Legal Issues in Social Media

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 Introduction

Global Business Experts (GBX) works with law firms and expert witnesses to provide consulting and litigation support. Their core areas of focus include marketing and consumer behavior, competitiveness, antitrust, intellectual property, valuation and damages, trademark infringement, as well as banking and financial services. After being in business for four years, the company has identified a new “start-up” opportunity related to their central business. Voluble: Insights for Litigation will provide a service to transform raw social media data into defensible evidence, specifically designed for complex commercial litigation. This company will not only be integrated into GBX’s fundamental practices, but can also be sold as a stand-alone service.

In 2016, it was projected that 185 million people within the United States used social media. This projection is expected to exceed 200 million people by the year 2020 (Statista, 2017). As social media use continues to grow, social media content has become increasingly valuable to brands as it provides a public platform for customers to voice their opinions, both positive and negative about the products and services that they provide. By analyzing what people are saying related to a topic, brand, or product, an organization can gauge consumer sentiment towards a company and trends in the conversation. For example, with tools provided by social monitoring companies such as Crimson Hexagon, marketers can track social conversations after launching new campaigns to gauge consumers’ views and public relation teams use social media to understand public opinions about their clients to better manage their reputations (Crimson Hexagon, 2017).

In trademark infringement cases, litigants can prove consumer confusion via expert testimony, visual trademark comparisons and consumer survey reports (Bird & Steckel, 2012).  By surveying consumers, litigants can provide consumers’ perceptions and show that consumers either are or are not confused by the trademarks at hand, which is actual evidence that an expert witness or visual comparisons can simply not provide. Social media data allows Voluble to capture consumers’ actual comments regarding issues of interest in the relevant timeframe, as opposed to collecting consumers’ opinion triggered by surveys prepared after the fact and solely for litigation purposes.  Voluble’s approach towards synthesizing data can be used as both qualitative and quantitative evidence and serve as a supplement to survey and other data evidence for litigation claims.  One use of Voluble is to provide concurrent evidence to support or refute survey data and other evidence presented by the opposing side.

Background

According to the United States Patent and Trademark Office (USPTO), trademark infringement is defined as “the unauthorized use of a trademark or service mark on or in connection with goods and/or services in a manner that is likely to cause confusion, deception, or mistake about the source of the goods and/or services” (USPTO, 2017). The owner of trademarks can file civil lawsuits and sue for infringement in federal court under the Lanham Act (15 U.S.C. §§ 1051). By proving infringement, courts can order the defendant to stop using the mark, the forfeiture of infringing articles, monetary compensations, and pay for the plaintiffs’ attorney fees (15 U.S.C. §§1114, 1116-1118).

A trademark infringement claim requires the plaintiff to prove that they hold a valid and senior trademark and that the defendant’s mark is likely to cause confusion in the mind of consumers. The court considers evidence to determine likelihood of confusion among consumers such as degree of similarity between marks, where the products or services are marketed and sold, the strength of the mark, as well as evidence of actual confusion. The quality of the evidence provided provides different weights to the factors addressed (USPTO, 2017). These factors are known as the Sleekcraft Factors and will be discussed in more detail in Part II of this report.

Dilution is a joint claim associated with likelihood of confusion. The owner of a trademark can assert that their mark is famous and others’ use of the mark weakens the mark’s value by blurring (15 U.S.C. § 1125(c)(2)(B)) or by tarnishment in which the reputation of the mark’s image is harmed (15 U.S.C. § 1125(c)(2)(C)). Dilution is evaluated under the Federal Trademark Dilution Act (FTDA) and is based on factors such as degree of similarity of the marks, the famous marks’ “acquired distinctiveness”, the exclusive use of the mark, as well as degree of recognition by the public (15 U.S.C. § 1125(c)).

In order to prove likelihood on confusion, plaintiffs provide evidence in the form of expert witness testimonies, visual comparisons of the mark, and consumer surveys. Expert witnesses can be called to testify their opinions regarding potential consumer confusion. Therefore, consumer surveys are constructed to detect opinions regarding products, services, and brands. The data can be gathered via online surveys and focus groups which involves showing respondents products and marks and collecting their perceptions (Bird & Steckel, 2012). While surveys and expert testimonies are standard practice and carry heavy influence in trademark cases, the data can be interpreted to favor the hiring party.

Research Objective

Expert witness consulting firms often compete for clients based on price and service. According to an IBISWorld industry report from January 2017, when dealing with litigation trials, there is very little room for error or mistakes in expert witness reports and testimonies.  Due to the importance of quality control, consulting firms often find success when they serve a niche market. Most clients are obtained through referrals and repeat business which require a reputation for quality and efficient work.

 As competition within the industry continues to rise, it is important for GBX to differentiate themselves. In 2016, there were approximately 2,000 enterprises within the industry which is a substantial increase from the approximate 1,800 in 2013 (IBISWorld, 2017).  Competition arises from large law firms and consulting firms with in-house expertise. While some expert witnesses testify at trial, a lot of their work is done in the analysis during the pre-trial stages.  Expert witness firms and consultants often specialize in subjects that commonly occur in litigation, such as quantification of business costs and lost wages.

GBX plans on standing out from their competitors by launching a new product and service, Voluble: Insights for Litigation. Voluble will become a marketing asset for GBX to land new business and expand service offerings with current clients. GBX cannot fully develop and launch Voluble until research has been completed on how social media can be integrated into electronic evidence in United States litigation cases. This research will help shape the creation of Voluble as a service and a brand.

Research was conducted to achieve an understanding of the legal environment surrounding social media. Case law was analyzed to gain knowledge on the admissibility and authentication of electronic evidence in U.S. litigation cases, focusing on intellectual property and Lanham Act cases. By discovering past precedents of when social media evidence has both succeeded and failed, Voluble can specialize in areas of practice with the most success, such as providing evidence for claims of actual confusion or secondary meaning.

Industry reports were analyzed to ascertain how consumers speak with brands via social media. Consumers use social media to gather news, stay current on industry trends, socialize with friends, as well as influence their purchasing decisions. A Deloitte study noted that nearly one in three U.S. consumers are influenced by social media in their purchases (Deloitte, 2015). By understanding the various uses, the Voluble algorithm will be able to better analyze what individuals are saying related to a topic, brand, or product and decipher trends within the conversation.

While there are other social listening services available on the market, Voluble will provide a service specifically intended for commercial litigation. To successfully tailor the software to consumer needs and demand, the competitive landscape and target audience were. Through an industry analysis, Voluble gained a better understanding of the internal and external factors shaping the both the social media analytics and expert witness consulting industries. By realizing how the industries currently function and where they are heading, Voluble is being developed to overlap both industries and stand out from their competition.  This research will ensure that Voluble is developed to succeed in both markets and better serve the needs of their clients.

Methodology

Exploratory research was conducted to gain knowledge and insight on the legal, social media, and business landscapes.  Legal research was conducted using case law databases such as Lexis Nexis and Law360, as well as legal journals, including The Trademark Reporter. Because legal rulings are based off past precedents, understanding how social media evidence has been perceived in the past, will be the predominant indication of how it will be perceived in the near future.

Additionally, further exploratory research was conducted to explore the uses of social media. With the growth of social media networks, industry professionals have studied the ways that consumers and brands interact on the various platforms and arising trends. Finally, industry research was conducted by both secondary data and client feedback. Secondary data, from sources such as IbisWorld and Markets and Markets, provided key insights to how the industry operates and the conditions it operates within. Competitors such as Listen Logic were evaluated to determine how their services can be integrated and/or modified for Voluble’s target market. GBX is currently testing the use of Voluble services with current clients. Client opinions, responses and concerns will be noted to help shape Voluble to efficiently meet the needs of clients moving forward.

Ultimately, Voluble will be integrated into the core business of GBX, but will also be functioning as an independent service. The written report and oral presentation will deliver an overview of relevant legal precedents, an understanding of how brands and consumers communicate on social platforms, as well as an industry analysis. Through this research project, Voluble will be accomplishing the goals necessary to shape its development prior to its launch.

Part I: Company Overview

Global Business Experts

Global Business Experts Group, also known as GBX, provides support to expert witnesses in litigation trials. Global Business Experts (GBX) works with law firms and expert witnesses involved in intellectual property, Lanham Act and various types of legal disputes involving data and analysis. Their areas of focus include branding, consumer behavior, valuation and damages, as well as competitiveness and anti-trust cases. GBX has identified a need in the marketplace for social media analysis designed specifically for commercial litigation. GBX is in the process of launching a new company, “Voluble: Insights for Litigation.” This start-up opportunity will not only be integrated into GBX’s fundamental practices, but can also be sold as a stand-alone service.

Voluble Insights for Litigation

Voluble: Insights for Litigation is being designed to provide social media analyses for complex litigation cases. With a team of experienced litigation consultants in the areas of Intellectual Property and Lanham Act disputes, Voluble will collect, analyze and synthesize social media data to provide robust reports that experts can rely on in forming their opinions. These reports are designed to provide expert witnesses with analyses and insights based on online consumer conversations across a collection of social media platforms. Voluble will convert vast amounts of unstructured social media chatter into relevant and reliable data for experts.

Voluble is being designed to be reliable and defensible at depositions and trials. It has the ability to search major social media sites such as Facebook, Twitter, Tumblr and YouTube, along with forums, blogs and product reviews. Through social sites’ APIs, Voluble can collect additional data by scraping relevant sites to customize data reports. Quantitative analysis can be conducted to determine how often consumers talk about at-issue trademarks or trade dress elements, to compare conversation volumes across multiple brands, or to assess the extent that multiple brands are spoken about simultaneously. Additionally, qualitative analysis can be performed to supply compelling evidence to support quantitative analysis, as well to identify posts for trial exhibits. An overview of the Voluble process can be seen in Appendix A.

Industry Overview

Expert Witness Consulting

Economic experts encompass much of the expert witness industry and lie in the tangent industry of economic and scientific consulting. Economic consulting represents 14% of this $36.7 billion industry which has been growing at an annualized rate of 4% over the past 5 years (IbisWorld, 2017). The industry of expert witness consulting services provides witnesses and support to witnesses who offer specialized knowledge in a specific subject for court cases. While some expert witnesses testify at trial, a lot of their work is done in the analysis during the pre-trial stages.  Expert witness firms and consultants often specialize in subjects that commonly occur in litigation, such as quantification of business costs and lost wages. By 2016 there were over 2,000 businesses within the industry bringing in $130.2 million in revenue (IbisWorld, 2017). As seen in, revenue is expected to grow by 1.5% in 2017 to $132.1 million in revenue.

Figure 1: Revenue Growth as of 2016 and Expected Outlook in millions (IbisWorld, 2017)

The expert witness services derive revenue from experts who specialize in a variety of areas, with economic experts composing 26.6% of the overall industry (IbisWorld, 2017). These experts are in demand for cases involving antitrust, intellectual property, and financial institutions. Since the recession, the demand for economic experts has increased due to an increase in both federal and state complex class action suits. The industry provides services to a variety of segments, but businesses largely make up 67.9% of the market (IbisWorld, 2017).

The industry fluctuates heavily with the strength of the economy. In weak economic times, there is a lower demand for these consultative services, as seen in Figure 1, with the decline of revenue and growth starting in 2008. Over the past few years there has been a shift in the legal industry away from litigation towards dispute resolution in the form of mediation and arbitration (Weil, 2017). With the decrease in litigation trials, the industry involving expert witnesses moderately declined in revenue in 2012 and 2013 as well.

Per IbisWorld (2017), as the economy continues to recover, revenue for consultative services are expected to increase an annualized 1% until 2021. The increased demand by law firms, increased corporate profits and voluminous cases benefit the industry. From 2016 to 2021, corporate profits are expected to grow at an annualized rate of 1.6% in which expert consulting can add value to these companies (IbisWorld, 2017). Large corporations are a main user of these consultative services. While patent litigation took a decline in 2014, it has since increased. In 2015, there were 5,830 patent cases filed, which equates to a 15% rise from 2014 as seen in Figure 2. Trademark litigation however saw its lowest filing in the past 10 years with 3,449 cases in 2015. This is, however, only 11.6% lower than the ten-year median (Lex Machina, 2016).

Figure 2: Number of Cases filed in U.S. District Courts (USPTO, 2017)

As noted by IbisWorld, the expert witness and economic consulting industry is mature. The industry serves a wide range of mature markets, limiting its ability to expand. This creates increased competition within the market, as the number of firms steadily increases. From 2011 to 2016, the number of companies has increased by a 2% annualized rate (IbisWorld, 2017). Clients, however are increasingly looking for consulting firms that can offer a variety of service solutions or focus on a niche solution.

Industry concentration is low as it is highly fragmented due to independent contractors and specialized firms. The largest firms within the industry are general consulting firms, in which the expert witness departments are only a small subset of the firm’s revenue. The top competitors within the industry include economic consulting firms such as NERA, Charles River Associates, Analysis Group, and Cornerstone Research, but none hold more than 5% of the overall market share (IbisWorld, 2017).

The industry has low barriers of entry due to the minimal capital startup required. Establishing a consultancy requires knowledgeable consultants and generally a high level of education for credibility. The capital intensity is low with the majority of expenses going towards wages. Investment within the industry is largely spent on research and computation software. As technology advances the scope of data that can be analyzed is broadening as well.

Within this industry, it is important for businesses to compete based on price and service offerings.  Having a skilled workforce is important in order to remain competitive and price efficiently. When dealing with litigation trials, there is very little room for error, or mistakes in expert witness reports and testimonies.  Due to the importance of quality control, firms often find success when the serve a niche market. Clients of these consultative hire based on price and past performance. Most clients are obtained through referrals and repeat business which require a reputation for quality and efficient work.

Social Media Monitoring Industry

As stated by Gohfar F. Khan in his book, Seven Layers of Social Media¸ social media analytics is defined as “the art and science of extracting valuable hidden insights from vast amounts of semi-structured and unstructured social media data to enable informed and insightful decision making.” Social media analytic and monitoring software provides functionality for collecting and reporting on data from social media networks. This software is used by marketing, communications and social media teams to identify target demographics, consumer sentiment, and campaign success (Crimson Hexagon, 2017). These tools allow corporations to gain a better understanding of consumer needs and wants through organic conversations.

Consumers are using social media to gather news, stay current on industry trends, socialize with friends, and are sharing their thoughts and opinions on a mass scale. As of January 2017, the world population was 7.4 billion, of which 3.7 billion used the internet and 2.8 billion people are active social media users (We Are Social, 2017). Facebook remains the market leader, as of January 2017. While social media users often use multiple accounts, some are more popular than others. It is estimated that Facebook has 1.8 billion active accounts around the globe (Statista, 2017). Facebook was the first of social platforms to surpass a billion active users.  Twitter estimates 317 million active users. In 2016, social media users generated 350,000 Tweets per minute and generated over 1.5 million pieces of new content daily (Schultz, 2017).

According to a report completed by Markets and Markets, the global social media analytics market was recorded to be $1.6 billion in 2015 and is projected to increase to $5.4 billion by the year 2020, with a compound annual growth rate of 27.6%. Within North America, the market grew from 732.4 million in 2014 and is expected to be 2.186 billion in 2019 (Markets and Markets, 2017). This growth is attributable to the transition of traditional business intelligence techniques to more advanced analytics techniques and the continual growth of social media users (PRNewswire). In North America, approximately 61% of marketers are using social media analytic tools to track campaigns, analyze brands, and perform competitive analysis (MicroMarket, 2017).

Social media analytic companies rely on demand from brand marketers, advertising and PR agencies, as well as customer service teams. For brand marketers, social media analytics allow them to manage their owned, earned and paid social media while allowing them to listen and curate conversations (Sysamos, 2017). Synthesizing this data allows for actionable insights from measuring campaign success and in determining future brand and marketing strategies. Agencies have the ability to keep track of multiple clients through analytic platforms and allows them to closely follow brand sentiment and locate key influencers. Additionally, customer service teams have used social media analytic platforms to interact with consumers and ensure inquiries are answered in a timely manner. This helps brands retain customers and spot widespread risks and opportunities (G2crowd, 2017).

Industry Overlap

The expert witness consulting and social media analytics industry intersect with e-discovery consulting. E-discovery consulting services is a $3.7 billion industry that has been growing at 12.5% annualized rate over the past 5 years and is expected to continue growing at a rate of 11.4% through 2021 (IbisWorld, 2017). The e-discovery industry is composed of companies focusing on the compilation and analysis of electronic data to be used in trial. Through the use of social media tools by experienced litigation consultants, insights can be produced from the electronic evidence that can inform the phases of litigation from discovery and investigation to trial exhibits. Complementing traditional legal strategy with social media tools offers consultants a tangible competitive advantage.

Continued success for firms within this industry are dependent on research and development, as well as their ability to adapt with technology. The highly technical aspects of this industry require companies to keep up with the cutting-edge techniques and resources in order to ensure clients are receiving high-quality reports efficiently. These firms will also face competition from firms who focus on management consulting, but offer e-discovery services as one of their many services. As e-discovery continues to grow, law firms can establish their own in-house e-discovery services to minimize costs.

Previously and currently, consultants use face-to-face focus groups and online surveys to collect consumer opinions. Traditional analysis tools tend to be limited in the amount of questions that can be asked and responses received. Social media provides a platform for consumers to largely speak unsolicited. Unlike traditional focus groups, social media analysis extracts insights from organic conversations without the added biases.  With social media, these barriers are removed as consumers are producing their own content in real time. Litigation consultants can analyze and evaluate social media data by trends, source, author, comment, time period and identify social influence and sentiment (The Jury Expert, 2011). The ability to employ social media analytics allows expert witness consulting firms to gather voluminous amounts of consumer data more efficiently to be used as electronic data.

Marketing Environment

While Voluble is being developed, it is important to understand current market trends, current solutions, as well as customer needs. The marketing environment analyzes Voluble’s place within the industry, their competitors and Voluble’s ability to grow.

Product

Voluble as a service will provide robust data that may be used as both anecdotal commentary and quantitative evidence that can supplement other types of consumer data, such as consumer surveys. Through social media, consumers’ comments regarding issues of interest are captured as they occur naturally, rather than in an artificial setting provoked by questions or surveys prepared after the fact, specifically for litigation purposes. Voluble will be able to provide naturally occurring contemporaneous evidence to support or refute survey and other evidence.

Voluble is currently in the product development stage of the product lifestyle and relies heavily on ongoing research to gain knowledge on the evolving market. While social media analytic firms are already in existence, most do not understand the nuances of providing electronic evidence for litigation purposes. Many industries have seen the value in “social listening,” but the United States legal system has its reservations on the authenticity of such data (Bloomberg Law, 2015). Social media is a new form of electronic evidence that is being presented in litigation cases. As this type of evidence becomes more popular in trying cases, courts are prompted to set precedents on their admissibility and discovery requirements. Therefore, Voluble is focusing on the niche market category of litigation to ensure that Voluble’s reports can stand up to the scrutiny of the courts.

Within the product development stages, Voluble has entered the concept development and testing stage. In this stage, Voluble is working on providing a product that will create new business opportunities and increase client satisfaction through a service that better meets their specific needs. Voluble will be a complementary service for GBX, as well as a differentiator. Ultimately, Voluble will be a standalone service that can be marketed to experts and lawyers engaged in matters beyond GBX’s core case load.

Thus far, Voluble has been able to perform both quantitative and qualitative analyses. Quantitative analysis can be conducted to determine how often consumers talk about at-issue trademarks or trade dress elements, to compare conversation volumes across multiple brands, or to assess the extent that multiple brands are spoken about simultaneously. Additionally, qualitative analysis can be performed to supply compelling evidence to support quantitative analysis, as well to identify posts for trial exhibits. Voluble has identified uses for social media evidence for legal claims involving secondary meaning, likelihood of confusion and dilution and more. A list of Voluble’s legal claims defined can be found in Appendix B. As the development of Voluble continues, Voluble’s analytic capabilities and targeted claims will continue to expand.

Voluble will be able to provide social media analyses for litigation cases due to our team of highly experienced litigation consultants, but also through the services of Crimson Hexagon, Lexis Nexis and possibly Page Vault. Crimson Hexagon provides Voluble with access to over one trillion social media posts dating back to 2008. Lexis Nexis provides access to legal briefs and court documents which allows Voluble to stay up to date on social media being admitted into evidence and any new precedents that are set. With Lexis Nexis, Voluble can also see how litigators are using social media as evidence for other claims allowing Voluble to find new cases. Page Vault takes into consideration the issues of authenticity and difficulties of admitting social media into evidence. Page vault ensures that copies of social media are accurately portrayed, captures metadata associated with posts, and removes Voluble from the digital chain of custody.

Place

Once Voluble is fully developed as a service, it will be launched into the market. Voluble will be first launched within the U.S. market, with the ability to be launched in the Canadian market as well. The voluble.ca Canadian domain has been purchased in preparation for this expansion. Voluble will be marketed to both expert witnesses directly as well as to law firms dealing with Intellectual Property, Lanham Act and related commercial litigation cases. For lawyers, Voluble will provide reports that capture consumer conversations about products and brands that can be used to support experts retained on behalf of clients or to refute opposing experts. Voluble will provide experts with reports that will enhance their analyses of the marketplace dynamics and consumer behavior.

Voluble will be a service that can be provided to expert witnesses who employ Global Business Experts for consultancy work. Voluble, however, will be its own entity which will allow expert witnesses and consulting groups to employ Voluble without having to go through GBX. Voluble’s services can be employed by lawyers as their ongoing social media analysts or by expert witnesses. Voluble’s services can also be employed for one-off cases as needed.

Promotion

Voluble will be promoted as a technical social media service with a litigation focus. It will be marketed based on the team’s experience in litigation and their understanding of the implications involved in legal disputes. Voluble’s approach is focused on comprehensive data, precision, and efficiency. Within the industry of expert witness consulting, business is won based on reputation and referral. Voluble’s services will first be promoted to GBX’s current book of business. By working collaboratively with current lawyers and experts to determine how Voluble can help solve their key questions and objectives, Voluble can gain a reputation within the industry.

Law firms that focus on hiring expert witnesses will be a key target audience for Voluble. These intellectual property law firms include Banner Witcoff, Fish & Richardson, Covington & Burling and WilmerHale. For these clients, Voluble will be marketed to them as a service to support their witnesses and provide analysis for the witness to base their opinion on. Additionally, Voluble can be marketed directly to the expert to collect and synthesize data as they see fit. For experts who have exclusive relationships with GBX’s competitive consulting firms, Voluble, being its own entity, will allow them to still contract with Voluble for their social media analytic needs. Additionally, Voluble can be marketed directly to GBX’s competitive firms including Analysis Group, Cornerstone, NERA, and Keystone.

Price

The pricing of Voluble will reflect the high costs of litigation, the quality and talent of the analysts, and the cost of producing one-off custom reports. Voluble will be priced as a premium service within the litigation and social media analytic markets. With the high cost of litigation services, Voluble can be profitable with only a handful of cases each year, while helping GBX win business as well. Data providers and analytic firms often provide services based on ongoing analytics and market intelligence projects where revenue is generated on an ongoing basis, whereas Voluble will be structured to produce one-off reports that capture a specific period in time. While the typical social media analytics reports are designed to provide brand managers with insights and directional feedback, the degree of precision required for litigation makes it much more time-consuming. Additionally, Voluble’s extensive knowledge in litigation will allow them to differentiate and charge a premium amongst other data analysis providers.

The nature of the legal environment is to bill clients hourly. Fixed fee and ceiling pricing is also common practice. Voluble could also introduce a tiered pricing model in which preliminary analyses at a lower price point and then a higher price point for further analyses. Since Voluble has fixed costs associated with the data providers and its other technological partners, a mixed price structure of fixed costs upfront, plus billable hours may suit Voluble best. Profit funds non-billable work including research and professional development. Research and development will be undertaken to improve and streamline processes and develop efficiencies. Voluble will need to hire lower priced staff to complete less skilled tasks.

Voluble will likely provide free initial consultations and complete some preliminary work to inform estimates and win business. Industry rates range based on the work and individual expertise. Based on GBX’s past work with industry experts, the industry pricing structure is as followed:

  • Consultants have a billing rate that ranges from $200-$500 per hour for research and reports.
  • Survey experts charge a fixed fee per survey varying greatly from $8,000 – $100,000.
  • Survey experts bill hourly for deposition and trial testimony for $350-$500 per hour.
  • Marketing experts bill hourly for deposition and trial testimony ranging from $600-$1,200 per hour.

After a few cases, Voluble will better be able to gauge the time required to complete certain projects, but based on the industry pricing, Voluble is expecting that each report will cost approximately $100,000. Due to the individual needs of each case, pricing will vary from client to client. For example, if a client were to present a problem that required access to the data API, the client would be charged an additional $10,000 for access.

Competitors’ Offerings

As Voluble is being developed, it is important to understand the offerings of our competitors and potential competitors. While there aren’t many companies who offer social media analytics in a litigation capacity, there are companies who have side practices in litigation. Additionally, there are large social media analytic companies who have the capacity to provide a similar service with their current resources.

Listen Logic

Listen Logic is a social media analytics firm that specializes in integrating and analyzing unstructured and structured data. They focus on social consumer relationship management and corporate reputation monitoring. They cater heavily to the financial, automotive, and pharmaceutical industry. Listen logic is also known to use social media conversations to assess litigation claims and prepare expert reports. In the past, they have worked with law firms and experts dealing with cases in trademark claims, deceptive advertising, patent infringement, antitrust and content analysis. While Listen Logic does not have a sole focus on litigation, in terms of services provided, Listen Logic is Voluble’s leading competitor.

FTI Consulting

FTI consulting is a global business consulting firm. They do not specialize in litigation, but it is one of their advertised practices. FTI offers litigation consulting services for trademark infringement, false advertising, and unfair competition. Their services include analyzing financial records, developing damages claims, critiquing opposition expert reports, assisting with witness preparation, performing analyses, and providing expert witness testimony. They are currently using social media data to illuminate investigation leads, to aid in discovery, and to select jury members.

Deloitte

Deloitte is a global consulting firm with services including legal consulting and analytics. Deloitte offers litigation and trial intelligence by leveraging social media data. They aggregate public record background information and detailed demographic information to select the right jurors. They also use social media to measure public opinion throughout cases to consult on litigation strategy, settlement negotiations and damage calculations.

Lexis Newsdeck

Lexis Nexis provides a service known as Newsdeck which focuses on social media analytics. Newsdeck is a social listening platform that allows clients to track conversation across social media platforms and other online communities. Their analysis consists of share of voice relative to competitors within the industry, themed word-clouds, and geo-maps to analyze where the conversations are originating from. While Lexis Nexis is a leader in aggregating litigation documents, Newsdeck is solely a social media analysis tool. While they do not provide litigation support, Lexis Nexis has the ability to combine their resources and move into social media analytics with a litigation focus.

Argent Media

Argent Media is a search engine marketing agency run by Chris Silver Smith. He has used his expertise to consult on legal cases and act as an SEO expert. He uses social media to detect user influence and to measure the effectiveness of online campaigns. Chris has used SEO practices to show genericness in the PODS vs. U-Haul case and has worked as a domain name expert for trademark infringing domains. From an interview with Mr. Smith, he plans on expanding his offerings to encompass social media, as “social media is increasingly emerging in legal cases, and will continue to be a major factor in many instances involving online reputations, harassment, defamation, trademark infringement, and disclosures of private/confidential information.” (Smith, 2017)

MotiveQuest

MotiveQuest is the leading strategic social market research company. As an industry innovator, they have been at the forefront of extracting market research insights from social big data. MotiveQuest pioneered the term “Online Anthropology,” by combining social data, software and consulting expertise to help clients solve complex, modern marketing challenges. Top global clients turn to MotiveQuest to rethink the way they look at their consumers and to seize new growth opportunities. Enabled by this software, the strategists provide real, actionable business advice by looking beyond what people are saying and explaining what their motivation is.  MotiveQuest was recently bought by Lieberman Research Worldwide which is one of the leading research firms in the world. It is companies like these that aren’t currently focused on litigation, but could still be competing for the same clients as they have the means to perform the same tasks.

Other Services

There are currently several other companies within the industry that offer social media services for litigation purposes. Companies such as Kessler International, Smith Carson, SMI Aware, and Focus Litigation Consulting all use social media for other legal purposes. For example, Kessler specializes in personal injury, unused vacation payouts and living beyond one’s means.  Smith Carson uses social media to identify fact witnesses in a case and gain an understanding of the timeline of events. SMI Aware and Focus Litigation both use social media for jury selection and discovering undisclosed biases or opinions that jurors may have towards a case. While these uses of social media are more targeted towards individuals, these are areas of practice that Voluble would be capable of pursuing in the future.

Voluble’s Differentiation

Voluble will be able to differentiate itself from its competitors based on their offering, specialties, and relationships. Listen Logic has the ability to compete with Voluble, but they do not understand the world of litigation as Voluble does. Lexis Newsdeck has the ability and tools, but they do not have a consulting practice. FTI and Deloitte provide versions of Voluble’s services, but it is a segment of their company and not their primary focus. MotiveQuest represents similar market research firms with a focus in social media analytics. While they can perform similar tasks and they have access to similar data, they do not have the legal knowledge. In an industry that competes on price, quality, and efficiency, Voluble gains an advantage due to their knowledge of both trademark litigation, social media analysis, and the admissibility of such data, as depicted in Figure 3 below. Additionally, through GBX Voluble has begun to build a reputation amongst experts and lawyers. These relationships and the ability to remain top of mind for data analytic solutions will help propel the success of Voluble.

  Voluble Lexis Newsdeck FTI Deloitte Listen Logic Motive

Quest

Primarily Litigation Focused X X
Social Media X X X X X X
Analytics X X X X X X
Trademark Evidence X X X X

Figure 3: Voluble’s Competitor Analysis

PART II: Social Media Legal Requirements

Overview

Consumer testimony can be compelling evidence to show that consumers connect a product with a specific brand. Companies often seek out consumers who have purchased or are about to purchase specific products through online surveys and customer comment sections on websites. More recently, social networks have become an increasingly popular means of sourcing such evidence. A brand’s social page can prompt customer testimonies, e-commerce sites can promote consumer reviews, and customers can speak openly about brands and products on their own various platforms. These testimonials can be extremely helpful when evaluating likelihood of confusion as well as fame and dilution.

A Texas Court of Criminal Appeals released an Opinion in 2012 in relation to authenticating social media evidence in Tienda v. State. In this case, Myspace postings were found sufficient circumstantial evidence. This case discusses the five distinct, yet interrelated evidentiary issues that govern electronic evidence and its admissibility into evidence. The five foundations include relevance, authenticity, hearsay, best evidence, and that the probative value must outweigh any prejudicial effect. With the expected increase of electronic evidence in future motions, the court provided thorough explanations for future defenses.

Data Collection

During discovery, data can be impaired due to retrieval techniques and data conversion. Courts have expressed uncertainty about the validity of electronic evidence. Since electronic evidence is relatively new, court and trial attorneys should present such evidence during pretrial and address the accuracy and reliability of the electronic evidence upfront.

In some cases, when relevant social media data is voluminous, sampling may be necessary. It is important to use statistical methods to justify the range and probability of error of the sample relative to the population data (Dickson, 2011). It is imperative to maintain accurate details on the collection method, the software used, and the metadata associated with electronic evidence. As cited in the Manual for Complex Litigation, a judge should “consider the accuracy and reliability of computerized evidence” and that a “proponent of computerized evidence has the burden of laying a proper foundation by establishing its accuracy” (Vinhnee v. American Express Travel Related Services Company Inc., Ninth Circuit App. 2015).

“Computerized data, however, raise unique issues concerning accuracy and authenticity. Accuracy may be impaired by incomplete data entry, mistakes in output instructions, programming errors, damage and contamination of storage media, power outages, and equipment malfunctions. The integrity of data may also be compromised in the course of discovery by improper search and retrieval techniques, data conversion, or mishandling” (Manual for Complex Litigation (Fourth) § 11.446 (2004)).

Fed. R. Evid. Rule 901(b)(9) defines the proper authentication for results of a process or system and considers evidence describing the process or system used to attain a result and demonstration that the result is accurate. The advisory committee noted that Fed. R. Evid. Rule 901(b)(9) was intended to incorporate computer-generated evidence and that it did not exclude taking judicial notice in fitting situations.

Authentication

Dictated by Fed. R. Evid. Rule 901(b)(1), testimony from knowledgeable witnesses can be used to authenticate evidence collected from websites and social platforms. Courts are still undecided on what knowledge is necessary for a witness to authenticate evidence. Evidence from website postings have been excluded due to failing to provide proof that the postings were made by the stated author and not an outside third party. In the case of US v. Jackson, 208 F.3d at 637-38, the court required evidence to ensure that the postings were not made by the defendant herself, but by the stated author.  It is important to remember that with regards to authentication, electronic evidence is not that different from many other forms of accepted evidence. A Pennsylvania court has addressed the authentication issue of such evidence stating that “anybody with the right password can gain access to another’s e-mail account and send a message ostensibly from that person. However, the same uncertainties exist with traditional written documents” (In Re F.P., 878 A.2d 91, 95-96, Pa. Super. Ct. 2005). The court further concluded that it was unnecessary to create unique rules of admissibility for electronic communications, including those from social media platforms.

Admissibility

In addition to Fed. R. Evid. Rule 901, there are additional Federal Rules of Evidence that outline criteria that must be met for information to become evidence. Under Fed. R. Evid. Rule 401, admissibility of evidence is contingent on “any tendency to make the existence of any fact more or less probable.” If the evidence is proven both relevant and authentic under Fed. R. Evid. Rule 401 and 901 respectively, then it will proceed to hearsay defined by Rule 801 or covered by the exceptions dictated by Fed. R. Evid. Rules 803, 804 and 807. Since most writings today are both created and stored in an electronic format, the hearsay rules that apply most often are the following:

  • Rule 803(1) Present Sense Impression
  • Rule 803(2) Excited Utterance
  • Rule 803(3) Then Existing State of Mind or Condition
  • Rule 803(6) Business Records
  • Rule 803(8) Public Records

Once evidence clears “Hearsay”, the evidence must surpass the “Best Evidence Rule” also known as the Original Writing Rules laid out in Fed. R. Evid. Rules 1001-1008 as seen in Figure 5, Steps for Admissibility of Electronic Evidence.

Representation of Evidence

Documented by Fed. R. Evid. Rule 1003, duplicates can be admitted into evidence instead of the original unless there are concerns of authenticity of the original document. When it comes to social media and website postings, this is extremely important as it is difficult to share or mark an exhibit displayed on a screen in its original form. If the print out displays the data accurately, the print out will be viewed as an original stated by Fed. R. Evid. Rule 1001(d). Lastly, Fed. R. Evid. Rule 403 aids against evidence being admitted that is unfair prejudice, confusion of issues, misleading the jury or waste of time (Goetz, 2013). The case law recognizes that certain circumstances call for the exclusion of evidence that may be relevant. These types of situations call for a balance of the evidence’s value and the resulting harm from admission.

Figure 5: Steps for Admissibility of Evidence

Expert witnesses

Experts can base their opinions on any information that they find to be relevant, including online activity and social media. According to Fed. R. Evid. Rule 703, experts can base their opinions on personal knowledge and facts or data that the expert has been made aware of.  Expert opinions may be considered inadmissible when their testimony is based upon hearsay. When dealing with hearsay, unless the statement falls under one of the exceptions, the expert is often blocked from restating third-party conversations. This principle can be used to exclude details of the social media posts, but experts can still use the post to influence their overall conclusions.

Demonstratives

Demonstrative evidence is used as an aid in presenting information to the court, but is not admitted into evidence. Demonstratives often include PowerPoint slide shows, lists, drawings, and other visual aids. Because demonstratives are not admitted into evidence, attorneys can rely on them without authenticating them. These demonstratives are often in the form of academic summaries, allowing experts to share their inferred conclusions or opinion to assist the jury. Ultimately, the courts retain the power to either permit or exclude the use of visual aids to help explain and summarize evidence (Fed. R. Evid. Rule 611).

However, not all demonstratives are inadmissible as evidence. Demonstrative evidence that highlights or condenses a testimony is admissible if the underlying testimony has been admitted or is later admitted as cited in N. Am. Van Lines, Inc. v. Emmons. Under Fed. R. Evid. Rule 1006, the expert may use charts and visuals in court for evidence that fits the following criteria:

  • Voluminous materials that may not be easily analyzed in court
  • The original materials must be made available to the opposing party

Fed. R. Evid. Rule 1006 is important when dealing with social media posts as they are often voluminous and it is impractical to display each individual post before the court. As previously stated regarding data collection, the condensed data and visual aids must be representative of the data as a whole. While demonstrative evidence is subject to admissibility by the judge, it is a practical and efficient way to display social media evidence before the court.

Trademark and Trade Dress Infringement

Trademark and trade dress infringement are governed federally under the Lanham Act, also referred to as the Trademark Act of 1946. This act is a federal statute that governs all trademarks, service marks, and unfair competition. On the state level, the law of intellectual property encompasses, copyright, patents, and trademark law. Trademarks are words, phrases, symbols, or logos that identifies a product and differentiates it from competitors. Service marks are similar to trademarks, except used for the promotion of services. Trade dress consists of the various design elements that are used to promote goods and services, such as product configuration and décor. Trademarks and trade dress can be registered with the United States Patent and Trademark Office to receive protection from federal courts. Trademarks and trade dress elements are used by consumers to decipher the origin of goods and services.

For a trade dress or trademark to be protectable, it must be distinctive and cause likelihood of consumer confusion by the use of others. Descriptive marks are not considered distinctive and therefore require secondary meaning in order to be protected. Secondary meaning requires widespread recognition and association of a trademark with a specific product or service, such as ChapStick and Xerox. Additionally, functional aspects of a trade dress cannot be protected under federal trademark law.

Sleekcraft Factors

As stated previously, in order for a trademark or dress to be protectable under United States law, use of the mark or dress needs to cause likely confusion about the source of the good. Likelihood of confusion is determined in the courts based on the weights given to eight key factors, known as the Sleekcraft Factors as defined in AMF Inc. v. Sleekcraft Boats. The eight factors are defined as follows:

  1. Strength or weakness of the plaintiff’s mark: If the public recognizes the trademark as an indication of the plaintiff’s good then there is likely to be confusion if the defendant were to use a similar mark.
  1. Defendant’s use of the mark: If the plaintiff and defendant are using similar marks in the same industry or on complementary goods there is likely to be confusion on the source of the good.
  1. Similarity of plaintiff’s and defendant’s marks: If the plaintiff’s appearance, sound, meaning or overall impression of the mark created is similar to that created by the defendant’s mark then consumers are likely to be confused.
  1. Actual confusion: If the defendant’s use of the mark in question has led to instances of actual consumer confusion, this weighs heavily in favor of likelihood of confusion. Actual confusion is not required, however, to prove likelihood of confusion.
  1. Defendant’s intent: If the defendant used the plaintiff’s mark in bad faith, knowingly to capitalize on the benefit of the reputation of the plaintiff’s mark, this shows intent to cause confusion amongst consumers.
  1. Marketing and advertising channels: If the plaintiff’s and defendant’s goods or services have similar distribution and marketing strategies, in that they are sold in similar stores and promoted on similar media outlets, there is likely to be confusion amongst consumers.
  2. Consumer’s degree of care: The more sophisticated the target audience and the costlier the goods or service, the more careful consumers are in their purchases, which would decrease the likelihood on consumer confusion.

 

  1. Product line expansion: If the plaintiff and defendant products differ, but it is likely that the plaintiff could expand its product line to include the defendant’s product, then there is likely to be confusion for consumers.

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