September 12, 2023

Out With a Bang

Almost a year ago, we wrote about a dispute between bridal designer Hayley Paige Gutman and her former employer over who owned social media accounts bearing her name. With the prevalence of social media and its importance for marketing, it seemed like it was only a matter of time until this issue came up again. And here it is. 

Vital Pharmaceutical, which makes an energy drink called Bang (we’ve written about Bang before), filed for bankruptcy in 2022. As part of the bankruptcy, Vital sought a declaration that it, not its former CEO John Owoc, owned the social media accounts @bangenergy.ceo (TikTok and Instagram) and @BangEnergyCEO (Twitter/X). In response, Owoc claimed that he had used these accounts to cultivate a personality and the accounts belonged to him, not Vital.

The bankruptcy court granted Vital’s motion for summary judgment against Owoc. In reaching this conclusion, the Court created its own, new test for determining ownership of social media accounts because, in its view, the law had failed to keep up with the times. 

Specifically, the court examined: (1) the existence of a documented property interest, i.e. an employment agreement or similar stating that certain social media accounts belong to the company; (2) who controls access to the social media accounts; and (3) the use of the account, for example, whether the account is used to promote the company’s products or to create a persona that goes beyond the company’s products. 

Based on these factors, the bankruptcy court determined that despite the social media account names referring to Vital’s CEO, they belonged to the company and not its former chief executive. While there was no agreement documenting that the accounts belonged to the company (one point to Owoc), the court noted that Vital employees had access to and created and posted content for the accounts.  This included posting things without Owoc’s approval. In addition, a large majority of posts featured Bang-branded products rather than Owoc’s personal content, indicating that the accounts should be the property of Vital, and not Owoc. Two points to Vital. 

The court declined to follow the test used by another bankruptcy court in an earlier, similar case because that case predated “the emergence of the social media influencer, among other changes” in the use of social media. Specifically, the prior decision did not consider the existence of agreements that may establish the ownership of social media accounts (factor #1 in the Vital Pharmaceutical case). 

The big takeaway from all this is that brands need to be very careful about establishing and using social media accounts and, in a dispute over who owns an account, it’s important to establish how social media accounts are used. 

(Epilogue: On July 31 Vital was purchased by Monster Beverage, so we can all hope someone other than Owoc will carry on as @BangEnergyCEO.)