When he was appointed by the Eleventh Circuit, U.S. Bankruptcy Judge Peter D. Russin probably did not expect to have to decide who has rights to the Twitter, Instagram, and TikTok handles associated with social-media-forward energy-drink brands. But that is exactly what Judge Russin did in a recent opinion related to the bankruptcy of “Bang” energy drink’s manufacturer, Vital Pharmaceutical, Inc.
Frequent social media users probably recognize Bang-brand energy drinks from their army of influencer-promoters. While widely publicized, the Bang-brand was apparently not successful enough to cover its manufacturer’s debts. That manufacturer, Vital Pharmaceutical (“Vital”), filed for chapter 11 protection in October 2022.
As part of its reorganization, Vital planned to sell the “Bang” brand. With it, Vital planned to sell the “BangEnergy.CEO” handles controlled by its former CEO, John H. Owoc. Owoc claimed the accounts were his own, not Vital’s, property. Vital moved for summary judgment against Owoc for control of the accounts.
Before starting his analysis, Judge Russin invited Congress to create a statutory framework for deciding these types of disputes. In its absence, Judge Russin “fashion[ed] a standard that [allowed him] to fairly resolve th[e] dispute.” In re Vital Pharm., No. 22-17842-PDR, 2023 WL 4048979, at *2 (Bankr. S.D. Fla. June 16, 2023).
Judge Russin began by rejecting the standard set forth by the only other bankruptcy court to address the issue, the Southern District of Texas in In re CTLI, LLC, 528 B.R. 359, 378 (Bankr. S.D. Tex. 2015). Judge Russin found that significant developments in the social media landscape since the 2015 decision—particularly the rise of social media “influencers”—made the eight-year-old framework “ill-suited for determining ownership of the rights to all types of social media accounts.” In re Vital Pharm., 2023 WL 4048979, at *7. Judge Russin pointed out that under the CTLI framework, an influencer’s account used to promote multiple brands could become one of those brand’s property, even though the account itself is the influencer’s means of promoting his or her own business as a social media personality, and thus should not be considered the property of the influencer’s advertising partners.
Instead, Judge Russin created his own framework focused on three factors: (1) a documented property interest, (2) control over access, and (3) use. As to the documented property interest, under the Vital standard, “[a]n agreement that documents or evidences a property interest in the account rights creates a rebuttable presumption that the party with the documented property interest owns the account rights.” However, that rebuttable presumption can be overcome by evidence of control over access to the account, especially “exclusive” control over the account. While control over access would rarely overcome a documented property interest, in the absence of such a documented interest, control over access itself creates a rebuttable presumption of ownership. If a party has both a documented property interest and control over access, use is irrelevant. However, if a party has only a documented property interest or control over access, the resulting presumption of ownership can be overcome by evidence of use. “Use” encapsulates:
the name used for the account; whether the account is used to market or promote one or more products; whether the account is used to promote a persona; how a determination of ownership of the account rights would change the account’s use; and whether any required changes to the account’s use would fundamentally change the nature of the account.
Id. at**8-9; see also id. at **9-11 (expanding on each factor and relevant evidence thereunder).
Applying the test, Judge Russin found that neither Vital nor Owoc had established a documented property interest in the accounts. While Vital’s employee handbook dictated that “inventions” were company property, it was unclear whether social media accounts constituted “inventions,” or whether Owoc ever signed the employee handbook.
Similarly, neither party could establish control over access, particularly exclusive control. While Owoc maintained the account passwords, he shared them with company employees, who created content and posted to the accounts without Owoc’s approval.
Thus, the decision came down to use. The record showed that Owoc’s wife (also a Vital employee at the time) created the Instagram and Twitter accounts, while Vital employees created the TikTok account at the Owocs’ instruction. Each account included “BangEnergy,” but also “CEO,” a position held by Owoc until recently. However, Vital demonstrated pervasive use of the accounts for marketing Bang energy drinks. Of 284 recent posts, 33.5% were “pure marketing” and 39.6% otherwise included Bang-brand hashtags, logos, or apparel. Another 15% were “subtle marketing of Bang products in that they emphasize[d] aspects of Mr. Owoc’s persona in a way that is virtually indistinguishable from Vital’s marketing strategy.” The accounts also contained links to Vital’s website and Bang energy drinks include the Instagram handle on their label. Together, this satisfied Vital’s initial burden as the moving party. The burden thus shifted to Owoc to demonstrate a genuine dispute of material fact.
Owoc provided evidence indicating use of the accounts to cultivate his individual persona, which centered around fitness, design, motivational speaking, and related products. Judge Russin acknowledged that while some of the posts included motivational quotes or health advice, the majority of those posts also included Bang-branded products. They were thus “the type of subtle marketing . . . which favors a determination [that] Vital owns the rights to the accounts.” Evidence that less than 10% of recent posts were purely personal, and that Owoc did not act as a general “influencer” by promoting non-Vital products, supported that conclusion.
Viewed together, Judge Russin concluded that the limited personal use, compared to the heavily brand-centric nature of the accounts’ content, meant that no reasonable jury could conclude that Owoc owned the rights to the accounts. Finding no genuine dispute, Judge Russin entered summary judgment in Vital’s favor, awarding it control over (and the ability to sell) the three “BangEnergy.CEO” handles.
