Does the CDA Bar State IP Claims?

A compelling rationale behind the Ninth Circuit's immunizing interactive computer service (ICS) providers and users from individual state-based intellectual property claims is that because material on a website may be viewed across the Internet, and thus in more than one state at a time, permitting the reach of any particular state's definition of intellectual property to dictate the contours of this federal immunity would be contrary to Congress' goal of insulating ISCs from state laws that would hold them liable as the publisher or speaker of information provided by another content provider. See, Perfect 10, 488 F.3d at 1118. This approach seems consistent with Congress' findings and policy statements in ”230(a) and (b) that the provisions were intended to promote the development of online services.

Rejecting the Ninth Circuit's Approach

However, the U.S. Court of Appeals for the First Circuit in dicta, and district courts in the First and Second Circuits explicitly, have rejected the Ninth Circuit's approach, concluding that had Congress intended to limit the term “intellectual property” law to federal law, it would have said so (as it did regarding the exception for federal criminal law). (See, Atlantic Recording Corp. v. Project Playlist Inc., 603 F.Supp.2d 690 (S.D.N.Y. 2009) (finding that state common law copyright and unfair competition claims for infringement of pre-1972 sound recordings were intellectual property claims for which the CDA immunity did not apply); Doe v. Friendfinder Network Inc., 540 F.Supp.2d 288 (D.N.H. 2008) (rights of privacy claims are barred by CDA, but right of publicity is an intellectual property claim not subject to the immunity); Universal Comm”n Sys. Inc. v. Lycos Inc., 478 F.3d 413 (1st Cir. 2007) (stating in dicta that a claim against a message-board operator that alleged a dilution of its trade name under state trademark law was based on intellectual property laws and not subject to CDA immunity but finding the plaintiff failed to plead a claim under the statutory elements); and Gucci America Inc. v. Hall & Associates et al., 135 F.Supp.2d 409 (S.D.N.Y. 2001) (finding federal Lanham Act and state trademark and unfair competition claims are grounded in the law of intellectual property and thus '230 immunity does not apply to them)).

Federal, State IP Laws Addressed

Indeed, of the four subparts of '230(e) setting forth the four immunity exceptions, three expressly refer to either state or federal law, or both, and only the subpart referring to “any law[s] pertaining to intellectual property” does not, suggesting no such limitation was intended.

As one commentator has pointed out, to conclude that state intellectual property laws are subject to the immunity, one would have to treat the four subparts not as independent, but “would have to conclude that [S]ection 230(e)(3), which broadly preempts all inconsistent state and local laws, modifies [S]ection 230(e) (2), which provides that: '[n]othing in this section shall be construed to limit or expand any law pertaining to intellectual property.' However, there is nothing in the text or structure of the statute to suggest that subpart (e)(3) modifies subpart (e)(2).” (See, e-Commerce & Internet Law, 37.05[5] at 37-144 (West Publishing, 2011)).

Forged Online Profiles and Associated Torts

In Friendfinder, a third party created a profile using plaintiff's likeness along with false details regarding her sexual proclivities on the defendant's sexually oriented dating site. In one of the most comprehensive discussions rejecting the Ninth Circuit's approach, the court granted the defendant's motion to dismiss in part, finding that CDA immunity applied to tort claims such as defamation, intentional infliction of emotional distress and invasion of privacy, but denied the motion as to right of publicity claims.

The district court noted that the legislative history was silent on the issue of what Congress meant by “intellectual property” and relied on plain meaning to conclude that the “intellectual property” provision of the CDA ('230(e)(2)) includes state law claims (i.e., CDA immunity does not extend to state IP claims). The court explicitly rejected the Ninth Circuit's holding in Perfect 10, as well as that court's underlying policy rationale, as not supported by canons of statutory interpretation. It also relied heavily on Professor McCarthy's Rights of Publicity treatise that characterizes the right of publicity as an intellectual property right and opines that Section 230 “does not apply to a claim for infringement of right to publicity by virtue of 230(e)(2).” Friendfinder, 540 F.Supp.2d at 302 (citing McCarthy, Rights of Publicity, 3.42).

The Ninth Circuit's 'More Uniform' Federal Approach

The Ninth Circuit position certainly creates a more uniform federal approach and seems to further Congress' intent to foster the development of online publishing by shielding publishers from state law claims that would hold them liable as the publisher or speaker of information provided by another content provider. However, unless the Supreme Court resolves this split, sponsors of national UGC campaigns will remain at risk of claims from UGC that infringes rights of publicity or otherwise violates state laws that sound in concepts that can be characterized as intellectual property.

Conclusion

While the CDA may not provide immunity for right of publicity and other state IP-based claims outside the Ninth Circuit, and certainly does not protect against federal IP claims, it does provide an important bar against tort claims (e.g., defamation and privacy), and likely unfair business-practices claims (e.g., Cal. Bus & Prof. Code '17200). Sponsors should seek to develop and operate UGC programs in a manner designed to qualify for the scope of CDA immunity.

In addition, advertisers should consider structural approaches to UGC campaigns that may present defenses to right of publicity claims and other non-copyright intellectual property claims not covered by a potential DMCA safe harbor.

Alan L. Friel is a partner and Jesse M. Brody is an associate at the international law firm of Edwards Wildman Palmer LLP, in its Los Angeles office. They may be reached at [email protected] and [email protected]. Friel is a member of the Board of Editors of our sibling newsletter, e-Commerce Law & Strategy, in which this article originally appeared.

This is Part Two of a two-part article. Part One was published in the March issue of Entertainment Law & Finance.

It is clear that there is no immunity under the Communications Decency Act of 1996 (CDA), 47 U.S.C. '230 (available online at http://bit.ly/ucKA3h), for copyright, patent and trademark law. And while the Digital Millennium Copyright Act of 1998 (DMCA) provides potential safe harbors for monetary damages in copyright infringement claims resulting from user-generated content (UGC) stored at the direction of users on a sponsor's sites or servers, there is simply no safe harbor or immunity for online publishers for patent and trademark claims.

What remains an open question ' and the subject of conflicting judicial interpretations ' is whether state intellectual property claims such as appropriation of rights of publicity are barred by Section 230. In one interpretation from the U.S. Court of Appeals for the Ninth Circuit, the carve-out from immunity has been held to include only federal intellectual property law, and not state law claims arguably sounding in intellectual property, such as unfair competition based on trademark infringement or rights of publicity. See , Perfect 10 v. CCBill LLC , 488 F.3d 1102 (9th Cir. 2007), cert. denied 128 S.Ct. 709 (2007); see also , Carafano v. Metrosplash.com Inc. , 339 F.3d 1119 (9th Cir. 2003) (dismissing invasion-of-privacy and right of publicity claims by a famous actress against a dating website that hosted an anonymously submitted, malicious, false and defamatory putative dating profile of the actress).

A compelling rationale behind the Ninth Circuit's immunizing interactive computer service (ICS) providers and users from individual state-based intellectual property claims is that because material on a website may be viewed across the Internet, and thus in more than one state at a time, permitting the reach of any particular state's definition of intellectual property to dictate the contours of this federal immunity would be contrary to Congress' goal of insulating ISCs from state laws that would hold them liable as the publisher or speaker of information provided by another content provider. See, Perfect 10, 488 F.3d at 1118. This approach seems consistent with Congress' findings and policy statements in ”230(a) and (b) that the provisions were intended to promote the development of online services.

Rejecting the Ninth Circuit's Approach

However, the U.S. Court of Appeals for the First Circuit in dicta, and district courts in the First and Second Circuits explicitly, have rejected the Ninth Circuit's approach, concluding that had Congress intended to limit the term “intellectual property” law to federal law, it would have said so (as it did regarding the exception for federal criminal law). ( See , Atlantic Recording Corp. v. Project Playlist Inc. , 603 F.Supp.2d 690 (S.D.N.Y. 2009) (finding that state common law copyright and unfair competition claims for infringement of pre-1972 sound recordings were intellectual property claims for which the CDA immunity did not apply); Doe v. Friendfinder Network Inc. , 540 F.Supp.2d 288 (D.N.H. 2008) (rights of privacy claims are barred by CDA, but right of publicity is an intellectual property claim not subject to the immunity); Universal Comm”n Sys. Inc. v. Lycos Inc. , 478 F.3d 413 (1st Cir. 2007) (stating in dicta that a claim against a message-board operator that alleged a dilution of its trade name under state trademark law was based on intellectual property laws and not subject to CDA immunity but finding the plaintiff failed to plead a claim under the statutory elements); and Gucci America Inc. v. Hall & Associates et al., 135 F.Supp.2d 409 (S.D.N.Y. 2001) (finding federal Lanham Act and state trademark and unfair competition claims are grounded in the law of intellectual property and thus '230 immunity does not apply to them)).

Federal, State IP Laws Addressed

Indeed, of the four subparts of '230(e) setting forth the four immunity exceptions, three expressly refer to either state or federal law, or both, and only the subpart referring to “any law[s] pertaining to intellectual property” does not, suggesting no such limitation was intended.

As one commentator has pointed out, to conclude that state intellectual property laws are subject to the immunity, one would have to treat the four subparts not as independent, but “would have to conclude that [S]ection 230(e)(3), which broadly preempts all inconsistent state and local laws, modifies [S]ection 230(e) (2), which provides that: '[n]othing in this section shall be construed to limit or expand any law pertaining to intellectual property.' However, there is nothing in the text or structure of the statute to suggest that subpart (e)(3) modifies subpart (e)(2).” (See, e-Commerce & Internet Law, 37.05[5] at 37-144 (West Publishing, 2011)).

Forged Online Profiles and Associated Torts

In Friendfinder, a third party created a profile using plaintiff's likeness along with false details regarding her sexual proclivities on the defendant's sexually oriented dating site. In one of the most comprehensive discussions rejecting the Ninth Circuit's approach, the court granted the defendant's motion to dismiss in part, finding that CDA immunity applied to tort claims such as defamation, intentional infliction of emotional distress and invasion of privacy, but denied the motion as to right of publicity claims.

The district court noted that the legislative history was silent on the issue of what Congress meant by “intellectual property” and relied on plain meaning to conclude that the “intellectual property” provision of the CDA ('230(e)(2)) includes state law claims (i.e., CDA immunity does not extend to state IP claims). The court explicitly rejected the Ninth Circuit's holding in Perfect 10, as well as that court's underlying policy rationale, as not supported by canons of statutory interpretation. It also relied heavily on Professor McCarthy's Rights of Publicity treatise that characterizes the right of publicity as an intellectual property right and opines that Section 230 “does not apply to a claim for infringement of right to publicity by virtue of 230(e)(2).” Friendfinder, 540 F.Supp.2d at 302 (citing McCarthy, Rights of Publicity, 3.42).

The Ninth Circuit's 'More Uniform' Federal Approach

The Ninth Circuit position certainly creates a more uniform federal approach and seems to further Congress' intent to foster the development of online publishing by shielding publishers from state law claims that would hold them liable as the publisher or speaker of information provided by another content provider. However, unless the Supreme Court resolves this split, sponsors of national UGC campaigns will remain at risk of claims from UGC that infringes rights of publicity or otherwise violates state laws that sound in concepts that can be characterized as intellectual property.

Conclusion

While the CDA may not provide immunity for right of publicity and other state IP-based claims outside the Ninth Circuit, and certainly does not protect against federal IP claims, it does provide an important bar against tort claims (e.g., defamation and privacy), and likely unfair business-practices claims (e.g., Cal. Bus & Prof. Code '17200). Sponsors should seek to develop and operate UGC programs in a manner designed to qualify for the scope of CDA immunity.

In addition, advertisers should consider structural approaches to UGC campaigns that may present defenses to right of publicity claims and other non-copyright intellectual property claims not covered by a potential DMCA safe harbor.

Alan L. Friel is a partner and Jesse M. Brody is an associate at the international law firm of Edwards Wildman Palmer LLP, in its Los Angeles office. They may be reached at [email protected] and [email protected]. Friel is a member of the Board of Editors of our sibling newsletter, e-Commerce Law & Strategy, in which this article originally appeared.