Technology Team Newsletter: Social Media Policy and Your IP Portfolio: Management Strategy

Phil Mitchell

Today, when the use of social media, such as Twitter®, Facebook® and blogs, is second nature to many within the workforce, it is critical for a business enterprise to build this technological reality into the design of its intellectual property portfolio management strategy. The inadvertent leak of the launch date of the new product, product design or other proprietary information to the public can be devastating to the enterprise, and is more than a mere possibility with the multitude of social media outlets that exist today. Based on this new reality, it is somewhat surprising that, at least according to one recent survey, only about 60 percent of businesses have actually implemented a social media policy.[1]  A business enterprise should view and develop its social media policy in the context of its existing security measures to protect its trade secrets and other proprietary and confidential information, and not as an independent personnel policy. 

A business enterprise seeking to develop a social media policy for its workforce should consider the following six points to help maximize the effectiveness of its social media policy and the protection of its valuable intellectual property and confidential information: 

1.  Communicate a Clear Meaning of Confidential Information 

The motivating force behind the development of a social media policy should be the business enterprise's desire to provide its workforce with clear parameters regarding an individual's public discussions through Internet outlets, including social networking sites and blogs, of issues and information relating to the business enterprise. Social media policies often prohibit the use of the enterprise's "confidential" and/or "proprietary" information in social media forums, with little or no additional guidance given to its workforce as to the meaning of those terms. While the concept of "confidential and proprietary" information may seem obvious to certain segments of the workforce, it may be a new concept to members of the workforce who are not subject to traditional confidentiality policies. While businesses have traditionally used confidentiality policies and non-disclosure agreements with members of the workforce with direct access to sensitive information and intellectual property, to protect this property today, a business enterprise needs to be able to fashion straightforward guidelines as to what it considers confidential or otherwise off limits for a much wider internal audience. In this regard, the social media policy should contain, at a minimum, the types of information that the enterprise deems to be "confidential," and provide examples that are relevant to the workforce. Further, the workforce should be advised to follow the mantra: "When in doubt, treat the information as confidential." To aid in this process, the enterprise should consider the proactive step of identifying an individual within the organization whom members of the workforce can use as a resource to determine or confirm whether or not the enterprise views certain material or information as confidential. Not only will this mechanism help reduce the likelihood of inadvertent disclosures, it may engender greater buy-in and acceptance from the workforce.  

2.  Integrate with Existing Policies and Procedures to Protect the Intellectual Property of the Enterprise 

In order for the social media policy to be most effective, it should be developed in the context of the existing policies and agreements that the enterprise uses to protect its intellectual property and confidential information. Such policies can include confidentiality restrictions, employee codes of conduct, electronic mail and Internet-use policies, and the like. Existing agreements may include employment agreements, non-disclosure agreements and service agreements with certain employees and/or contractors. Typically, these policies and agreements will include broad confidentiality provisions, with enumerated exceptions. To the extent that the new social media policy permits the workforce to discuss information in public Internet forums that are otherwise prohibited under the existing policies or agreements, the confidentiality protections under the pre-existing policies and agreements may be undermined. Thus, a coordinated approach to the implementation of the social media policy is essential to ensure that it does not disrupt pre-existing practices established by the enterprise for protecting the confidentiality of its proprietary materials and information. In this regard, it may also be helpful to include in the social media policy an express statement that the policy is not intended to modify pre-existing policies and agreements. As part of the development of the social media policy, it may be an opportune time for the enterprise to also review and re-evaluate its existing confidentiality practices and template agreements to avoid these potential conflicts and to ensure its policies and agreements work in tandem with one another.  

3.  Ensure the Social Media Policy and Confidentiality Practices Have Universal Application to Employees and Independent Contractors  

Another factor that a business enterprise should consider in the development of a social media policy is the extent to which the policy will apply to various sectors of the enterprise's workforce. Is the policy intended to apply only to employees, or is it intended to also cover independent contractors of the business enterprise? If the policy is adopted as an "employee" policy, the enterprise will need a mechanism to ensure that its independent contractors are subject to similar requirements regarding the use of the enterprise's confidential information, such as amending the template contractor agreement to incorporate the new social media policy or specifically referencing the use of social media as a prohibited use under the template confidentiality or services agreements with its contractors. 

4.  Restrict the Use of Third-Party Intellectual Property
A business enterprise also should use its social media policy as a means to re-enforce the enterprise's position regarding the treatment of the proprietary information of third parties. Restrictions on the use or disclosure of confidential information of the enterprise's business partners and clients should be explicitly covered by the social media policy. Furthermore, the social media policy should expressly prohibit the use of third-party intellectual property or proprietary confidential information, whether it be in the form of text, designs, pictures or music, without the third-party owner's consent, particularly on blogs that may be sponsored by the enterprise.  

5.  Field-Test the Policy 

Like any other business policy, the social media policy should not be developed in a vacuum. The social media policy should be developed by an interdisciplinary approach by multiple stakeholders, particularly the sources of the confidential information and the proprietary materials, as well as HR and IT groups. Once developed, the policy should be reviewed by a focus group that includes a representative sample of the workforce to ensure that the elements of the policy can be implemented and that the overall message as to the restrictions under the policy and the potential consequences of non-compliance are easily understood by the various sectors of the workforce.  

6.  Train/Communicate Workforce Without White Noise
Ultimately, the effectiveness of the social media policy will hinge upon the business enterprise's ability to communicate a clear message to its workforce that is re-enforced through an appropriate level of training and periodic reminders and updates on changes. While the training can be incorporated into the enterprise's other established training programs, the enterprise should consider new and creative means to familiarize and remind its workforce of the parameters of its social media policy so that that the policy resonates with, and is readily understood by, the workforce.

Phil Mitchell is a Member of the Firm in the intellectual property group and Health Care and Life Sciences practice in the Newark and New York offices. Phil has over 20 years' experience counseling clients in all industry and service sectors on a variety of intellectual property matters, including  registration issues, corporate acquisition and merger transactions, licensing agreements and Internet law. Phil can be contacted at [email protected].


[1] According to an April 2010 online survey of IT security professionals by nCircle, Inc., 59 percent of the respondents' businesses maintained a social media policy. See:

News from the Technology Team

Michelle Capezza 

On April 29, 2010, BNA's Health Law Reporter (Vol. 19, No. 17) published an article that Michelle Capezza co-authored with her colleagues entitled "Executive Compensation in the Headlights: Challenges Ahead for Not for Profit Hospitals in Compensating Executives." This article also was published in the BNA Pension & Benefits Reporter (Vol. 37, No. 18) on May 4, 2010. A copy of this article can be found at /publications/executive-compensation-in-the-headlights-as-appeared-in-bnas-health-law-reporter/ 

On June 17, 2010, Michelle Capezza will be the featured speaker at the UBS Financial Services Speakers Series, a quarterly live web meeting in which UBS introduces an external industry expert to speak on a topic related to equity compensation, financial issues or human resource issues 

What Is the Technology Team?

The Technology Team is a multidisciplinary team of lawyers at Epstein, Becker & Green, P.C., who have dedicated themselves to serving the needs of technology companies—public and private, large and small. The Technology Team's members all have extensive experience representing technology companies—such as software companies, electronic device manufacturers, medical device producers, and wireless telecommunications companies—and bring their diverse skills and collective understanding of the needs of technology companies to the task of helping these clients solve a variety of matters and problems.  

Working in a coordinated manner, the Technology Team is able to efficiently provide comprehensive legal services, across a broad spectrum of matters, including entity formation, securities, debt financing, acquisitions/divestitures, regulatory issues, employee benefits and executive compensation, labor and employment law, intellectual property, and commercial litigation.  And because the members work as a team, they can tailor the type and level of legal services to the particular needs of the client in a cost- efficient manner. 

Located in various offices across the Firm, the Technology Team's members can address their clients' needs across the country, whether the matter involves litigation or simply the need to understand how businesses operate in different locations.  Team members routinely collaborate with each other and with other attorneys inside and outside the Firm, when necessary, in order to provide clients with effective and efficient legal services.