It's a situation that would buckle the knees of even the most steel-nerved planner: An outside vendor is hired to videotape the proceedings of a company's internal meeting. Afterwards, the vendor sells copies of the tapes not only to other businesses, but also to labor unions and attorneys with agendas that could seriously harm the host company's brand image and financial health. Such a situation has struck one of the largest corporations in the worldWal-Mart.
The meeting content that's for sale comes not from a single event, but from nearly 30 years of Wal-Mart's internal sessions, including annual sales and executive meetings. Worse, the Bentonville, AR-based retail giant does not appear to have any signed documents proving it owns its meetin's footage rather than the firm that recorded it, Flagler Productions of Lenexa, KS.
According to an April 9 article in the Wall Street Journal, Flagler Productions founder Michael Flagler claimed he was hired in the mid-1970s through a handshake agreement with Wal-Mart to help produce and record the firm's events. Two years ago, Wal-Mart relieved Flagler Productions of those duties, just days after Michael Flagler sold the firm to employees Mary Lyn Villanueva and Gregory Pierce. As a result, the production firm, which derived about 90 percent of its revenue from Wal-Mart, laid off all 16 of its employees and moved from a 20,000-sf facility to an 800-sf office.
But several months ago, after Wal-Mart rejected an offer by Flagler Productions to sell the footage to Wal-Mart for $150 million (Wal-Mart's counter-offer: $500,000), Flagler chose to remain in business by selling access to Wal-Mart's meeting contentnearly 15,000 tapes' worthto any paying customer.
Among those who paid to have footage scanned for specific content were the United Food and Commercial Workers Union and the Service Employees International Union, who are at odds with Wal-Mart over unionization policies. Attorneys who represent plaintiffs with gender-discrimination and injury-liability suits against Wal-Mart have also bought access to films in hopes of finding relevant comments by executives.
While Wal-Mart said in a January letter to Flagler Productions that it has "claims to rights in the video library" and the film transcripts, Wal-Mart has not claimed that it possesses a signed agreement that transferred ownership of the footage to Wal-Mart. According to Tim Armstrong, assistant professor of law at the University of Cincinnati College of Law, "copyright in video footage ordinarily attaches to the party who fixed it in a tangible medium. To divest Flagler of the copyright...Wal-Mart needs to show that the footage was a 'work made for hire'which is going to be problematic because the video firm wasn't an 'employee,' and because the parties had no written agreement." These are the two criteria that can define a "work made for hire" under Section 201(b) of the U.S. Copyright Act.
On the flip side,Armstrong noted that Wal-Mart may have legal redress from a trade-secret angle. "Wal-Mart can argue [in court] that these meetings were secret, [that they] have value to the company and can be exploited to its detriment if generally known," he said, adding that it is possible even in a handshake deal that Wal-Mart had reasonable expectations that the films would not be divulged. As of late April, however, it appeared that Wal-Mart had not taken any formal legal action against Flagler Productions.
The Dangers, the Solutions
Wal-Mart's situation lays bare the consequences firms can face when they record internal meetings. While it can have beneficial purposesinforming non-attending employees of what was discussed, or compiling footage for a motivational presentationthe pitfalls are too large for planners to ignore.
Two veteran planners from New Jersey, one from a major pharmaceutical firm and the other from a biotech company, spoke about this issue to MeetingNews on the condition of anonymity. "Planners need to understand the value of their organizations' intellectual property and evaluate options for using copyright and trademark protection," said the pharma planner. Before using outside vendors, "an agreement should be in place that specifies in advance how information will be used both at an event and beyond. This should include a plan on how [it] will be stored, accessed, and distributed after the event," as well as clear ownership rights.
The biotech company planner agreed. "Vendors should be required to sign consulting agreements and confidentiality clauses. Beyond this, many companies no longer record sessions due to the inability to protect information from getting beyond the company in any number of wayseven with computer firewalls, passwords, and other precautions."
Furthermore, "as a planner, I would recommend no taping of meetings outside of what's needed for training purposes," the biotech planner added. "I don't see the need to record a meeting as a motivational tool. It is the wrong media for such purposes."
On this point, however, the pharma planner differed." Meetings are about information exchange, and the content would not be fully leveraged if we did not use it to continue momentum beyond the actual event. Meetings are also a huge investment. So the reuse and the sharing of information can be accomplishedbut with the proper safeguards."
Another concern: What about attendees who can record sessions with video-enabled cell phones and show footage to outsiders? "Planners used to worry about the distraction from audience members text messaging their friends when they got bored..." the biotech planner said. "But there are worse scenarios that must be taken into account."
Originally published May 5, 2008