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Title 47 U.S.C. § 230 generally blocks lawsuits (e.g., for libel, invasion of privacy, negligence, and the like) against online platforms based on material posted by third parties. Section 230(e)(2) contains an exemption for "any law pertaining to intellectual property"; this means, for instance, that federal trademark and copyright claims are generally allowed to go forward (though subject to their own rules and limitations, such as those set forth in the Digital Millennium Copyright Act).
But what about the so-called "right of publicity," which generally makes actionable certain commercial uses of a person's name or likeness? Is that an exempted "law pertaining to intellectual property," so that right of publicity claims against (say) Facebook based on right of publicity infringements by Facebook users or advertisers can go forward? Or is it a non-intellectual-property claim, which continues to be blocked by § 230? (Similar questions arise about state trademark claims.)
In yesterday's Hepp v. Facebook, a split Third Circuit panel (in an opinion by Judge Thomas Hardiman, joined by Judge Peter Phipps) said the case could go forward; there is now a circuit split on the subject, so it's possible that the Supreme Court will take the matter up. The panel began by concluding that the § 230(e)(2) exemption covered state intellectual property laws as well as federal ones:
Appellant Karen Hepp has worked in the news industry her entire adult life. Presently, she hosts FOX 29's Good Day Philadelphia. As is often the case for television personalities, Hepp's professional success as a newscaster depends in part on her reputation and social media following. She has built an "excellent reputation as a moral and upstanding community leader" and has amassed a sizeable social media following. So Hepp's endorsement can be valuable. Naturally, that value depends on her ability to control the use of her likeness.
In 2018, Hepp was told by coworkers that her photograph was making its way around the internet. The image depicts Hepp in a convenience store, smiling in the center of the frame's foreground. But the photograph was taken without Hepp's knowledge or consent. She knows neither the convenience store's location nor how the image was posted online. And she never authorized the image to be used in online advertisements for erectile dysfunction and dating websites….
[In particular, one such] post—which was an advertisement to a dating app, FirstMet—appeared on Facebook, which is one of the world's largest social media companies. The advertisement used Hepp's image to promote its dating service. And it encouraged Facebook users to "meet and chat with single women near you." …
In the twenty-five years since the Communications Decency Act was passed, there are precious few cases interpreting § 230's intellectual property provision. The first noteworthy case is Universal Communication Systems, Inc. v. Lycos, Inc. (1st Cir. 2007). There, a company sued internet message board providers alleging that some posts contained "false, misleading" content about the company's financial prospects. The suit alleged violations of federal law, as well as trade name dilution in violation of Florida law. The First Circuit treated the Florida dilution claim separately because "[c]laims based on intellectual property laws are not subject to Section 230 immunity." As to the merits of the state-law claim, the court reasoned that "[t]rademark injury arises from an improper association between the mark and [someone else's] products or services"—not from "criticism" leading to reputational harm. See Ultimately, the court held "that even though Section 230 immunity does not apply, the claim was properly dismissed as a matter of [Florida] trademark law" "because of the serious First Amendment issues that would be raised by allowing [Plaintiff's] claim." But that decision was necessary only because the court held § 230(e)(2) preserved the state law claim.
Soon after the First Circuit announced its decision in Lycos, the Ninth Circuit went the other way in Perfect 10, Inc. v. CCBill LLC (9th Cir. 2007). There, a website operator alleged violations of federal law and a state right of publicity law. The district court dismissed the complaint and the Ninth Circuit affirmed, reasoning that federal intellectual property's scope was more established compared to state laws. And it explained the Act's policy goal—to insulate the internet from regulation—would be hindered if federal immunity varied based on state laws. In the Ninth Circuit's view, § 230(e)(2) includes only "federal intellectual property." …
We disagree that "any law pertaining to intellectual property" should be read to mean "any federal law pertaining to intellectual property." … [T]he explicit references to state law in subsection (e) are coextensive with federal laws. But those references also suggest that when Congress wanted to cabin the interpretation about state law, it knew how to do so—and did so explicitly. Because the evidence cuts both ways, the structure does not change the natural meaning. So the text and structure tell us that § 230(e)(2) can apply to federal and state laws that pertain to intellectual property….
[To be sure, in § 230] Congress enacted a pro-free-market policy. But … Section 230's policy goals do not erase state intellectual property rights as against internet service providers…. After all, state property laws—along with contract laws—enable "the resulting formation of effective markets." Because state property rights can facilitate market exchange, interpreting the § 230(e)(2) limitation to include state intellectual property laws tracks Congress's pro-free-market goal. So the enacted policies do not require an alternate reading.
Third, Facebook offers policy arguments independent of the statute's text. According to Facebook, our reading would increase uncertainty about the precise contours of immunity in cases involving state intellectual property law. But policy considerations cannot displace the text….
Even if we considered policy outside the statute's text, it too could cut the other way. For example, if likeness interests are disregarded on the internet, the incentives to build an excellent commercial reputation for endorsements may diminish. That would cut against the statute's explicit policy objectives because information provided by promotional advertisements can enhance market efficiency and vibrancy. So these policy arguments do not carry the day for Facebook either.
The parties present a clear split of persuasive authority. Facebook and its amici offer arguments based on the statute's text and policy considerations. But there are strong textual and policy arguments to the contrary. Because we adhere to the most natural reading of § 230(e)(2)'s text, we hold that § 230(e)(2) is not limited to federal laws. Simply put, a state law can be a "law pertaining to intellectual property," too….
And the panel majority concluded that the right of publicity is indeed an intellectual property law:
Our survey of legal dictionaries reveals "intellectual property" has a recognized meaning which includes the right of publicity. This conclusion follows from several observations.
First, two of the legal dictionaries explicitly list the right of publicity as an intellectual property right. See infra Appendix A (Black's and McCarthy's). These dictionaries are especially apt. Black's is renowned, and McCarthy's directly addresses the subject. A third legal dictionary, Bouvier's, provides more support. It sets forth a test that Pennsylvania's right of publicity statute satisfies because the statute grants people monopolies in their likenesses. The statute also provides for property-like relief, including the ability to obtain damages and injunctions against trespassers. In sum, these definitions provide strong evidence that the term "intellectual property" includes Pennsylvania's statutory right of publicity.
Along with that explicit evidence, the legal definitions provide implicit support as well. For instance, one definition does not mention the right of publicity—but it includes trademark. And that inclusion implies the right to publicity by analogy.
In Zacchini, the Supreme Court explained the right of publicity is an individual property right that is "closely analogous to … patent and copyright" because it focuses "on the right of the individual to reap the reward of his endeavors and [has] little to do with protecting feelings or reputation." That focus also fosters market function by preventing the "unjust enrichment by the theft of goodwill." And just as the right is "closely analogous" to patent and copyright, so too for trademark. Like the right to publicity, trademarks secure commercial goodwill. Trademarks also foster the marketplace because they protect consumers' ability to distinguish between competitors. So the right of publicity and trademark are close analogues….
In conclusion, we hold that Hepp's statutory claim against Facebook arises out of a law pertaining to intellectual property. For that reason, the § 230(e)(2) limit applies, and Facebook is not immune under § 230(c)….
We close by emphasizing the narrowness of our holding. First, it does not threaten free speech. Hepp's statutory claim against Facebook clarifies the point. She alleges her likeness was used to promote a dating service in an advertisement. And she claims that misappropriated the effort she spent to build a valuable reputation, so it could confuse consumers by suggesting she endorses the service. Again, the analogy to trademark is striking. Just as a counterfeit item can misappropriate a trademark owner's goodwill, so too might the unauthorized use of Hepp's image in the ad. Further, both misappropriations could create consumer confusion and undercut efficient incentives. In this way, trademark claims typically avoid violating free speech by addressing misleading commercial speech. So too for Hepp's statutory claim against Facebook. Thus, Hepp's statutory claim against Facebook is about the commercial effect on her intellectual property, not about protected speech.
Second, our holding does not open the floodgates. Pennsylvania's statute is limited. For instance, it provides a right of publicity cause of action only for those whose valuable interest in their likeness "is developed through the investment of time, effort, and money." And we express no opinion as to whether other states' rights of publicity qualify as intellectual property as a matter of federal law….
Judge Robert Cowen dissented in relevant part:
I believe that the "intellectual property" exception or exclusion … ("Nothing in this section shall be construed to limit or expand any law pertaining to intellectual property"), is limited to federal intellectual property laws (i.e., federal patent, copyright, and trademark laws) and—at most—state laws only where they are co-extensive with such federal laws. Because Hepp's statutory and common law "right of publicity" claims under Pennsylvania law are clearly not coextensive with federal intellectual property laws, the exception does not apply ….
Initially, the majority indicates that there is a circuit split between the First and Ninth Circuits regarding the scope of § 230(e)(2). However, there is no existing split in the circuits on this issue. On the contrary, it is the majority that creates such a split.
In Perfect 10, Inc. v. CCBill LLC, the Ninth Circuit did conclude that the intellectual property exception "includes only 'federal intellectual property.'" … [But] the First Circuit [in Universal Communication Systems v. Lycos] simply stated without any further discussion (or even acknowledgement that there could be an issue regarding the scope of the statutory exception) that … "Claims based on intellectual property laws are not subject to Section 230 immunity." It then noted that, while the district court held that the claim was in effect a defamation claim and that defendants thereby would be shielded from the claim by CDA immunity, "[w]e reason somewhat differently, holding that even though Section 230 immunity does not apply, the claim was properly dismissed as a matter of trademark law." Instead of simply applying its purported holding concerning the scope of § 230(e)(2) and state laws, the First Circuit subsequently assumed "without deciding" that the plaintiffs' remaining state law claims "come within the compass of this exception." Jane Doe No. 1 v. Backpage.com, LLC (1st Cir. 2016). It recognized that "[t]he application of the exemption to the appellants' state law claims for the unauthorized use of pictures is not free from doubt." "At least one court of appeals has suggested that state law intellectual property claims are not covered by this exemption. See [Perfect 10]; but cf. Lycos (applying section 230(e)(2) to a claim under state trademark law, albeit without detailed analysis)." … Upholding the dismissal of the plaintiff's claims under state law, the First Circuit explained that "[w]e need not reach either of these issues." See also Almeida v. Amazon.com, Inc. (11th Cir. 2006) (stating that, while district court should have addressed § 230(e)(2) before invoking grant of immunity, it was unnecessary to address difficult issue of applying CDA because Florida right of publicity claim would not withstand motion to dismiss under state law)….
"Facebook's appeal to text and structure rightly urges us to read § 230 as an integrated whole." In short, the other immunity exceptions set forth under subsection (e) refer to only specified federal laws and, in certain instances, to co-extensive state laws…. Given such narrowly circumscribed categories, should § 230(e)(2) be read to apply to "any number of [disparate state] laws that could be characterized as intellectual property laws: trademark, unfair competition, dilution, right of publicity and trade defamation, to name just a few"—which all have "varying causes of action and remedies, and have varying purposes and policy goals," Perfect 10? Would Congress have really gone so far as to grant immunity from a wide range of state and federal laws—including state criminal law—yet permit claims to go forward under the nebulous (and expansive) category of state "intellectual property"/"rights of publicity" laws? …
[And t]he application of § 230(e)(2) to various state "intellectual property" laws would be inconsistent with the objectives of § 230. On the one hand, federal intellectual laws are relatively well established. As Amicus EFF explains in some detail, "copyrights and patents are relatively clear, relatively knowable, and embody a longstanding balance between rightsholders, future creators and inventors, and the public at large." In turn, Facebook notes that "[a] trademark is a very unique type of property." A trademark is defined by the Lanham Act as "any word, name, symbol, or device, or any combination thereof" used by a person "to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown."
On the other hand, "state laws protecting 'intellectual property,' however defined, are by no means uniform," with such laws bearing various names (e.g., trademark, unfair competition, dilution, and right of publicity), legal elements, remedies, and purposes. Such confusion is only magnified by the fact that "material on a website may be viewed across the Internet, and thus in more than one state at a time," and "defendants that are otherwise entitled to CDA immunity will usually be subject to the law of numerous states." Permitting litigation and liability under such a tangle of disparate state law schemes would threaten "the continued development of the Internet" as well as "the vibrant and competitive free market that presently exists for the Internet and other interactive computer services, unfettered by Federal or State regulation"—even though Congress found that the "Internet and other interactive services offer a forum for a true diversity of political discourse, unique opportunities for cultural development, and myriad avenues for intellectual activity" and that the Internet has flourished to the benefit of all Americans, "with a minimum of government regulation." In other words, the imposition of such liability would simply constitute "another form of intrusive government regulation of speech," which Congress sought to prevent in the first place.
"The appearance of near-uniformity in the adoption of some version of the right of publicity belies the degree to which the exact contours of the right differ significantly from jurisdiction to jurisdiction." For example, some states specifically define the aspects of a person's identity that may serve as the basis for the claim, see, e.g., Okla. Stat. Ann. tit. 12, § 1449(A) ("name, voice, signature, photograph, or likeness"); 42 Pa. Cons. Stat. Ann. § 8316(a) ("name or likeness"), while other states evidently bar uses that merely evoke a person, like a modified race car, see Motschenbacher v. R.J. Reynolds Tobacco Co. (9th Cir. 1974), or a celebrity catch-phrase, see Carson v. Here's Johnny Portable Toilets (6th Cir. 1983). "And while most states historically view the right as nondescendible, the modern trend holds it capable of surviving the death of the celebrity." Stacey L. Dugan & Mark Lemley, What the Right of Publicity Can Learn from Trademark Law, 58 Stan. L. Rev. 1161 (2006). Other differences include whether a claim of right must be registered in order to pursue a posthumous claim, whether the claimant must live in the state whose law he or she wishes to invoke, and whether the claimant needs to prove sufficient fame or show that his or her persona has economic value…. Furthermore, it is clear that, at least in certain states, the right of publicity is particularly broad in nature—and certainly broader than the purported federal counterparts. See, e.g., White v. Samsung Elec. Am., Inc. (9th Cir. 1993) (Kozinski, J., dissenting from order rejecting suggestion for rehearing en banc) ("[I]t's now a tort for advertisers to remind the public of a celebrity. Not to use a celebrity's name, voice, signature or likeness; not to imply the celebrity endorses a product; but simply to evoke the celebrity's image in the public's mind. This Orwellian notion withdraws far more from the public domain than prudence and common sense allow. It conflicts with the Copyright Act and the Copyright Clause. It raises serious First Amendment problems. It's bad law, and it deserves a long, hard second look."). …
Internet service providers now face the prospect that so troubled the Ninth Circuit—"Because such laws vary widely from state to state, no litigant will know if he is entitled to immunity for a state claim until a court decides the legal issue." … Such uncertainty as well as the probability of additional litigation in the future together with the real possibility of being held liable under disparate and often very expansive state law "intellectual property" regimes would encourage internet service providers to censor more content—even though Congress "recognized the threat that tort-based lawsuits pose to freedom of speech in the new and burgeoning Internet medium," enacted § 230 "to maintain the robust nature of Internet communication, and, accordingly, to keep government interference in the medium to a minimum," and made the policy choice "not to deter online speech through the separate route of imposing tort liability on companies that serve as intermediaries for other parties' potentially injurious messages." The fact that "defendants that are otherwise entitled to CDA immunity will usually be subject to the law of numerous states," only further compounds the pressure to restrict speech….
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