On December 18, 2012 photo sharing website Instagram released updated terms of service; now, some of the 100 million who use the service are finding that because they’re having difficulty understanding the new terms of use, they are not comfortable with it.  Because of Instagram’s use by creative professionals and celebrities, we feel this story, which has a compelling intellectual property aspect, may be particularly relevant in Los Angeles.

When the news broke in December, there was much speculation by users and commentators whether user content may be used by Instagram for commercial purposes.  Basically, the new terms of service means that the site may use or have the ability to transfer its right to use content uploaded by users without compensating those users.  January 16 is when the new terms of use go into effect.  As of this date, a third party will be able to pay Instagram for the use of creative work generated by another user, without the user who created the work being compensated.

Essentially this means that users will have no copyright protections. Celebrities have commented about the new terms of service, wondering if it could mean that photos on the site imply that the celebrity endorses a particular product or service.  For instance, if an individual notices a celebrity coming out of (or going into) a merchant’s place of business, could that merchant purchase the photo taken by the user, then imply that the celebrity endorses their business?

Instagram now faces some serious problems because of the new terms of use; some news sources say that up to 25% of users have deleted their accounts since the news broke.  This isn’t the only bad news for Instagram, however.  On December 21st, a class action lawsuit was filed in U.S. District Court for the Northern District of California against Instagram, Funes v. Instagram Inc., 12-CV-6482 (N.D. Cal.).

Instagram did amend its terms of service somewhat on December 20; however, the proposed license still gives Instagram far greater use of users’ content than in most standard terms.  Will this be the beginning of an ongoing debate regarding privacy, technology and copyright?

As talented Los Angeles intellectual property attorneys, The Law Offices of Spotora & Associates will be interested to see how this all plays out.