In a court filing last week, Instagram sent a blunt message to anyone thinking of accusing it of facilitating infringement: You signed up for this. A close look at major social media platforms’ user terms shows that Instagram is not alone in acquiring broad content rights—and that’s unlikely to change.

Broad Terms Used as a Shield

In support of its (now successful) motion to dismiss a copyright class action filed in California, Instagram defended its eight-year-old web embedding feature by contending that users “licensed away” their rights. “Embedding” enables third parties to place code onto their websites to display social media content without copying it from its source. Plaintiffs claimed Instagram lured online publishers into embedding posts without permission in a “scheme” to benefit from a wider digital presence.

While Instagram’s defense focused on a nuanced application of the “server test”—a copyright theory affirmed by the Ninth Circuit in 2007 and currently under assault—its motion reached a straightforward conclusion: The real obstacle to plaintiffs’ claim is Instagram’s terms.

Phrases That Trigger Déjà Vu

A recent Bloomberg Intelligence report highlighted Alphabet (parent of YouTube), Facebook (parent of Instagram), Twitter, Snapchat, and Pinterest as companies with high engagement and ad revenue growth. Their respective user terms demonstrate tremendous bargaining power.

Major Change Is Not Likely

It is unlikely that provisions will change due to embedding-related claims against publishers. The litigation hurdles are daunting. To invalidate the Ninth Circuit’s server test (which deserves a separate analysis), there must be a circuit split. For example, the Second Circuit could affirm rulings from federal judges in New York, who are chipping away at this theory as claims increase. Then, for a nationwide shift, the U.S. Supreme Court must agree to resolve the split and rule against Ninth Circuit precedent.

Even if these hypotheticals all come true, platforms could appease would-be plaintiffs simply by granting users the option to restrict third-party embedding of their content, as some providers have already done.

Bloomberg Law subscribers can find guidance on drafting advertising and marketing agreement terms, including for co-branding arrangements, copyright licenses, and image releases, in the Marketing & Advertising module of our Practical Guidance: Engagement & Services Agreements resource page.

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