UPDATE October 5, 2022: Recently a Fifth Circuit Court of Appeals decision upheld the Texas law that restricts SMPs from banning users or posts based on one’s particular viewpoint. The judges addressed First Amendment implications of the bill, specifically with respect to the impact big tech has on the ability to shape the public’s discussion, stating “we reject the idea that corporations have a freewheeling First Amendment right to censor what people say.” While the Supreme Court temporarily blocked the bill from taking effect in May 2022 subject to an emergency decision, this 5-4 vote in the Court of Appeals upholding the law makes this case ripe for Supreme Court review. Should HB 20 be upheld in the highest court, such a decision would have an immense impact on big tech SMPs in how they approach and handle free speech content.

UPDATE December 2, 2021: A federal judge has issued an injunction against Texas HB 20 preventing the social media bill that would impact social media platforms with more than 50 million monthly users from coming into effect on December 2, 2021. The case in the Western District of Texas Austin Division is currently pending.  We will keep you informed as the matter makes its way through the court system.

Texas Governor Greg Abbott has signed HB 20 to stop social media platforms (SMPs) from banning users or posts based on one’s particular viewpoint. SMPs with more than 50 million monthly users in a calendar month will be required to disclose their content management processes, data management, removal processes, and business practices, among other pertinent information related to the monitoring and censorship of content. Setting aside any politically backed rationale for supporting HB 20 or not, trademark lawyers should be aware that the new law affects trademark enforcement directly and has the potential to speed up the resolution of complaints made to SMPs regarding the unauthorized use or misuse or infringement of trademarks.

Trademark owners are in the business of protecting consumers by enforcing their rights against infringers who seek to capitalize on the goodwill associated with trademarks or sometimes just to use marks in fraudulent schemes. Another reason to have a robust enforcement program is to lower the potential of losing trademark rights to dilution or genericide. However, this duty does not impose an endless call-to-action to tirelessly scour the Internet and confront the unauthorized use or misuse or infringement of trademarks. Such an obligation would be unreasonable and unmanageable. Courts have consistently held that “failure to sue other […] infringers does not constitute abandonment” (see Big Island Candies, Inc v Cookie Corner, 244 F Supp 2d 1086, 1095 (D Haw 2003)). That said, enforcement of trademark rights is necessary to maintain one’s rights and to protect and uphold the value of one’s trademarks, and the reputation and goodwill of the related company or brand.

HB 20 has the potential to improve outcomes for trademark owners when they enforce their rights as the unauthorized use or misuse or infringement of a trademark would very likely constitute illegal content or illegal activity and in most cases would violate an SMP’s acceptable use policies, provided that the user that posted said illegal content resides in, does business in, or shares or receives content on an SMP in the state of Texas.

SMPs must publicly disclose in an easily accessible manner an acceptable use policy to explain the means by which users can notify the SMP of illegal content, among other considerations. In response, SMPs are then required to evaluate the legality of the content within 48 hours of receiving the notice of the illegal content, or other identified content that violates the policy.

While most SMPs currently have a mechanism in place for reporting the unauthorized use or misuse or infringement of trademarks and do a decent job of reviewing and responding to the same, on occasion, a reported violation goes unanswered, denied for no plausible reason, denied without explanation, or simply takes weeks or months to be resolved. This can frustrate attempts to enforce trademark rights and embolden bad actors. The 48-hour response time is particularly attractive for trademark owners and attorneys alike. Being able to potentially close out a trademark enforcement matter within a matter of days will reduce enforcement spending.

Since it seems unlikely that an SMP will build out a 48-hour turnaround time for content posted by users who reside in, do business in, or share or receive content on an SMP in the state of Texas and a different workflow for those that do not fall into this category — a category that seems hard to define with clarity in 48 hours in any event — the trademark-related changes in HB 20 are likely to result in greater efficiencies for all trademark complaints. In other words, a speedier response time due to the Texas law will likely have an impact regardless of where the user resides. 

 

 

This article originally appeared in World Trademark Review Weekly on Sept. 23, 2021 and is reprinted with permission.