Limits of CDA Immunity For Claims Based on User-Generated Content

This article concentrates on the scope of CDA immunity advertisers and entertainment companies that operate UGC campaigns may enjoy, limitations of the CDA in protecting against these claims and ways to structure UGC campaigns to minimize the risk of liability arising from unauthorized use of individuals' name, likeness and other personal attributes possibly included in UGC submitted as part of a sponsored UGC campaign.

CDA Immunities and Limitations;
DMCA Safe Harbors

The CDA provides the possibility that a website or other online service hosting UGC, or an operator of a UGC campaign on a third-party website or service, may be immune from liability for certain claims (particularly tort claims such as defamation, libel and common-law negligence) arising from such UGC, and provides a bar to liability arising from good-faith efforts to restrict objectionable content. See, 47 U.S.C. ”230(c)(1) and (2).

The CDA immunity for users and operators of websites that publish others' content has been shaped by court opinions, which initially treated it as a near absolute protection unless the claim was within the statute's enumerated carve-outs. More recently, some courts have been applying facts of various circumstances to explain when users and publishers are acting in ways that make them responsible for another's content they publish. These limitations are of two types:

1. The nature of the claim; and
2. The nature of the content.

Section 230(c)(1)

Section 230(c)(1) of the CDA provides that “[n]o provider or user of an interactive computer service (ICS) shall be treated as the publisher or speaker of any information provided by another information content provider” and expressly preempts any state law inconsistent with the provision. See, 47 U.S.C. ”230(c)(1) and (e)(3).

Assuming the cause of action is not carved from the immunity by '230 itself (such as is the case with regard to intellectual property claims discussed in more detail below), a shield to liability for publishing the offending UGC should exist if:

• The defendant uses or provides an interactive computer service;
• The defendant is not itself an information content provider with respect to the disputed activity or objectionable content; and
• The plaintiff seeks to make the defendant responsible as a “publisher or speaker” of information originating with a third party.

Websites have been held to be an ICS under the CDA (see, e.g., Doe v. MySpace, 474 F.Supp.2d 843 (W.D. Tex. 2007), affirmed by 528 F.3d 413 (5th Cir. 2008); Gentry v. eBay Inc., 99 Cal. App. 4th 816 (2002); and Schneider v. Amazon, 31 P.3d 37 (Wash. App. 2001)).

Although it is not certain that an application that interacts with a website would also be treated similarly to a website, under the reasoning of cases finding websites to be ICSs, apps that interact with popular online platforms like Facebook should also qualify as an ICS. Online activities as a publisher and a distributor, and by providers and users, have been found to qualify for the immunity, so long as such defendant is not the content originator (see, Zeran v. America Online Inc., 129 F.3d 327 (4th Cir. 1997), cert. denied, 524 U.S. 937, and Barrett v. Rosenthal, 40 Cal. 4th 33 (2006)).

A provider's or user's own content, including corporate blogs to which company employees contribute, do not qualify for the immunity, because the ICS is the content provider (see, e.g., 800-JR Cigar Inc. v. GoTo.com Inc., 437 F.Supp.2d 273 (D.N.J. 2006) (no immunity for operator's own activities benefiting its advertisers); and Anthony v. Yahoo Inc., 421 F.Supp.2d 1257 (N.D. Cal. 2006) (fraudulently posting false user profiles to induce subscribers to a dating service was not third party content and thus immunity does not apply)).

Content Originator?

What publisher activities constitute those of a content originator has been the subject of many court decisions that help map the boundaries of what a UGC program operator may and may not do while still retaining immunity.

To qualify for CDA immunity for claims arising from UGC, an ICS must remain a mere content conduit and not itself an information content provider. The closer the ICS comes to directing or contributing to the creation of the content, the more likely it will be held responsible for the content (see, Fair Housing Council of San Fernando Valley v. Roommates.com LLC, 489 F.3d 921 (9th Cir. 2007), reversed in part, vacated in part and remanded in part, 521 F.3d 1157 (by designing the system with pre-populated answers to illegal questions, “Roommates becomes much more than a passive transmitter of information provided by others; it becomes the developer, at least in part, of that information”); and MCW Inc. v. Badbusinessbureau.com LLC, 3:02-CV-2727 (N.D. Tex. 2004) (website was a content provider, in part, because it “actively encourage[ed] and instruct[ed] a consumer to gather specific detailed information” and post that information to the website. The defendant's website provided specific directions to users regarding the type of content to post, such as instructing users to take photos of the rip-off artist and his/her car with license-plate number)).

Courts have, however, refused to preclude the immunity merely because the ICS encouraged and promoted unfavorable statements that would be defamatory if untrue (see, Shiamili v. Real Estate Group, 68 A.D.3d 581 (N.Y. Sup. Ct. 2009)).

Content-Shaping Concerns

Operators also should be careful not to direct or shape user content so that it would infringe upon third-party rights. Where the line is drawn is factually driven, which means that a well-pled complaint may survive a motion to dismiss.

Such was the case in the highly publicized lawsuit between Quiznos and Subway over an online UGC contest where users were asked to create videos comparing Quiznos and Subway sandwiches, allegedly in a manner that encouraged false and disparaging statements and depictions, and shaped the content by giving detailed instructions and examples that suggested disparagement and false product claims. See, Doctor's Associates Inc. v. QIP Holders LLC, 3:06-cv-1710 (D. Conn. 2010). The court denied Quiznos' motion to dismiss by indicating that the extent of Quiznos' alleged active involvement in the creation of the content was a factual inquiry that the plaintiff had the right to try to prove.

Accordingly, the risk of losing immunity under the CDA increases as an operator interacts with the process of developing UGC in a way that inherently leads to an infringement or violation of law, such that the activities look more like co-participation than that of a mere publisher. Examples of these types of interactions may include:

• The sponsor inserting promotional content into the UGC (as opposed to giving the user sponsor content the user can elect to use or not);
• Editing UGC in a manner that changes it substantively;
• Directing the content, or prompting users with content-inducing inquiries or prepared content choices, the results or use of which are likely to lead to or encourage a violation of rights or law; or
• Collecting and processing ( e.g., sorting or matching) UGC in a manner that inherently creates an infringement or violation of law.

Terms-of-Use Safeguards

Accordingly, a sponsor should have terms of use that prohibit any violation of law or infringement of any third-party rights. These requirements should be clearly and conspicuously explained in simple, short notices where the user can create and post content, and the sponsor does nothing to encourage or direct the user to do otherwise.

A sponsor should also limit its editorial function to selecting what content to post or remove, and to making edits that do not materially change the content. A somewhat vexing question is whether content tools that permit the importing of pictures or videos without confirming the consent of third parties that may be depicted is so naturally likely to lead to infringement that a court may treat the sponsor as a co-content provider. Employing technology such as facial-recognition software to restrict the posting of third-party images would likely protect against such a theory of liability, but is admittedly burdensome and restrictive and not customary in the industry. A more customary approach that seems reasonably tailored to show the tool is not designed to direct, shape or foster infringement is to post a notice such as:

I HAVE PERMISSION OF ALL THOSE DEPICTED IN OR THAT CONTRIBUTED TO MY CONTENT SUFFICIENT TO UPLOAD AND SHARE IT, ACCORDING TO THE TERMS OF USE.

It's a good idea, too, for this notice to be just above the submit button, and that a box must be checked for users to proceed. “Terms of Use” should link to that document, where more detailed venue and content rules are posted. Also, as noted, by the terms of '230, its immunity is not absolute, and '230(e) explains its effect on other laws. First, it does not impair enforcement of “federal criminal statute[s].” 47 U.S.C. '230(e)(1). It also does not limit “the [federal] Electronic Communications Privacy Act ' or any similar State law.” 47 U.S.C. '230(e)(4). And it does not “prevent any State from enforcing any State law that is consistent with ['230],” but bars claims under “any State or local law that is inconsistent with ['230].” 47 U.S.C. '230(e)(3). Finally, '230 shall not “limit or expand any law pertaining to intellectual property.” 47 U.S.C. '230(e)(2).

Part Two, next issue, will explore whether state intellectual property claims, such as appropriation of rights of publicity, are barred by '230.

For several years, advertisers ' including entertainment content and technology companies ' have sponsored contests and other online promotional campaigns that allow users to create and publish content (user-generated content (UGC)) as a way to entice interaction with the brand or with a community associated with the brand. Knowing that engaging consumers is more valuable than bombarding them with banner and pop-up ads, online marketers are rushing to get Internet users to directly participate with their brands and involve bloggers, UGC, social networking sites and other virtual communities to do so.

An initial area of concern for website providers, promotions operators and sponsors concerning UGC and user participation is the distinct possibility that the user will infringe third-party intellectual property or personal rights, particularly copyright and an individual's right of publicity, and that the sponsor may be subject to related claims.

While there are, depending on how an online UGC campaign operates, potential safe-harbor protections and immunities available to the sponsor pursuant to the Digital Millennium Copyright Act of 1998 (DMCA), 17 U.S.C. '512 (available online at http://1.usa.gov/vvSvKc), and the Communications Decency Act of 1996 (CDA), 47 U.S.C. '230 (available online at http://bit.ly/ucKA3h), the scope of DMCA and CDA protections for advertisers and entertainment companies sponsoring UGC campaigns or websites hosting such a campaign is far from as broad as frequently assumed. (Note that the DMCA provides a potential safe harbor from financial liability of a service provider for copyright-infringing UGC posted to its service by a user.)

This article concentrates on the scope of CDA immunity advertisers and entertainment companies that operate UGC campaigns may enjoy, limitations of the CDA in protecting against these claims and ways to structure UGC campaigns to minimize the risk of liability arising from unauthorized use of individuals' name, likeness and other personal attributes possibly included in UGC submitted as part of a sponsored UGC campaign.

CDA Immunities and Limitations;
DMCA Safe Harbors

The CDA provides the possibility that a website or other online service hosting UGC, or an operator of a UGC campaign on a third-party website or service, may be immune from liability for certain claims (particularly tort claims such as defamation, libel and common-law negligence) arising from such UGC, and provides a bar to liability arising from good-faith efforts to restrict objectionable content. See, 47 U.S.C. ”230(c)(1) and (2).

The CDA immunity for users and operators of websites that publish others' content has been shaped by court opinions, which initially treated it as a near absolute protection unless the claim was within the statute's enumerated carve-outs. More recently, some courts have been applying facts of various circumstances to explain when users and publishers are acting in ways that make them responsible for another's content they publish. These limitations are of two types:

1. The nature of the claim; and
2. The nature of the content.

Section 230(c)(1)

Section 230(c)(1) of the CDA provides that “[n]o provider or user of an interactive computer service (ICS) shall be treated as the publisher or speaker of any information provided by another information content provider” and expressly preempts any state law inconsistent with the provision. See, 47 U.S.C. ”230(c)(1) and (e)(3).

Assuming the cause of action is not carved from the immunity by '230 itself (such as is the case with regard to intellectual property claims discussed in more detail below), a shield to liability for publishing the offending UGC should exist if:

• The defendant uses or provides an interactive computer service;
• The defendant is not itself an information content provider with respect to the disputed activity or objectionable content; and
• The plaintiff seeks to make the defendant responsible as a “publisher or speaker” of information originating with a third party.

Websites have been held to be an ICS under the CDA ( see , e.g. , Doe v. MySpace , 474 F.Supp.2d 843 (W.D. Tex. 2007), affirmed by 528 F.3d 413 (5th Cir. 2008); Gentry v. eBay Inc., 99 Cal. App. 4th 816 (2002); and Schneider v. Amazon , 31 P.3d 37 (Wash. App. 2001)).

Although it is not certain that an application that interacts with a website would also be treated similarly to a website, under the reasoning of cases finding websites to be ICSs, apps that interact with popular online platforms like Facebook should also qualify as an ICS. Online activities as a publisher and a distributor, and by providers and users, have been found to qualify for the immunity, so long as such defendant is not the content originator ( see , Zeran v. America Online Inc. , 129 F.3d 327 (4th Cir. 1997), cert. denied , 524 U.S. 937, and Barrett v. Rosenthal , 40 Cal. 4th 33 (2006)).

A provider's or user's own content, including corporate blogs to which company employees contribute, do not qualify for the immunity, because the ICS is the content provider ( see , e.g. , 800-JR Cigar Inc. v. GoTo.com Inc. , 437 F.Supp.2d 273 (D.N.J. 2006) (no immunity for operator's own activities benefiting its advertisers); and Anthony v. Yahoo Inc. , 421 F.Supp.2d 1257 (N.D. Cal. 2006) (fraudulently posting false user profiles to induce subscribers to a dating service was not third party content and thus immunity does not apply)).

Content Originator?

What publisher activities constitute those of a content originator has been the subject of many court decisions that help map the boundaries of what a UGC program operator may and may not do while still retaining immunity.

To qualify for CDA immunity for claims arising from UGC, an ICS must remain a mere content conduit and not itself an information content provider. The closer the ICS comes to directing or contributing to the creation of the content, the more likely it will be held responsible for the content ( see , Fair Housing Council of San Fernando Valley v. Roommates.com LLC , 489 F.3d 921 (9th Cir. 2007), reversed in part, vacated in part and remanded in part , 521 F.3d 1157 (by designing the system with pre-populated answers to illegal questions, “Roommates becomes much more than a passive transmitter of information provided by others; it becomes the developer, at least in part, of that information”); and MCW Inc. v. Badbusinessbureau.com LLC, 3:02-CV-2727 (N.D. Tex. 2004) (website was a content provider, in part, because it “actively encourage[ed] and instruct[ed] a consumer to gather specific detailed information” and post that information to the website. The defendant's website provided specific directions to users regarding the type of content to post, such as instructing users to take photos of the rip-off artist and his/her car with license-plate number)).

Courts have, however, refused to preclude the immunity merely because the ICS encouraged and promoted unfavorable statements that would be defamatory if untrue ( see , Shiamili v. Real Estate Group , 68 A.D.3d 581 (N.Y. Sup. Ct. 2009)).

Content-Shaping Concerns

Operators also should be careful not to direct or shape user content so that it would infringe upon third-party rights. Where the line is drawn is factually driven, which means that a well-pled complaint may survive a motion to dismiss.

Such was the case in the highly publicized lawsuit between Quiznos and Subway over an online UGC contest where users were asked to create videos comparing Quiznos and Subway sandwiches, allegedly in a manner that encouraged false and disparaging statements and depictions, and shaped the content by giving detailed instructions and examples that suggested disparagement and false product claims. See, Doctor's Associates Inc. v. QIP Holders LLC, 3:06-cv-1710 (D. Conn. 2010). The court denied Quiznos' motion to dismiss by indicating that the extent of Quiznos' alleged active involvement in the creation of the content was a factual inquiry that the plaintiff had the right to try to prove.

Accordingly, the risk of losing immunity under the CDA increases as an operator interacts with the process of developing UGC in a way that inherently leads to an infringement or violation of law, such that the activities look more like co-participation than that of a mere publisher. Examples of these types of interactions may include:

• The sponsor inserting promotional content into the UGC (as opposed to giving the user sponsor content the user can elect to use or not);
• Editing UGC in a manner that changes it substantively;
• Directing the content, or prompting users with content-inducing inquiries or prepared content choices, the results or use of which are likely to lead to or encourage a violation of rights or law; or
• Collecting and processing ( e.g., sorting or matching) UGC in a manner that inherently creates an infringement or violation of law.

Terms-of-Use Safeguards

Accordingly, a sponsor should have terms of use that prohibit any violation of law or infringement of any third-party rights. These requirements should be clearly and conspicuously explained in simple, short notices where the user can create and post content, and the sponsor does nothing to encourage or direct the user to do otherwise.

A sponsor should also limit its editorial function to selecting what content to post or remove, and to making edits that do not materially change the content. A somewhat vexing question is whether content tools that permit the importing of pictures or videos without confirming the consent of third parties that may be depicted is so naturally likely to lead to infringement that a court may treat the sponsor as a co-content provider. Employing technology such as facial-recognition software to restrict the posting of third-party images would likely protect against such a theory of liability, but is admittedly burdensome and restrictive and not customary in the industry. A more customary approach that seems reasonably tailored to show the tool is not designed to direct, shape or foster infringement is to post a notice such as:

I HAVE PERMISSION OF ALL THOSE DEPICTED IN OR THAT CONTRIBUTED TO MY CONTENT SUFFICIENT TO UPLOAD AND SHARE IT, ACCORDING TO THE TERMS OF USE.

It's a good idea, too, for this notice to be just above the submit button, and that a box must be checked for users to proceed. “Terms of Use” should link to that document, where more detailed venue and content rules are posted. Also, as noted, by the terms of '230, its immunity is not absolute, and '230(e) explains its effect on other laws. First, it does not impair enforcement of “federal criminal statute[s].” 47 U.S.C. '230(e)(1). It also does not limit “the [federal] Electronic Communications Privacy Act ' or any similar State law.” 47 U.S.C. '230(e)(4). And it does not “prevent any State from enforcing any State law that is consistent with ['230],” but bars claims under “any State or local law that is inconsistent with ['230].” 47 U.S.C. '230(e)(3). Finally, '230 shall not “limit or expand any law pertaining to intellectual property.” 47 U.S.C. '230(e)(2).

Part Two, next issue, will explore whether state intellectual property claims, such as appropriation of rights of publicity, are barred by '230.