THE LAW

7-2

Are the law and ethics relatedfor practitioners? Relationship exists, but to be sure,

practitioners must examine both legal and ethical considerations in their professional practice.

7-3

Areas of legal concern for publicrelations practitioners: First amendment implications Insider trading Disclosure law Ethics law Privacy law Copyright law Censorship of the Internet

7-4

First Amendment

“Congress shall make no law…abridging the freedom of speech or the press”

Broad interpretation and freedoms

Practitioners must fiercely defend it

7-5

Defamation

Defamation is used to describe libel and slander.

Libel is a printed falsehood

Slander is an oral falsehood

7-6

Defamation continued

In order for defamation to be proved, it is incumbent that a plaintiff meet four standards:

1. The falsehood was communicated in print, broadcast, or electronic means.

2. The subject was identified or identifiable. 3. The identified person suffered injury — either monetary

losses, reputation loss, or mental suffering. 4. The person making the statement was malicious or

grossly negligent.

7-7

Privacy

Privacy is protected by law unless it involves a public figure.

Actual malice must be proved in slander charges. Statements published knowingly that were false or with reckless disregard.

7-8

Public relations practitioners must be careful not to defame when they write. As the spokesperson, practitioners must be careful in statements to the media on behalf of their organization/clients.

7-9

SEC

The SEC Securities and Exchange Commission has disclosure requirements for all practitioners.

The SEC stems from the Securities Act of l933 and the Securities Exchange Act of l934, which was aimed at protecting the public from abuses in the issuance and sale of securities.

7-10

Key Points

Investors must be made aware of any new material information as soon as possible since any information can affect stock value.

Rule 10b-5 strictly prohibits the dissemination of false or misleading information to investors. It prohibits insider trading of securities on the basis of material information not disclosed to the public.

7-11

Question:Who got into trouble when ImClone Systems

CEO Sam Waksal unloaded stock (along with his family and friends) after they learned that the FDA was about to reject a key ImClone drug?

Clue: Domestic Perfectionist found out that “was not a good thing.”

7-12

Disclosure Tightening

Regulation FD or fair disclosure requires companies to widely disseminate any material announcement.

7-13

Public Relations and Ethical Behavior Legal and moral implications Lobbyists must follow the guidelines and

rules

7-14

Copyright Law

Copyright law provides basic automatic protection for writers, whether a manuscript is registered with the Copyright Office or even published.

According to the Copyright Act of l976, “an original work of authorship” has copyright protection from the moment the work is in the following fixed form (work is permanent to permit it to be perceived, reproduced, or otherwise communicated):

7-15

Copyright Act continued

Literary works Musical works Dramatic works Pantomimes and choreographic works Pictorial, graphic, or sculptural works Motion pictures Sound recordings

7-16

Copyright law gives the owner:

Exclusive right to reproduce, authorize others to reproduce the work, prepare derivative works, and perform and/or display the work publicly.

7-17

Fair Use

News reporting, teaching, scholarship or research, use of copyrighted material constitutes fair use and is open to interpretation by the courts.

7-18

Categories not protected:

Titles and short slogans Works from common sources and public

documents (calendars, lists and tables, speeches and performances not fixed on paper or recorded).

Works in the public domain—not covered by copyright or lapsed, material lacking originality and basic themes and plots

Ideas cannot be protected, but old ideas newly packaged are okay.

7-19

Trademark law Trademark law covers a word, symbol or

slogan used alone or in combination that identifies a product or its sponsor.

7-20

Internet LawAreas of Importance

Censorship and the issues of free speech Intellectual Property Cybersquatting E-fraud

7-21

Question

Can you match the name to the deed in the Intellectual Hall of Fame?

Free Speech Freedom Fighters

Clue: Went against Napster