Third Circuit: Facebook Not Immune to Right of Publicity Claims Under IP Carve-Out of Section 230

By Matthew Schutte
September 28, 2021

“Because trademark and the right to publicity are analogues, the legal definition including trademark also supports including the right of publicity as ‘intellectual property.’” – Third Circuit

On September 23, the U.S. Court of Appeals for the Third Circuit reversed in part a decision by the U.S. District Court for the Eastern District of Pennsylvania, ultimately holding that Karen Hepp’s complaint against Facebook was not barred by Section 230 of the Communications Decency Act of 1996.

Right of Publicity Complaint

Facebook - https://depositphotos.com/188830032/stock-photo-broken-plate-facebook-logo-gavel.htmlIn 2018, Hepp was informed by a coworker that a photo of her was being used online. The photo of Hepp was taken without her knowledge or consent and she never authorized the use of the image in any advertisements.

Hepp’s complaint cited two sets of posts online of the photo, which Hepp alleged under Pennsylvania law violated her right to publicity. The first post appeared on Facebook as an advertisement to a dating app. The advertisement encouraged Facebook users to use the app and used the image of Hepp to promote the dating service. The second post appeared on Reddit, where a user linked to a post on Imgur. The Reddit post was upvoted hundreds of times and incited indecent user commentary regarding the photo of Hepp.

Based on two state-law claims, Hepp sued Facebook, Reddit and Imgur for violating Pennsylvania’s right of publicity statute and for violating Pennsylvania’s common law. The district court dismissed Hepp’s complaint holding all three of the companies were entitled to immunity under Section 230 of the Communications Decency Act (the Act). The district court held the Section 230(e)(2) limitation did not apply to state law violations.

Jurisdiction

The Third Circuit began its analysis by deciding whether the district court had personal jurisdiction over Reddit and Imgur. Facebook had already conceded the district court had personal jurisdiction over it. Citing Ford Motor Co. v. Montana Eighth Judicial District Court (U.S. Supreme Court, 2021), the Third Circuit found that the district court lack jurisdiction over Reddit and Imgur.

Personal jurisdiction can be either general or specific. General jurisdiction exists if a company is “essentially at home” where the lawsuit has been brought. Reddit and Imgur are not at home in Pennsylvania, therefore general jurisdiction does not apply.

The Third Circuit applied the Supreme Court’s specific jurisdiction doctrine, which is a two-prong test to determine whether specific jurisdiction applies. Reddit and Imgur conceded that the first prong was satisfied because they have minimum contacts within Pennsylvania to reach out and do business in Pennsylvania. The second prong requires that these contacts give rise to the plaintiff’s claim. The Third Circuit found that the contacts that Hepp alleged Reddit and Imgur had did not relate to the misappropriation of the use of Hepp’s likeness.

Facebook’s Immunity under Section 230

The purpose of Section 230 of the Act was to promote the internet by fostering a free market online while eliminating all objectionable content. Section 230(c) bars attempts to websites as publishers or speakers of the content that is posted by others. This protection was used to encourage companies to host content from third-parties.

Section 230(e) carves out five limitations to the provisions provided by Section 230(c). One such limitation is on intellectual property. The provision strictly recognizes that “nothing in [§ 230] shall be construed to limit or expand any law relating to intellectual property.” The Third Circuit stated that Hepp’s appeal turns on whether Facebook is immune under Section 230(c) or whether Hepp’s claims fall outside the reach of Section 230(c) because of the limitations in Section 230(e).

The court performed a two-step analysis to decide this question. First, the court analyzed whether Section 230(e)(2) can be applied to state law claims. Secondly, the court had to determine whether Section 230(e)(2) applied to Hepp’s statutory claim.

Third Circuit Interprets Section 230(e)

The Third Circuit noted that there have been few cases since the inception of the Act that attempted to interpret Section 230’s IP provision. The court first cited Universal Communications Systems, Inc. v. Lycos Inc. (U.S. Court of Appeals for First Circuit, 2007) regarding previous decisions that examined the IP provision. The First Circuit in Lycos concluded that Section 230(e)(2) preserved the state law claim because trademark injuries arise improper association between the mark and something else imitating the mark, not from criticisms that lead to reputational harm.

After Lycos, the Ninth Circuit decided a case which went the other way. In Perfect 10, Inc. v. CCBill LLC (U.S. Supreme Court, 2007), the Ninth Circuit held that Section 230(e)(2) included only federal IP because the Act’s policy goal of promoting the internet would be adversely affected the federal immunity varied based on state laws. The final case the court found of note, Atlantic Recording Corp. v. Project Playlist, Inc. (U.S. District Court S.D.N.Y., 2009), held that had Congress wanted the phrase in the provision to protect strictly federal law then Congress would have made that explicitly clear, but chose not to.

The district court adopted the holding of the Ninth Circuit by holding that Section 230(e)(2)’s limitation applied to federal IP only. Facebook asked the Third Circuit to affirm the holding of the district court on three bases: 1) the text and structure of Section 230(e); 2) the policy provision of the statute; and 3) practical policy reasons. Facebook’s appeal to text and structure asks the court to read Section 230 as a cohesive whole. Facebook suggested that state laws should only apply when specified and federal limitations should be the default for Section 230(e) because state law is not specifically called out.

Citing Atlantic Recording, Hepp argued that her claim arose under state law that pertained to IP which means that Section 230(c) cannot block them. The Third Circuit agreed with Hepp’s argument. The court held that Facebook’s interpretation drifted too far from the natural reading of Section 230(e)(2). Facebook’s other arguments were found to be unpersuasive in the view of the court.

Hepp’s Cause of Action

Finally, the Third Circuit needed to determine whether Hepp’s cause of action was one of these limitations. Facebook argued the right of publicity was rooted in privacy and thus did not fall under traditional IP law. Hepp argued that her right to publicity is considered an IP right by citing Edison v. Edison Polyform Mfg. Co. (N.J. 1907), which held “there was no distinction between the intellectual property protections afforded a person’s name and trademark-like protections for likenesses used on a label.”

The Third Circuit began its analysis by determining the meaning of IP by by researching the meaning of IP in various legal dictionaries which revealed that the right to publicity is recognized as IP in many legal dictionaries. Along with examining legal dictionaries, the Third Circuit cited Zacchini v. Scripps-Howard Board, Co. (U.S. Supreme Court, 1977), where the Supreme Court explained the right to publicity is an individual property right which is closely analogous to trademarks. The court furthered examined this analogy through time, stating:

For example, a New Jersey court in Edison analogized the right in one’s likeness to trademark. That same year, a federal court granted an injunction to stop the “deceptive use of the Emperor Franz Josef’s name and portrait” because it falsely implied his endorsement. More recently, the Florida Supreme Court explained the harm caused by a right to publicity violation is that ‘it associates the individual’s name or . . . personality with something else.’ Because trademark and the right to publicity are analogues, the legal definition including trademark also supports including the right of publicity as ‘intellectual property.’”

The court came to the conclusion that Hepp’s statutory claim arose out of a law that pertained to IP, and thus the limitations outlined in Section 230(e)(2) apply. Therefore, said the court, Facebook is not immune under Section 230(c) and Hepp has standing to bring her suit.

The majority concluded by emphasizing the narrowness of their holding and outlined three main points: 1) The holding does not limit free speech; 2) the court’s holding does not open the floodgates because Pennsylvania’s statute is limited; and 3) the holding offers no opinion about the Pennsylvania common law claim.

Dissent

Judge Robert Cowen dissented in part, arguing that “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.” Since Hepp’s claims “under Pennsylvania law are clearly not coextensive with federal intellectual property laws, the exception does not apply, and Facebook (as well as NKL Associates, S.R.O. (“NKL”)) are entitled to immunity,” Cowen said.

Image Source: Deposit Photos
Author: nextnewmedia
Image ID: 188830032

The Author

Matthew Schutte

Matthew Schutte is a 2L at the University of New Hampshire Franklin Pierce School of Law. Before attending law school, Matthew attended Purdue University where he earned a Bachelor of Science in Mechanical Engineering. Upon graduation from Purdue, Matthew worked at Cummins Inc. as a Test Engineer for two years. Matthew looks forward to applying his technical experience to the field of intellectual property law.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

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  1. Mark Nowotarski September 29, 2021 6:48 am

    I think it’s fascinating that we are seeing the emergence of a new form of intellectual property.

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