THE CHANGING FACE OF SOCIAL MEDIA: TIKTOK AND THE LURKING IP DISPUTES

“Social media is addictive precisely because it gives us something which the real world lacks; it gives us immediacy, direction, a sense of clarity and value as an individual.”[1]

The aforementioned phrase aptly summarizes the “virtual lives” led by many of us on social media. At a time when physical distances have been negated by augmented proximity, social media platforms have become an invincible part of our lives. Several companies in the past have launched various online platforms aimed at “connecting” people, but only few have gained the extent of popularity as has been achieved by “TikTok” in a span of less than four years. TikTok, owned by ByteDance, is a Chinese video-sharing social networking platform. TikTok has an estimated user base of over 800 million at present of which over 466 million active subscribers[2] are based in India.

Combined with an unprecedented augmentation in the user base of millennials and Gen Zers, TikTok now enjoys the enviable position in dominating the market of “virtual branding”. However, despite the extensive traction attracted by TikTok for its unique range of services, it has also been in the news due to its debilitated standards of managing Intellectual Property issues.

BURGEONING INTELLECTUAL PROPERTY ISSUES AROUND TIKTOK:

RIGHTS OF CONTENT CREATORS

In the rapidly evolving market scenario, brands have to constantly rework their marketing strategies and look for newer methods of consumer engagement. One of the most significant outcomes of this trend has been the emergence of the concept of “social media influencers”. A social media influencer is often categorized as a user who has established credibility in a specific industry, has access to a huge audience and can persuade others to act based on his/her recommendations. The primary job of social media influencers / content creators is that they capitalize on a niche to attain widespread credibility.

With the growing wave of followers and commercial opportunities, the risk of being imitated also grows for the content creators. Therefore, it may be important for content creators to recognize their intellectual assets and look for ways to protect the same. As an attempted solution, TikTok created a copyright infringement notification process, where individuals including creators can report videos that they believe infringe their copyright. As per TikTok’s Transparency Report [3]released on December 30, 2019, , TikTok received 3,345 copyright takedown notices and removed 85% of those requests from the platform. However, infringers have often surpassed the process by making “questionable modifications” to the original audio/video which prevents them from being penalized under the relevant provisions of Copyright Law.

Further, a closer look at TikTok’s Creator Program Terms of Service[4], essentially designed to stipulate the protection granted to content creators on TikTok, indicates that it actually protects the rights of the platform rather than the content creators. As per the said terms, the content creators are granted all ownership and intellectual property rights in any content that they post on the platform. However, in consideration of TikTok allowing the creators to participate on the said platform, TikTok gets a royalty-free, non-exclusive and sub-licensable right to use the posted content. Further, TikTok is not obligated to make any financial compensation to creators for this trade off. While such terms may seem arbitrary, more often than not, content creators are oblivious of the underlying legal issues surrounding their content on these platforms.

Further, content creators also need to be vigilant in terms of protecting their trade marks on TikTok and other similar platforms with undisputed ease of access. A recent study suggests that with “TikTok transforming into the new-age business space for brands as well as content creators”, most TikTok influencers are at immense risk of brand infringement[5]. The said study further suggests that while working with major brands, many of these content creators are crafting their own personal brands through merchandise and entertainment deals. However, most well-known TikTok stars do not appear to have any registered trademarks for their channel names or other brand assets. As a result, these creators often lose out on potential business opportunities that arise with “associated protection” and are prone to widespread misuse of their brand. Moreover, while the content creators need to be mindful of protecting their own content, they are also required to be watchful of using third party trademarks in their content. Unless it is a case of endorsement or an honest review of a product/ services, any use of a trademark may call for a legal action for infringement/ disparagement, depending on the manner in which such trademark is used.

2. RIGHTS OF BRAND OWNERS

With the growing wave of followers on TikTok and the evolving consumer behavior, the roadmap of brand owners also needs to be adjusted. While a number of brands are already making their presence felt on TikTok, the trend is more prevalent for brands targeting the younger audience. Some of the early birds in the TikTok game have been Redbull, CocaCola and NBA. It is certainly an opportunity for progressive brands to take a peek at what the future has in store for them.

Another important issue that deserves attention from brand owners is that TikTok has seen an unprecedented rise in the fake “official accounts”. Counterfeiters have metamorphosed into “imitators” on the video-sharing platform and have created “imitation profiles” of various brands to deceive viewers into making unverified purchases. A search on TikTok reveals that the top search option for ‘Rolex’ is an account using the Rolex logo and has accrued over 10,000 followers, and a search for ‘Adidas’ and ‘Tommy Hilfiger’ similarly bring up imitator accounts.[6] While TikTok has adopted unique ways to tackle counterfeiting over its platform including the use of blockchain technology, verified badges for authentic brand accounts etc., brands are still susceptible to counterfeiting. Thus, brand owners who believe that TikTok does not require any place in their IP strategy, need to adjust their radars and redesign their IP strategy.

Apart from creating brand visibility, social media platforms like TikTok also play a major role in prejudicing consumer choices. Since a majority of subscribers are young audience who are influenced by social media in respect of their buying choices but may not necessarily have access to designer goods, influencers popularizing “rip offs” find a huge audience on TikTok. As per a recent study conducted by INTA[7], three in five Gen Zers feel they cannot afford the lifestyle they want. Further, 79% of the respondents admitted to have purchased counterfeit products in the past year. While the gap between the luxury brands and the accessibility/ buying capacity of young consumers cannot always be bridged, few brands have started looking at partnering with lower priced brands to capture the younger audience.

3. RIGHTS OF COPYRIGHT HOLDERS

An important issue that has brought TikTok some serious criticism from the Music Companies is the rampant copyright infringement by influencers on TikTok. While a majority of short videos comprise popular music tracks playing in the background, TikTok has been caught on the wrong side of the law with regard to copyright licenses on a number of occasions.

A body representing thousands of music publishing companies, including Universal, has threatened to sue video-sharing app TikTok for copyright infringement. Universal Music, which is simultaneously holding negotiations with the said application has alleged that TikTok is allowing users to record and simply lip-sync on those evergreen tracks owned by Universal against which it deserves royalties.[8]

As per a March 2020 report by Billboard [9], TikTok entered into short term agreements with Sony, Universal and Warner. However, as per the reports, Universal’s agreement, which concerns the recorded side of the music (the tracks themselves), only covers a section of its catalogue and is due to expire soon. Further, it is believed that Universal does not have an agreement in place for the publishing part, which covers songwriters’ and artists’ royalties.

Tiktok, has entered into a multi-territory agreement with Merlin-the digital licensing hub for the world’s independent music sector. Even in India, ByteDance has reportedly inked deals with Indian labels like T-Series and Times Music.[10]

While TikTok seems to be making attempts to partner with music labels across the globe to seek licensed content, the prospect of Copyright infringement on a platform which allows such ease of content flow, remains an issue of concern for both IP owners as well as content creators.

4. INTERMEDIARY LIABILITY

Another interesting issue surrounding TikTok is whether it enjoys the status of an “intermediary” in India.

In April, 2019, the Madras High Court had banned the download of TikTok by an interim in a Public Interest Litigation (PIL) filed against TikTok in view of safety concerns for women and children due to potential misuse of TikTok for distribution of explicit content. However, the ban was eventually lifted based on the grievance mechanism of the law and the self-regulatory mechanism of TikTok, whereby, TikTok claimed that they were merely a platform for sharing of content, and are therefore, covered under the description of an “intermediary” under the Information Technology Act, 2000. [11]

This decision has a direct impact on the future working of TikTok, because of its precedential effect on the future judgements. What is interesting to note is that while on one hand, the platform claims “intermediary” status under the Information Technology Act, on the other hand, TikTok has sent take down notices to another Indian social media platform ShareChat, asking it to take down about a hundred video compilations that were originally uploaded on the Tiktok before being uploaded on ShareChat. The said notices are clearly paradoxical to TikTok’s claims regarding being a mere intermediary. [12]

ShareChat reported the said notices to the Ministry of Electronics and Information Technology (MeitY) stating that an “intermediary claiming safe harbor provisions under the IT act cannot engage in acts which suggest that the intermediary owns such content”. [13] Following the said complaint, TikTok clarified in a public statement that it is an intermediary, but also enters into mutual contractual arrangements with some content creators, hence, it may enjoy exclusivity over some content.

With applications of this nature gaining unprecedented acceptance across the globe, framing the discussion around present ideas of ‘liability’ for intermediaries is insufficient for governing contemporary content sharing platforms.

Owing to concerns regarding the safety as well as Intellectual Property Rights on the platform, TikTok has made considerable efforts to mitigate these issues. A recently launched “Family Pairing” function on the said application, allows parents to link their accounts with their children, to regulate the form of content consumption. While dynamic changes in policy as well as aggressive enforcement of these policies have reduced the instances of copyright as well as trade mark infringement on the said platform, however, with the extent of viewership, there remains considerable scope for further improvement in TikTok’s IP Policy.

[1] David Amerland- The Social Media Mind: How social media how social media is changing business, politics and science and helps create a new world order

[2] TikTok Revenue and Usage Statistics (2020), Business of Apps, accessible at https://www.businessofapps.com/data/TikTok-statistics/

[3]TikTok Transparency Report, accessible athttps://www.tiktok.com/safety/resources/transparency-report

[4] Creator Program Terms of Service, TikTok legal, accessible at https://www.tiktok.com/legal/creator-program-terms-of-service?lang=en

[5] World Trade Mark Review : Most TikTok influencers at risk of brand infringement; urged to consider trademark protection: https://www.worldtrademarkreview.com/anti-counterfeiting/most-tiktok-influencers-risk-of-brand-infringement-urged-consider-trademark

[6] It's just got a lot harder to spot a fake Rolex, Wiired UK, accessible at https://www.wired.co.uk/article/how-to-spot-fake-rolex

[7] Gen Z Insights: Brands and Counterfeit Products, INTA Report, accessible at https://www.inta.org/Communications/Documents/INTA%20Gen%20Z%20Insights_Global.pdf

[8] Music companies threaten to sue TikTok over copyright, Financial Times, accessible at https://www.ft.com/content/1b3b78ea-32a3-4237-8b79-3595820eeb63

[9] TikTok Now Has Short-Term Licensing Deals With the Major Labels, accessible at https://www.billboard.com/articles/business/digital-and-mobile/9347970/tiktok-now-has-short-term-licensing-deals-with-the-major-labels

[10] TikTok owner ByteDance to launch paid music service; secures rights from T-Series, Times Music, Medianama, accessible at https://www.medianama.com/2019/05/223-tiktok-owner-bytedance-to-launch-paid-music-service-secures-rights-from-t-series-times-music/

[11] Madras High Court lifts ban on TikTok, Economic Times, accessible at https://economictimes.indiatimes.com/tech/internet/madras-high-court-lifts-ban-on-tiktok/articleshow/69027422.cms?from=mdr

[12] Government notices an issue in TikTok’s ShareChat notices, Economic Times, accessible at https://economictimes.indiatimes.com/tech/internet/government-notices-an-issue-in-tiktoks-ShareChat-notices/articleshow/70850975.cms

[13] “We don’t exercise editorial control, may get into contract for some exclusivity on content: TikTok”, Financial Express, accessible at https://www.financialexpress.com/industry/technology/we-dont-exercise-editorial-control-may-get-into-contract-for-some-exclusivity-on-content-tiktok/1689025/

The article was originally published on www.lexology.com on June 25, 2020 and can be accessed here.