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Matt Dunning

Non-media companies face media liability exposures and risks

January 19, 2014 - 6:00am


Regardless of the size of their audience, a company's online marketing materials could generate claims for a range of liabilities likely unfamiliar to most small and midsize firms outside of the publishing and broadcast industries.

Common forms of third-party injury claims can originate from competitors and consumers, and include allegations of defamation, libel, product disparagement, invasions of privacy, infliction of emotional distress and unfair trade practices, experts said.

“You don't have to be a media organization to have media exposures,” said Meredith Schnur, a New York-based senior vice president and technology, privacy and network risk practice leader at Wells Fargo Insurance Services USA Inc. Even midsize companies with considerable experience marketing their brand via traditional outlets such as print or television ads often overlook potential liability exposures when it comes to online activities, she said.

“Whether it's social media or what they display on their corporate website, they don't equate that to the traditional media exposures related to their output in paper format,” Ms. Schnur said.

Depending on the nature and origin of their content and how it is distributed, experts said companies engaging in online marketing also could be held liable for exceeding the scope of permitted use for photos, text, audio clips or other materials they post online, even if they previously licensed those materials for traditional advertising and marketing purposes.

Additionally, online materials gathered ad-hoc from third-party sources could infringe on copyrights and trademarks protected under federal or international laws.

“Oftentimes, companies assume that whatever they find on the Internet is free for use, and that's simply not the case,” said Adam Bialek, a New York-based partner and chair of Wilson Elser Moskowitz Edelman & Dicker L.L.P.'s intellectual property group. “Even so-called royalty -free content typically has certain terms and conditions attached to its use, and that's something that gets overlooked quite a bit.”

In addition, Mr. Bialek said smaller firms, particularly in industries that traditionally conduct very little business over the Internet, usually delegate the daily management of their online and social media activities to young, junior-level employees who lack the requisite compliance training and experience.

 



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