Google Loses Two Section 230(c)(2) Rulings–Spy Phone v. Google and Darnaa v. Google
Section 230(c)(2) doesn’t get a lot of love from practitioners or academics because it doesn’t get a lot of love in court. At the motion to dismiss stage, plaintiffs often can get past a Section 230(c)(2) defense by alleging the defendant’s bad faith, as these two recent Northern District of California rulings against Google illustrate:
Spy Phone Labs LLC v. Google Inc., 2016 WL 6025469 (N.D. Cal. Oct. 14, 2016)
I’ll recap allegations from the plaintiff’s complaint. The plaintiff “owns” a trademark in the app name “Spy Phone,” downloaded over a million times. I put the word own in quotes because it’s hard to believe the phrase “spy phone” can be trademarked. As we’ve seen repeatedly, bad things happen when trademark law weaponizes descriptive terms like this. Armed with a trademark, the plaintiff successfully demanded that Google remove similarly named apps from Google Play. Eventually, the tides turned against the plaintiff, as it says Google retaliated against the plaintiff by removing its app from Google Play for violating its anti-spyware policy, even though the plaintiff says it fully complied with Google’s Developer Distribution Agreement. After the plaintiff sued Google, Google changed its tune, saying there wasn’t a problem with the anti-spyware policy but Google was banning all apps with the word “spy” in them. The plaintiff responded by renaming its app “Phone Tracker,” but download rates diminished. Meanwhile, Google’s no-“spy”-in-title policy was inconsistently enforced, and plaintiff’s continued complaints eventually led Google to ban it again.
Earlier this year, Judge Grewal dismissed the plaintiff’s lawsuit with leave to amend. Due to Judge Grewal’s departure from the bench, the case got reassigned to a judge with apparently more receptivity to the plaintiff’s arguments.
Contributory Trademark Infringement. The plaintiff alleges Google took too long to honor its trademark takedown demands, including in two cases 18 and 27 days. The court says it can’t resolve on the pleadings whether that turnaround time is too long.
The court also discusses “willful blindness,” saying that Google’s pre-review of apps does not mean it had willful blindness about apps with the word “spy” in the app title. However, the court doesn’t dismiss the plaintiff’s claims for “apps from developers that Plaintiff had previously reported to have infringed on its trademark, such as Defendant Ciuca. Like Spy Optic, Google would have more specific notice that such a developer had previously infringed on the trademark, yet continued to allow that same developer to release an app that again infringed on the trademark.” This is similar to the uncited MP3Tunes conclusion from the copyright context. Does this suggest that contributory trademark law now has an implicit repeat infringer standard?
Section 230. The court says:
* Section 230 can be applied on a motion to dismiss.
* Android source code does not make Google the “information content provider” of all resulting apps because “providing neutral tools does not constitute ‘development.'” (blech) The court distinguishes Opperman v. Path because, in that case, Apple’s policies allegedly encouraged the practices that formed the lawsuit’s basis, so “Apple did more than provide a ‘neutral tool’ to develop the complained of practice…” (double blech). In contrast, Android’s “source code does not ‘materially contribute’ to the actions complained of in this suit, namely that those app titles are infringing on Plaintiff’s trade mark.”
* the plaintiff successfully alleged Google’s lack of good faith because Google allegedly never really had a policy against using the word “spy” in app titles, so invoking this non-policy to justify its actions must have been pretextual. As a result, Section 230(c)(2) doesn’t work now, but Google can try the defense again on summary judgment.
A few other claims survive, including breach of good faith and fair dealing, tortious interference with prospective economic advantage and the UCL claim.
Finally, the court considers the plaintiff’s request to add a claim that Google engaged in false advertising by allowing apps to buy the keyword “spy” on Google Play when Google had allegedly taken the position that the term was misleading. The court holds that the proposed claims are futile because the plaintiff had previously argued that Google didn’t actually have a no-“spy”-in-title policy, so it can’t argue the facts both ways. The court also questions materiality and injury.
Darnaa, LLC v. Google, Inc., 2016 WL 6540452 (N.D. Cal. Nov. 2, 2016)
This is likely one of Judge Whyte’s final opinions, and I previously blogged this case. Darnaa posted a video to YouTube called “Cowgirl.” (I linked to the video in my last post and I can’t bring myself to link to it again). YouTube apparently believed Darnaa or confederates jacked up the view count using impermissible automated means, so it removed-and-relocated the post to a new URL, which had the adverse consequences of wiping away the old view count, breaking inbound links to the old URL, and displaying a message implying that the video’s contents had broken YouTube’s rules.
In this post, I’ll just focus on the Section 230 discussion. The court apparently treats YouTube’s view count as the third party content at issue. This is a strange twist. We treat star ratings as third party content when they are an aggregation of individual users’ ratings, so is a view count–the recordation of third party activity–really that different? Maybe not, but the automated recording of users’ technical activity somehow seems different to me than users’ submissions of star ratings.
The court then says Section 230(c)(1) preempts Darnaa’s intentional interference with prospective economic advantage claim but not her good faith and fair dealing claim. The court explains that the good faith and fair dealing claim:
seeks to hold defendants liable for breach of defendants’ good faith contractual obligation to plaintiff, rather than defendants’ publisher status. Even though the claim is based on the same factual allegations as plaintiff’s intentional interference claim, the source of defendants’ alleged liability is different. The Terms of Service contain, as do all contracts, a covenant of good faith and fair dealing that defendants would not do anything to unfairly interfere with plaintiff’s right to recover the benefits of the contract.
The Section 230(c)(2) defense fails because Darnaa adequately alleged Google’s lack of good faith based on the following:
• Plaintiff “did not engage in any activities to create an illegitimate view count” and “categorically denies” that it violated the Terms of Service.
• Defendants had no basis for removing the video and its view count.
• Defendants falsely accused plaintiff of violating the prohibition against using an automated systems to inflate the view count of the video.
• Defendants restored the Cowgirl video under a different URL.
• Defendants knew that plaintiff had not violated the Terms of Service and nevertheless removed the Cowgirl video on two occasions—ever after being advised of plaintiff’s “huge expenditure in advertising and promotion money.”
• Defendants were able to track viewers and ascertain that “the large majority of the viewer accessing the ‘Cowgirl’ video on YouTube came to the video by
clicking links embedded in various of the hundreds of Clear Channel Internet radio websites”
• Defendants unfairly competed with Clear Channel, defendants’ advertising competitor, with whom plaintiff had a promotional contract.
• Defendants sought to punish plaintiff because it failed to play “advertising ball” (agree to have advertising embedded in its video) with defendants.
I assume that, like in the Spy Phone case, Google could try the Section 230(c)(2) defense again on summary judgment if Darnaa can’t provide enough evidence to support these allegations.