Court Dismisses Misappropriation Claims Against Facebook Over Its Friend Finder Service — Cohen v. Facebook

[Post by Venkat Balasubramani]

Cohen v. Facebook, C 10-5282 RS (N.D. Cal. June 28, 2011)

There are a slew of publicity rights lawsuits pending against Facebook. This one alleged that Facebook misappropriated the names and likenesses of Facebook users by suggesting to Facebook users that their friends had utilized the “Friend Finder” service. (Ironically, Facebook’s friend finder service looks similar to the service Power.com offered and which Facebook is trying to shut down.) Plaintiff brought a putative class action, alleging state law misappropriation, Lanham Act, and unfair competition claims.

Facebook’s user agreement: Facebook argued that the consent contained in Facebook’s terms of use barred plaintiff’s claims. Facebook argued that its terms contained a broad license that was limited only by privacy settings for particular types of content:

For content that is covered by intellectual property rights, like photos and videos (‘IP content’), you specifically give us the following permission, subject to your privacy and application settings: you grant us a non-exclusive, transferable, sub-licensable, royalty-free license to use any IP content that you post on or in connection with Facebook (“IP License”).

According to Facebook, an end user’s name and profile picture have no privacy settings and therefore there were no limitations on the clause quoted above (i.e., no limitations on Facebook’s right to use end user photos and user names). Judge Seeborg, disagreed, noting that:

a more natural reading of the provision is that it gives Facebook a worldwide license to reproduce any pictures or text posted by a user, subject to any privacy settings, that would insulate it from any copyright claims by the user, whether or not the reproduction was made on ‘Facebook’.

Facebook also argued that its users had no expectation of privacy in their name or profile picture, but the court notes that this does not bar a user claim for publicity rights. It’s one thing to disclose a person’s name and it’s another to use it for endorsement purposes. Although the discussion is slightly confusing, the court’s conclusion was that it’s not totally clear that Facebook’s terms freely allow Facebook to exploit a user’s publicity or personality rights in this manner. The court also noted that there was nothing in the terms which ostensibly allowed Facebook to disclose to other users what services a particular user utilized. [Ouch! I think the conclusion is debatable, and despite Facebook’s clunky user agreements, the quoted language is broad. To be on the safe side, if I were Facebook, I would expressly reference publicity and personality rights.]

Plaintiff did not sufficiently allege injury: In order to make out a claim for misappropriation of publicity rights, the plaintiff has to allege injury. Although plaintiff included a conclusory allegation in the complaint that she “suffered injury-in-fact,” plaintiff did not allege any harm whatsoever. Injury to feelings is sufficient to assert a publicity rights claim, but plaintiff failed to allege this. Plaintiff argued that she was entitled to statutory damages even absent a showing of harm, but the court disagreed. Under the case law, a plaintiff who suffers no economic loss but suffers emotional harm may be entitled to the minimum damages amount, but plaintiff failed to allege that she suffered any “mental anguish” as a result of Facebook’s alleged misappropriation.

Plaintiff’s lack of commercial interest in her name undermines Lanham Claim: With respect to the Lanham Act claim, the court held that plaintiff had to allege some “commercial interest” in his or her name in order to assert a Lanham Act Claim. While the plaintiff need not be in “actual competition” with Facebook, the plaintiff had to have some “economic interest” in her name “akin to that of a trademark holder.” Plaintiff argued that she had a commercial interest (at least within the group of her Facebook friends) but the court rejects this argument.

Unfair competition: Plaintiff’s unfair competition claims was derivative of her publicity rights claims and therefore were dismissed. The court also adds that apart from the injury issue, plaintiff is not likely to be able to show that she has lost “money or other property.” The remedies available via a section 17200 action have been sharply limited in recent years, and if a plaintiff cannot show that Facebook wrongly took money or property belonging to plaintiff, he or she will be out of luck. The fact that Facebook offers a free service to end users makes section 17200 claims useless for anything other than prospective injunctive relief. (One or two cases have recognized that personal information can constitute “property,” but the court does not discuss that possibility here. See “Judge Recognizes Loss of Value to PII as Basis of Standing for Data Breach Plaintiff“.)

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I’d characterize this as a partial win for both sides. Judge Seeborg’s view that the Facebook end user agreement did not bar the misappropriation claims has to make Facebook nervous. On the other hand, if plaintiffs are going to have to show that they suffered “mental anguish” as a result of Facebook’s use of their names and profile photos and they have an economic interest in their names, these present obvious barriers. [I can just imagine Facebook’s investigators trolling the internet for examples of use by plaintiffs of their own photos and names on other sites or on Facebook, to show that plaintiffs did not really exert any control over use of their names and photos by third party websites.]

Facebook may also have an opportunity to argue that the claims are not amenable to resolution on a class-wide basis, given that individual facts may affect the determination of whether a particular user suffered “mental anguish” as a result of Facebook’s use of plaintiffs’ photos and user names.

Of course, the reality is that this is a cobbled together class action based on allegations of harm that are tenuous at best. The result may be different if plaintiff alleged that Facebook used plaintiff’s name and likeness to advertise third party products or services or even promote something outside the Facebook ecosystem, but telling someone’s Facebook’s friends that they used the “friend finder” services sounds like a weak publicity rights claim at best.

Plaintiff may be able to amend and get past another motion to dismiss, but this lawsuit will probably be shuttled to the dustbin of internet privacy lawsuits in short order.