Facebook in the fast lane: Ferrari moves up a gear

Most big companies are present on social media these days, whether it is on Twitter, Facebook or Instagram. In fact, when establishing a brand today, an important consideration is to create its social media pages, and especially to do so before anyone else does it. This concern was not as predominant a few years ago as it is now.

Ferrari Facebook page: currently over 15 million fans

Sammy Wassem, a Ferrari fan, created a Ferrari fan page on Facebook in 2008, when he was just 15 years old. He managed the page himself, until he was contacted by Ferrari in 2009. They congratulated him on reaching 500,000 fans on Facebook, but said that “unfortunately legal issues force us in taking over the formal administration of the fan page.” No contracts were signed, but an oral agreement was eventually reached between Sammy and Ferrari, allowing him to continue to control the page alongside a few other supervising managers. Sammy asked Ferrari for some compensation in return for working on the page, but never received any. He nevertheless continued to create content for the page for the next four years, until Ferrari withdrew his administration rights two years ago.

In February 2013 Sammy and his father filed a lawsuit against Ferrari, alleging that it owed them payment for over 5,500 hours of work and for infringing the copyright of the Facebook page. Following the filing of the lawsuit, Ferrari counterclaimed for their trade mark, citing two instances of misuse in particular: advertising merchandise on the page and using the page to send invitations to Sammy’s 18^th birthday party. Stefano Lai, a spokesman for Ferrari said: “The issue isn’t with Facebook or with our fans but with those who try to use Ferrari’s intellectual property to make money out of it”.

The issue is complex. Ferrari’s intellectual property is clearly involved. Its trade marks were used, as well as their copyright-protected works. However, no money was made from this unauthorised use. Sammy may have advertised some merchandise on the page, but he did not receive any monetary compensation in exchange. In fact, he helped create valuable content for the Ferrari page and contributed to some extent to its popularity. He may himself be considered to have created copyright-protected content and to be thus entitled to his intellectual property.

The action was filed in Switzerland, but what might have been the outcome if it were filed in the UK?

Sammy’s Ferrari fan page would most likely be seen as a literary work. This could be either under s.3(1)(a) of the Copyright, Designs and Patents Act 1988 as a compilation or under s.3(1)(d) as a database It is plausible for the page to be seen as a compilation as it contained various facts about Ferrari on one page. Alternatively, it could be a database, defined under s.3A(1) of the Act as a ‘collection of independent works, data or other materials’ which have been arranged in a ‘systematic or methodical way and which are individually accessible by electronic or other means.’ S.3A(2) specifies that the database would be considered to be original if ‘by reason of the selection or arrangement of the contents of the database the database constitutes the author’s own intellectual creation.’ When Sammy created the page, he was solely responsible for what was posted there, and of its arrangement, suggesting that he may have created content which was entitled to copyright protection.

Other brands have faced similar issues to those currently faced by Ferrari. For example, in 2008 the Coca-Cola Company hired the creators of a Coca-Cola Facebook page which had reached two million ‘likes’. It offered them the possibility to make their page the official page of the brand, and gave them resources to improve the page. Wendy Clark, who works for Coca-Cola explained their decision in an email statement: “In a socially networked world where everyone has 24/7 access to media to express a point of view –­ good or bad –­ it is crucial that we embrace our fans and followers,”

Indeed, court proceedings can do irreparable harm to a brand, in particular when it is targeting its own fans. The power of social media is increasing and, while the content and administration of a fan page is important, decisions that could alienate fans are unwise.

More on the story here and here.