Facebook and Privacy: cases, reports and actions in Europe

Facebook and Privacy: cases, reports and actions in Europe

A list of European enforcement action, official legislative (Parliamentary) reports, and cases concerning Facebook with respect to data protection and privacy. This is a work in progress, last updated November 2018.

Data Protection Commissioner (Ireland) v Facebook Ireland Limited, Maximillian Schrems [Case C-311/18]

  • Jurisdiction: European Union, Ireland
  • Status: Case still in progress
  • Authority:  Court of Justice of the European Union
  • Keywords: EU Data Protection Directive (95/46/EC); EU/US Privacy Shield; Fundamental Rights

Continue reading “Facebook and Privacy: cases, reports and actions in Europe”

Transatlantic Data Transfers: US-EU Privacy Shield under review

When personal data travels between Europe and America, it must cross international borders lawfully. If certain conditions are met, companies can rely on the US-EU Privacy Shield, which functions as a sort of “tourist visa” for data. 

Earlier this week (19 November) the United States Federal Trade Commission finalised settlements with four companies that the agency accused of falsely claiming to be certified under the US-EU Privacy Shield framework. This news closely follows the highly anticipated second annual joint review of the controversial data transfer mechanism. 

IDmission LLC, mResource LLC, SmartStart Employment Screening Inc., and VenPath Inc. were slapped on the wrist by the FTC over allegations that they misrepresented their certification. But this is just the latest saga in an on-going debate regarding the Privacy Shield’s fitness for purpose. Only this summer, the European Parliament urged the European Commission to suspend the Privacy Shield programme over security and privacy concerns.

flying airplane

Background and purpose

Designed by the United States Department of Commerce and the European Commission, the Privacy Shield is one of several mechanisms in which personal data can be sent and shared between entities in the EU and the United States. The Privacy Shield framework thereby protects the fundamental digital rights of individuals who are in European Union, whilst encouraging transatlantic commerce.

This is particularly important given that the United States has no single, comprehensive law regulating the collection, use and security of personal data. Rather, the US uses a patchwork system of federal and state laws, together with industry best practice. At present, the United States as a collective jurisdiction fails to meet the data protection requirements established by EU lawmakers.

As such, should a corporate entity or organisations wish to receive European personal data, it must bring itself in line with EU regulatory standards, known as being “protected under” the Privacy Shield. To qualify, companies must self-certify annually that they meet the requirements set out by EU law. This includes taking measures such as displaying privacy policy on their website, replying promptly to any complaints, providing transparency about how personal data is used, and ensuring stronger protection of personal data.

Today, more than 3,000 American organisations are authorised to receive European data, including Facebook, Google, Microsoft, Twitter, Amazon, Boeing, and Starbucks. A full list of Privacy Shield participants can be found on the privacyshield.gov website.

Complaints and non-compliance?

There is no non-compliance. We are fully compliant. As we’ve told the Europeans, we really don’t want to discuss this any further.

—Gordon Sondland, American ambassador to the EU

Although the Privacy Shield imposes stronger obligations than its ancestor, the now-obsolete “Safe Harbor,” European lawmakers have argued that “the arrangement does not provide the adequate level of protection required by Union data protection law and the EU Charter as interpreted by the European Court of Justice.”

In its motion to reconsider the adequacy of the Privacy Shield, the EU Parliament stated that “unless the US is fully compliant by 1 September 2018” the EU Commission would be called upon to “suspend the Privacy Shield until the US authorities comply with its terms.” The American ambassador to the EU, Gordon Sondland, responded to the criticisms, explaining: “There is no non-compliance. We are fully compliant. As we’ve told the Europeans, we really don’t want to discuss this any further.”

Věra Jourová, a Czech politician and lawyer who serves as the European Commissioner for Justice, Consumers and Gender Equality, expressed a different view: “We have a list of things which needs to be done on the American side” regarding the upcoming review of the international data transfer deal. “And when we see them done, we can say we can continue.”

Photo: Ambassador Sondland with Commissioner Jourova in the Berlaymont.
Jourová and Sondland, via a tweet from Sondland saying he was “looking forward to our close cooperation on privacy and consumer rights issues that are important to citizens on both sides of the Atlantic.” 

The list from the Parliament and the First Annual Joint Review [WP29/255] (.pdf) concerns institutional, commercial, and national security aspects of data privacy, including:

  • American surveillance powers and use of personal data for national security purposes and mass surveillance. In particular, the EU is unhappy with America’s re-authorisation of section 702 of the Foreign Intelligence Surveillance Act (FISA), which authorises government collection of foreign intelligence from non-Americans located outside the United States (Remember Edward Snowden and PRISM? See the Electronic Fronteir Foundation’s explanation here)
  • Lack of auditing or other forms of effective regulatory oversight to ensure whether certified companies actually comply with the Privacy Shield provisions
  • Lack of guidance and information made available for companies
  • Facebook and the Cambridge Analytica scandal, given that 2.7 million EU citizens were among those whose data was improperly used. The EU Parliament stated it is “seriously concerned about the change in the terms of service” for Facebook
  • Persisting weaknesses regarding the respect of fundamental rights of European data subjects, including lack of effective remedies in US law for EU citizens whose personal data is transferred to the United States
  • The Clarifying Overseas Use of Data (“CLOUD”) Act signed into law in March 2018 allows US law enforcement authorities to compel production of communications data, even if they are stored outside the United States
  • Uncertain outcomes regarding pending litigation currently before European courts, including Schrems II and La Quadrature du Net and Others v Commission.

 

Image result for max schrems
Max Schrems is an Austrian lawyer and privacy activist. In 2011 (at the age of 25) while studying abroad at Santa Clara University in Silicon Valley, Schrems decided to write his term paper on Facebook’s lack of awareness of European privacy law. His activism led to the replacement of the Safe Harbor system by the Privacy Shield.

What happens if the Privacy Shield is suspended?

In a joint press release last month, the representatives from the EU and USA together reaffirmed “the need for strong privacy enforcement to protect our citizens and ensure trust in the digital economy.” But that may be easier said than done.

In the event that the Privacy Shield is suspended, entities transferring European personal data to the United States will need to consider implementing alternative compliant transfer mechanisms, which could include the use of Binding Corporate Rules, Model Clauses, or establishing European subsidiaries. To ensure that the American data importer implements an efficient and compliant arrangement, such alternatives would need to be assessed on a case-by-case basis involving careful review of data flows, and the controller and processors involved.

Regardless of the method used to transfer data, American companies must ensure that they receive, store, or otherwise use European personal data only where lawfully permitted to do so. The joint statement noted above concluded by saying that the “U.S. and EU officials will continue to work closely together to ensure the framework functions as intended, including on commercial and national-security related matters.”

The European Commission is currently analysing information gathered from its American counterparts, and will publish its conclusions in a report before the end of the year.

Noteworthy interview on new social media advertising regulations

Noteworthy interview on new social media advertising regulations

Earlier this autumn, several celebrities were investigated by UK regulators for not labelling social media posts as “advertisements”. Given that so-called influencers can potentially sway the shopping habits of millions, the Advertising Standards Association published An Influencer’s Guide to making clear that ads are ads, to help celebs and bloggers avoid misleading consumers. But what does this guide really mean in practical terms? To better understand the world of influencers and online advertising, I’ve interviewed Nicole Ocran-Hegarty: journalist, style blogger, and Influencer Strategy Manager at Disney.

noteworth

Kelsey:  Nicole, you and I first met online about 15 years ago on the blogging platform Livejournal. Since then, we both – coincidentally – moved from the United States to London, where we finally met in real life!

Can you tell me a bit about your professional background in journalism, and what inspired you to begin your personal fashion blog, The Noteworthy?

Nicole:  I honestly cannot get over how the Internet brings people together. I remember typing away and commenting on your LiveJournal and messaging you from my childhood bedroom in Annandale, Virginia. You were constantly here there and everywhere and I was so jealous of that. Anyway, I’m already off topic!

My career in journalism started when I was 19 or 20 and a student at George Mason University. I had just started editing the Style pages of my university’s student newspaper, the Fourth Estate. It was there that I really honed my craft, my love of writing, editing of interviewing. In my junior year I became editor-in-chief of the paper: I lived and breathed the paper, and didn’t want to do anything else but be in the Student Media office. I also was interning at the The Washington Post’s free daily paper, Express.

By the time I graduated from George Mason, I started another internship at the non-profit Student Press Law Center, fighting for First Amendment rights for students across America. At the same time I applied to City University in London, and went with their journalism masters programme! It was the best decision I ever made.

In London, I got my first job in entertainment journalism at Entertainment News, and I’ve since written for the Metro, The Sun and Refinery29 UK! I decided to start The Noteworthy while I working in a job where I wasn’t really able to express myself through personal writing. When I got made redundant, The Noteworthy became a real outlet for me, as I was able to showcase my love of fashion, where I hadn’t been able to before.

nwty2
In addition to writing about style, fashion and beauty, Nicole routinely explores topics about feminism, politics, Black women, and pop and celebrity culture. Recently, she explained why she won’t shop at Topshop anymore in light of the Philip Green sexual harassment scandal.

Under the new Influencer’s Guide, bloggers only need to disclose something as an advert if: (1) they’ve been “paid” in some way, which could include receiving a freebie, AND (2) they are under some form of editorial “control” by the brand. What are your thoughts on this? Do you think most people are aware of the “control” aspect? Do you think it matters?

I have so many thoughts on this! Firstly, I think disclosure is incredibly important. We’re in an age now where not only are audiences incredibly savvy but they’re also somewhat skeptical. It’s so important to be completely honest about their gifted items, paid campaigns, free trips and so on. Especially in an age where we are just feeling terrible and comparing ourselves to everything we see online.

I’m not sure how much the general public knows how much control a brand has over content. Often it can be very clear and sometimes it doesn’t look authentic to that influencer, so it can be a bit obvious. Other times, the brand might gift the influencer a product without any expectation for them to post, so it ends up just fitting in naturally.

The control aspect is key. If a brand gifts you an item, but then expects you to post on a certain day or see content before it goes live – then this is sponsored content. Even if you haven’t been paid for it, and that must be made clear to your audience. The guidelines are in place to protect consumers, which I appreciate.

You mention “gifting” by brands. Is the distinction between “paying” and “gifting” a product an important one to make? If so, why?

To me, yes. The two mean completely different things in my mind – when something is paid, I think of brand control, I think of money exchanging hands, and contracts signed. Gifted items and freebies although have monetary value, should be made clear in a different way. I do prefer to know that an influencer hasn’t purchased that product with their own money, for example, or didn’t pay for that holiday.

Something I hear often from colleagues and friends is that advertising on social media is “obvious enough,” and that consumers don’t need the #ad hashtag or similar disclaimers. As a general rule, do you think bloggers and influencers are actually clear and transparent enough? Is there sufficient self-regulation? Or were the regulators right to step in with new rules?

There are definitely #ads and #sponcon that are extremely obvious with their advertising messaging and aren’t being declared as such – but I don’t think that should matter. The regulators are absolutely right to step in with new rules and best practice. I also think there’s been a real effort from bloggers and influencers to declare ads, but there are still a select few (including celebrities and reality stars) getting away with not doing it.

What do you think some of the biggest concerns influencers and bloggers have with making it clear that adverts are indeed adverts? Aesthetics? Independence? Credibility?

I think fatigue? I think there are a lot of consumers who feel like they are constantly being advertised to, but we spend so much time on our phones, our laptops and social media now that advertising is just becoming more obvious. It’s always been there in TV, radio and print!

no ad

But at least for me, a lot of the bloggers that I followed before they were known as influencers, I followed them because I liked them as people (or their online personas), so I understand it can be jarring to see an ad thrown in with their regular content. But I enjoy supporting them still because I feel like I’ve been on that journey with them.

If you could speak to the advertising regulators directly and tell them one key thing about this issue, what would it be?

I do think a lot of the declaration can feel excessive, which does cause people to have to say “This isn’t an ad, I just love X”. My main issue has been the distinction between a gifted item as payment, especially as there can be a lot of influencers who receive gifted product and declaring it as an ‘ad’ or as ‘sponsored’ to me as a consumer, means something else entirely.

Finally, what have been the most challenging and rewarding things about running your own fashion and lifestyle blog thus far? What is something you hope to accomplish or participate in over the next few months?

The most challenging thing is time! I still work full-time in talent/influencer strategy, so that is my 9-5 job. Having to run my blog during evenings and weekends can be pretty tiring but also I just wish I could do more!

The most rewarding by miles and miles are the friendships I’ve made through blogging, that is what I cherish the most and is what keeps me coming back to create more content! Being able to speak to people all over the world is just a joy.

I hope to be able to get my life in order and continue to post consistently! Anything I can do to write more would be ideal, so hopefully some more freelance opportunities, or even speaking opportunities as well!

banner

Many thanks to Nicole for sharing her time, expertise and insight with me for this interview! You can follow her at The-Noteworthy.com, on Instagram at @NicoleOcran, and on Twitter @NicoleOcran

The MPRE: my experience sitting the American legal ethics exam as an English lawyer

The MPRE: my experience sitting the American legal ethics exam as an English lawyer

The Multi-state Professional Responsibility Exam, or “ethics exam” (MRPE) is one of three exams required in order to practice law in an American state (more on that here). Having just taken the exam, here are my thoughts as an English-trained solicitor currently practicing in London. 

🌟 UPDATE: I passed the exam! I exceeded the score I needed for California.

For more information on how the United States and English legal systems compare, read my post “Lawyering in America and England”. 

Introduction to the MPRE

The MPRE tests a prospective lawyer’s understanding of professional ethics regulation in the United States. The questions are based on the Model Rules of Professional Conduct (MRPC). The MPRE is a 60-item (50 scored questions and 10 non-scored questions), two-hour multiple-choice examination administered three times each year at established test centers across the country. You must pass the MPRE before you can be admitted to practice in the United States, but you can take it anytime after completing their first year of law school (including after sitting the bar exam itself).

I chose to sit the exam in New York City because: 1) it’s easiest to get to from London and 2) my husband works for a NY headquartered company, so he was able to meet up with colleagues while we were there. My score will be sent to my jurisdiction of choice, which happens to be California.

One Pace Plaza
I took the exam at Pace University in Manhattan. My only complaint was that the individual desks were really tiny, but other than that, it was a good test day experience. 

Test day

On the morning of the exam, I woke up at about 5AM: this was due to still being on “London time” and somewhat jet-lagged! I bought some coffee and brought it back to the hotel room, and spent about an hour doing some last minute cursory revision.

At 8AM, I walked the three blocks to the testing centre at Pace University. The reporting time was at 8:15, and there was already a massive queue of students and prospective lawyers outside. We were held in the queue for about 30 minutes, and I enjoyed chatting to a few people about our various career stages. I even spoke to a young guy who was resitting the exam after failing it previously. It’s important to maintain some perspective: failing isn’t the end of the world!

At 8:45AM we began to stream into the building, where people were turned away for having backpacks (the rules clearly state NO BAGS). At one point a test invigilator said, “if you have cellphones, don’t tell me about them! Just make sure they’re turned off and hidden away!” Phones, like bags, are also forbidden – but I suppose there was a slightly more lenient approach to having them on this occasion.

We then went through the process of having our admission tickets checked against our ID, and sent into our testing rooms. At Pace, we sat in small classrooms with about 20 people per room: there wasn’t any assigned seating, it was simply done on a first-come, first-seated basis.

By 9AM, everyone in my room was seated and the door was closed. The invigilator read instructions about the exam, and we had a few minutes to fill out the various bubbles with our names and other bits of information. At 9:10AM we were permitted to break open the seal of our papers and begin.

study
The day before the exam, I spent a few hours studying in the famous Rose Reading Room at the New York Public Library

Preparation

I probably invested about 50 hours in studying for the MPRE over the course of two months. That time also includes “passive studying,” such as listening to MPRE lectures while on the tube, for example.

  • I first familiarised myself with the subject matter breakdown of the exam itself, available here on the NCBE website.
  • I listened to and read the BarMax lectures, which are free for the MPRE.
  • I did a lot of practice questions, using BarMax as well as AmeriBar.
  • I read through the MRPCs on the ABA website.
  • I identified which questions were tripping me up and what Rule they related to. I then read the explanatory comments for those particular rules, also available on the ABA website.
  • I read through all of the test day instructions at least one week prior to the exam itself, so I knew exactly where to go and what to bring (for example, a passport photo in addition to ID!)

Final thoughts and tips

  • Do focus your energies on practice questions when studying! This exam is not about understanding the theory or philosophy of professional ethics. You will not be writing essays about the merits of client confidentiality!
  • Do review the commentary for rules that you want more clarity on. The commentary is far less vague than the rules, and often includes practical examples.
  • Do not underestimate this exam. Especially as a foreign lawyer, I found some of the rules a bit counter intuitive. Don’t be tempted to cram the night before: I strongly recommend dedicating 20 hours to studying for this exam if you’re an American law student, and more if you’re a foreign lawyer.
  • Do feel free to contact LSAC ahead of time at MPREinfo@LSAC.org if you have questions, including questions about test center assignments. I originally registered to take the exam in Seattle but then changed my mind. LSAC staff were very helpful and the change only took one email to initiate.
  • Do not bother trying to memorise the rules!
  • Do not worry about drinking too much coffee on the morning of the exam. You will have plenty of opportunities to use the toilet – at least I did at my centre!
  • Do manage your time. You will have two minutes per question. Some questions only took me 20 seconds to answer. My advice? Go through the exam answering everything you can on a first pass. If you come across anything that requires a bit of contemplation, write the question number down on the test booklet, and return to it later. When you go through the exam for a second time, cross off the difficult questions from your earlier list.
  • Do not be afraid to guess, if for whatever reason you can’t come up with the answer. There are no penalties for wrong answers, so just give it your best shot!

Image result for mpre

From stealing to kneeling, what do NFL player contracts say about “bad” behavior?

From stealing to kneeling, what do NFL player contracts say about “bad” behavior?

Three times each year, two professional American football teams journey across the pond to play against each other in the NFL London Games. This weekend however, four players from the Jacksonville Jaguars made headlines for something they did off the field. They were arrested under suspicion of fraud by false representation for attempting to leave a nightclub without paying the £50,000 ($64,000) bar tab.

According to ProFootball Talk, expensive bottles of champagne and vodka were sent to the players’ table. They thought someone else was paying, and were surprised to learn that they were expected to pay. The bill was settled hours after the arrest, and the players were released with no further action taken by police. “There was definitely a misunderstanding,” said Barry Church, one of the players arrested. “We handled it as a private matter within the team, and we’ll just go from there.”

Screenshot 2018-10-30 at 5.44.56 PM

Despite their fame and talent, at the end of the day, professional athletes are capable of making mistakes just like the rest of us. But unlike the rest of us, sports stars are often contractually obligated to maintain a positive reputation.

The NFL has had a formal policy addressing off-field conduct since 1997. The current 2014 Personal Conduct Policy prohibits physical violence, illegal possession of a gun or drugs, and cruelty to animals – remember Michael Vick and his dogfightingBut the policy also prohibits anything “that undermines or puts at risk the integrity of and public confidence in the NFL.” Even if a player’s conduct does not result in a criminal conviction, the NFL can impose fines, suspension, or even banishment from the league.

In addition to the NFL Policy, individual player contracts also contain “morality clauses.” Also known as a “moral turpitude clause” or “bad boy clause”, this permits an employer to end the contractual relationship if the employee’s conduct breaches the moral expectations laid out in the employment or endorsement agreement. For my overview of the history and use of morality clauses more generally, see Morality Clauses in Talent Contracts.

The 2012 contract between Arian Foster (“Player”) and the Houston Texans (“Club”) is available online thanks to a (fascinating) IPO filing with the Securities and Exchange Commission. Clauses regarding Foster’s behaviour and conduct included:

  • Player agrees to give his best efforts and loyalty to the Club, and to conduct himself on and off the field with appropriate recognition of the fact that the success of professional football depends largely on public respect for and approval of those associated with the game. 
  • If at any time, in the sole judgement of Club, Player has engaged in personal conduct reasonably judged by Club to adversely affect or reflect on Club, then Club may terminate this contract.
  • Player recognizes the detriment to the League and professional football that would result from impairment of public confidence in the integrity and good character of NFL players.

“Meaning Transference” and marketing magic

You might be wondering why a football team should care about the off-field behaviour of its players. As long as the guy can run the ball or block a tackle, who cares if he’s arrested for trying to skip out on a bar tab. Right? Wrong.

Consider for a moment the amount of money teams and companies invest in employment contracts and endorsement agreements. By way of example, Russell Wilson earned $2 million during his first three seasons with the Seattle Seahawks. In 2015, the Hawks rewarded their quarterback with a renewed contract worth nearly $90 million. Wilson also gets $10 million a year from his deals with Bose, Nike, and Alaska Airlines. On the other side of the country, the New York Giants’ wide receiver Odell Beckham Jr is earning about $10 million over four years. But the real kicker is that Nike recently signed him for the biggest shoe endorsement ever, worth $25 million over five years.

CFO
“Seattle’s hometown airline” Alaska Airlines “couldn’t be more proud of Seattle’s football hero, Russell Wilson.” Thanks to Wilson’s impressive skill and wholesome image, they even made him their CFO! Chief Football Officer, that is.

Meaning Transference is a social theory which posits consumers “transfer” the perceived ideals, credibility and reputation of celebrities to the associated product or service being sold (Grant McCracken). Because negative perceptions can also transfer, a company will want to distance themselves if a celebrity behaves badly. Essentially, morality clauses protect the team or company’s public image from the athlete’s potential scandals. In practice, this could mean suspending or terminating the contract, which could cost the athlete thousands – or potentially millions – of dollars.

The crux of any morality clause is how the “bad behaviour” is defined. Does a player kneeling during the American national anthem adversely affect the image of the NFL?

Given today’s heated political climate, it’s no surprise that professional athletes are increasingly voicing – or otherwise demonstrating – their opinions on social issues. In 2016, Colin Kaepernick of the San Fransisco 49’s started the trend of protesting police brutality and racial inequality, by kneeling during the national anthem at the start of games. Other players soon joined in, much to the ire of many football fans and prominent figures, including President Trump. That same year, Kaepernick was deemed the most hated player in the NFL.

Speaking to The Washington Postconstitutional law Professor Fred Smith Jr. described the anthem debate as a “clash of values which has become a very fraught issue in the American political imagination.” The NFL reacted to the situation by announcing a new policy in May of this year: players must either stand for the national anthem on the field or wait in the locker room. The policy was then shut down by the NFL’s labour union (NFLPA) only two months later.

As the NFL and the NFLPA continue to negotiate, “no new rules relating to the anthem will be issued or enforced”. However, introduction of the new rules in the first place demonstrates that the NFL is at least attempting to mitigate the perception that it is an unpatriotic organisation. It could be argued that from the NFL’s perspective, it is the result of the public’s perception that matters, and not the conduct itself. 

In spite of the furor and uproar, Nike made a risky decision in September to feature Colin Kaepernick in an advertising campaign. Despite some backlash and boycotts, the move paid off handsomely overall: Nike received valuable free publicity, and online sales and stock price skyrocketed. In this way, Kaepernick’s kneeling is both detrimental to one organisation (the NFL), as well as highly profitable for another (Nike).

Image result for colin kaepernick nike
Nike released a controversial commercial featuring Colin Kaepernick, which hints at the embroilment over NFL players kneeling during the American national anthem.

Ultimately, it is critical to understand that morality clauses attempt to regulate something that is continually in flux. Opponents of morality clauses worry that the definition of what constitutes “immoral” or damaging activity could be too broad and subject to abuse by the employer. Smart sports stars and their lawyers will therefore do well to ensure that morality clauses are carefully negotiated and written precisely in order to protect their position – and their paycheques.

NDAs and the Sound of Silence

NDAs and the Sound of Silence

“When truth is replaced by silence, the silence is a lie.” 
Yevgeny Yevtushenko

The #MeToo movement has brought Non-Disclosure Agreements (NDAs) as a way to silence allegations of sexual harassment into the public debate.  In light of controversies surrounding Donald Trump, Harvey Weinstein and now – Sir Philip Green, the billionaire retailer whose brands include Topshop – much has been discussed about the legality and morality of using NDAs to prevent publicity or otherwise cover up  bad behaviour.

But like any legal document, NDAs are not inherently “good” or “bad”. They are simply a tool, regularly used by lawyers in many contexts. To understand why they have become controversial, and to contribute to the debate concerning their use and abuse, we must first consider their structure and purpose.

NDAs, which are also called Confidentiality Agreements, are simply a type of contract used to prevent someone from sharing confidential information in ways which are unacceptable or damaging to another person. What information is considered “confidential” depends very much on the situation, as well as the relationship between the person providing the information (“discloser“) and the person receiving it (“recipient“).

Use of the word “confidential” to mean “intended to be treated as private” dates from the 1770s, and has its roots in the Latin word confidentia. This means “firmly trusting,” and is itself derived from confidere, which means “to have full trust or reliance.” 

Confidential information is often shared for a business purpose or in corporate negotiations, especially when mergers or collaborations occur. For example, a restaurant chain looking for a deal with a food manufacturer may want to share recipes, or a fashion designer may seek a partnership with a well-known athlete who has sketches and drawings of a sports-inspired clothing range. Likewise, when a company hires a new employee, they may be given access to company client lists, manufacturing processes or other valuable data.

The basic anatomy of the NDA is relatively straight forward, and should always contain the following elements:

  • A clear definition of the confidential information.
    These are often heavily negotiated clauses, and it is usual to have very wordy and detailed definitions which set out explicitly what is and is not captured by the agreement. Sometimes, even the NDA itself is considered “confidential information,” which means that its terms or existence must be kept secret.The discloser will often want a broad definition of confidential information which covers not only the documents or products in question, but perhaps any derivative ideas, feedback, analysis or concepts created or inspired by the confidential information. On the other hand, the receiving party will want to keep this definition as narrow as possible.

 

  • The key obligation to keep the information secret.
    Standard wording will typically begin as follows: “In return for the discloser making confidential information available to the recipient, the recipient promises to the discloser that it shall keep the confidential information secret and confidential.”However, the obligation clause almost always contains many more rules and responsibilities. For example, the recipient may be prohibited from even indirectly sharing or hinting at the confidential information. They may also be prohibited from making copies, removing the information from a particular location, or storing it on their personal smartphone.

 

  • The ways in which the information can be used.
    The recipient will be prohibited from using or exploiting the confidential information except for the “purpose.” The purpose is the defined reason the information will be shared in the first place, for example, “to establish a collaboration in respect of the Tommy Hilfiger x Lewis Hamilton fashion line.”Disclosures of the information by the recipient to their employees and professional advisers (including lawyers and accountants) are usually permitted. In such cases, the discloser may ask that all individuals who receive the confidential information from the recipient sign a separate confidentiality agreement. While some may consider this a bit over the top, it makes sense from the discloser’s perspective that the receiver should take responsibility if its employees or advisers breach confidentiality.

 

  • What happens if the project or deal does not go ahead, and the duration of the secrecy.
    The discloser will often ask that the receiver returns or destroys the confidential information if the project or transaction fails to materialise. The parties should also establish a realistic time period for the duration of the secrecy, as it may be unreasonable to expect that the information has to remain confidential for eternity.
Image result for Lilly Panholzer
Lilly Panholzer for City finds it is easy to silence women with NDAs

Seems simple enough, so what’s all the fuss about?

As mentioned above, NDAs are incredibly common and used in a wide variety of situations, ranging from complex corporate takeovers to short-term collaborations. But despite their ubiquitous nature and seemingly straightforward terms, it would be a mistake to assume that these are simple contracts. 

It is rare for the parties entering the agreement to have perfectly equal bargaining power. Due to an imbalance of money, expertise, resources or even reputation, one of the parties involved will almost always be able to exert more influence over the other. This inherent imbalance can lead to the creation of NDAs which grant – or limit – rights in an unfair or improper way.

Entrepreneurs may think that an NDA adequately protects their valuable information when it is divulged to a potential investor. But unless the definitions and obligations are sufficiently locked down, little may prevent the investor from stealing the entrepreneur’s ideas.

Similarly, some unscrupulous companies may attempt to force their employees to enter into NDAs in an attempt to prevent whistleblowing or discrimination lawsuits. Matters can become very complex when an individual who has a grievance against a powerful boss is threatened with dismissal or further harassment, unless they sign an NDA. Moreover, a new common extension of NDAs is the inclusion of a “non-disparagement” clause. This goes beyond the protection of confidential information, and requires employees to never speak negatively about their employer or former employer.

In both the United States and the United Kingdom, lawmakers and courts have begun to establish clearer boundaries about the enforceable scope of NDAs. In the court of public opinion, powerful individuals who weaponise NDAs in an attempt to stifle access to justice, impair free speech and limit creativity are already losing. Regardless of the reason for entering a NDA, you owe it to yourself to ensure the document is checked first by a lawyer, and that your rights – and remedies – are adequately protected. 

 

“The Wife” and rights of attribution: an intellectual property perspective

“The Wife” and rights of attribution: an intellectual property perspective

* * * CONTAINS SPOILERS * * *

In The Wife, Glenn Close plays Joan Castleman, the steadfast and amenable wife of celebrated novelist Joseph Castleman. But when Joe wins the Nobel Prize in Literature, things start to unravel between them. Is there more to Joan’s support than meets the eye? In this post, I consider the merits of a hypothetical intellectual property dispute between the couple, and an often-neglected right in particular.

Related image
The Wife is a 2018 film from Swedish director Björn Runge, starring Glenn Close and Jonathan Pryce. The script by Jane Anderson is based on Meg Wolitzer’s novel of the same name.

 

We first meet Joan Castleman – The Wife – the evening before her husband, celebrated novelist Joseph Castleman, wins the Nobel Prize in Literature. Praise and adoration for Joe’s prolific and highly acclaimed body of work are subsequently lavished upon him, while Joan and their two children watch on. But when the family arrives in Stockholm for the award ceremony, we begin to realise that Joe Castleman’s success rests on secrets and sacrifices.

Through the use of flashbacks to the 1950s and 1960s, we learn that Joan was a promising writer. While at college, her then-professor Joe Castleman encourages her writing, and the two eventually become romantically involved. But Joe is not content with merely lecturing about novels: he seeks to prove himself in the literary world as an author himself.

During a heated argument about his poorly written first attempt at a novel, Joe threatens to leave Joan. Desperate to keep him happy and aware of his deep desire for publication, Joan offers to “fix” Joe’s draft. Her amended version of The Walnut is published under Joe’s name, and becomes a literary sensation. For the next forty years, Joan continues to write as Joe gets all of the credit.

In Stockholm, Joan revisits The Walnut and considers the personal sacrifices she’s made in her marriage.

What makes The Wife so delicious to watch is the way in which Joan’s character transforms and gains a sense of agency. Having grown up in the sexist environs of mid-century America, Joan at first appears to have dutifully accepted her fate as an ignored, pushed-aside woman whose only roles have been “wife” and “mother.” The announcement of “Joe’s” Nobel Prize in 1996 serves as a catalyst, and through a series of small events Joan eventually gathers momentum and power – like a storm – to unleash her torrential anger. The Roger Ebert review perhaps puts it best, noting that Glenn Close’s Joan “undergoes a quietly powerful transformation from self-deprecating spouse to fiery force of nature.” The film ends on an uncertain yet quietly optimistic note, and we get the sense that Joan will reveal the truth – not only to her family, but to the public – in due course.

As I left the cinema, I found myself ruminating over Joan’s legal position. As the author of the novels, would she stand a chance at winning a copyright lawsuit?

Copyright arises automatically in original works of authorship fixed in a tangible medium of expression. This means that from the moment an author expresses something unique in a tangible way – for example, by writing it down using a typewriter – the author obtains an intellectual property right in the work.

Image result for annie starke the wife
A young Joan (played by Glenn Close’s daughter Annie Starke) supports her husband Joe in his literary ambitions (played by Henry Lloyd).

It’s pretty clear from the story that Joe did infringe Joan’s intellectual property. Unfortunately for Joan, even if she wanted to bring some sort of copyright lawsuit against her husband Joe, is is doubtful that she would win. Whereas a “negative defense” seeks to factually disprove an element of the plaintiff’s case, an “affirmative defense” defeats or mitigates the legal consequences of the defendant’s otherwise unlawful conduct.

Put simply, in my imagined Castleman copyright lawsuit scenario, Joe’s lawyers could admit that Joe stole Joan’s work, but argue that he’s innocent in the eyes of the law. Here are three ways in which this could be possible:

  • Firstly, a lawsuit for copyright infringement must typically be filed within the applicable limitation period. The US Copyright Act requires a civil lawsuit to be filed within three years after the infringing action occurred. As such, a copyright lawsuit concerning Joan’s older novels would be practically impossible.
  • Secondly, Joan’s conduct may evidence acquiescence, or consent. This means that Joan knowingly watched Joe infringe her IPRs, but failed to raise any objection to the infringement at the time. In some instances, silence or inaction can be a form of “inferred consent.”
  • Thirdly, if Joe can prove that he infringed Joan’s copyright believing in good faith that he was entitled to do so, estoppel could apply. “Estoppel” as a term might not known by many non-lawyers, but the fundamentals are rather straightforward: a court may prevent (estop) a person from making assertions or from going back on her word, thereby preventing unconscionable conduct.

 

Image result for the wife film
While working on a definitive biography of Joe Castleman, author Nathaniel Bone (played by Christian Slater) discovers some striking discrepancies in Joe’s writing style.

Nevertheless, Joan’s cause is not a hopeless one. As evidenced by Joan’s emotional attachment and identity tied to her novels, literary and artistic work often mean much more than just the economic value they can generate. The creations can be very special to the person who first produced them, and often speak to immense emotional and intellectual effort. As a result, copyright works can be protected in ways that are different to traditional forms of property.

Moral rights are a type of non-economic rights which are considered personal to an author, in that they are inalienable and fundamental to the individual. Even if an author assigns the intellectual property rights to her novels to a third party, she will still maintain the moral rights to the work.

Chief among the moral rights is the right of attribution, which is the right of an author to be credited as the author of a work in question. Moral rights have a long history in international copyright law, and are set out in the Berne Convention for the Protection of Literary and Artistic Works, which governs international copyright law:

(1) Independently of the author’s economic rights, and even after the transfer of the said rights, the author shall have the right to claim authorship of the work and to object to any distortion, mutilation or other modification of, or other derogatory action in relation to the said work, which would be prejudicial to his honor or reputation.

Moral rights are well established in European legal systems, especially in French and German law. By contrast, moral rights in the United States have been somewhat neglected, as American law traditionally puts more significance on protecting economic interests. This has been changing in recent years however. In 2017, the US Copyright Office commenced a study to review how existing American law, including provisions found in Title 17 of the U.S. Code and other federal and state laws, protects the moral rights of attribution and integrity.

The laws which govern intellectual property rights have been forced to change in the face of challenges posed by the internet, disruptive technologies and an increasingly mobile population. Might moral rights be next on the agenda for American copyright reform? For Joan Castleman at least – whose conflict focuses almost entirely upon her identity and recognition as a writer – it’s easy to see why moral rights could be so important.