By Thomas Hagen and Anna Eide
Social media has become an important marketing tool for businesses. Businesses can digitally advertise their brands and products, connect and engage with potential customers, and increase their brand awareness by having a social media presence. Although social media platforms are great for marketing, they also provide platforms for misusing trademarks and brand names. Companies might learn that social media accounts or pages have already been registered under their trademarks, hindering the company from using their valuable trademarks on social media platforms. Several social media platforms operate with the general principle that registered usernames and platform profiles cannot be reserved and are provided on a first-come, first-served basis. With this as a backdrop, we will address an interesting judgment from Oslo District Court regarding the right to social media platforms and profiles registered under a company's trademark, trademarks, and domains. The case illustrates how companies may seek legal actions to protect valuable trademarks and business names.
Party B had registered the trademark "Shades of Norway" for classes 9 and 25 (the "Trademark") and assigned the rights to the Trademark to Bestun AS ("Bestun"). On the other hand, Party A had registered an Instagram account under the name "ShadesofNorway" (the "Instagram Account"), a Facebook page named "ShadesofNorway" (the "Facebook Page"), and the domain <www.shadesofnorway.no> (the "Domain"). Party A and party B co-owned the company Box Fresh AS ("Box Fresh"), taken under compulsory dissolution in 2011. Bestun and Norshades AS ("Norshades") agreed to collaborate on selling sunglasses, and Norshades sent one invoice to Bestun. Although Bestun and Norshades communicated on a possible agreement, they never reached such an agreement. In May 2021, Bastun submitted a claim to party A, Box Fresh, and Norshades, requesting that the parties cease using the Trademark.
Did Bestun own the Trademark, and did party A and Norshades have a license to use the Trademark?
Bestun had submitted an action for a declaratory judgment confirming its sole ownership of the Trademark. Party A claimed that the Trademark was jointly owned by party A as Bestun had accepted this by conclusive behaviour, passivity, and given party A legitimate expectations that the Trademark would be co-owned by the parties. Party A argued that he would not have contributed to work related to evolving the Trademark if he had known that he would not co-own the Trademark. The parties had collaborated, and party A was responsible for the design, development, marketing and sales under the brand.
The District Court dismissed party A's arguments as the District Court found that party A was aware of Bestun's trademark registration. The evidence in the case showcased the parties' mutual understanding was that Bestun was the sole owner of the Trademark. Furthermore, neither of the parties had applied for a change in the Norwegian trademark registry. The District Court pointed out that the parties have the risk of their preconditions. If it was a condition for party A's work related to the Trademark was that the parties would co-own the Trademark, party A had the responsibility to clarify this position. Further, the District Court emphasized that the parties were shareholders in Box Fresh, marketing sunglasses under the Shades of Norway brand for several years, granting both parties the benefit of the commercial success. Consequently, the District Court concluded that Bestun was the sole owner of the Trademark.
In addition to claiming joint ownership of the Trademark, party A and Norshades contended that they had an exclusive, non-terminable, and royalty-free license to use the Trademark. The District Court stated that such claims impose strict requirements on evidence as the existence of such a right would entail significant restrictions on Bestun's right to the Trademark. As the District Court found that neither Norshades nor party A had made it plausible that it had such rights, the District Court dismissed this claim.
Did Bastun own the Facebook Page and the Instagram Account?
Bestun claimed that it was the sole owner of the Facebook Page and the Instagram Account. According to the District Court, the right to the Facebook Page and/or the Instagram Account must be regarded as a separate issue to ownership of the Trademark; ownership of the Trademark did not automatically entail ownership of the Facebook Page and Instagram Account. The District Court stated that general property law principles must be considered when assessing the question. Thus, the initial registration of the Facebook Page and Instagram Account form a central starting point when considering the ownership. Additionally, subsequent circumstances must also be taken into consideration.
The District Court referenced a judgment from the Court of Appeals, recalling the importance of social media platforms for marketing and that popularity on social media can be complex and require time and resources. In principle, the clientele and followers built up over the years in a marketing channel must still belong to the person who established, paid for, and maintained the channel, even though some success is built on brands no longer offered. A distributor cannot be blamed for the continued use of such channels to market new products if there are no agreements with the original distributor. Whether the further use is legally acceptable will depend on the content and if the audience has been informed that the products that have previously been marketed, and may have caused "likes", are no longer offered.
The District Court found it probable that party B had set up the Facebook Page and that the content, to some degree, required the consent of the Trademark owner. These circumstances meant that Bestun either was the sole owner of the Facebook Page or the co-owner of the Facebook Page. Party A's work on the Facebook Page was considered to have been conducted on behalf of Box Fresh. Thus, the District Court stated that the Facebook Page was owned jointly by Box Fresh and Bestun, not party A personally. However, as the parties had not claimed that Box Fresh was a co-owner of the Facebook Page, Bestun had to be considered the sole owner of the Facebook Page.
Additionally, given that Box Fresh had been dissolved and had not transferred the right to the Facebook Page, Box Fresh's right to the Facebook Page would accrue to Bestun as the corresponding co-owner of the Facebook Page. Therefore, Bestun had the right to demand that the Facebook Page be transferred to Bestun by virtue of its ownership.
As for the Instagram Account, the District Court found that party A had established and maintained the account. This had not accumulated any costs. The District Court did not find the differences between the Instagram Account and the Facebook Page decisive. Thus, the assessment with respect to the Instagram Account coincided with the assessment regarding the Facebook Page. Consequently, the District Court concluded that Bestun had the right to the Instagram Account and the Facebook Page.
Did Bastun own the own the Domain?
Bestun claimed that it was the sole owner of the Domain, and that this must be transferred to Bestun. The District Court referred to its decision on the Facebook Page and stated that it was probable the Domain was registered on party A for technical reasons to have the formal rights transferred to party A. Consequently, the registration itself was not considered a decisive factor when assessing the rights to the domain. There had not been any maintenance of the Domain, only payments of registration fees which, in the District Court's view, were likely charged to Box Fresh. The District Court stated that its view and assessment regarding the ownership of the Domain coincided with the right of the Facebook Page and Instagram Account. Additionally, the District Court stated that it could not see any protection-worthy interest that party A had in maintaining any ownership to the Domain, as long as party A did not own the Trademark. Using the Domain name for marketing sunglasses would therefore] require Bestun's consent as otherwise it would infringe Bestun's Trademark rights.
Key take-aways from the case
The case illustrates the importance of registering tradenames and distinguishing marks used in a business' marketing. Such registrations improve the position of a company in an infringement case and clearly indicate the company's right to such marks.
Interestingly, the case concerns profiles and pages created on social media platforms owned and supplied by private third parties. Although several social media platforms operate with a general principle that registered usernames and platform profiles are provided on a first-come, first-served basis, the case illustrates that companies may enforce their rights through the courts of law.
For the sake of good order, in our opinion, the District Court's considerations relating to the impact of the dissolution of Box Fresh on the ownership of the rights co-owned between Box Fresh and Bestun lack basis under Norwegian law and cannot be expected to be upheld in future cases. Furthermore, the District Court's considerations appear not to be based on the relevant legal background. In our opinion, the District Court should have assessed the agreement and relevant regulations in the contractual relationship between the parties and the platform holder (in this case Meta and Norid). Lastly, the results do not seem to correlate with the starting point established by the District Court, namely that the basis for registration and that the party establishing, paying for, and maintaining the channels should be the owner of the social media channels. In this case, it seems Party A, who was the initial registrant of the platforms in question, was the main contributor.