Technology Law Update

Court Grants CDA Immunity for ISP Spam-Blocking

In the world of NFL football, certain prohibited blocking techniques done by the offense, such as clipping, chop blocking, and illegal blocking from behind, are penalized if the referee sees it on the field and throws a flag.  However, in the world of Internet service providers (ISPs), spam blocking is a big concern and is a desirable feature to Internet users, particularly given the latest report from Sophos stating that spam messages in the first quarter of 2008 accounted for over 90 percent of all email sent. 

However, does an ISP have any protections from the potential “penalty” of legal liability for the good faith blocking of suspected spam that the ISP deems “objectionable”?  A recent decision from the Northern District of Illinois states that under the law, a choice to block objectionable material, even a mistaken one, if made in good faith, cannot be the basis for liability under federal or state law.  In e360Insight, LLC v. Comcast Corp., No. 08-340, 2008 U.S. Dist. LEXIS 29287 (N.D. Ill. Apr. 10, 2008), the court held that the an ISP, that blocked an Internet marketer’s objectionable spam is immune from liability under the "Good Samaritan" provision of the Communications Decency Act (CDA) for claims of tortious interference and unfair practices, among others.  The court dismissed the marketer’s action, finding the ISP immune under Section 230(c)(2)(A) as an provider of an “interactive computer service” that in good faith “restricted access to” material that the provider considered “objectionable.”  The court found that the marketer’s bulk e-mails were the sort of communications that an ISP could deem to be objectionable, noting that the CDA imposes a “subjective element” and only requires that the provider subjectively deem the blocked material objectionable.  In support of this proposition, the court cited the Zango v. Kaspersky Lab decision from last year, where a district court found that a software maker, whose anti-spyware software classified an Internet software maker’s Web-based product as potential malware, was immune from liability under the CDA’s "Good Samaritan" provision. The court also rejected the marketer’s arguments that its emails complied with the CAN-SPAM Act and the ISP had no right to block them, concluding that compliance with the CAN-SPAM Act “does not evict the right of the provider to make its own good faith judgment to block mailings.” 

Ninth Circuit En Banc Affirms CDA Immunity Ruling in Roommates.com Case

In Fair Housing Council v. Roommates.com, the roommate-matching site was sued for violations of the Fair Housing Act. The Ninth Circuit, sitting en banc, has now affirmed the panel ruling that the site may be liable for violations of the FHA because of the manner in which the site elicits information from prospective roommates. To summarize, the site requires users to answer questions about sex, family status and sexual orientation, among other characteristics, in a series of structured questions, and then matches potential roommates on the basis of those characteristics. The concluded that this technique rendered Roommates.com an "information content provider" and thus outside the protection of CDA Section 230:

Here, the part of the profile that is alleged to offend the Fair Housing Act and state housing discrimination laws—the information about sex, family status and sexual orientation—is provided by subscribers in response to Roommate’s questions, which they cannot refuse to answer if they want to use defendant’s services. By requiring subscribers to  provide the information as a condition of accessing its service, and by providing a limited set of pre-populated answers, Roommate becomes much more than a passive transmitter of information provided by others; it becomes the developer, at least in part, of that information. And section 230 provides immunity only if the interactive computer service does not “creat[e] or develop[]” the information “in whole or in part.” See 47 U.S.C.§ 230(f)(3).

What impact will this ruling have? Perhaps very little, due to the unique combination of the nature of the site and the particular law allegedly violated. The Roommates site is structured in such a way that users are required to answer questions concerning protected categories such as sex, family status and sexual orientation in order to use the site. Although the court did not rule on whether the site actually violated the FHA because of the procedural posture of the case, the court noted that the FHA does provide for liability merely for asking questions about protected categories, and therefore the plaintiff had at least a "plausible claim" that the site violated the FHA.

Also, keep in mind that the Seventh Circuit ruled very recently that online site Craigslist is not liable under the FHA for discriminatory postings by its users, noting that the site does not structure the information provided by users according to discriminatory criteria. The Ninth Circuit expressed the view that its ruling is consistent with the Craigslist ruling, similarly distinguishing comments by users posted in the free form "additional comments" portion of a user's profile from information elicited via a structured questionnaire:

Websites are complicated enterprises, and there will always be close cases where a clever lawyer could argue that something the website operator did encouraged the illegality. Such close cases, we believe, must be resolved in favor of immunity, lest we cut the heart out of section 230 by forcing websites to face death by ten thousand duck-bites, fighting off claims that they promoted or encouraged—or at least tacitly assented to—the illegality of third parties. Where it is very clear that the website directly participates in developing the alleged illegality—as it is clear here with respect to Roommate’s questions, answers and the resulting profile pages—immunity will be lost. But in cases of enhancement by implication or development by inference—such as with respect to the “Additional Comments” here—section 230 must be interpreted to protect websites not  merely from ultimate liability, but from having to fight costly and protracted legal battles.

Thus, as we suggested in our previous post following oral argument the Roommates case, CDA Section 230 immunity may depend upon site design, at least in the Ninth Circuit.

Fair Housing Council of San Fernando Valley v. Roomates.com, LLC, No. 04-56916 (9th Cir. Apr. 3, 2008)

Does CDA Section 230 Protect Web Sites From State Law Right of Publicity Claims? One Court Says "No."

Section 230 of the Communications Decency Act protects Web site owners and other providers of "interactive computer services" from many types of claims based on content provided by third parties, but the statute contains a number of exceptions. One of the most significant exceptions is that for intellectual property claims. 47 U.S.C. 230(e) provides: "Nothing in this section shall be construed to limit or expand any law pertaining to intellectual property." Thus, a Web site owner remains open to liability for third party content under "intellectual property" laws.

The Copyright Act clearly is a "law pertaining to intellectual property," and thus the CDA does not protect Web site owners from copyright claims based on third party content, but Web site owners may seek protection from those claims under the safe harbor provisions of the Digital Millenium Copyright Act. Trademark laws also pertain to intellectual property, but there is no safe harbor law to protect Web site owners from trademark-related claims. Thus, they are left open to claims by trademark owners, as evidenced by the current litigation by Tiffany seeking to hold the eBay auction site liable under trademark laws for fake merchandise sold by eBay users.

But what about state law right of publicity claims? Are they claims based on laws "pertaining to intellectual property"?

In one of the Perfect 10 cases in the Ninth Circuit, the court noted the variety of state right of publicity laws, and the difficulty of classifying them. Rather than ruling on the proper characterization of those laws, the court held that the term "intellectual property" in the CDA Section 230(e) refers only to federal intellectual property rights, because allowing the states' varying definitions of intellectual property to "dictate the contours of [CDA] immunity would be contrary to Congress's expressed goal" of fostering the Internet." Perfect 10, Inc. v. CCBill LLC, 488 F.3d 1102  (9th Cir. 2007). As a result, Perfect 10's claims based upon the rights of publicity of the models depicted in its adult images (which rights the models assigned to Perfect 10) were not within the intellectual property exception to CDA Section 230 immunity and were thus precluded by Section 230.

A district court in the First Circuit has now squarely rejected the Ninth Circuit approach, ruling in Doe v. Friendfinder Network, Inc. (D. N.H. Mar. 27, 2008) that right of publicity laws are laws "pertaining to intellectual property," and thus claims under such laws are not precluded by Section 230 immunity:

    ... This court has no reason to believe that reading § 230(e)(2) to exempt state intellectual property law would place any materially greater burden on service providers than they face by having to comply with federal intellectual property law--an obligation that persists under even Perfect 10's construction of the CDA. That court’s view that “inclusion of rights protected by state law within the ‘intellectual property’ exemption would fatally undermine the broad grant of immunity provided by the CDA,” 488 F.3d at 1119 n.7, is simply unsupported.
    Thus, even if it were free to disregard the plain language of § 230(e)(2), this court cannot accept the defendants’ claim at oral argument that allowing state-law intellectual property claims to survive the CDA would have a “devastating” impact on the internet. Despite the general consensus before the Perfect 10 decision that the CDA did not shield service providers from state intellectual property law, both the internet and so-called “e-commerce” remain alive and well, and show no signs of imminent collapse.  *** Indeed, while protecting third-party intellectual property rights no doubt presents some challenges for service providers like the defendants, those challenges would appear to be simply a cost of doing business on-line. They certainly cannot support judicially rewriting the CDA, in any event.

The plaintiff in Doe v. Friendfinder alleged that she was the subject of a false profile posted by an anonymous party on an adult social networking site. Among other claims, she alleged that the false profile violated her "Invasion of Privacy/Intellectual Property Rights" under New Hampshire law.  Having held that a right of publicity claim is not precluded under Section 230, the court embarked upon exactly the kind of fine-grained analysis of the nature of the rights being asserted that the Ninth Circuit rejected in Perfect 10 v. CCBill. The court concluded that in her "Invasion of Privacy/Intellectual Property Rights" count, the plaintiff was asserting four privacy torts recognized by the New Hampshire Supreme Court, only one of which constituted a right of publicity claim. To the extent that the plaintiff was asserting invasion of privacy claims, the court concluded, those claims were precluded under Section 230:

While the plaintiff objects to the dismissal of any part of Count I on the ground that it asserts “intellectual property rights” under § 230(e)(2), her argument and authorities on that score address only the fourth theory, commonly known as a “right of publicity” claim. See, e.g., Carson v. Here’s Johnny Portable Toilets, Inc., 698 F.2d 831, 834 (6th Cir. 1983). As the plaintiff points out, “the right of publicity is a widely recognized intellectual property right.” Almeida, 456 F.3d at 1322 (citing authorities). Such a claim therefore arises out of a “law pertaining to intellectual property” within the meaning of the statute. See 1 McCarthy, Rights of Publicity, § 3:42 (opining that § 230 immunity does not apply to claim for infringement of right to publicity by virtue of § 230(e)(2)).

The other three torts encompassed by the “right of privacy” rubric, however, do not fit that description. Unlike a violation of the right to publicity, these causes of action--intrusion upon seclusion, publication of private facts, and casting in false light--protect “a personal right, peculiar to the individual whose privacy is invaded” which cannot be transferred like other property interests. *** The plaintiffs’ claims under these branches of the privacy doctrine, then, do not sound in “law pertaining to intellectual property,” and she offers no authority or argument to the contrary. While § 230(e)(2) exempts her right of publicity claim from the immunity provision of the CDA, then, that provision applies with full force to the other invasion of privacy claims asserted in her complaint.

The end result in Friendfinder is the dismissal of most of the plaintiff's claims, except her right of publicity claim, along with several trademark claims. Those claims are interesting all by themselves. The plaintiff alleged that Friendfinder used her false profile in its advertising and promotional efforts, giving rise to false advertising and false designation of origin claims under the Lanham Act. The court refused to dismiss those claims, rejecting the argument that such claims are limited to celebrities.