The dilemma of who truly owns a social media account, particularly business accounts, has been a recurrent topic of discussion in the legal community. For instance, in JLM Couture, Inc. v. Gutman, the case revolves around creative individual Haley Paige Gutman, who is locked in a dispute over two social media accounts she created under her name while working for a fashion design company.
The intricate case underscores the glaring yet often overlooked consequences of signing a comprehensive work-for-hire agreement. It’s commonplace for corporations to demand their creatives to sign such agreements, which typically entail forfeiting their rights to anything creative fashioned, ideated, or developed during their tenure at the company.
The flip side of the coin is the lag of the legal system, particularly the appellate courts, in catching up with the ever-evolving digital landscape. This results in an unsettling limbo where legal professionals must provide less than definitive answers on social media account ownership, often using phrases such as “it depends”.
Rather than relying on a standard property ownership analysis, the district court in this case introduced a unique six-factor test to examine how the accounts were presented to the public, their purposes, and how they were managed. The appellate court, however, dismissed this approach, asserting the novelty of determining the ownership of social media accounts does not necessitate a new test.
Furthermore, the appellate court decided accounts should be treated like any other form of property, focusing on who owned the accounts at the time of their creation. According to this logic, Gutman was the initial owner of the accounts as they were created under her personal information. Consequently, the primary question becomes if and how she transferred ownership of the accounts to JLM Couture, Inc.
The Second Circuit court rejected the notion that JLM could claim current ownership based on work-for-hire provisions in their contract with Gutman. The court argued that social media account creation does not share the core attributes of the fashion design process, hence falling outside of the purview of the contract’s “any other works” language, leaving JLM’s claim to ownership unsupported.
In conclusion, the Second Circuit provides some clarity, suggesting that the analysis of social media account ownership ought to start by determining the original owner and end by verifying if ownership was ever transferred to another party. This ruling highlights the urgent need for companies to explicitly articulate social media account ownership within their contracts.