This one could be headed to the Supreme Court. In Hepp v. Facebook (Nos. 20-2725 & 2885, 3d Cir., 9/23/2021), https://www2.ca3.uscourts.gov/opinarch/202725p.pdf, the Third Circuit Court of Appeals created a split in the circuits on an important issue, the Ninth Circuit having ruled the other way in Perfect 10, Inc. v. CCBill LLC, 488 F.3d 1102 (9th Cir. 2007). Both cases were 2-1 decisions with vigorous dissenting opinions.
Karen Hepp is a Philadelphia newscaster (https://www.fox29.com/person/h/karen-hepp) with a good reputation as a “community leader” and “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.” Nevertheless, a photo of Hepp (taken by an unknown person without Hepp’s knowledge or consent) appeared on Facebook in an advertisement for a dating app. The ad “used Hepp’s image to promote its dating service [and] encouraged Facebok users to ‘meet and chat with single women near you.’”
Hepp sued Facebook under Pennsylvania’s “right of publicity” statute: “Any natural person whose name or likeness has commercial value and is used for any commercial or advertising purpose without the written consent of such natural person…may bring an action to enjoin such unauthorized use and to recover damages for any loss or injury sustained by such use.” The district court dismissed the complaint with prejudice, holding that § 230 of the Communications Decency Act immunized Facebook from liability and that § 230(e)(2) of the Act, which prevents § 230 from affecting “any law pertaining to intellectual property,” does not apply to violations of state law. The court of appeals reversed.
The majority opinion summarizes § 230 and the intellectual property exception as succinctly as possible:
Passed in 1996, Section 230 of the Communications Decency Act was intended to promote the internet. It specifically sought to preserve “the vibrant and competitive free market” – “unfettered by Federal or State regulation.” The Act also promoted filtering technology and the vigorous enforcement of criminal obscenity laws. In essence, Congress fostered a largely unregulated free market online while snuffing out certain objectionable content. [Citations omitted.]
Section 230(c) strikes the balance. It provides “Good Samaritan” protection, which enables “blocking and screening of offensive material”…. [It] bars attempts to treat websites as publishers or speakers of content posted by others. And it encourages companies to host and moderate third-party content by immunizing them from certain moderation decisions. In other words, it forgoes some publisher liability and paves the way for service providers to make their own moderation decisions.
Lest the liability provisions in § 230(c) be read too broadly, however, the Act also carves out five limitations in § 230(e). Subsection (e) ensures several legal domains remain unaffected by §230(c). Most relevant here, § 230 has “[n]o effect on intellectual property.” § 230(e)(2). Indeed, “[n]othing in [§ 230] shall be construed to limit or expand any law pertaining to intellectual property.” Similarly, § 230(c) does not affect federal criminal law, communications privacy law, or sex trafficking law. Among these 11 limitations, state law is mentioned several times. For instance, in the communications privacy and sex trafficking domains, “similar” or coextensive state laws also fall outside § 230(c)’s scope. Finally, the Act also provides a general state law limitation, stating consistent state laws are not affected. In sum, § 230(e) cabins the reach of the Act’s liability provisions. [Some citations omitted.]
Having set the stage, the court defines its task as follows: “This appeal turns on whether § 230(c) makes Facebook immune or whether § 230(e)(2) places Hepp’s claims outside § 230(c)’s reach. We resolve that issue in two steps. First, we consider whether § 230(e)(2) can apply to any state law claims. We then turn to whether § 230(e)(2) applies to Hepp’s statutory claim.”
There wasn’t much precedent to aid the court in answering those questions – as it states at the outset, “In the twenty-five years since the Communications Decency Act was passed, there are precious few cases interpreting § 230’s intellectual property provision.” That said, the court answered the first question in the affirmative, based largely on its agreement with Atlantic Recording Corp. v. Project Playlist, Inc., 603 F.Supp. 2d 690 (S.D.N.Y. 2009), in which the district court rather acerbically remarked that, given the references to "federal" and "state" law in § 230(e)'s subsections, “if Congress wanted the phrase ‘any law pertaining to intellectual property’ to actually mean ‘any federal law pertaining to intellectual property,’ it knew how to make that clear….” (Emphasis in original.) The court then proceeded to answer the second question in the affirmative as well, based largely on definitions of the term “intellectual property” in both legal and general purpose dictionaries. The court cited an authoritative source for this procedure: “Absent unanimity about the meaning of ‘intellectual property’, we survey dictionary definitions…. See generally Antonin Scalia & Bryan A. Garner, Reading Law 417 (2012) (explaining that ‘comparative weighing of dictionaries is often necessary’).”
As I mentioned above, this was a 2-1 decision. In the dissent’s view, “the ‘intellectual property’ exception or exclusion to immunity under § 230(e)(2)… 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.” The dissenting opinion is forceful and in many ways compelling. Certainly this is an issue on which reasonable legal minds can differ.
You can be sure that Facebook will file a petition for certiorari. As the Third Circuit noted, the scope of the intellectual property exception has not been heavily litigated, so I think it’s unlikely the Supreme Court will choose to hear this case. But you never know -- it just might.
