Service was heading into questionable legal waters with new copyright policy

Instagram is backing away from language in new terms-of-use guidelines that generated protest among users of the photo sharing app, but the incident underscores the confusion and concern over just who retains copyright to material posted on social-media platforms.

On Monday, Instagram announced a change to its terms of use, effective Jan. 16, that “a business or other entity may pay us to display your username, likeness, photos (along with any associated metadata), and/or actions you take, in connection with paid or sponsored content or promotions, without any compensation to you.” Users had until then to opt out.

That led to a backlash on Tuesday among Instagram users, including some entertainment figures who expressed concerns that they were giving away ownership rights to their photos as well as their potential to earn money through endorsements.

Faced with the prospect of a flood of users dropping the service, Kevin Systrom, co-founder of Instagram, said in a blog posting on Tuesday that while the new terms of use “have raised question about whether your photos can be part of an advertisement,” they “do not have plans for anything like this, and because of that, we’re going to remove the language that raised the question.”

“Our main goal is to avoid things like advertising banners you see in other apps that would hurt the Instagram user experience,” he wrote.

As social-media platforms gain traction, their owners are seeking new ways to monetize content, which has led, from time to time, to an outcry among users concerned about privacy as well as from content creators in Hollywood, who have long complained that Google and YouTube were selling ads against pirated material.

Facebook, which bought Instagram earlier this year, was the source of its own backlash in November, when users began posting lengthy legal disclaimers that they retained the copyright to the material they put on their pages. As it turned out, their concerns that Facebook would claim ownership of their material were unfounded.

The Facebook experience inspired MPAA chairman Chris Dodd to chime in, issuing a statement that it “provides average Internet users with some insight into the point of view of the creators of movies, music or other artistic endeavors whose work has been subject to online theft.”

Instagram’s language, however, was real, and according to some legal observers, problematic.

Peter Toren of Weisbrod, Matteis & Copley said that users who take a photo own the copyright to that image. When they post them to Facebook pages or Instagram accounts, they are essentially agreeing to license them for display on the social-media platform, he said. Instagram, he said, was essentially calling for users to give the company the copyright.

The problem, more than anything, was in PR. Torren added, “I am not saying it is happening in this case, but I have seen situations where businesspeople go ahead and do things that seem like a great business idea, but they get two steps ahead of themselves and fall flat on their face.”

Jeremiah Reynolds of Kinsella, Weitzman, Iser, Kump and Aldisert said it was “not a surprise” that Instagram backed away from the language. He noted that the transfer of copyright can only be done in a signed agreement. Instagram, he said, apparently was relying on a users clicking on the terms of use agreement to make that transfer.

But “what is interesting to me is whether you can (make that transfer) in advance of a user ever taking that photo,” he said.

Also complicating any effort on the part of Instagram is that many users post photos that they didn’t take — such as from a family member — and they therefore do not own the copyright.

“Just because you post it doesn’t mean you own the copyright to that photo,” he noted.

The company also would run into right of publicity laws, particularly in California, which restrict the commercial use of a person’s image without their permission.

“There are so many interesting implications to this, but I am not surprised that they are backing down,” Reynolds said. “This is really a controversial thing to be implementing.”

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