Section 230

After Hepp: Section 230 and State Intellectual Property Law

Kelso Horne IV, MJLST Staffer

Although hardly a competitive arena, Section 230(c) of the Communications Decency Act (the “CDA”) is almost certainly the best known of all telecommunications laws in the United States. Shielding Internet Service Providers (“ISPs”) and websites from liability for the content published by their users, § 230(c)’s policy goals are laid out succinctly, if a bit grandly, in § 230(a) and § 230(b).[1] These two sections speak about the internet as a force for economic and social good, characterizing it as a “vibrant and competitive free market” and “a forum for a true diversity of political discourse, unique opportunities for cultural development, and myriad avenues for intellectual activity.”[2] But where §§ 230(a),(b) both speak broadly of a utopian vision for the internet, and (c) grants websites substantial privileges, § 230(e) gets down to brass tacks.[3]

CDA: Goals and Text

The CDA lays out certain limitations on the shield protections provided by § 230(c).[4] Among these is § 230(e)(2) which states in full, “Nothing in this section shall be construed to limit or expand any law pertaining to intellectual property.”[5] This particular section, despite its seeming clarity, has been the subject of litigation for over a decade, and in 2021 a clear circuit split was opened between the 9th and 3rd Circuit Courts over how this short sentence applies to state intellectual property laws. The 9th Circuit Court follows the principle that the policy portions of § 230 as stated in §§ 230(a),(b) should be controlling, and that, as a consequence, state intellectual property claims should be barred. The 3rd Circuit Court follows the principle that the plain text of § 230(e)(2) unambiguously allows for state intellectual property claims.

Who Got There First? Lycos and Perfect 10

In Universal Commc’n Sys., Inc. v. Lycos, Inc., the 1st Circuit Court faced this question obliquely; the court assumed that they were not immunized from state intellectual property law by § 230 and the claims were dismissed, but on different grounds.[6] Consequently, when the 9th Circuit released their opinion in Perfect 10, Inc. v. CCBILL LLC only one month later, they felt free to craft their own rule on the issue.[7] Consisting of a few short paragraphs, the court’s decision on state intellectual property rights is nicely summarized in a short sentence. They stated that “As a practical matter, inclusion of rights protected by state law within the ‘intellectual property’ exemption would fatally undermine the broad grant of immunity provided by the CDA.”[8] The court’s analysis in Perfect 10 was almost entirely based on what allowing state intellectual property claims would do to the policy goals stated in § 230(a) and § 230(b), and did not attempt, or rely on, a particularly thorough reading of § 230(e)(2). Here the court looks at both the policy stated in § 230(a) and § 230(b) and the text of § 230(e)(2) and attempts to rectify them. The court clearly sees the possibility of issues arising from allowing plaintiffs to bring cases through fifty different state systems against websites and ISPs for the postings of their users. This insight may be little more than hindsight, however, given the date of the CDA’s drafting.

Hepp Solidifies a Split

Perfect 10 would remain the authoritative appellate level case on the issue of the CDA and state intellectual property law until 2021, when the 3rd Circuit stepped into the ring.[9] In Hepp v. Facebook, Pennsylvania newsreader Karen Hepp sued Facebook for hosting advertisements promoting a dating website and other services which had used her likeness without her permission.[10] In a much longer analysis, the 3rd Circuit held that the 9th Circuit’s interpretation argued for by Facebook “stray[ed] too far from the natural reading of § 230(e)(2)”.[11] Instead, the 3rd Circuit argued for a closer reading of the text of § 230(e)(2) which they said aligned closely with a more balanced selection of policy goals, including allowance for state intellectual property law.[12] The court also mentions structural arguments relied on by Facebook, mostly examining how narrow the other exceptions in 230(e) are, which the majority states “cuts both ways” since Congress easily cabined meanings when they wanted to.[13]

The dissent in Hepp agreed with the 9th Circuit that the policy goals stated in §§230(a),(b) should be considered controlling.[14] It also noted two cases in other circuits where courts had shown hesitancy towards allowing state intellectual property claims under the CDA to go forward, although both claims had been dismissed on other grounds.[15] Perhaps unsurprisingly, the dissent sees the structural arguments as compelling, and in Facebook’s favor.[16] With the circuits now definitively split on the issue, the text of §§ 230(a),(b) would certainly seem to demand the Supreme Court, or Congress, step in and provide a clear standard.

What Next? Analyzing the CDA

Despite being a pair of decisions ostensibly focused on parsing out what exactly Congress was intending when they drafted § 230, both Perfect 10 and Hepp left out any citation to legislative history when discussing the § 230(e)(2) issue. However, this is not as odd as it seems at first glance. The Communications Decency Act is large, over a hundred pages in length, and § 230 makes up about a page and a half.[17] Most of the content of the legislative reports published after the CDA was passed instead focused on its landmark provisions which attempted, mostly unsuccessfully, to regulate obscene materials on the internet.[18] Section 230 gets a passing mention, less than a page, some of which is taken up with assurances that it would not interfere with civil liability for those engaged in “cancelbotting,” a controversial anti-spam method of the Usenet era.[19] It is perhaps unfair to say that § 230 was an afterthought, but it is likely that lawmakers did not understand its importance at the time of passage. This may be an argument for eschewing the 9th Circuit’s analysis which seemingly imparts the CDA’s drafters with an overly high degree of foresight into § 230’s use by internet companies over a decade later.

Indeed, although one may wish that Congress had drafted it differently, the text of § 230(e)(2) is clear, and the inclusion of “any” as a modifier to “law” makes it difficult to argue that state intellectual property claims are not exempted by the general grant of immunity in § 230.[20] Congressional inaction should not give way to courts stepping in to determine what they believe would be a better Act. Indeed, the 3rd Circuit majority in Hepp may be correct in stating that Congress did in fact want state intellectual property claims to stand. Either way, we are faced with no easy judicial answer; to follow the clear text of the section would be to undermine what many in the e-commerce industry clearly see as an important protection and to follow the purported vision of the Act stated in §§230(a),(b) would be to remove a protection to intellectual property which victims of infringement may use to defend themselves. The circuit split has made it clear that this is a question on which reasonable jurists can disagree. Congress, as an elected body, is in the best position to balance these equities, and they should use their law making powers to definitively clarify the issue.

Notes

[1] 47 U.S.C. § 230.

[2] Id.

[3] 47 U.S.C. § 230(e).

[4] Id.

[5] 47 U.S.C. § 230(e)(2).

[6] Universal v. Lycos, 478 F.3d 413 (1st Cir. 2007)(“UCS’s remaining claim against Lycos was brought under Florida trademark law, alleging dilution of the “UCSY” trade name under Fla. Stat. § 495.151. Claims based on intellectual property laws are not subject to Section 230 immunity.”).

[7] 488 F.3d 1102 (9th Cir. 2007).

[8] Id. at 1119 n.5.

[9] Kyle Jahner, Facebook Ruling Splits Courts Over Liability Shield Limits for IP, Bloomberg Law, (Sep. 28, 2021, 11:32 AM).

[10] 14 F.4th 204, 206-7 (3d Cir. 2021).

[11] Id. at 210.

[12] Id. at 211.

[13] Hepp v. Facebook, 14 F.4th 204 (3d Cir. 2021)(“[T]he structural evidence it cites cuts both ways. Facebook is correct that the 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.”).

[14] 14 F.4th at 216-26 (Cowen, J., dissenting).

[15] Almeida v. Amazon.com, Inc., 456 F.3d 1316 (11th Cir. 2006); Doe v. Backpage.com, LLC, 817 F.3d 12 (1st Cir. 2016).

[16] 14 F.4th at 220 (Cowen, J., dissenting) (“[T]he codified findings and policies clearly tilt the balance in Facebook’s favor.”).

[17] Communications Decency Act of 1996, Pub. L. 104-104, § 509, 110 Stat. 56, 137-39.

[18] H.R. REP. NO. 104-458 at 194 (1996) (Conf. Rep.); S. Rep. No. 104-230 at 194 (1996) (Conf. Rep.).

[19] Benjamin Volpe, From Innovation to Abuse: Does the Internet Still Need Section 230 Immunity?, 68 Cath. U. L. Rev. 597, 602 n.27 (2019); see Denise Pappalardo & Todd Wallack, Antispammers Take Matters Into Their Own Hands, Network World, Aug. 11, 1997, at 8 (“cancelbots are programs that automatically delete Usenet postings by forging cancel messages in the name of the authors. Normally, they are used to delete postings by known spammers. . . .”).

[20] 47 U.S.C. § 230(e)(2).