While SMEs have much to benefit from the astute and effective use of social software, they should be wary of legal complications arising from possible copyright infringements.
The idea is simple and attractive - build an online forum for your customers, stakeholders, suppliers and partners, and encourage them to interact, share their opinions and stay in contact with your company.
By allowing them to spread the word about the good products and services that you offer, they become your company's spokesmen. In 'business-speak' - achieve a critical mass of stakeholders and leverage the network effects for a connected and involved customer base.
But wait a minute. A letter arrives at the office. A lawyer's letter. The atmosphere is almost as unwelcome as an undertaker at a birthday party.
It seems that customers at your forum have been sharing music and video files, and posting links where unauthorised copies of these files can be downloaded. In 'lawyer-speak' - this is copyright infringement.
You may wonder if this could happen to your business. How can a business today glean the benefits of social software without getting into trouble?
The advent of 'social software' that began with humble electronic bulletin boards and e-mail messages has led to new networking tools such as Facebook, Linkedin, Google Groups, online forums, blogs, etc. As enterprising businessmen always do, they seek to avail themselves of such tools to develop and promote their businesses. They may establish product user groups, advertise in online forums or even facilitate transactions in what are essentially online marketplaces. The aim is, ultimately, to reap the benefits of developing and keeping a loyal customer base, or at least gaining access to a focused and targeted group of potential customers and users.
While social software gives you the freedom to interact and exchange ideas and information with others, the freedom and ease with which one can now share content on the Internet has become a by-product of the social software development.
The law has been trying to keep up with new developments. Since 1998, the Copyright Act has been amended about 10 times. This averages to about one amendment a year - considered high frequency for any legislation. The difficulty, however, is that possible ambiguities in the amendments themselves need to be tested in a court of law before a definitive opinion or conclusion of their effect and scope can be ascertained.
From the legal precedents set, it is now clear that mere unauthorised and possibly passive storage of infringing material on a server may constitute infringement. On the other hand, infringing content stored on a computer as a result of system caching may, in certain conditions, not trigger any liability for infringement.
So, in the example given earlier, will your business get into trouble? Unless a company is being prosecuted in court, only then we will know if new relevant provisions regarding the immunity of 'network service providers' can be extended to cover these companies. They could be caught in a situation where they establish forums that act as a conduit for the exchange of content between users. Such is the nature of the legal process and the development of the law.
Amid this, the law is striving to balance the interests of both the owners of the rights and the users who may accidentally be caught in a compromising situation. However, the lesson should be clear. If you are contemplating leveraging social software to complement your business, proceed with caution and do not go overboard. The prospect of greater freedom given to users opens the prospect of greater abuse. It may be useful for businesses to educate users on the proper conduct within business forums or extend a light moderating touch on the content shared. An administrator would be an ideal person to help police the forum and ensure that unsuitable or negative content is sieved out.
That would allow businesses to continue harnessing the enormous potential for business development opportunities and the promise of greater networking capabilities.
Clearly, small and medium enterprises have much to benefit from the astute and effective use of social software. While a lawyer's letter is not likely to bring a smile to most, and this is a situation that businesses should try to avoid, a thriving and well-regulated forum of involved and committed stakeholders certainly will be of great benefit.
- This article is contributed by Jeffrey Lim, an infocomm committee member of The Law Society of Singapore, from Stamford Law Corporation.
- This article first appeared in The Business Times on 30 September 2008 and information is correct at the time of publication.
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