Pinterest’s amended terms still leave users exposed

Pinterest (I am going to be a little lazy in this post and refer to “Pinterest” when discussing both the site and its creator, Cold Brew Labs) has been in the spotlight quite a bit lately due to its terms of service as well as content creators’ concerns that their content is being shared without their permission on the service by its enthusiastic users. I wrote about the copyright implications in my post titled “Is Pinterest a den of copyright thieves?” and about the potential liability users face in a subsequent post titled “Pinterest’s hidden threat to its users“. Pinterest announced updates to its terms recently and the new terms go into effect next week. Unfortunately the new terms still leave users exposed to potentially substantial liability simply by using the service.”

Current terms (published on 29 March 2011)

Much of the focus on Pinterest’s new terms of service (which go into effect on 6 April) is on the original content license users grant to Pinterest which includes the right to “sell” “Member Content”. The two key clauses here are the definition of “Member Content” and the original license clause which state the following (I highlighted the problematic terms in bold):

“Member Content” means all Content that a Member posts, uploads, publishes, submits or transmits to be made available through the Site, Application or Services.

and

We may, in our sole discretion, permit Members to post, upload, publish, submit or transmit Member Content. By making available any Member Content through the Site, Application or Services, you hereby grant to Cold Brew Labs a worldwide, irrevocable, perpetual, non-exclusive, transferable, royalty-free license, with the right to sublicense, to use, copy, adapt, modify, distribute, license, sell, transfer, publicly display, publicly perform, transmit, stream, broadcast, access, view, and otherwise exploit such Member Content only on, through or by means of the Site, Application or Services. Cold Brew Labs does not claim any ownership rights in any such Member Content and nothing in these Terms will be deemed to restrict any rights that you may have to use and exploit any such Member Content.

The effect of these provisions was to enable Pinterest to commercially exploit Member Content published on the site on the basis that users grant Pinterest. This license is granted automatically and the way Pinterest attempts to ensure that users are legally authorised to grant this license is through this acknowledgement or warranty:

You acknowledge and agree that you are solely responsible for all Member Content that you make available through the Site, Application and Services. Accordingly, you represent and warrant that: (i) you either are the sole and exclusive owner of all Member Content that you make available through the Site, Application and Services or you have all rights, licenses, consents and releases that are necessary to grant to Cold Brew Labs the rights in such Member Content, as contemplated under these Terms; and (ii) neither the Member Content nor your posting, uploading, publication, submission or transmittal of the Member Content or Cold Brew Labs’ use of the Member Content (or any portion thereof) on, through or by means of the Site, Application and the Services will infringe, misappropriate or violate a third party’s patent, copyright, trademark, trade secret, moral rights or other proprietary or intellectual property rights, or rights of publicity or privacy, or result in the violation of any applicable law or regulation.

This sort of warranty is a common mechanism in website terms and short of having each user prove they are entitled to post each item to the service (totally impractical), this is how site providers tend to protect themselves from a user submissions perspective.

One of the significant challenges in these terms is that users are potentially liable for substantial damages simply by using the service. This is as a result of the liability clauses in the terms. I won’t go into this in detail here as I have already done so in my post titled “Pinterest’s hidden threat to its users” which I recommend you read before continuing with this post.

Paul Jacobson / Pinterest

The new terms (6 April 2012)

The new terms deal with content a little differently. Firstly, the definition will change to “User Content”. This isn’t as well defined as “Member Content” is in the current terms. It is defined or framed as follows (I highlighted the relevant sections):

Your content. Pinterest allows you to pin and post content on the Service, including photos, comments, and other materials. Anything that you pin, post, display, or otherwise make available on our Service, including all Intellectual Property Rights (defined below) in such content, is referred to as “User Content.” You retain all of your rights in all of the User Content you post to our Service.

Framing “User Content” this way does two things. It streamlines the definition of User Content and it explicitly states that users retain the rights they have in the content they post. This means that Pinterest has no ownership claim over your stuff which you post to the site or, implicitly, anyone else’s. This also addresses a very common misperception we see in media coverage of site terms of use: Pinterest doesn’t claim to own your content. In fact, I don’t recall ever seeing site terms where a provider claims ownership of user content. The problem lies more in how broad the license is that users grant these service providers. The license users grant Pinterest is the following (I’ve highlighted some interesting provisions):

  • How Pinterest and other users can use your content. Subject to any applicable account settings you select, you grant us a non-exclusive, royalty-free, transferable, sublicensable, worldwide license to use, display, reproduce, re-pin, modify (e.g., re-format), re-arrange, and distribute your User Content on Pinterest for the purposes of operating and providing the Service(s) to you and to our other Users. Nothing in these Terms shall restrict Pinterest’s rights under separate licenses to User Content. Please remember that the Pinterest Service is a public platform, and that other Users may search for, see, use, and/or re-pin any User Content that you make publicly available through the Service.
  • How long we keep your content: Following termination or deactivation of your account, or if you remove any User Content from your account or your boards, Pinterest may retain your User Content for a commercially reasonable period of time for backup, archival, or audit purposes. Furthermore, Pinterest and other Users may retain and continue to display, reproduce, re-pin, modify, re-arrange, and distribute any of your User Content that other Users have re-pinned to their own boards or which you have posted to public or semi-public areas of the Service.

What is noticeable is that the new terms omit the reference to “sell” and the new license is not irrevocable or perpetual. It is still royalty-free and “sublicenseable” so Pinterest is not liable for any royalties payable for publishing User Content and can sub-license the content to another party. This latter requirement may be intended more to enable the service to function more than a desire to move content around. Any other party that republishes the content as part of the overall service would need the right to do so. This may include Pinterest’s hosting provider, 3rd party services and so on.

A related term in the new terms is “Pinterest Content” which is framed as follows:

Pinterest Content. Except for User Content, the Service itself, all content and other subject matter included on or within the Service, and all Intellectual Property Rights in or related to the Service or any such content or other subject matter (“Pinterest Content”) are the property of Pinterest and its licensors. Except as expressly provided in these Terms, you agree not to use, modify, reproduce, distribute, sell, license, or otherwise exploit the Pinterest Content without our permission.

A big change in the new terms is the introduction of an Acceptable Use Policy which more fully addresses how users can make use of the service. Two of the prohibitions include posting any User Content that –

infringes any third party’s Intellectual Property Rights, privacy rights, publicity rights, or other personal or proprietary rights

and

contains any information or content that you do not have a right to make available under any law or under contractual or fiduciary relationships

The new terms define “Intellectual Property Rights” as follows:

Definition of Intellectual Property Rights. When we refer to “Intellectual Property Rights” in these Terms, we mean all patent rights; copyright rights; moral rights; rights of publicity; trademark, trade dress and service mark rights (and associated goodwill); trade secret rights; and all other intellectual property and proprietary rights as may now exist or hereafter come into existence, and all applications for any of these rights and registrations, renewals and extensions of any of these rights, in each case under the laws of any state, country, territory or other jurisdiction.

The new terms make it pretty clear that users are only to publish content they have the rights to publish, whether this be under a license granted by the content creator (most Creative Commons licensed content, for example, would probably be fine) or where there are copyright infringement exceptions (I wrote about this in my first post titled “Is Pinterest a den of copyright thieves?“). The terms also include fairly extensive provisions intended for content owners and which detail Pinterest’s interest in protecting their rights, preventing efforts to circumvent the so-called “no pin” tag content owners can use to block efforts to pin their content as well as to report any copyright infringement.

What Pinterest hasn’t changed much are its liability protection clauses. As with the current terms, the new terms include an indemnity clause which states the following:

You agree to indemnify and hold harmless Pinterest and its officers, directors, employees and agents, from and against any claims, suits, proceedings, disputes, demands, liabilities, damages, losses, costs and expenses, including, without limitation, reasonable legal and accounting fees (including costs of defense of claims, suits or proceedings brought by third parties), arising out of or in any way related to (i) your access to or use of the Services or Pinterest Content, (ii) your User Content, or (iii) your breach of any of these Terms.

The terms also include a liability limitation clause which reminds users that “THE ENTIRE RISK ARISING OUT OF YOUR ACCESS TO AND USE OF THE SERVICES, PINTEREST CONTENT, AND USER CONTENT REMAINS WITH YOU AND YOU USE THE SERVICES AT YOUR OWN RISK” (among other things).

Actually there is one significant change from the old indemnity clause to the new one. The old (or current) clause requires users to “defend” Pinterest. That change relieves users of the potential responsibility for filing court papers in Pinterest’s defence should it be sued. What the new indemnity clause doesn’t do is relieve users of the potential responsibility for any damages Pinterest may be ordered to pay, any costs it may incur or other penalties which flow from claims lodged against Pinterest in respect of –

  • “your access to or use of the Services or Pinterest Content”;
  • “your User Content”; or
  • “your breach of any of these Terms”.

There is one important omission in the indemnity. The indemnity doesn’t require your “use of the Services or Pinterest Content” to be unlawful or to infringe a 3rd party’s rights, necessarily. It potentially includes a situation where your use of the “Services or Pinterest Content” is legitimate and Pinterest’s isn’t. This could be possible if your use is regarded as a “fair use” (this has a specific legal context, see below) and Pinterest’s may not be because it’s a commercial service, for example.

What does this all mean for you?

The bottom line is that you should only pin stuff to Pinterest which you are licensed to pin or which you can pin under a copyright exception like “fair use” as applied in the State of California (these terms are governed by the “internal substantive laws of the State of California”). Any other publication or use of the service and content published on Pinterest could be a violation of someone Intellectual Property Rights and a breach of the terms of service. If Pinterest is sued for that and you are the unlucky user who did the infringing, you could be on the hook. This could be regardless of whether you acted lawfully when you used Pinterest.

In other words, heed the liability limitation clause’s admonition:

YOU ACKNOWLEDGE AND AGREE THAT, TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE ENTIRE RISK ARISING OUT OF YOUR ACCESS TO AND USE OF THE SERVICES, PINTEREST CONTENT, AND USER CONTENT REMAINS WITH YOU AND YOU USE THE SERVICES AT YOUR OWN RISK.

Pinterest’s hidden threat to its users

Pinterest follow screen

We recently wrote about the questionable copyright implications of using Pinterest to “pin” images and videos to the site and to share these items with other Pinterest users. What we didn’t deal with in that post is the consequential threat facing Pinterest users that has persuaded at least one photographer and lawyer to delete her boards (collections on Pinterest). The threat comes from an often overlooked clause which has potentially severe implications considering the copyright issues facing Pinterest users:

Indemnity

You agree to defend, indemnify, and hold Cold Brew Labs, its officers, directors, employees and agents, harmless from and against any claims, liabilities, damages, losses, and expenses, including, without limitation, reasonable legal and accounting fees, arising out of or in any way connected with (i) your access to or use of the Site, Application, Services or Site Content, (ii) your Member Content, or (iii) your violation of these Terms.

In terms of this clause you agree to cover Pinterest’s creator, Cold Brew Labs and all the categories of people specified in the clause, in the event it is sued or suffers some sort of loss due to your use of or access to the site; if your content gives rise to a claim or you violate Pinterest’s Terms. So what does this mean? It means that if, by using Pinterest to pin photos and videos, you infringe on someone’s copyright (or even where your use is legitimate and Pinterest’s use isn’t), Pinterest can invoke its indemnity and call on you to cover its losses and costs. The way the clause is worded, Pinterest’s ability to invoke the indemnity isn’t limited to instances where you actually infringed copyright or did something to otherwise violate a 3rd party’s rights. It can be invoked if the losses simply flow from your use of or access to the site or your pins.

As with virtually any social service on the Web the question is how real the risk is that this could happen and you could find yourself dragged into court in the Northern District of California to defend yourself against a claim for losses and costs where this indemnity clause is invoked? It may seem implausible but consider that a number of content creators are pretty concerned about Pinterest users sharing their content without their permission. It may not be too long before we begin to see the first lawsuits emerge and, at that point, users will have to wait and see if the indemnity is invoked and their lives changed because of a whimsical share.

 

Is Pinterest a den of copyright thieves?

Background

A debate whether Pinterest is flouting copyright laws by allowing its users to post, or “pin”, images and videos to the site is raging online. If you haven’t heard of Pinterest, it is one of the hottest new social networks that encourages users to share stuff they find on the Web. Pinterest’s focus is on images and videos and the service gives users ways to republish images on the site and categorise them in “Boards”. I found a great introduction video which explains the site with a series of demonstrations:

The site is enjoying tremendous uptake and once you start using it you can understand why. It enables people to create collections of ideas for their homes, brides use it to source inspiration for their weddings and share them with friends and so on. It is a truly social service but it relies on its users republishing 3rd party content to the site so questions about the copyright implications are understandable. One group of content owners who are particularly perturbed about Pinterest are photographers whose works are being published and shared on the site. Mike Masnick over at Techdirt believes this is not what photographers should concern themselves with and points to Trey Ratcliffe’s post (read this post for an expanded discussion about this) about the benefits of having his photographs “pirated” as support for his position that Pinterest’s benefits far outweigh any potential harm photographers may suffer by having their works pinned on the site:

Either way, his point is a strong one, and it’s really no different than what many people have made to reactionary folks in other parts of the content industry. You can spend all your time trying to kill innovation or stop people from doing what they want to do… or you can bask in the wonderment that people want to do stuff, encourage them to do so, and make it easier for them to help spread your works… all the while making it easy for them to support you. Ratcliff seems to be a perfect example of our discussion on the benefits of being open, human and awesome.

Exclusive rights

Regardless of the benefits of sharing more openly or even tolerating copyright infringement, content creators are entitled to protect their rights so the question remains what those rights are and whether Pinterest is either directly infringing copyright or is facilitating copyright infringement by its users? I’ll explore these questions in the context of South African copyright law which is largely governed by the Copyright Act, No. 98 of 1978.

Images and videos are categorised as “artistic works” and “cinematograph films”, respectively. Provided this content is original and reduced to a material form, it is generally protected by copyright. This means that the content’s copyright owner has a number of exclusive rights in and to that content –

Nature of copyright in artistic works.

7. Copyright in an artistic work vests the exclusive right to do or to authorize the doing of any of the following acts in the Republic:

(a)   Reproducing the work in any manner or form;
(b)   publishing the work if it was hitherto unpublished;
(c)   including the work in a cinematograph film or a television broadcast;
(d)   causing a television or other programme, which includes the work, to be transmitted in a diffusion service, unless such service transmits a lawful television broadcast, including the work, and is operated by the original broadcaster;
(e)   making an adaptation of the work;
(f)   doing, in relation to an adaptation of the work, any of the acts specified in relation to the work in paragraphs (a) to (d) inclusive.

Nature of copyright in cinematograph films.

8. (1) Copyright in a cinematograph film vests the exclusive right to do or to authorize the doing of any of the following acts in the Republic:

(a)   Reproducing the film in any manner or form, including making a still photograph therefrom;
(b)   causing the film, in so far as it consists of images, to be seen in public, or, in so far as it consists of sounds, to be heard in public;
(c)   broadcasting the film;
(d)   causing the film to be transmitted in a diffusion service, unless such service transmits a lawful television broadcast, including the film, and is operated by the original broadcaster;
(e)   making an adaptation of the film;
(f)   doing, in relation to an adaptation of the film, any of the acts specified in relation to the film in paragraphs (a) to (d) inclusive;
(g)   letting, or offering or exposing for hire by way of trade, directly or indirectly, a copy of the film.

Barring exceptions to copyright infringement (more about that below) and a license from the content owner granting permission to exercise these rights (more on this below, too), any exercise of these rights would likely be copyright infringement. Section 23(1) deals with this specifically and states the following –

Copyright shall be infringed by any person, not being the owner of the copyright, who, without the licence of such owner, does or causes any other person to do, in the Republic, any act which the owner has the exclusive right to do or to authorize.

Copyright infringement exceptions

At this point the law becomes a little tricky. The Copyright Act recognises a series of exceptions to copyright infringement. This means there are uses of copyright protected content which, but for these exceptions, would be infringing uses. I won’t republish the sections of the Act for the sake of some semblance of brevity but below are the principles which come out of the Act (this is not a complete treatment of these exceptions):

  • In respect of photographs –
    • personal or private use does not infringe copyright;
    • using the photographs for the purpose of reviewing or criticising them is similarly not infringing; and
    • “using such work, to the extent justified by the purpose, by way of illustration in any publication, broadcast or sound or visual record for teaching [is similarly not infringing]: Provided that such use shall be compatible with fair practice and that the source shall be mentioned, as well as the name of the author if it appears on the work”.
  • In respect of videos –
    • “using such work, to the extent justified by the purpose, by way of illustration in any publication, broadcast or sound or visual record for teaching [is similarly not infringing]: Provided that such use shall be compatible with fair practice and that the source shall be mentioned, as well as the name of the author if it appears on the work”.

Unlike artistic works, cinematograph films don’t carry the same exceptions that permit use for “personal or private use”. In the United States there is a broad exception called “fair use”. We don’t have fair use in our law but we do have “fair dealing”. That said, “fair dealing” is pretty much limited to literary and musical works (think print publications and sheet music).

Back to Pinterest

So what does this mean so far? Well, before you even look at Pinterest’s terms of use, you know that you can probably copy photos and publish them to Pinterest under the “personal or private use” exception for artistic works but the same doesn’t apply to videos. If you had permissive licenses to republish those photos and videos on Pinterest from the content creators that would resolve your dilemma but that would depend very much on where you get the photos and videos from (there is a wealth of content on the Web released under flexible licenses like Creative Commons but this has to be specified – your default is always that the copyright owner reserves all rights and that means you don’t have any).

Pinterest’s terms of service contain content licensing provisions. These provisions comprise the broad license users grant to Pinterest and licenses Pinterest grants to its users. The purpose of these licenses is to ensure that the site can continue to operate but the challenge is that the licenses are not always in line with the rights users have to use the content on the site. Here are the relevant provisions:

Pinterest Content and Member Content License

Subject to your compliance with the terms and conditions of these Terms, Cold Brew Labs grants you a limited, non-exclusive, non-transferable license, without the right to sublicense, to access, view, download and print any Pinterest Content solely for your personal and non-commercial purposes. Subject to your compliance with the terms and conditions of these Terms, Cold Brew Labs grants you a limited, non-exclusive, non-transferable license, without the right to sublicense, to access and view any Member Content solely for your personal and internal business purposes. You will not use, copy, adapt, modify, prepare derivative works based upon, distribute, license, sell, transfer, publicly display, publicly perform, transmit, stream, broadcast or otherwise exploit the Site, Application, Services, or Site Content except as expressly permitted in these Terms. No licenses or rights are granted to you by implication or otherwise under any intellectual property rights owned or controlled by Cold Brew Labs or its licensors, except for the licenses and rights expressly granted in these Terms.

Member Content

We may, in our sole discretion, permit Members to post, upload, publish, submit or transmit Member Content. By making available any Member Content through the Site, Application or Services, you hereby grant to Cold Brew Labs a worldwide, irrevocable, perpetual, non-exclusive, transferable, royalty-free license, with the right to sublicense, to use, copy, adapt, modify, distribute, license, sell, transfer, publicly display, publicly perform, transmit, stream, broadcast, access, view, and otherwise exploit such Member Content only on, through or by means of the Site, Application or Services. Cold Brew Labs does not claim any ownership rights in any such Member Content and nothing in these Terms will be deemed to restrict any rights that you may have to use and exploit any such Member Content.

You acknowledge and agree that you are solely responsible for all Member Content that you make available through the Site, Application and Services. Accordingly, you represent and warrant that: (i) you either are the sole and exclusive owner of all Member Content that you make available through the Site, Application and Services or you have all rights, licenses, consents and releases that are necessary to grant to Cold Brew Labs the rights in such Member Content, as contemplated under these Terms; and (ii) neither the Member Content nor your posting, uploading, publication, submission or transmittal of the Member Content or Cold Brew Labs’ use of the Member Content (or any portion thereof) on, through or by means of the Site, Application and the Services will infringe, misappropriate or violate a third party’s patent, copyright, trademark, trade secret, moral rights or other proprietary or intellectual property rights, or rights of publicity or privacy, or result in the violation of any applicable law or regulation.

In many instances it may be legally impossible for users to grant the license Pinterest takes from its users and for Pinterest to re-license that content back to users. Even where a photograph or video is made available under a permissive Creative Commons license, Pinterest’s license terms are at odds with those liberal licenses. What this means is that, in the absence of legally competent permissions, using the content on Pinterest could infringe copyright. This would seem to be the case with video content and with Pinterest’s use of photographs published to the site which are not licensed for that purpose. Users republishing photographs may be protected by the copyright exception I mentioned above.

Pinterest is aware of these concerns and published a post recently titled “Growing Up” in which the Pinterest team pointed out its efforts to comply with US copyright legislation and the “take down notice” procedure which gives rights holders the ability to have infringing content taken down –

With all that growth, we’ve gotten more questions from reporters and Pinners. In the past, we’ve been pretty quiet, but we want to get better about answering questions openly with people who are interested in Pinterest. We decided to start today by talking about copyright.

As a company, we care about respecting the rights of copyright holders. We work hard to follow the DMCA procedure for acting quickly when we receive notices of claimed copyright infringement. We have a form for reporting claims of copyright violations on our site here. Every pin has a flag to make reporting easier. We also know that copyright is a complicated and nuanced issue and we have knowledgeable people who are providing lots of guidance.

Pinterest also introduced a mechanism a little like the robots.txt mechanism where copyright owners can incorporate code into their content links to prevent Pinterest from pinning that content. This may or may not be much comfort for copyright owners but I find myself going back to Ratcliffe’s, Masnick’s and numerous others’ points about the benefits of sharing more openly and ignoring many infringing uses (sometimes even encouraging it). It comes down to whether a copyright owner is interested in exploring a more innovative model or prefers more control. Either way, there seems to be grounds for concerns about Pinterest and copyright infringement that don’t seem to have easy answers.