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Thursday, August 9, 2012

Court Says Facebook 'Fans' Don't Translate Into Protected Expectation of Business

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Once more a court has been asked to assess the significance of a Facebook “like,” this time in a dispute between nail polish vendors where one party convinced Facebook to take down another’s Facebook page due to a claim of trademark infringement. The problem: the page had 19,000 “fans”[1] at the time it was taken down.

The owner of the Facebook page – Piggy Paint LLC – contended that its rival’s act of convincing Facebook to take down the page constituted a tortious interference with business expectancy. The court identified a few problems with Piggy Paint’s theory, chiefly that fact that there was no immediate way for Piggy Paint to convert those “fans” into customers:

Piggy Paint has not shown any valid business expectancy. Although Piggy Paint alleges that it had 19,000 “fans” of the page, Piggy Paint has not and cannot show that the removal of the Facebook page – which did not offer any means of placing orders or doing business – resulted in the loss of any business.  

… Piggy Paint’s alleged business expectancy with the “fans” of its Facebook page is too indefinite to form the basis of an actual expectation of business ….  

The case is Lown Companies LLC v. Piggy Paint LLC, No. 11-cv–911 (W.D. Mich., Aug. 9, 2012).

The court’s ruling is an odd one. I write it off to loose language. Clearly Facebook pages with “likes” or “fans” have commercial value. Perhaps the court meant to say that Piggy Paint had failed to adequately allege damages due to the loss of its Facebook page. The loss of an advertising opportunity surely has some commercial value (according to the Internet Advertising Bureau, companies spent $8.4 billion on online advertising in the first quarter of 2012), and Piggy Paint’s Facebook page surely contained some means of contacting the company to place an order. The idea that social media advertising is not legally protected from disruption by a competitor because it lacks an immediate opportunity to consummate a business transaction is troublesome. In 2012, most businesses attach considerable value to followers/fans/etc. on social media platforms. The court's ruling reflects a deaf ear to music that everyone can hear.

Along the way, the court also noted that Piggy Paint’s beef is with Facebook, the party that took down Piggy Paint’s page, not Lown Companies, the company that requested the takedown. Though that route is likely foreclosed by Facebook’s terms of service.

The biggest problem with the court’s ruling is that it conflicts with a leading case in this area. The argument that a Facebook “like” has commercial value was embraced in Fraley v. Facebook Inc., No. 11–1726 (N.D. Cal., Dec. 16, 2011), a case presenting the question of whether a Facebook “like” has enough of a commercial value to support a right of publicity claim. The court ruled that it did:

Plaintiffs here have made specific allegations that their personal endorsement of Facebook advertisers’ products are worth two to three times more than traditional advertisements on Facebook, and that Facebook presumably profits from exploitation of this calculable commercial value.  

The difference between Fraley and prior cases (for example, Cohen v. Facebook, No. 10–5282 (N.D. Cal., Oct. 27, 2011), is that in Fraley the plaintiff built a case supporting a plausible theory of damages whereas the earlier, unsuccessful plaintiffs had merely alleged damages in a conclusory fashion. This must be where Piggy Paints fell down: a bare allegation of loss with no legal legwork to back it up. Now we have a ruling on the books that the loss of a Facebook page – a page containing an indicia of 19,000 “fans” – does not have enough value to support a tort claim. Unlike!

Follow this blogger on Twitter at @tjotoole.


  1. Facebook changed terminology in 2010. “Fans” and “Likes” are the same, only the name has changed.  ↩

 
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