The concepts of successful business strategy and social media are becoming synonymous in the 21st century. Businesses who don’t embrace the benefits of social media are frankly the exception rather than the rule, but as with most benefits, they do come with their own risks. One of these risks, which is becoming increasingly apparent, is the question of who owns these elusive accounts?
It goes without saying that social media accounts such as Facebook and Twitter can be of significant commercial value to a business. It provides a targeted, captive audience for legal direct marketing, and also a platform on which to engage on a one-to-one basis with customers.
The value of the medium is clearly reflected by the increasing trend of businesses to ‘sell space’ on their social media accounts. Magazines, sports stars, and celebrities are often reported to be selling Twitter tweets and Facebook posts.
As a result of the novelty of social media, in many instances it is not the business that has established an account but rather employees of those businesses, who tweet or post on behalf of the business.
When former BBC Political Correspondent Laura Kuenssberg left the BBC to join ITV, she had established a Twitter following of almost 60 000 persons with her Twitter handle, @BBCLauraK.
She was in effect tweeting on behalf of the BBC while using this account, but when she left, her account was renamed @ITVLauraK and she took her 60 000 followers with her to the competitor news station.
Examples like this give rise to the very important question of who owns these accounts? It’s a long standing principle that client lists do constitute company property. But will the same be true for Twitter followers, Facebook friends, and even LinkedIn connections?
How will it affect your business if an employee leaves your business and ‘steals’ the social media accounts? Likewise, how will a former employee react if you, as their erstwhile employer, demand that they hand their social media accounts over?
Leaving with Twitter lists
The issue recently came to a head in a dispute between Phonedog Media LLC, an online blog site focusing on mobile phone news and reviews, and its former employee, Noah Kravitz. Kravitz, while tweeting on behalf of Phonedog, had gathered some 17 000 followers, which Phonedog alleged were each valued at $2,50 per month.
After Kravitz left the business, and took ‘his’ account with him, Phonedog instituted action against him, seeking to have the account returned to it and damages in the amount of $340 000. If Kravitz had been leaving with a client list the case would have been the proverbial ‘slam dunk’ for Phonedog, but he wasn’t, he was leaving with a Twitter account which he had established and run while employed by Phonedog.
In Phonedog’s application it acknowledged that it could not own the Twitter account, but rather asserted that it had an ownership interest in the account, and more importantly in the list of ‘followers’.
Somewhat regrettably, after Kravitz failed in an initial application to dismiss, the parties reached a settlement and accordingly the issue has still not been pronounced upon by a Court. We now have to wait and see how the courts will deal with the issue in the future.
Related: Your Employees are Your Brand
Who owns the IP?
The issues raised by these disputes are not simple and stretch the bounds of existing laws to the extent that the answer is very often not clear. It involves issues of copyright, trade marks, trade secrets, privacy, restraint of trade and personality/image rights.
This uncertainty leaves both the employer and the employee in a rather precarious position of not knowing where they stand with issues of this nature.
Despite this uncertainty, in a statement made by Kravitz after the matter had been settled, he commented:
“If anything good has come of this, I hope it’s that other employers and employees can recognise the importance of social media… good contracts and specific work agreements are important, and the responsibility for constructing them lies with both parties.”
Business should not simply rely on existing IP transfer policies and agreements, as it is not clear whether these will be sufficiently broad to include social media accounts. Businesses must as a matter of good governance, and to avoid disputes of this nature arising, put in place comprehensive social media policies dealing with these issues.
These policies should also deal with the additional risks associated with social media such as security of accounts, management of content and appropriateness of conduct on personal social media accounts.
Are You Focusing Too Much On The Little Details (And Forgetting The Bigger Picture)?
To what degree do outside influences impact your business’s success? As a business owner, should you be focused on your business, or taking a macro view of the world?
Entrepreneurs live in the daily grind of their businesses. This is unavoidable but can often be fatal. Day to day we think that the little things matter more than the very big things do. A little thing like the floor of your office or store being mopped daily can become a huge issue if not done.
Sure, these things are important because they create a culture of care and pride, but what you might be missing while you watch your team mop the floors is the macro-economic climate shifts that happen more rapidly than you think.
Step back to move forward
Early in the life of a new business the only way to survive is for the founders to do absolutely everything. From designing a logo and launching a strategy all the way through to writing tweets and emailing customers when there are issues.
This makes sense when you’re building a business, your team is small and your cash is tight. However, as you grow, it becomes important to let your people do their best and take on the day to day work.
Related: Expanding At The Speed Of Stress
As an obsessive entrepreneur it’s often hard to let go of these little details. Day to day operations will always be integral to the growth of your business and an important part of someone’s job in your organisation. However, it shouldn’t be yours if you are taking care of the big picture.
As the leader of your business you need to take a step back from the grind and look at the world around you.
To truly understand the positioning of your growing business you need to understand your country, continent and world.
You should understand the economic position you’re in as well as that of your province, country and even the markets that might directly influence your sales. Get a good understanding of the political stability of your country and the world.
Finally, you should figure out if there are any large- scale impending disasters. If disaster is imminent, like Zuma pillaging a nation and tanking an economy, then you have to get your head out of the floor mopping and into the high-level strategy of survival and preparation for disaster.
Move the needle
Every day there are 24 hours that you can fill. You can choose to work during that time and faff with the things that were once important, or you can figure out what is going to move the needle in your business.
What is going to really help you survive and grow in the years to come? Founders, CEOs and leaders need to be thinking about the next three, five and ten years. Let your team worry about today. Let the smart people you work with make today and tomorrow and next week work.
Chances are, the things you are doing in the hours/minutes aren’t saving your business or moving the needle. It’s the things that you plan for the next six months that affect the next five years.
Don’t live in a bubble
It’s easy to fall into the trap of thinking that you live in an isolated country or region that isn’t affected by world events. Unfortunately, no matter how hard you close your eyes and hide your head under the pillow you can’t avoid the fact that your business exists in a globally connected environment.
At Nic Harry we were affected by the Brexit events that unfolded in the UK and Europe. British shoppers were scared and didn’t spend their money when they were on holiday in Cape Town over the peak holiday season. I was so busy preparing for the seasonal uptick that I missed the link between a huge global event and my sales.
You live in a world that is filled with online shoppers and tourists who visit your business whether you know it or not. Prepare for the world to start having an effect on your business more and more.
Broaden your view
I am always fascinated by the narrow view of the world many entrepreneurs display. I may sell men’s socks, accessories and style but that doesn’t mean that the mining sector doesn’t affect my business.
Even if you were an entrepreneur building a business in Antarctica I would urge you to read about oil prices, political world events and the intricacies of overfishing in the South American seas. Being well rounded and having a broad view of the world and your business can only make you a more robust thinker who sees more angles to exploit, protect against and thrive on.
Why Adversity Is Actually The Best Thing For Your Business
There’s been a lot of talk about privilege lately: What is it? Who has it? Who doesn’t have it? I have a slightly different take on privilege and prefer to frame it as the privilege of adversity.
Studies across the globe show that the minorities in all contexts have higher rates of entrepreneurial activity than the incumbent majority. There are a host of reasons for this, but one of them is that adversity creates resilience and self-reliance that are vital for entrepreneurial success.
Every successful and exponentially successful entrepreneur that I have met or read about has transitioned through a baptism of fire. They have overcome insurmountable obstacles and used the lessons gifted through their experiences to rocket their business to the next level.
Related: Approach Adversity Head-On
The Five Gifts Of Adversity
A sense of where your true limits are. These are always far beyond what your belief system believed them to be. The experience of testing your limits breaks the preconceived notion of where your limits are or were.
Confidence. Once you have overcome an issue, the experience of overcoming it builds a high level of confidence that should the issue reoccur, you will have the ability and resources to overcome it. For example, if you lose your biggest client and manage to keep your business afloat, the next time you lose a big client you will not panic or become despondent, but will instead kick into action and claw your way out again.
Insight. Insight as to which of your non-financial resources you can tap into. When the chips are down and money is nowhere to be found, it’s amazing how many resources you will now perceive around you that can potentially help you transition to success. These resources come in the form of advice from friends, access to new markets through networks, credit from suppliers, and free promotion through networks, to name a few.
Your relationship with your own resourcefulness. The experience of not having resources but somehow manufacturing some out of thin air, recalibrates your sense of your own resourcefulness, which in turn builds a level of confidence that should you be dropped off in the middle of the desert with only a matchbox and a magnifying glass, you will survive.
Faith. A level of faith and a belief system that there is always a way to overcome a problem. This is true no matter how overwhelming the problem may be. The more you overcome impossible problems, the less you’ll believe in the existence of impossible problems.
So instead of worrying about who has privilege, who doesn’t, or what privilege actually is, use the lessons gifted to you when overcoming insurmountable obstacles to propel your business forward.
The Principles Of Cession: A Powerful Business Tool
Relinquish your rights with these quick and easy tips.
In terms of South African law, the legal concept of cession was defined in Johnson v Incorporated General Insurance Ltd 1983 (1) SA 318 (A) and in FNB vLynn1996 (2) SA 339 (A), as:
“…an act of transfer to enable the transfer of the right to claim to take place.F Accomplished by means of an agreement of transfer entered into between the cedent and the cessionary and arising out of a justa causa, from which the intention of the cedent to transfer the right to claim appears or can be inferred and from which the intention of the cessionary to become the holder of the right appears or can be inferred.”
In simple terms, according to the online Oxford Dictionary, cession is ‘the formal giving up of rights, property, or territory by a state’. According to the online Free Dictionary, it is ‘the act of relinquishing one’s right’.
This means that cession is clearly distinguishable from contracts because it does not create obligations and is also distinguished from delegation and subrogation, which do not involve the actual transfer of rights.
Valuable tool for business
Cession is a valuable business tool because it allows businesses to cede assets that can be ceded by transferring them − completely or not − when there is no cash available to secure a transaction or assure performance. However, it is essential that the parties involved understand and express their needs rather than blindly signing documents that do not enshrine their true intentions.
Legal requirements for a valid cession
According to van der Merwe et al 2002, the following requirements must be met to affect valid cession:
- A right inhering to the cedent
- Agreement between the cedent and the cessionary to give and accept transfer of the right
- Compliance with any formalities set by the law.
1.1. A right inhering to the cedent
Existing rights versus a spes
According to FNB v Lynn 1996 (2) SA 339 A, our courts have to date followed the approach that only existing rights may be ceded, and not rights which amount to nothing more than an expectation or spes. The determining factor in this approach is whether or not the right falls within the cedent’s estate at the time of the cession.
However, according to Muller v Trust Bank 1981 (2) SA 117 N, there is another theory that deviates completely from this approach and deserves a mention. In terms of the doctrine of cession in anticipando, cession of a spes may happen provided the cedent and cessionary conclude both a contract (obligatory agreement) as well as a transfer agreement to affect cession. Upon the materialisation of the right, when the right actually comes into existence, cession may take place.
There is no formal objection to this approach and our courts have not indicated that they are completely adverse to it. Nevertheless, there is no precedent to date that guarantees cession can be enforced based on this common law doctrine.
Accordingly, any personal right may be ceded provided it already falls within the cedent’s estate and is capable, in law, of being ceded. Therefore, this even applies to rights that have not yet come into force or effect − such as vested rights (for example: the rights of the beneficiaries of a family trust before its dissolution); contingent rights (rights which are subject to a condition); and/or the right to receive your pension pay out upon reaching the age of 65 years.
1.2 Justa causa (or intent)
A causa, or reason, for the cession taking place essentially determines the nature and extent to which the right is transferred between the cedent and the cessionary.
In the case of out and out cession, or normal cession, the right is usually transferred to the cessionary while the cedent has a reversionary right to cancel the cession and (re)claim the right, should it become necessary.
Whether or not total transfer of rights takes place in the case of security cession, or cession in securitatem debiti, has been widely debated for some time now. But, legal uncertainty prevails to a certain extent. The question remains as to whether security cession is only a ‘sue do’ or ‘theoretical cession’, where the cession is treated like a pledge of the right. In this case, no actual transfer of the right takes place.
The only logical explanation for this theory is that the cedent retains ownership but only relinquishes his ability to exercise or enforce his rights. Although the courts have, in fact, confirmed this construction may be theoretically unsound, some continue to apply this model based on the notion of an established legal precedent that has been applied for over 70 years. This was confirmed again in Grobler v Ootshuizen 2009 ZASCA 51, where the Supreme Court of Appeal held that security cession is nothing more than a pledge.
There is an opposing argument that this type of cession, regardless of the difference in causa, is treated as an out and out cession and transfer of rights. This theory is further supported by the case of Picardi Hotels v Thkweni Property 2008 ZASC 128, where the court held that a cedent who has not exercised his reversionary rights lacks locus standi in the enforcement or exercise of the right so ceded.
2. The agreement
Although an agreement for cession need not be in writing, a written agreement is always preferable. The only requirement set according to Botha v Fick 1995 (2) SA 720 (A) is that ‘mere consensus is sufficient to effect a cession’.
In addition, the cession must also be lawful and the rights of debtors should not be prejudiced. This does not imply that the debtor must be notified or that the debtor will become a party to the cession.
In most cases, there is no need to comply with any formalities to affect cession. In some instances, however, certain formalities are prescribed by law. In the case of a mortgage bond, for example: it must be registered at the Deeds Office.
Cession is a valuable tool in business. That said, it is of utmost importance that the cedent and cessionary both understand the legal nature and consequences of their transaction, or cession, before entering into an agreement.
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