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9th Circuit En Banc Decision Denies Roommates.com Section 230 Immunity

Published by Bertie Cheng May 1st, 2008 in CDA 230. 0 Comments

On April 3, the 9th Circuit handed down its eagerly awaited en banc decision in Fair Housing Council of San Fernando Valley v. Roommates.com, LLC, Nos. 04-56916, 04-57173, 2008 WL 879293 (9th Cir. April 3, 2008), holding that Section 230 of the Communications Decency Act does not immunize defendant Roommates.com (“Roommate”) for some of the site’s content because of the way it collected and filtered user information. Namely, the site requires users to identify their gender, sexual orientation and familial status and then uses that information to send e-mail communications to its customers with compatible preferences.

The CDA § 230 states: “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” Under § 230 an “information content provider” is defined as one who is “responsible, in whole or in part, for the creation or development of” content.

First, the court held Roommate could not be immunized for the questions it posed via drop down menus.

The FHA makes it unlawful to ask certain discriminatory questions for a very good reason: Unlawful questions solicit (a.k.a.“develop”) unlawful answers. Not only does Roommate ask these questions, Roommate makes answering the discriminatory questions a condition of doing business. This is no different from a real estate broker in real life saying, “Tell me whether you’re Jewish or you can find yourself another broker.”When a business enterprise extracts such information from potential customers as a condition of accepting them as clients, it is no stretch to say that the enterprise is responsible, at least in part, for developing that information.

Id. at *4.

Furthermore, the court held Roommate could not be immunized by § 230 based on the way it channeled and filtered information.

Here, Roommate’s connection to the discriminatory filtering process is direct and palpable: Roommate designed its search and email systems to limit the listings available to subscribers based on sex, sexual orientation and presence of children. Roommate selected the criteria used to hide listings, and Councils allege that the act of hiding certain listings is itself unlawful under the Fair Housing Act, which prohibits brokers from steering clients in accordance with discriminatory preferences. We need not decide the merits of Councils’ claim to hold that Roommate is sufficiently involved with the design and operation of the search and email systems-which are engineered to limit access to housing on the basis of the protected characteristics elicited by the registration process-so as to forfeit any immunity to which it was otherwise entitled under section 230.

Id. at *7.

The court arrived at the aforementioned conclusion by defining “development” as follows.

We believe that both the immunity for passive conduits and the exception for co-developers must be given their proper scope and, to that end, we interpret the term “development” as referring not merely to augmenting the content generally, but to materially contributing to its alleged unlawfulness. In other words, a website helps to develop unlawful content, and thus falls within the exception to section 230, if it contributes materially to the alleged illegality of the conduct.”

Id. at *5.

The court, in an attempt to clarify the meaning of “develop” may have broadened (or at least blurred) its definition. Drawing the line as to whether an interactive service provider is a “developer” of information may become more difficult in the future.

However, the 9th Circuit held that Roommate would be immunized by § 230 for what people wrote in response to the “Additional Comments” section, because the input field was open-ended.

Lurking behind the holding could be the view that the internet has matured and is no longer a new medium to be treated with deference in order to let it develop.

The Internet is no longer a fragile new means of communication that could easily be smothered in the cradle by overzealous enforcement of laws and regulations applicable to brick-and-mortar businesses. Rather, it has become a dominant-perhaps the preeminent-means through which commerce is conducted. And its vast reach into the lives of millions is exactly why we must be careful not to exceed the scope of the immunity provided by Congress and thus give online businesses an unfair advantage over their real-world counterparts, which must comply with laws of general applicability.

Id. at *3, n.15.

Ah, the pendulum has indeed begun to swing away from broad § 230 immunity. As most web services gain their functionality through channeling and filtering information, expect plaintiffs to read the holding of this decision broadly.

Section 230 of the Communications Decency Act still a bar to suit, even if website operator is on notice that content is potentially defamatory

Published by Bertie Cheng March 19th, 2008 in CDA 230 and Defamation. 0 Comments

In an online defamation action, Global Royalties, Ltd. v. Xcentric Ventures, LLC, No. CV-07-0956-PHX-FJM, 2008 WL 565102 (D. Ariz. Feb. 28, 2008), the District Court of Arizona dismissed plaintiff Global Royalties, Ltd.’s amended complaint on the basis of Section 230 of the Communications Decency Act. Section 230 states, “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”

The defendants operate a website called Ripoff Report, located at www.ripoffreport.com, where visitors are invited and encouraged to post consumer complaints. A Ripoff Report visitor named Spencer Sullivan, who is not a party to this action, had posted three entries complaining about the plaintiff, a company that brokers investments in gemstones. Afterwards, Sullivan contacted the defendants and asked them to remove his entries, but the defendants refused to remove them.

The court held that, even if the defendants were on notice that the posts were potentially defamatory, Section 230 bars the defamation claim. “We conclude that liability based on an author’s notice, workable or not, is without statutory support and is contrary to well-settled precedent that the CDA is a complete bar to suit against a website operator for its exercise of a publisher’s traditional editorial functions-such as deciding whether to publish, withdraw, postpone or alter content.” Xcentric Ventures, 2008 WL 565102 at *3. (citations omitted)

Interestingly, the court may have stated the law more broadly than it had intended. Instead of the Section 230 acting a complete bar to suit against website operators for exercising a publisher’s editorial functions, Section 230 has been held to be a complete bar to suit against website operators despite any editorial functions that they may exercise on content provided by third parties.

The plaintiff also attempted to argue that the defendants created and developed some of the content on the site by employing category tags with preset text. In order to post on the defendants’ site, visitors are required to select a category with which to label their complaint. Sullivan chose the category “Con Artists” from a list provided by defendants to label one of his posts. Plaintiff attempted to rely on Fair Housing Council of San Fernando Valley v. Roommates.com, LLC, 489 F.3d 921 (9th Cir.2007), reh’g granted, 506 F.3d 716 (9th Cir.2007), which based its holding partially on such structured inputs.

The court properly declined to give Roommates.com any consideration, as the 9th Circuit’s decision has been vacated and will be superseded by the forthcoming en banc opinion. The court also rejected plaintiff’s request to stay the case pending the en banc opinion, stating the following: “Believing that Fair Housing is analogous to this action, plaintiffs have filed a motion to stay until the Ninth Circuit issues its en banc opinion. We reject that suggestion. There is no reason for this action to remain on our docket until another court issues an opinion which may or may not be binding, or even persuasive, on these issues.”

Warner Bros. Records and other record labels sue SeeqPod, Inc. for copyright infringement

Published by Bertie Cheng February 27th, 2008 in DMCA and Copyright. 0 Comments

On January 18, Warner Bros. Records, Inc. and other record labels brought a copyright infringement lawsuit against SeeqPod, Inc., a music search engine that searches for playable audio and video content residing on the world wide web. Like any other search engine (such as Yahoo and Google), SeeqPod crawls, indexes, searches and displays search results; the content it crawls, indexes, searches and displays is hosted on other sites. The user is then able to stream the content found by SeeqPod by clicking on a link to the content on the SeeqPod interface; the content is not downloaded onto the user’s computer. Given the circumstances, the record labels may be facing an uphill battle.

Initially, search engines have been moderately successful in dismissing claims for direct copyright infringement. For example, the 9th Circuit in Perfect 10 v. Amazon.com et al. held that Google’s in-line linking of full-sized images hosted on other servers did not amount to direct copyright infringement. (The court in Perfect 10 opened the door as to whether such activity can amount to contributory copyright infringement, however, and that matter has yet to be decided by the district court upon remand.)

Secondly, the DMCA take-down provision provides a shortcut for plaintiffs to demand the removal of infringing content, and this shortcut allows for infringing content to be removed without a party having to resort to a lawsuit. However, as services such as SeeqPod become more robust and sophisticated in locating content on the web, and more and more infringing content becomes accessible to users as a result of these services, parties suffering infringements have become increasingly unhappy with the DMCA safe harbor scheme of contacting internet service providers directly to remove infringing content in each instance of infringement, as the content to be policed has become so voluminous. The SeeqPod case is yet another case that has been filed recently to challenge services that are arguably DMCA compliant. (Universal v. Veoh, Viacom v. YouTube, etc.)

The complaint in Warner v. SeeqPod notes that although SeeqPod describes itself as a search engine, SeeqPod “in fact targets a particular type of content – music – that SeeqPod knows is overwhelmingly copyrighted and posted without authorization from copyright owners.” Warner Bros. specifically accuses SeeqPod of knowingly using infringing material to increase its audience. However, in the DMCA scheme, and as the law stands now, an internet service provider does not “know” whether any particular material is infringing until it receives notice about specific instances of infringement or if a cursory glance on the internet service provider’s site shows obvious “red flags” such as words like “pirate” or “bootleg” indicating the site is hosting or providing access to pirated content. Corbis Corporation v. Amazon.com, Inc., et al., 351 F.Supp. 2d 1090 (W.D. Wash. 2004).

An online service provider acting as an “information location tool” such as SeeqPod is immune from liability if it “does not have actual knowledge that the material or activity is infringing” or “in the absence of such actual knowledge, is not aware of facts or circumstances from which infringing activity is apparent.” And “upon obtaining such knowledge or awareness, acts expeditiously to remove, or disable access to, the material.” 17 U.S.C. §512(d).

If SeeqPod’s take-down policy is compliant with the DMCA, then it appears that SeeqPod may be protected by the DMCA safe harbor provisions. However, this lawsuit is an effort to change the present approach of the law. The record label plaintiffs are trying to convince the court that SeeqPod should not be treated as a search engine, because the service is not just a search engine but “an unlawful music service that directly engages in, encourages, and facilitates the mass infringement of Plaintiffs’ and other intellectual property owner’ copyrighted works.”

Another possible reason why the plaintiffs have instituted this suit is to strong-arm SeeqPod into paying them license fees or entering into a revenue share agreement as part of a settlement, as Warner did with Imeem, a content sharing service, last year.

Eastern District of Kentucky holds that search engine keyword-buys might be a use in commerce

Published by Bertie Cheng February 20th, 2008 in Keywords and Trademark. 0 Comments

In a recent case, T.D.I. International, Inc. v. Golf Preservations, Inc., No. 6:07-313-DCR, 2008 WL 294531 (E.D. Ky. Jan. 31, 2008), the Eastern District of Kentucky held, however cautiously, that keyword advertising might be a Lanham Act “use in commerce,” thereby declining to dismiss the Lanham Act claims there at issue.

In T.D.I. International, the Defendants had purchased Plaintiff’s trademark “XGD” as a keyword in order to improve the Defendants’ placement in search engine results.

The court stated the following: “In light of the uncertain state of the law on the specific issue presented in this case, the Court does not find the Defendants’ arguments sufficient to warrant dismissal of the Plaintiffs’ Lanham Act claims at this stage in the proceedings. Accordingly, the Court finds that the Plaintiffs have alleged facts sufficient to state a claim to relief that is plausible on its face.” Id. at 4.

In a footnote, the court did mention that although the Plaintiffs’ trademark claims mostly relate to search engine keyword advertising, the Plaintiffs “have explicitly alleged that the Defendants have otherwise used the XGD trademarks in a manner that violates the Lanham Act.” Id. The court did not describe the nature of these allegations, thus allowing for the possibility that these other allegations are supported by facts illustrating a use in commerce that does not involve keyword advertising.

In any event, the Second Circuit, contrarily, has held search engine keyword-buys are not a “use in commerce.” See, for example, FragranceNet.com, Inc. v. FragranceX.com, Inc., 2007 WL 1821153 (E.D.N.Y. June 12, 2007) and Merck & Co. v. Mediplan Health Consulting, 425 F.Supp.2d 402 (S.D.N.Y. Mar. 30, 2006).

Courts in other Circuits have held the opposite. See, for example, Edina Realty, Inc. v. TheMLSonline.com, Civ. 04-4371JRTFLN, 2006 WL 737064 (D.Minn. March 20, 2006); Buying for the Home, LLC v. Humble Abode, 459 F.Supp.2d 310 (D.N.J. 2006); and J.G. Wentworth SSC Ltd. v. Settlement Funding LLC, No. 06-0597, 2007 WL 30115 (E.D. Pa. Jan. 4, 2007).

Notably, the defendants did not appear to cite FragranceNet.com or Merck & Co., cases that stand for the proposition that buying another’s trademark as a keyword for improved search engine placement is not a “use in commerce.” T.D.I. International was filed 9/11/2007, so FragranceNet.com, Merck & Co., and Hamzik were available to be cited.

Accordingly, while the T.D.I. International case does not explicitly and unequivocally state that keyword advertising is a “use in commerce,” the court does leave the issue open, at least in the Eastern District of Kentucky, which is within the Sixth Circuit.

A not so perfect week for Perfect 10

Published by Bertie Cheng December 7th, 2007 in DMCA, Copyright and CDA 230. 0 Comments

On December 3, 2007 the Ninth Circuit amended its May 16, 2007 opinion in Perfect 10 v. Amazon.com, Inc., 487 F.2d 701 (9th Cir. 2007) on a technical matter. The Ninth Circuit reversed itself as to which party has the burden of proof in proving fair use in the context of a preliminary injunction in a copyright infringement action. In the original opinion, the 9th Circuit held, “We conclude that Perfect 10 is unlikely to be able to overcome Google’s fair use defense and, accordingly, we vacate the preliminary injunction regarding Google’s use of thumbnail images.” Perfect 10 v. Amazon.com, Inc., 487 F.2d at 725. In that opinion, the burden was placed on the plaintiff to prove that the defendant does not have a fair use defense in order to succeed in a preliminary injunction. However, in the December 3 opinion, although the substantive holding regarding fair use remains intact, the Ninth Circuit reversed itself as to which party has the burden of proof. “We conclude that Google is likely to succeed in proving its fair use defense, and accordingly, we vacate the preliminary injunction regarding Google’s use of thumbnail images.” Perfect 10 v. Amazon.com, Inc., — F.3d —, 2007 WL 4225819, *15 (9th Cir. 2007). Thus, the December 3 opinion places the burden on the defendant to establish fair use in order to overcome a motion for preliminary injunction. Copyright owners everywhere breathe a small sigh of relief, because in effect, the Ninth Circuit opinion has lifted some heavy lifting off of copyright plaintiffs’ backs.

In other Perfect 10 news, the U.S. Supreme Court on December 3 denied cert in the Perfect 10 v. CCBill case, in which Perfect 10 sued CCBill and CWIE, two companies that Perfect 10 claimed enabled copyright infringement, violated California state trademark law and other state laws by providing online credit card billing and web hosting services to sites displaying unauthorized copies of Perfect 10’s images.

Author Archive for bhc

9th Circuit En Banc Decision Denies Roommates.com Section 230 Immunity

Section 230 of the Communications Decency Act still a bar to suit, even if website operator is on notice that content is potentially defamatory

Warner Bros. Records and other record labels sue SeeqPod, Inc. for copyright infringement

Eastern District of Kentucky holds that search engine keyword-buys might be a use in commerce

A not so perfect week for Perfect 10

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