Copyright 2008 The Prinz Law Office. 1 Employee Blogs and Websites: How to Protect Your Company from the Legal Risk of Workers Going Online By Kristie D. Prinz, Esq. Founder of The Prinz Law Office American Features Syndicate Teleconference July 15, 2008, 10:30-12:00 PST

I. What is a blog? A blog is a website with regular entries (text, images, videos, and/or links) usually displayed in reverse chronological order. Most blogs offer news or commentary on a given subject, with readers leaving comments on these postings. Copyright 2008 The Prinz Law Office. 2

II. Why allow employee blogging? Free speech rights of employees Viral marketing; promotion of company or development of thought leaders Can promote dialogue at company Can boost company morale or identify morale problem Copyright 2008 The Prinz Law Office. 3

III. What are the Legal Risks that Companies Face as a Result of Employee Blogs? Employer liability for blogging acts by employees (e.g. vicarious liability) Trade secret disclosure by employee bloggers Violation of state and federal laws (e.g. employment, securities, privacy) Copyright 2008 The Prinz Law Office. 4

III. Potential Liabilities for Employers: Defamation What is defamation? –Black’s Law Dictionary definition: “an intentional false communication, either published or publicly spoken, that injures another’s reputation or good name” –Concern that an employee will be determined to have defamed third party in scope of employment Copyright 2008 The Prinz Law Office. 5

III. Potential Liabilities for Employers: Copyright Infringement What is copyright infringement? –Unauthorized use of copyrighted material –Note: Fair Use Exemption—factors to be considered: Purpose and character of use Nature of copyrighted work Amount and substantiality of portion used Effect of Use on Potential Market, Value of Work Copyright 2008 The Prinz Law Office. 6

III. Potential Liabilities for Employers: Copyright Infringement DMCA takedown notices –17 USC Section 512 creates safe harbor immunity from copyright infringement for service providers that respond quickly to notices claiming that they are hosting or linking to an infringing site Copyright 2008 The Prinz Law Office. 7

III. Potential Liabilities for Employers: Copyright Infringement Challenge to fair use exemption launched by Associated Press –Potential for litigation over new decision to charge royalty for blogger use of more than five words of text from an A.P. article –Will fair use be redefined? Copyright 2008 The Prinz Law Office. 8

III. Potential Liabilities for Employers: Trade Secret Disclosure What are trade secrets? –Proprietary information, know-how Risk that trade secrets will be disclosed into public domain –Can potentially lose protection Copyright 2008 The Prinz Law Office. 9

III. Potential Liabilities for Employers: Anonymous Blogging Recent issue regarding Rick Frankel of Cisco who was anonymously blogging about patent matters in which Cisco had an interest –Cisco sued after ransom offered to unmask blogger Copyright 2008 The Prinz Law Office. 10

III. Potential Liabilities for Employers: Statutory Violations State and federal privacy laws State and federal laws on advertising, consumer protection, deceptive practices, and unfair competition 1933 Securities Act violations Employment discrimination laws Copyright 2008 The Prinz Law Office. 11

III. Potential Liabilities for Employers: Statutory Violations Risks in terminating blogging employees –Whistleblower laws –Laws protecting discussions on union- related matters –Laws protecting employees who exercise free speech, particularly with respect to political speech Copyright 2008 The Prinz Law Office. 12

IV. Best Practices for Corporations: Develop a Corporate Blogging Policy What should be covered by a policy? –Disclaimer –Guidelines on what can and can’t be disclosed; what can be discussed in blog –Position on anonymous blogging –Guidelines on appropriate blogging, dealing with comments –Information on laws that must be followed Copyright 2008 The Prinz Law Office. 13

IV. Best Practices for Corporations: Develop Corporate Monitoring Policy What should be covered by a policy? –Should establish the parameters of employees’ privacy expectations (technology, Internet use) –Should expressly state when the employer would be permitted to monitor employee Internet use (and other electronic communications); can address employee blogs Policy should be signed by each employee Copyright 2008 The Prinz Law Office. 14

IV. Best Practices for Corporations: Develop Intellectual Property Policy What should be covered by policy regarding blogs? –Should clearly define ownership rights in intellectual property created as employee –Should require that employees sign assignment of rights in IP (in compliance with policy) –Should require appropriate copyright notice –Employees should be required to sign policy Copyright 2008 The Prinz Law Office. 15

IV. Best Practices for Corporations: Require Employees to Sign Confidentiality Agreement What should be covered by agreement? –Should protect corporate trade secrets, know- how, and other proprietary information –Should be informative and easy to understand Employees should be required to sign Employees should be reminded of agreement on departure; needs to survive any severance agreement Copyright 2008 The Prinz Law Office. 16

IV. Best Practices for Corporations: Adopt Policies and Procedures to Protect Trade Secrets Adopt internal policies and procedures to protect trade secrets, including educating employees on how to protect trade secrets Limit knowledge of trade secrets to those who “need to know” Consider equitable remedies if trade secrets are disclosed Copyright 2008 The Prinz Law Office. 17

IV. Best Practices for Corporations: Consult Legal Counsel Before Terminating Employee Document any employee violations of corporate policies, employee agreements Consult with legal counsel early when any violation occurs, involve counsel in response If decision to terminate employee is made, work with legal counsel to ensure that no laws are broken Offer fair and reasonable severance agreement in order to obtain waiver and release of legal claims against employer Copyright 2008 The Prinz Law Office. 18

IV. Best Practices for Corporations: Educate Employees on Legal Developments Companies cannot count on employees staying current on blog law developments –Companies need to be proactive on staying up-to-date on blog law developments; communicate those developments to employees Copyright 2008 The Prinz Law Office. 19

IV. Best Practices for Corporations: Insure Against Risk? What insurance is available to protect against blogging liabilities? –Pros and cons of cyberinsurance; media risks or perils insurance –Development of blogging liability policies Copyright 2008 The Prinz Law Office. 20

Copyright 2008 The Prinz Law Office. 21 CONTACT INFORMATION: Kristie D. Prinz, Founder The Prinz Law Office P.O. Box 1594 Los Gatos, CA Phone: Fax: