Texas social media bill may speed resolution of trademark complaints

Texas Governor Abbott has signed HB 20 to stop social media platforms (SMPs) from banning users or posts based on one’s particular viewpoint. SMPs with more than 50 million monthly users in a calendar month will be required to disclose their content management processes, data management, removal processes and business practices, among other pertinent information related to the monitoring and censorship of content. Setting aside any politically backed rationale for supporting HB 20 or not, trademark lawyers should be aware that the new law affects trademark enforcement directly and has the potential to speed up the resolution of complaints made to SMPs regarding the unauthorised use or misuse or infringement of trademarks.

Trademark owners are in the business of protecting consumers by enforcing their rights against infringers who seek to capitalise on the goodwill associated with trademarks or sometimes just to use marks in fraudulent schemes. Another reason to have a robust enforcement programme is to lower the potential of losing trademark rights to dilution or genericide. However, this duty does not impose an endless call-to-action to tirelessly scour the Internet and confront the unauthorised use or misuse or infringement of trademarks. Such an obligation would be unreasonable and unmanageable. Courts have consistently held that “failure to sue other […] infringers does not constitute abandonment” (see Big Island Candies, Inc v Cookie Corner, 244 F Supp 2d 1086, 1095 (D Haw 2003)). That said, enforcement of trademark rights is necessary to maintain one’s rights and to protect and uphold the value of one’s trademarks, and the reputation and goodwill of the related company or brand.

HB 20 has the potential to improve outcomes for trademark owners when they enforce their rights as the unauthorised use or misuse or infringement of a trademark would very likely constitute illegal content or illegal activity and in most cases would violate an, SMP’s acceptable use policies, provided that the user that posted said illegal content resides in, does business in or shares or receives content on a SMP in the state of Texas.

SMPs must publicly disclose in an easily accessible manner an acceptable use policy to explain the means by which users can notify the SMP of illegal content, among other considerations. In response, SMPs are then required to evaluate the legality of the content within 48 hours of receiving the notice of the illegal content, or other identified content that violates the policy.

While most SMPs currently have a mechanism in place for reporting the unauthorised use or misuse or infringement of trademarks and do a decent job of reviewing and responding to the same, on occasion a reported violation goes unanswered, denied for no plausible reason, denied without explanation, or simply takes weeks or months to be resolved. This can frustrate attempts to enforce trademark rights and embolden bad actors. The 48-hour response time is particularly attractive for trademarks owners and attorneys alike. Being able to potentially close out a trademark enforcement matter within a matter of days will reduce enforcement spend.

Since it seems unlikely that an SMP will build out a 48 hour turnaround time for content posted by users who reside in, do business in or share or receive content on a SMP in the state of Texas and a different workflow for those that do not fall into this category (a category that seems hard to define with clarity in 48 hours in any event) the trademark-related changes in HB 20 are likely to result in greater efficiencies for all trademark complaints. In other words, a speedier response time due to the Texas law will likely have an impact regardless of where the user resides. 

Update: a federal judge has issued an injunction against Texas HB 20 preventing the social media bill that would impact social media platforms with more than 50 million monthly users from coming into effect on 2 December 2021. The case in the Western District of Texas Austin Division is currently pending.  We will keep you informed as the matter makes its way through the court system.

This is an Insight article, written by a selected partner as part of WTR's co-published content. Read more on Insight

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