The post The Ninth Circuit’s Broad (and Wrong) Standards for Conversion–Taylor v. Google (Guest Blog Post) appeared first on Technology & Marketing Law Blog.
]]>Recently, there has been a revival of anemic trespass to chattels claims in California. And so perhaps we should not be surprised that California courts have opened the door to a resurgence in anemic digital conversion claims, as well.
If Taylor v. Google is any indication, that door is now very much ajar.
On February 28th, the Ninth Circuit held that plaintiffs had properly pleaded a conversion claim against Google because Google’s passive data transfers of cellular data had behaved in a way that was inconsistent with the plaintiffs’ property interests. In so doing, they reversed the district court that had previously held that cellular device users’ data allowances under their contracts with cellular service providers did not constitute “property” subject to conversion. The district court ruled that the right of access was defined by their contracts with carriers, and so “cellular data” was a contractual right, not a property right.
There are a few things worth breaking down here. First, this seems to be a significant expansion of the definition of intangible property; Second, this blurs the line between property and contract claims in an area of law that already has lots of problems separating the two; Three, by opening up conversion claims for usage/misappropriation of minuscule quanta of digital data, it seems to undercut the serious and substantial threshold requirement for the tort of conversion.
Expansion of the Definition of Digital Property
It is far from settled law that digital property claims can give rise to conversion claims. Many courts, including the District of Columbia, have rejected the expansion of conversion claims to intangible property, except in limited circumstances where the property represents or “merges with” a tangible item, such as a paper document.
In the Ninth Circuit, the most important case to open the door to a broader category of conversion claims was Kremen v. Cohen from 2003, which held that under California law, an internet domain name was a form of intangible property that could serve as basis for the registrant’s conversion claim. In so doing, the court rejected the strict merger requirement of the Restatement of Torts that most states still adhere to for conversion claims.
While cellular data and domain names are both intangible, this is the first case to categorize cellular data as property capable of exclusive control. It’s not obvious that cellular data is property. And to call it such invites others to categorize other not-so-obvious intangible items as “property” as well.
Blurring the Line Between Contract and Property
The district court rejected the plaintiffs’ conversion claim on the basis that the rights associated with cellular data were defined by the plaintiffs’ contracts with their carriers. As such, to the extent that there is a grievance here, it should be based in contract, not in property.
The appellate court rejected this argument without bothering to argue it.
Cellular data is also capable of exclusive possession or control. It can be “valued, bought and sold,” Kremen, 337 F.3d at 1030; users may transfer their interest in cellular data through mobile hotspots; and the right to transmit cellular data over a cellular network is by its nature restricted to the user, G.S. Rasmussen, 958 F.2d at 903. In addition, the manner in which a user’s exclusive interest in cellular data vests is analogous to that in the utilities context. As is the case for utilities, the user’s claim to exclusive possession or control of cellular data vests when the user causes “an actual diversion and beneficial use of the [data]” by using the cellular network’s bandwidth to make data transfers. See Inyo Consol. Water Co. v. Jess, 119 P. 934, 936 (Cal. 1911); see also Terrace Water Co. v. San Antonio Light & Power Co., 82 P. 562, 563 (Cal. 1905).
It is a hard to know how to categorize valuable, intangible items that are resources in the digital age. But in this instance, cellular data was entirely defined and valued pursuant to the terms of a series of contracts. And the Ninth Circuit ignored that, even though the district court found it dispositive. To ignore such a critical fact when defining cellular data as property means that the Ninth Circuit glossed over and ignored the most complex and important legal question in this case.
Lots of intangible items have value and are bought and sold, but they aren’t traditionally treated as property under the law.
For example, consultants and lawyers charge for their time. And they value and sell it through contracts. Does that make a lawyer’s time property? Not according to our current legal understanding of property rights. And that’s almost certainly a good thing.
If we define property as expansively as the Ninth Circuit has here, lots of things that we don’t think of as property can be labeled as property subject to conversion. And that’s almost certainly a bad thing.
Many online legal domains blur the line between property and contract. We don’t need another.
Mark Lemley observed this nearly twenty years ago, but if you allow private parties to define property rights through contracts, it takes the job of defining property out of the hands of the law and subject to the whims of the preferences of private parties. And since most contracts these days are contracts of adhesion with no room for negotiation, with token forms of notice and consent, that can lead to a parade of horrible second-order negative effects.
Minuscule Quanta of Data and the Serious and Substantial Requirements of Conversion
One of the things that makes conversion a hard tort to plead is that it requires a serious diminution of value of the property where the proper remedy is reimbursement for the total value of the property.
Here, the plaintiffs describe the property that was taken as “capable of exclusive possession and control because it represents a unique quantum of energy that, once used, is gone.”
This is a clever argument because it gets around the substantiality threshold that makes conversion a hard tort to plead.
More than twenty years, the Supreme Court of California explained the relationship between trespass to chattels and conversion in the seminal Internet law case, Intel v. Hamidi:
Dubbed by Prosser the “little brother of conversion,” the tort of trespass to chattels allows recovery for interferences with possession of personal property “not sufficiently important to be classed as conversion, and so to compel the defendant to pay the full value of the thing with which he has interfered.” (Prosser & Keeton, Torts (5th ed.1984) § 14, pp. 85–86.)
Though not amounting to conversion, the defendant’s interference must, to be actionable, have caused some injury to the chattel or to the plaintiff’s rights in it. Under California law, trespass to chattels “lies where an intentional interference with the possession of personal property has proximately *1351 caused injury.” (Thrifty–Tel, Inc. v. Bezenek (1996) 46 Cal.App.4th 1559, 1566, 54 Cal.Rptr.2d 468, italics added.) In cases of interference with possession of personal property not amounting to conversion, “the owner has a cause of action for trespass or case, and may recover only the actual damages suffered by reason of the impairment of the property or the loss of its use.” (Zaslow v. Kroenert, supra, 29 Cal.2d at p. 551, 176 P.2d 1, italics added; accord, Jordan v. Talbot (1961) 55 Cal.2d 597, 610, 12 Cal.Rptr. 488, 361 P.2d 20.) In modern American law generally, “[t]respass remains as an occasional remedy for minor interferences, resulting in some damage, but not sufficiently serious or sufficiently important to amount to the greater tort” of conversion. (Prosser & Keeton, Torts, supra, § 15, p. 90, italics added.)
Intel Corporation v. Hamidi, 30 Cal.4th 1342, 1 Cal.Rptr.3d 32, 71 P.3d 296 (2003).
In sum, trespass to chattels is a lesser intermeddling with the personal property of another, and conversion is a much more serious interference with the personal property of another, where the proper remedy is recovery of the full value of the thing that has been interfered with.
That said, the primary holding of Intel v. Hamidi, the seminal case on trespass to chattels, was that the “tort of trespass to chattels did not encompass electronic communications that neither damaged the recipient computer system nor impaired its functioning.”
A fortiori, the tort of conversion should not encompass online conduct that doesn’t damage a computer system or impair its functioning.
But if the property that is interfered with can be subdivided into minuscule “quanta” and then reaggregated through a class action, then the serious and substantial requirements of the conversion tort can be circumvented, because minuscule quanta have been converted in their entirely. With this clever rearticulation of what is lost, trivial losses of property that should not meet the lower threshold for trespass to chattels, all of the sudden become serious and substantial enough to meet the more rigorous requirements for a conversion claim.
In this instance, I don’t know how much data was passively transferred by Google to give rise to this action, but it was small enough that almost nobody noticed. My first reaction to this case was that surely that meant it wasn’t serious or substantial enough to give rise to a conversion claim. But plaintiffs appear to have succeeded with this workaround.
Conclusion
One thing the Ninth Circuit got right with this opinion was classifying this case as “not appropriate for publication and [] not precedent except as provided by Ninth Circuit Rule 36-3.”
That is the case’s saving grace. But whether this is officially precedent or not, this line of thinking will be delicious chum for plaintiff’s lawyers.
* * *
Eric’s Comment: Cellphone plans often advertise they are “unlimited,” but many Internet access contracts cap the total available amount of data the subscriber can transit. (At home, I’m on one of Comcast’s 1.2T/month plans). For users subject to a capped plan (and how would a sender know if they are or are not?), the opinion suggests that every time anyone shares packets with these users on the Internet, they consume a portion of the capped amount of available data and thus checked off a key prerequisite for conversion. It’s a crazy outcome, and I sure hope that’s not the law.
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]]>The post Tubi’s TOS Formation Fails–Campos v. Tubi appeared first on Technology & Marketing Law Blog.
]]>The account signup page on mobile devices looked like this (Screen 1):
Note the unusual “skip” link in the upper right–what happens if users select it?
If users select “continue with email,” as the court assumes the named plaintiff Campos did, they see this (quite ugly) Screen 2:
What is that background? Blurred out porn?
As usual nowadays for TOS formation cases, the court starts by getting the -wrap nomenclature out of the way:
it is unnecessary to expound on [the wrap nomenclature] in much detail or find a perfectly fitting category here. To clarify the parties’ dispute, Tubi’s registration page fits most closely with the hybridwrap or “sign-in-wrap” camp. Nonetheless, the Court’s duty to inquire into the reasonableness of Tubi’s presentation of its terms and whether Campos objectively assented to them remains unchanged; the basic principles of contract law do not apply differently depending on the type of “wrap” at issue
“Hybridwrap” is another way of saying that the ubiquitous and “well-accepted” -wrap taxonomy is a complete failure. A taxonomical node of “none of the above” would also be accurate.
Turning to the merits, the court concludes that “Tubi has not established that it reasonably communicated the existence of its TOU to Campos.” The court identifies three main problems.
First, the call-to-action has poor visibility:
The Prompt is in the smallest font on the screen, and it is very nearly at the bottom. The relevant text of the Prompt, “By registering, you agree to Tubi TV’s,” is in a gray font that contrasts poorly with the background. To be sure, a user does not seem to need to scroll to see it, a fact that favors Tubi’s position.
I invoke Goldman’s Fourth Rule of Acquisition: the call-to-action should never be the smallest font on the screen (though, to be fair, the words “Have an account?” look slightly smaller).
Second, the court doesn’t like the hyperlink presentation on Screen 1, especially the gray font on a black background:
the hyperlink to its TOU is not reasonably visually conspicuous…The cases and screenshots in Tubi’s Exhibit 1 each involve more conspicuously displayed hyperlinks than Tubi’s TOU hyperlink on the initial registration page at issue here
Third, and perhaps most importantly, the call-to-action is spatially decoupled from the registration:
a reasonable user registering for a Tubi account would not be expected to read [the “Prompt”/call-to-action]. This is because the Prompt on the first screen is not spatially coupled with any mechanism for manifesting assent. Nothing on the screen indicates that clicking one of the “Continue with…” buttons manifests assent to the terms of use; to the contrary, the Prompt indicates that some other action—registering—is required to assent to the TOU. And there is nothing on the first screen of the app that tells one how to register…the Prompt and the manifest assent button (“Register”) are not even on the same screen. Moreover, the prominent and colorful “Continue with…” buttons would be of much more interest and relevance to a prospective Tubi user than would the small and obscure text at the bottom of the first screen. Having been invited to “Continue with” their exploration of the app, it is unlikely that Campos or others would have expected or noticed the “Terms of Use” prompt on the first screen advising that registration (which is otherwise unmentioned on the first screen) equals assent…
That Tubi’s Prompt is on a different screen than the registration button, coupled with the absence of any warning on the registration page that registration equates to assent, weighs heavily against a finding that Tubi reasonably presented the existence of its TOU to Campos
There are several interrelated problems here:
Tubi easily could have avoided these problems. If Tubi had repeated verbatim the call-to-action on the email registration page, it would have been OK in this case (that still wouldn’t address the Google/Facebook bypasses). Even better, if Tubi had included a mandatory checkbox to accept the TOS or an interstitial screen dedicated solely to the TOS, it would have easily succeeded. Rulings like this are why I keep insisting that a proper TOS formation process should have a dedicated click for the TOS, in addition to any clicks associated with proceeding.
As a last-ditch measure, Tubi argues that all consumers assume that services have TOSes. It doesn’t help:
Tubi does not require users to register for an account to watch its content, registration only provides a handful of modest features that are unavailable to unregistered users, and registration is free. There is no indication that Tubi, like various other ad-supported video streaming platforms, allows registered users to comment on its content, generate their own content (e.g., upload their own videos), or otherwise interact with other users—functions that may suggest that account usage may be tied to certain terms and conditions given their hazards. Therefore, Tubi’s site is meaningfully different from other online engagements where consumers may more reasonably expect their conduct and interactions to be subject to terms and conditions (e.g., purchasing goods, paying fee-based subscriptions to access content, or registering accounts for permission to interact with content and/or other users)
Last month, I blogged two cases where courts found enforceable browsewraps (though one was actually a clickthrough) (1, 2). (A reminder: the term “enforceable browsewrap” should be an oxymoron). It is virtually impossible to reconcile those rulings with this one. In particular, one of those rulings, Hawkins v. CMG, also involved a VPPA claim where the court found a successful TOS formation–without any call-to-action at all! The page just linked to the terms, and users were supposed to figure it out. Cut corners on your TOS formation process, and maybe you’ll roll a lucky 7 like CMG did–but you could also roll snake-eyes like Tubi did. Use a 2-click formation process (one click for the TOS, one click to proceed), and you are more likely to sleep soundly like this Cuban dog.
The court also rejects the motion to dismiss the VPPA claim for reasons that made my head hurt. The plaintiff cited disclosures in Tubi’s privacy policy as evidence of Tubi’s VPPA violations, but at the same time the plaintiff’s position is that those disclosures were insufficient to get consumer consent. I’m not really sure how that works.
Case Citation: Campos v. Tubi, Inc., 2024 WL 496234 (N.D. Ill. Feb. 8, 2024). Yesterday, Tubi appealed this ruling to the Seventh Circuit.
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]]>The post Twitter Narrows, But Doesn’t Completely Avoid, a Dangerous Copyright Lawsuit–Concord Music v. X appeared first on Technology & Marketing Law Blog.
]]>Direct Copyright Infringement. The publishers argued that Twitter “transmitted” their works. The court says the tweeter does any “transmitting,” not Twitter or the viewer. This diverges from the Aereo ruling where the only players were the broadcaster, the viewer, and Aereo, so there wasn’t a fourth entity to throw under the bus. The court explains this and other differences from Aereo:
Sadly, the court didn’t and couldn’t say what’s on all of our minds: that the Aereo decision was wrong.
The court summarizes:
X/Twitter, unlike Aereo, did not “transmit” any of the allegedly infringing material in the manner of a cable provider, because it was not the party that initially diverted that material from the intended channels of distribution. X/Twitter was more like a telephone company—providing the mechanism for communication between independent communicators—than like a cable company that actively selects material to make available. The purpose of the Transmit Clause, the Supreme Court acknowledged, was to “erase[] the . . . line between broadcaster and viewer,” but X/Twitter was neither of those things. It was a carrier…
I guess that’s a way to resolve the analysis–but not exactly a satisfying way. Twitter isn’t like a “telephone company” or a “carrier” because it hosts the relevant materials, which phone companies don’t do…and Aereo did. That’s a pretty fundamental factual distinction. But don’t blame this court for the dubious rationale. Blame the Supreme Court for its problematic decision in Aereo.
[An aside: it’s hard to believe the Aereo opinion is a decade old. Time flies.]
Contributory Copyright Infringement. The publishers tried a number of tired/old-school arguments that would categorically hold UGC sites liable for user-caused copyright infringement. The court doesn’t take the bait:
The court summarizes: “Many of the supposedly problematic practices that the plaintiffs identify are unremarkable features of X/Twitter generally that X Corp. has simply failed to fence off completely from infringers.” The DMCA online safe harbors have mooted most of these arguments in practice, but the court says they don’t work as a matter of the prima facie elements either.
Also, the court says: “Any feature that makes a service easier for all of its users will, by definition, also make the service easier for bad actors. The plaintiffs have not identified any basis for concluding that X Corp. was obligated to make its service worse for everyone, just to punish the people who misuse it.” For more on this point, see my Assuming Good Faith Online piece.
Nevertheless, the publishers identify three places where the allegations survive the motion to dismiss:
On the latter point, the court nevertheless makes some defense-favorable points:
Nothing in the Complaint is sufficient to plausibly suggest that a social media platform like X/Twitter has an obligation to suspend or terminate the account of every person who infringes more than once, or even every user who infringes a number of times. Like delays, however, recidivism can exist in degrees….there is no basis in the law for concluding that the operator of a social media platform will face liability simply because it was less draconian in its enforcement than copyright holders would prefer
Vicarious Copyright Infringement. The court narrowly views the degree of culpable control/supervisory power:
The plaintiffs do not allege that X Corp. had the power to oversee users’ actual drafting of the relevant tweets. Nor do they allege that X Corp. had the power to oversee users’ efforts, if any, to obtain authorization from copyright holders before tweeting. The plaintiffs also do not allege that X/Twitter had editorial control over the content of tweets, other than making the yes-or-no decision of whether or not to remove a tweet after it was posted and brought to X Corp.’s attention…
X Corp. undoubtedly had some power over X/Twitter’s users—the way that a company that provides a valued service always has power over the customers who rely on it—but that does not turn customers into even loose equivalents of agents or subordinates.
Implications. Overall, Twitter dismissed much of this case. The court rejected the publishers’ core attempts to overturn decades of precedent and impose copyright liability for basic online functions. Still, surviving the motion to dismiss is a potentially net strategic loss for Twitter.
First, the court didn’t rule on the DMCA online safe harbors, so those remain theoretically available to Twitter. However, if the publishers can show sufficient evidence to support their surviving claims, that evidence will also likely disqualify Twitter from the safe harbors.
Second, by getting past the motion to dismiss, the publishers now can engage in discovery. I imagine they will be thorough. If the publishers find any smoking guns, we’ll hear more about them. And given Twitter’s size, venerability, and post-Musk reductions in T&S staff, I imagine there are some smoking guns to be found. As a result, this case still poses substantial risk to Twitter and the entire Internet ecosystem.
Case Citation: Concord Music Group, Inc. v. X Corp., 2024 WL 945325 (M.D. Tenn. March 5, 2024)
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]]>The post Fifth Circuit Once Again Disregards Supreme Court Precedent and Mangles Section 230–Free Speech Coalition v. Paxton appeared first on Technology & Marketing Law Blog.
]]>To help Texas along with its Conlaw resistance efforts, the Fifth Circuit–a known graveyard of the rule of law–cherrypicks Supreme Court precedent to embrace or disregard as it sees fit. That’s how the Fifth Circuit reaches the risible conclusion that HB 1181 only triggers rational basis review. There’s no point in blogging that conclusion as if it’s legitimate judging.
(If you care for the details, the panel majority claims the 56-year-old Ginsberg opinion, which dealt with offline retailers, governs the Conlaw analysis of the Texas law instead of the squarely on-point 1997 Reno v. ACLU and 2004 Ashcroft v. ACLU opinions, both of which dealt with the Internet. Judge Higginbotham, dissenting in this case, makes appropriate rebuttals).
This post instead focuses the court’s treatment of Section 230, not because the Fifth Circuit got it right (it didn’t), but because this is another entry in the Fifth Circuit’s increasingly unstable Section 230 jurisprudence.
The court starts out with a misreading that Section 230 only applies to removal decisions, not leave-up decisions:
Texas correctly suggests that Congress enacted § 230 to shield against liability for removal, but not promulgation, of ‘offensive material.’…But plaintiffs seek to…make (c)(1) a shield for purposefully putting “offensive material” onto the Internet.
(Note the slippery word “promulgation”–can you think of any more accurate synonyms the panel majority might have used here?)
Leave-up/removal decisions are the exact same decisions. Imposing liability for leave-up decisions necessarily imposes liability for removal decisions. Also, Texas has tried to functionally eliminate services’ discretion to make removal decisions via its social media censorship law–and the Fifth Circuit upheld that law too. Putting the two together, the Fifth Circuit indicates that 230 only applies to removals, but services can’t actually make any removals, so…..I guess Section 230 doesn’t exist in Texas?
The court’s reference to “purposefully” also implies that this panel majority supports a scienter-based exception to Section 230, i.e., services qualify for Section 230 if they lack scienter, but show defense scienter and 230 is toast? I discuss how Section 230 eliminates scienter-based inquiries, and why that’s a good thing, in this paper.
Unfortunately for the panel majority, the pesky 2008 Fifth Circuit ruling in Doe v. MySpace read Section 230 broadly. The Fifth Circuit recently came within 1 vote of repealing that case en banc, and I wrote at the time: “any future Section 230 case heading to the Fifth Circuit faces an extreme risk of judicial activism to overturn the existing Fifth Circuit precedent and disrupt decades of Section 230 jurisprudence.” Indeed, this panel majority has already disregarded SCOTUS precedent, so it’s not going to feel constrained by Fifth Circuit precedent either.
Having previously said that Section 230 only protected removal decisions and not leave-up decisions, the panel majority whipsaws the reader and says Section 230 actually does protect leave-up decisions:
Like cellphone service providers, interactive computer service providers cannot be held liable for harmful communications that they fail to remove. But liability under H.B. 1181 is not like liability under a negligence claim. It is not reliant on the harm done by third-party content. It imposes liability purely based on whether plaintiffs comply with the statute, independently of whether the third-party speech that plaintiffs host harms anybody. As Texas puts it “if a minor circumvents age verification, ignores the health warnings, and is subsequently harmed by third-party content or resulting offline conduct,” Section 230 would kick in and bar liability. That is the nature of Section 230’s protections: to protect a provider from speaker-liability stemming from the speech it hosts.
Among other defects, the analogy to “cellphone service providers” is trash. Cellphone service providers are not legally permitted to listen into their subscribers’ conversations, so they have no power to “remove content” at all. Also, cellphone service providers don’t host speech.
As I said, don’t try to overthink this. The panel majority is playing Calvinball. At one point, the panel majority declares without a whiff of irony that “Plaintiffs mislead the reader.”
The panel majority never says it so clearly, but I think it’s trying to say that the age authentication mandate only regulates the services’ conduct, and thus it doesn’t impose liability for third-party content. A conduct/content distinction is often illusory in the publisher context because editorial decisions pervade the “conduct” of publishing. Furthermore, as I read it, HB 1181 applies equally (as did CDA and COPA) to a website’s publication of its own content and third-party content. The statutory drafting tries to mask that fact by putting the age authentication obligation front-and-center (which itself ought to be enough to trigger First Amendment scrutiny). However, fundamentally, the statute imposes liability for services for publishing third-party content to underage viewers, and Section 230 clearly should apply to that aspect.
This opinion will be appealed to the Supreme Court, alongside other cases over statutes imposing mandatory age authentication. The pro-censorship forces have been angling for an opportunity to challenge Reno v. ACLU and the COPA caselaw, hoping that the Supreme Court will forget or overturn that precedent. This highlights the stakes of this and the other cases on their way to SCOTUS: do the foundational Constitutional law principles that have fostered the Internet’s success over the past 25+ years still apply, or have the rules since changed and opened the door to rampant government censorship? The Internet’s fate–and perhaps the fate of free speech in our country–hangs in the balance.
Case Citation: Free Speech Coalition, Inc. v . Paxton, 2024 WL 982225 (5th Cir. March 7, 2024). Prior blog post.
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]]>The post “Ringless Voicemail” Vendor Wins Section 230 Defense Against FTC–US v. Stratics Networks appeared first on Technology & Marketing Law Blog.
]]>Stratics Networks offers ringless voicemail and VOIP services. The court explains that, with ringless voicemails, “users can mass deliver prerecorded messages directly to recipients’ voicemail inboxes without causing their phones to ring or giving recipients the opportunity to answer or block the call.”
[Note 1: I HATE getting voicemails. I don’t believe I’m the only person who feels this way. My outgoing voicemail message tells people to hang up and send me an email. Unlike voicemail, my email inbox is spam-filtered (unless places like Texas have successfully banned spam filters), and emails are much quicker for me to sort than voicemails. So the idea of getting unwanted and unrequested voicemails is not appealing to me.]
[Note 2: when I worked at the law firm in the 1990s, the firm’s voicemail system allowed senders to send ringless voicemails, i.e., voicemails not preceded by a phone call. I’d be sitting in my office working, and the voicemail light would magically go on without the phone ringing. I’d have to stop what I was doing, pick up the phone, log into the voicemail system, listen to the message, and if it was substantive, take written notes on the voicemail’s content. Ugh, I hated that!]
What is a “Telephone Call”?
The first question the court must resolve is whether ringless voicemails qualify as “telephone calls” for purposes of the Telemarketing Sales Rule, which prohibits deceptive or abusive telemarketing practices. The court says they are:
An interpretation of “telephone call” that does not include ringless voicemail would defy the common meaning of “telephone call.” First, people often leave voicemails when they fail to speak live with their intended recipient. Ringless voicemail is akin to leaving a voicemail when a consumer’s phone is turned off and unable to ring or be answered. Second, most consumers access their voicemail inbox via telephone. Common meaning then suggests the FTC intended to regulate ringless voicemail under the TSR regardless of whether the underlying technology uses telephone wires.
[Note: the court says that most voicemail inboxes are accessed via telephone. OK boomer. I have all of my office voicemails forwarded to my email inbox, where I listen to them. This means I receive my voicemails instantly wherever I am. I don’t use an auto-transcription feature, but that also helps sort voicemails. So listening to voicemails via telephone is so old-school.]
The court is engaging in a standard analysis of technological definitions, which frequently age poorly as the technology evolves. In the old days, a “telephone call” had certain properties. The phone ring would sonically interrupt the recipient, disrupting their concentration or waking them up from sleep. The incoming call would tie up the telephone line so other incoming and outgoing calls weren’t possible. The “call” would be synchronous, i.e., the caller and recipient talked to each other in real-time. “Ringless voicemails” share none of these attributes. In fact, about the only thing ringless voicemails share in common with old-school telemarketing is that both involve the dissemination of audio over an electronic network. So I’m not on the same wavelength as the court about the “common meaning” of a telephone call.
We can test the court’s “common meaning” by noodling what digital voice communications are NOT “telephone calls.” Is a Facetime conversation a “telephone call”? What about a Zoom meeting? If I send an audio message by text message, is that a phone call? These questions brought to mind the old Joffe case, where the held that the TCPA applied to “text calls”–say what??? (See more possibly related blog posts on the incoherence of definitions of various electronic media). Or we can flip this around–would a ringless voicemail qualify as an “email” for CAN-SPAM purposes?
As I wrote in 2005 in the Joffe post:
Regulatory efforts to carve up marketing on a per-technology basis have failed. We can’t separate telephone from email from faxes technologically, so efforts to do so legislatively are bound to lead to weird results like an anti-telemarketing law restricting sending email to a person who will receive it as email.
It’s cool that courts are still wrestling with the same question 20 years later.
Stratics’ Eligibility for Section 23o
Stratics disseminated third-party voicemails using its ringless voicemail technology. This sounds like an easy Section 230 case, no? The court does get there, but in a way that will make your head hurt. The result is a rare FTC loss on Section 230 grounds.
ICS Provider. The court says Stratics qualifies as an “access software provider” because “Stratics provides software allowing users to transmit messages to consumers’ voicemails.” The FTC argued “that because multiple users cannot access the same content, Stratics is not an interactive computer service.” I guess the FTC is taking the position that 230 only applies to public posts, not private messages? That tired argument has failed numerous times before:
Twitter is still an interactive computer service for its direct messages, which are nonpublic, because multiple users can access the site. [Cite to Fields v. Twitter]. Similarly, Stratics does not need to make content publicly available to qualify as an interactive computer service. For example, Zoom still qualifies as an interactive computer service for private video calls because Section 230 only requires that Stratics “provides or enables computer access by multiple users to a computer server.” [Cite to In re Zoom] Finally, the CDA does not require Stratics to distribute content over the internet. For example, Twitter is still an interactive computer service even if some messages are delivered via text messages because users can access the service via the internet. [Cite to Nunes v. Twitter].
To disqualify Stratics as an access software provider, the FTC argued that it was suing over Stratics’ offline conduct. “Plaintiff argues to grant Stratics immunity would be akin to granting a newspaper immunity for publishing defamatory advertisements in hardcopy form because those advertisements were submitted via an online webportal.” If offline distribution was in fact the correct analogy, then I would agree that Section 230 doesn’t apply, as I just blogged earlier this week. However, the court doesn’t see it the FTC’s way: “It ultimately does not matter that voicemail messages are delivered to consumers’ voicemails and are not accessed via a computer. Stratics would be forced to perform the content moderation responsibilities the CDA seeks to avoid if it were held liable.” The court might have strengthened this discussion by expressly saying that Section 230 applies to cyberspace, not only “the Internet,” and that includes electronic networks primarily moving audio.
Publisher/Speaker Claim.
Plaintiff’s Complaint alleges Stratics provided substantial assistance to sellers or telemarketers in violation of the TSR for: (1) initiating outbound prerecorded telephone calls to induce the purchase of goods or services; (2) initiating outbound telephone calls to consumers on the National DNC registry to induce the purchase of goods or services; and (3) failing to disclose the identity of the seller of the goods or services truthfully, promptly, and clearly. Each of these claims derives from Stratics’s status as a publisher or speaker
The court discusses two Section 230 workarounds, neither of which apply.
First, the court says “Section 230 does not immunize providers against content-neutral claims.” The court is referring to HomeAway, but this decontextualized statement invokes the vexing Constitutional terminology about “content-neutral” regulations. (Also, as I repeatedly remind everyone, the phrase “content neutrality” is typically an oxymoron). I think the court is using the phrase to distinguish conduct-based claims from content-based claims? If so, it should have just said that and left the “neutrality” term out of it. In any case, the court says this workaround doesn’t apply:
With respect to content neutrality, each alleged violation is premised on the content of the messages delivered using Stratics’s ringless voicemail system. While Stratics’s conduct—namely its ringless voicemail delivery system—is the basis for its alleged substantial assistance, Stratics is only liable because of the content of the messages delivered. Claims 1 and 2 allege Stratics delivered calls to induce the purchase of goods or services. If Stratics’s customers were not hawking their wares, Stratics would not be liable for providing substantial assistance. Claim 3 alleges Stratics provided substantial assistance to Stratics customers who did not appropriately disclose their identities in attempting to induce the purchase of goods or services. If Stratics’s customers had disclosed their identities, Stratics would not be liable. Accordingly, these claims are not content-neutral….
To avoid liability for providing substantial assistance, Stratics must monitor and screen the content of users’ voicemail messages. The CDA was enacted specifically to avoid imposing these moderation duties on providers.
So messy. Section 230 says websites aren’t liable for third-party content. Stratics disseminated third-party content, and the FTC wants to hold Stratics liable for that content. This isn’t complicated; whereas any judicial inquiry into “content neutrality” is going to create drama–and errors.
Second, the court says that “Section 230 permits claims that do not derive from the defendant’s status as a publisher or speaker…For example, contractual duties, supervisory duties, and tort duties, including a failure to warn, may still be brought against providers because those claims arise outside the zone of free speech and publisher interests Congress sought to protect in enacting the CDA.” That’s a pretty gross oversimplification. If those claims are being wielded to hold defendants liable for third-party content, then Section 230 applies. I think the court is trying to say that the subject matter of the third-party content is a but-for cause of the FTC’s claim; but recall that but-for prerequisite is exactly what the lower court in Neville v. Snap expressly rejected.
In any case, the court responds:
Stratics allegedly provides substantial assistance to sellers and telemarketers by virtue of distributing their content. Distribution of content is quintessential publishing activity.
It really is that simple.
Third-Party Content. “Stratics’s users generate the prerecorded messages distributed using Stratics’s platform. While Stratics developed the ringless voicemail technology at issue, that development goes to how the third-party content is distributed rather than the content itself. Therefore, third parties generate the offensive content alleged in Plaintiff’s Complaint.”
Implications. I’m sure the FTC will appeal this ruling. The FTC hates Section 230, they never want to limit their range of defendants, and they may be concerned that the court’s holding could infect the FTC’s over-interpretation of the FTC Act. On appeal, it wouldn’t surprise me if the appellate court analyzes the case differently. I still think Section 230 should apply, but the Ninth Circuit should get away from any “content neutrality” articulation of Section 230 and provide a cleaner approach to the content/conduct divide. Pending appeals in other cases will also push the Ninth Circuit to clarify the conduct/content distinction, probably before this appeal is heard.
Case Citation: U.S. v. Stratics Networks, Inc., 2024 WL 966380 (S.D. Cal. March 6, 2024)
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]]>The post The SAD Scheme as an Institutional Failure appeared first on Technology & Marketing Law Blog.
]]>The SAD Scheme involves a trademark owner suing dozens/hundreds of defendants using a sealed complaint, getting an ex parte TRO, and then having the online marketplaces freeze the defendants’ accounts and money. The TRO acts like a supernotice compared to the traditional takedown notice: it targets sellers, not individual items; and it implicates their cash from all of their sales, not just the allegedly infringing listings. As a super-notice, it can produce cash payouts from settlements or default judgments (which are enforced against the cash held at the online marketplace, so they have actual value). Even though the TRO is supposed to be temporary, the online marketplaces typically keep the freezes in place longer because of their fear of being liable for recidivist infringers. Mistakes are common in the SAD Scheme, and appeals are almost nonexistent. We consistently see SAD Scheme cases from rightsowners with dubious rights (Emoji, Smiley) and increasingly competitors are using the scheme to sideline their competitors during peak sales seasons.
The SAD Scheme illustrates three essential points about our institutions.
First, the trademark rules on the street can differ widely from the doctrines drawn up in appellate courts. This includes the rules as set by rightsowners in ex parte proceedings, which can deviate widely from standard doctrine–it’s whatever the rightsowners can get the judges to agree to–and the rules set by third-party intermediaries, such as online marketplaces. As another example of the significance of non-appellate law, Google’s trademark policy is the de facto trademark law of online keyword advertising.
Second, the SAD Scheme is swallowing up the rest of trademark law. There are a few thousand non-SAD Scheme trademark cases per year, typically with one defendant or a small number of defendants. If there are 1,000 SAD Scheme cases a year with 200 defendants each, there are 200,000 SAD Scheme trademark defendants in litigation every year. In other words, if we measure activity by number of trademark defendants, the SAD Scheme is approaching 98%+ of trademark enforcements in the US, and it will only grow so long as the scheme keeps working.
Third, IP cases routinely support ex parte TROs, but IP cases are not well-suited to procedures where the defense isn’t involved because those adjudications are too error-prone. Without hearing from the defense, the adjudicators are far too likely to find over-infringement and give insufficient credit to the defenses (such as the first sale defense for used/gray market goods). Other examples of error-prone IP topics: design patents, where a simple visual comparison of the two works isn’t sufficient to determine infringement; or trade secret litigation, where the item’s trade secret status and ownership is often highly contested. Ex parte proceedings, where the putative rightsowner tells an unrebutted story, are highly likely to get it wrong. The rule of law is nominally satisfied if the defense gets an opportunity to correct those errors, but in practice the SAD Scheme TRO often has irreparable consequences, and further proceedings in the court are irrelevant.
I think there’s a great research project here: comparing the rightsowners’ success rates in ex parte proceedings vs. their success rate after the defense gets involved. This error rate is possibly quantifiable, and I think it would rock the world.
While we need to get the doctrine right through appellate advocacy, we also need a way to fix the SAD Scheme’s high-volume mangling of trademark law because it’s the law of the street for the vast majority of trademark defendants today. I need some help with that because the secretive and low-stakes nature of any individual case has made it virtually impossible to intervene; and judges are showing increasing discomfort with the rightsowners’ behaviors but are taking insufficient steps to penalize them or create better precedent.
#StopTheSADScheme
Prior Blog Posts on the SAD Scheme
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]]>The post Section 230 Doesn’t Apply to Sending Non-Consensual Pornography by Postal Mail–Doe v. Spencer appeared first on Technology & Marketing Law Blog.
]]>With respect to Section 230, Spencer said “I would again here refer to the above Laws in regards to ‘Copies’ and that the Alleged explicit material was created by Plaintiff himself it was posted to an interactive site…” The court responds simply: “The Court is not persuaded that Section 230(c) of the Communications Decency Act has any application to this case.”
Indeed, it does not. Section 230 never applies to the dissemination of offline content, including physical items sent through the postal mail. The statutory definitions say that the immunity applies only with respect to “information provided through the Internet or any other interactive computer service.” By necessity, this excludes offline disseminations.
While this opinion isn’t a surprising outcome, it reinforces three points of note. First, though non-consensual pornography (NCP) is often characterized as an Internet phenomenon, not all NCP is distributed online. Indeed, in our 2018 survey of NCP court cases, we found six cases involving offline distribution and additional cases with threatened offline distribution (including one dating back to 1984, well before the Internet enabled the distribution of images or videos), and several cases were very similar to this case (postal mail to relatives, friends, and business contacts). Second, Doe made a claim under VAWRA–the “Violence Against Women Reauthorization Act of 2022″–and that bill’s title reflects the fact that NCP victims are overwhelmingly women. However, men are victims too, as in this case. In our 2018 study, we found seven cases involving male victims. Third, though Section 230 sometimes limits who can be sued by NCP victims, there is always at least one defendant who cannot claim Section 230 immunity; and, as in this case, sometimes no one can claim Section 230 at all.
Case Citation: Doe v. Spencer, 2024 WL 915554 (M.D. Tenn. May 4, 2024)
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]]>The post Print-on-Demand Service Defeats Fish Illustrator’s Copyright Claim–Tomelleri v. Sunfrog appeared first on Technology & Marketing Law Blog.
]]>Note: this case is functionally moot because the defendant, Sunfrog, is already defunct. RIP. As I’ve mentioned before, the legal environment for print-on-demand services remains dicey, and I wonder how many services will survive the legal shakeout. Any surviving services may need to be structured as marketing agencies that push all of the legal risk to the users and third-party vendors. That only works if the users and vendors can tolerate that legal risk. If not, the print-on-demand industry may not be commercially viable under prevailing law.
A magistrate judge recommended dismissing Tomelleri’s copyright claims. The supervising judge agrees.
Volitional Conduct. This judge is vexed by the definition of volitional conduct. He ultimately summarizes: “District court decisions within the Sixth Circuit have held that plaintiffs must show the defendant ‘intentionally and knowingly’ copied the copyrighted work.”
These concepts of scienter imputed into direct infringement are perilous because they seemingly conflate mens rea with an actus reus. The question on the table is supposed to be: did the defendant take a legally significant action that resulted in the infringement? Framing the question this way, it becomes clearer why most courts have adopted a proximate causation standard.
This judge doesn’t like that formulation:
But [the causation term] is technically imprecise. Causation, as used in the traditional sense, refers to the connection between the tort and the plaintiff’s harm. But, as used by Judge Morris and other federal courts in the copyright context, “causation” or the “volitional conduct” requirement more accurately refers to the connection between the tort and the defendant’s actions
Note: I’m not a torts expert, but I’m not sure about the distinction the court is making. The volitional conduct requirement still requires the plaintiff to show that the defense “caused” the harm, i.e., the copyright infringement.
Even if causation were the right framing, assigning causation is cloudy with print-on-demand services. The user may upload the image and request the manufacturing and delivery, but there are many additional “actions” between the user upload and someone shipping a custom-manufactured physical good from the warehouse, and it may be hard to assign responsibility to the user for all of those intermediate steps.
In any case, the court explains why there’s no volition here:
First, Plaintiff alleged that Defendants displayed his copyrighted illustrations without authorization. But Judge Morris correctly concluded that, as a matter of common sense, merely displaying a copyrighted work does not plausibly suggest that the displayer knew the work was copyrighted. Indeed, Judge Morris noted that Plaintiff’s Complaint does not indicate whether Defendants selected the works that appeared on their website. And although Plaintiff also alleged Defendants marketed, advertised, and sold merchandise bearing his copyrighted illustrations. Judge Morris correctly concluded that “Rule 8 requires more”—Plaintiff did not, for example, allege that Defendants “design[ed], manufacture[d] or even select[ed] the products on their website.”
Note 1: Again, direct copyright infringement is strict liability, so it doesn’t matter if “the displayer knew the work was copyrighted” or was completely in the dark about its copyrighted status.
Note 2: these sound like easily avoided pleading problems. This make me check if Tomelleri was proceeding pro se, but in fact he had two law firms on the caption.
DMCA Online Safe Harbors. Tomelleri argued that the DMCA safe harbors aren’t amenable to resolution on a motion to dismiss. Sadly, that’s usually true. Nevertheless, the copyright plaintiff still must establish the prima facie elements of contributory or vicarious copyright infringement, which Tomelleri didn’t sufficiently do. The magistrate judge dismissed the claims on prima facie grounds, not because of the safe harbors.
Implications.
The court summarizes:
In sum, Plaintiff’s Complaint was all bait and no hook. [Eric’s note: get the pun?] Although Plaintiff sufficiently alleged that someone, somewhere, somehow infringed on his four copyrighted fish illustrations, he insufficiently alleged that Defendants directly infringed. Nor did he sufficiently allege that Defendants are secondarily liable under either vicarious or contributory theories.
While Sunfrog won this battle, it lost the war because it’s exited the market. I wonder if this opinion would look different if Sunfrog was still an ongoing operation? In other words, dismissing the complaint almost certainly saves everyone time and money if, for other reasons, there will be no meaningful relief at the end of the lawsuit. That might have helped the judges be more inclined towards the defense.
I’m also left wondering about possibly divergent applications of copyright and trademark law to print-on-demand services. In yesterday’s ruling, the plaintiff got virtually all of the inferences stacked in their favor, but that plaintiff emphasized trademark law. This plaintiff emphasized copyright law but got little traction. (Both rulings were on motions to dismiss, so procedurally they were identical). Could it be that, in the print-on-demand context, trademark law is more powerful to rightsowners than copyright? For example, trademark law doesn’t have a concept of “volition”–the closest analogue is the trademark use doctrine, which has produced doctrinal anarchy. Also, trademark law doesn’t have a direct analogue to the DMCA online safe harbors, though the DMCA was irrelevant in both decisions.
Case Citation: Tomelleri v. Sunfrog LLC, 2024 WL 940238 (E.D. Mich. March 5, 2024)
Related posts
* Print-on-Demand Services Face More Legal Woes–Canvasfish v. Pixels
* Atari’s Lawsuit Against a Print-on-Demand Service Fizzles Out–Atari v. Printify
* Ninth Circuit Highlights the Messy Law of Contributory Trademark Infringement Online–YYGM v. RedBubble
* RedBubble Gets Another Favorable Ruling–YZ Productions v. RedBubble
* IP Lawsuits Against Print-on-Demand Vendors Continue to Vex the Courts–OSU v. Redbubble & More
* Another Tough Ruling for Print-on-Demand Vendors–Sid Avery v. Pixels
* Print-on-Demand Vendor Doesn’t Qualify for DMCA Safe Harbor–Feingold v. RageOn
* CreateSpace Isn’t Liable for Publishing Allegedly Infringing Uploaded Book–King v. Amazon
* More Evidence That Print-on-Demand Vendors May Be Doomed–Greg Young Publishing v. Zazzle
* Section 230 Doesn’t Protect Print-on-Demand Vendor–Atari v. Sunfrog
* Online Marketplace Defeats Trademark Suit Because It’s Not the “Seller”–OSU v. Redbubble
* Zazzle Loses Copyright Jury Verdict, and That’s Bad News for Print-on-Demand Publishers–Greg Young Publishing v. Zazzle
* Trademark Injunction Issued Against Print-on-Demand Website–Harley Davidson v. SunFrog
* DMCA Safe Harbor Doesn’t Protect Zazzle’s Printing of Physical Items–Greg Young Publishing v. Zazzle
* CafePress May Not Qualify For 512 Safe Harbor – Gardner v. CafePress
* Cafepress Suffers Potentially Significant Trademark Loss for Users’ Uploaded Designs
* Life May Be “Rad,” But This Trademark Lawsuit Isn’t–Williams v. CafePress.com
* Print-on-Demand “Publisher” Isn’t Liable for Book Contents–Sandler v. Calcagni
* Griper Selling Anti-Walmart Items Through CafePress Doesn’t Infringe or Dilute–Smith v. Wal-Mart
* CaféPress Denied 230 Motion to Dismiss–Curran v. Amazon
The post Print-on-Demand Service Defeats Fish Illustrator’s Copyright Claim–Tomelleri v. Sunfrog appeared first on Technology & Marketing Law Blog.
]]>The post Print-on-Demand Services Face More Legal Woes–Canvasfish v. Pixels appeared first on Technology & Marketing Law Blog.
]]>Meanwhile, more vertically integrated print-on-demand services face a difficult legal environment. This post covers an opinion where the court assumes such vertical integration based on the pleadings (it remains to be seen if that’s actually the case). Based on that assumption, the opinion offers no good news for the defense.
The print-on-demand service at issue is Pixels, who has appeared on this blog before. The plaintiff paints fish, has a trademark in his name, “DeYoung,” and has registered copyrights. The plaintiff claims that Pixels’ users upload infringing images and refer to them by the trademark DeYoung.
Trademark Infringement.
The court wades into the ever-fraught question of what constitutes trademark “use”:
On one end are companies like eBay and Amazon which facilitate sales for independent vendors and are typically not considered “users.” [cites to Tiffany v. eBay and Multi-Time Machine v. Amazon, neither of which I believe turned on the TM use question]. On the other end are brick and mortar stores that sell trademark-infringing items directly to consumers, regardless of whether the stores design or manufacture those items. [Cite to Ohio State v. Redbubble and others]….just because a seller is an online service does not mean they automatically escape liability….
Lanham Act liability is more likely to apply to a print-on-demand website to the degree it holds itself – and not the third-party designers – out as the creator of the products in question. If the service controls the printing, manufacturing, and shipping of the products and delivers those products bearing the service’s own labels and tags rather than those of the designer, then it is identifying the goods as its own.
The plaintiff’s allegations indicate that Pixels exercises sufficient control to qualify as a trademark “user,” so the trademark claim survives:
Canvasfish alleges that Pixels “is actively involved in nearly every aspect of its users’ sales, providing the art, advertising, payment processor, manufacturing, printing, warehousing, and shipping for each product sold through its Websites and Mobile App.” Indeed, Canvasfish alleges that Pixels has more control over the goods it sells than Redbubble, which the court in Ohio State noted “never t[ook] title to any products shown on its website… [and] d[id] not…manufacture, or handle th[ose] products.” Much like Redbubble, Pixels also has a hand in advertising infringing work, allowing users to search for DeYoung artwork and providing a link to view “all Derek DeYoung products,” despite the fact that many of those products originated from unlicensed third parties. In addition, the prints that Canvasfish purchased came in a box bearing a “FineArtAmerica” label.
In the Sid Avery lawsuit, Pixels ultimately won at trial that it was not sufficiently vertically integrated for copyright purposes, so we’ll see if the judge’s tone changes on summary judgment.
Trademark Counterfeiting.
The court says that Pixels could be “counterfeiting” the Canvasfish online store (?) and by offering counterfeit goods in Pixels’ store:
Canvasfish presents a plausible case that the goods Pixels sold bearing the DEYOUNG mark were counterfeits. True, Pixels does not operate a DeYoung online retail store, nor does it offer original paintings. However, it does sell, manufacture, and print the same type of goods that are directly covered by Canvasfish’s registered service mark….
Canvasfish has a registered mark for an online store that sells prints, boat wraps, phone cases, drinkware and various other products bearing DeYoung’s artwork and registered mark. Pixels sells the exact same products – prints, phone cases, drinkware, and stickers. It also sells a similar type of product – various other items bearing DeYoung’s artwork and mark including beach towels, pillows, tapestries, puzzles, and pouches. When a consumer buys a product off of Pixels’ website bearing a DEYOUNG mark, they may well think they are buying an official DeYoung product. Therefore, Pixels’ use of the DEYOUNG mark could cause confusion in the general public over whether the goods are genuine Canvasfish products or knockoffs.
The counterfeiting analysis doesn’t change regardless of whether Pixels includes the plaintiff’s trademark in its URL.
However, Pixels isn’t counterfeiting the plaintiff’s mark for “paintings”: “no reasonable consumer purchasing a print or product displaying DeYoung artwork from Pixels’ website would be confused over whether they were purchasing an original DeYoung painting.” The outcome might have been different if the mark’s class had extended to “artwork” or “artistic images,” not just “paintings.”
To establish counterfeiting, the plaintiff must also show Pixels’ scienter, which the court equates to “willful blindness.” UGH. Whether the standard is willful blindness or constructive knowledge, the plaintiff’s allegations are sufficient:
It is alleged that Pixels knew that products which infringed Canvasfish’s trademarks were being offered for sale by users of its website as early as September 2022. Even if it took action to remove those particular offending products, it did not stop either those users or others from uploading DeYoung trademarked images. Indeed, there appears to be a pattern of ignoring the trademarks of the goods offered on its websites, as multiple well-known brands of products are being offered by third-party users for sale, apparently without license. The Court finds that these allegations are sufficient to show that Pixels plausibly knew or was willfully blind to sales of counterfeit products bearing the DEYOUNG mark on its websites.
The court seems to be saying that Pixels acquired the affirmative obligation to police all instances of vendor infringement after Pixels got knowledge “that products which infringed Canvasfish’s trademarks were being offered for sale.” Failing that policing burden, Pixels becomes a direct counterfeiter. Wild. If so, every trademark owner could send a super-notice takedown right that applies to all instances of its trademark, not just specifically identified items. That differs from the Tiffany case, which generally requires trademark owners to identify specifically infringing items. I’m not sure if the court intended such a broad principle.
DMCA Safe Harbor.
The court says Pixels’ 512(c) defense isn’t apparent on the face of the plaintiff’s complaint.
Publicity Rights.
Among other things, Pixels argued that Section 230 applied to the publicity rights claim. The court says 230 is an “awkward fit” because Pixels allegedly “benefits from printing and shipping the finished products to consumers and charging them money for that service.” While there’s no reason Section 230 couldn’t apply to digital items sold by the defendant, I don’t see how 230 can apply equally to offline physical items. The court also implicitly sidesteps the possibility that 230 doesn’t apply to publicity rights claims outside the Ninth Circuit because other courts have characterized the claims as “intellectual property” claims.
Implications.
Other than the narrow interpretation of the “painting” trademark, the court made all of the inferences in favor of the plaintiff over Pixels. That surely reflects the procedural stats. Pixels sought a motion to dismiss, so the court assumed the plaintiff’s facts were true. It likely also reflects the consequences of the narrative over Pixels’ alleged vertical integration. If a print-on-demand service can’t fit into a narrow safe haven as a marketing agent (and even then, we’re still trying to determine if there is, in fact, any safe haven at all), then the resulting opinions look U-G-L-Y–especially the crazy-broad approach to counterfeiting and the vitiation of the “intent” scienter. However, after losing the preliminary rulings, Pixels turned around its prior Sid Avery case in a shocking trial win. Will it make magic again in this case on further proceedings?
Case Citation: Canvasfish.com, LLC v. Pixels.com, LLC, 2024 WL 885356 (W.D. Mich. March 1, 2024)
Related posts
* Atari’s Lawsuit Against a Print-on-Demand Service Fizzles Out–Atari v. Printify
* Ninth Circuit Highlights the Messy Law of Contributory Trademark Infringement Online–YYGM v. RedBubble
* RedBubble Gets Another Favorable Ruling–YZ Productions v. RedBubble
* IP Lawsuits Against Print-on-Demand Vendors Continue to Vex the Courts–OSU v. Redbubble & More
* Another Tough Ruling for Print-on-Demand Vendors–Sid Avery v. Pixels
* Print-on-Demand Vendor Doesn’t Qualify for DMCA Safe Harbor–Feingold v. RageOn
* CreateSpace Isn’t Liable for Publishing Allegedly Infringing Uploaded Book–King v. Amazon
* More Evidence That Print-on-Demand Vendors May Be Doomed–Greg Young Publishing v. Zazzle
* Section 230 Doesn’t Protect Print-on-Demand Vendor–Atari v. Sunfrog
* Online Marketplace Defeats Trademark Suit Because It’s Not the “Seller”–OSU v. Redbubble
* Zazzle Loses Copyright Jury Verdict, and That’s Bad News for Print-on-Demand Publishers–Greg Young Publishing v. Zazzle
* Trademark Injunction Issued Against Print-on-Demand Website–Harley Davidson v. SunFrog
* DMCA Safe Harbor Doesn’t Protect Zazzle’s Printing of Physical Items–Greg Young Publishing v. Zazzle
* CafePress May Not Qualify For 512 Safe Harbor – Gardner v. CafePress
* Cafepress Suffers Potentially Significant Trademark Loss for Users’ Uploaded Designs
* Life May Be “Rad,” But This Trademark Lawsuit Isn’t–Williams v. CafePress.com
* Print-on-Demand “Publisher” Isn’t Liable for Book Contents–Sandler v. Calcagni
* Griper Selling Anti-Walmart Items Through CafePress Doesn’t Infringe or Dilute–Smith v. Wal-Mart
* CaféPress Denied 230 Motion to Dismiss–Curran v. Amazon
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]]>The post “Assuming Good Faith Online” Essay Published appeared first on Technology & Marketing Law Blog.
]]>This essay has had a more convoluted publication history than most. I initially drafted it in early 2022 as part of an essay package that had been pre-placed at Journal A. For reasons that remain unclear to me, Journal A changed its mind about the package. The organizers then approached Journal B about taking the package or pieces of it. That didn’t go anywhere, at least for me. After a few more months of delay, the organizers eventually told me I was free to pursue any publication opportunity I chose. Fortunately, the piece found an excellent home with the Journal of Online Trust & Safety, a relatively recently launched journal that has been a very welcome addition to the conversation.
The essay abstract:
Every Internet service enabling user-generated content faces a dilemma of balancing good-faith and bad-faith activity. Without that balance, the service loses one of the internet’s signature features—users’ ability to engage with and learn from each other in pro-social and self-actualizing ways—and instead drives towards one of two suboptimal outcomes. Either it devolves into a cesspool of bad-faith activity or becomes a restrictive locked-down environment with limited expressive options for any user, even well-intentioned ones.
Striking this balance is one of the hardest challenges that internet services must navigate, and yet the U.S. regulatory policy currently lets services prioritize the best interests of their audiences rather than regulators’ paranoia of bad faith actors. However, that regulatory deference is in constant jeopardy. Should it change, it will hurt the Internet—and all of us.
This essay distills some of my efforts as a Knight Visiting Scholar from 2021, which resulted in the “Lessons from the First Internet Ages” project. That project produced some awesome highlights, and I encourage you to revisit it.
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