Facebook Drops Its New Terms of Service: Time to Breathe Easy?

So last week Facebook dropped its controversial new terms of service. That got us to thinking...what was in the old (and now current) terms of service. More importantly, what should our clients know about uploading their material on the site. What we learned gave us some pause.

1. User Content: In this section, there are two provisions worth knowing. First, the terms make clear that users agree that the use of the site is for "personal, non-commercial use only." Users also agree not to post any videos that "are original art or animation created by you or your friends."

2. User Content Posted on the Site. This section authorizes Facebook to make copies of content as it deems necessary "to facilitate the posting and storage." Users grant Facebook "an irrevocable, perpetual, non-exclusive, transferable, fully paid, worldwide license (with the right to sublicense) to use, copy publicly perform, publicly display, reformat, translate, excerpt (in whole or in part) and distribute such User Content for any purpose, commercial, advertising, or otherwise...to prepare derivative works of, or incorporate into other works, such User Content."

We'll focus on the second part and, in particular, the scope of the license granted. First, the license never terminates and can never be cancelled by the user. This is pretty troubling for obvious reasons. Second, the scope of the license includes the right to prepare derivative works. An example of a derivative work would be a film based upon a novel, or a musical based upon a film or a catelogue of songs. The right to create derivative works is frequently among the most valuable to a copyright owner. While the grant is non-exclusive, multiple derivative works are generally not created from the same underlying work.

Obviously, notwithstanding these legal concerns, there is a practical perspective here. There are valid reasons for Facebook to seek these broad rights -- to avoid unintentional infringement, etc. -- and we're not suggesting that Facebook has the intent to run around creating all sorts of derivative works based upon its users' works. It did, however, remind us of the importance of understanding the legal relationships that exist between content creators and sites such as Facebook that provide an outlet for creative content.