Publicity/Privacy Rights – Technology & Marketing Law Blog

Court Casts Doubt on the Legality of the Data Brokerage Industry–Brooks v. Thomson Reuters

Eric Goldman — Wed, 01 Sep 2021 14:28:25 +0000

Thomson Reuters (TR) offers a database called “CLEAR” that assembles personal information into individual dossiers. The plaintiffs are Black civil rights activists leading a class action lawsuit for publicity rights and related claims. The court denies TR’s motion to dismiss–in a ruling with potentially vast implications.

Publicity Rights. TR claimed its dossiers didn’t “use” the plaintiffs’ identity, citing Perfect 10 v. Google (2010) and Cross v. Facebook. The court distinguishes those cases, saying “Google and Facebook—unlike Thomson Reuters—were not posting or sharing the plaintiffs’ identities; they were simply providing the websites or platforms where others posted that information.” Instead, citing Perkins v. LinkedIn and Fraley v. Facebook, the court says “it is Thomson Reuters that posted the dossiers with Plaintiffs’ name, likeness, and personal information on its CLEAR platform. In other words, Thomson Reuters—not third parties—used Plaintiffs’ identities.”

TR also argued that the plaintiffs don’t make a commercial endorsement via their dossiers. The court agrees but says that’s not required:

Plaintiffs therefore correctly argue that…their names, likeness, and personal information is what attracts the attention of Thomson Reuters’s customers to the dossiers on the CLEAR platform, even if Thomson Reuters is not suggesting that Plaintiffs endorse its dossiers. The only reason CLEAR subscribers pay Thomson Reuters is to have direct access to Plaintiffs’ personal information, regardless of whether Plaintiffs authorized or endorsed the creation of the dossiers. The Court therefore cannot conclude that this is not a right of publicity case simply because Thomson Reuters is not suggesting that Plaintiffs endorse its dossiers.

The last sentence contained how many negatives? Stuffing more than two negatives into a sentence is a yellow flag of judges trying to reach a strained outcome.

This is shaping up to be a really troubling publicity rights precedent, but the court eventually turns it around. The court questions how TR uses the plaintiffs’ identity for promotional purposes:

Plaintiffs allege the product is their name, likeness, and personal information. Plaintiffs do not cite a single right of publicity case with analogous facts. Although the publishing of Plaintiffs’ most private and intimate information for profit might be a gross invasion of their privacy, it is not a misappropriation of their name or likeness to advertise or promote a separate product or service.

That distinguishes the case from Perkins and Fraley, where the users’ identity was displayed in the ads:

The use of a person’s name and likeness to promote a product (other than that which pertains to the person themselves) is the essence of an “appropriation” of one’s name or likeness. No such appropriation is alleged here; unlike Perkins and Fraley, Plaintiffs’ name or likeness in this case were not sent to unsuspecting CLEAR users to advertise or promote the CLEAR platform or some other third party’s products or services; they were sent only to CLEAR subscribers who deliberately paid Thomson Reuters to receive information about them.

Unfairness Prong of 17200

TR argued that the CCPA authorized its dossier sales because the CCPA permits data sales unless consumers opt-out. This argument goes over poorly:

The court says no other case has held that. Well, there have been less than 10 cases interpreting the CCPA so far because it came into effect less than 2 years ago. Given the CCPA’s newness, it’s disingenuous to adversely interpret the lack of precedent. The court could have said this was an argument that has never been tested before.
The CCPA expressly doesn’t curtail other California privacy laws: “the Court can easily harmonize the CCPA’s right to opt-out with Plaintiffs’ claim under the unfair prong of the UCL by concluding that CLEAR’s opt-out mechanism does not necessarily mean Thomson Reuters’s unauthorized sale of Plaintiffs’ personal information is fair under the UCL as a matter of law.” (Another sentence that would have benefited from avoiding the double negatives).
the court questions if TR made adequate disclosures of the CCPA opt-out enough to satisfy the CCPA. This portion made me uncomfortable. The AG has exclusive enforcement of the CCPA requirements (other than the data breach provisions), so having the court police the CCPA requirements through this 17200 backdoor makes my head spin. In particular, this statement from the court seemed clearly inappropriate by implying a 17200 claim from alleged CCPA violations: “plaintiff alleges that CLEAR required Plaintiffs’ photo identifications and faces to opt out. If true, those allegations could easily lead a reasonable trier of fact to conclude that CLEAR’s opt-out mechanism, itself, is unfair under the UCL.”

The court says the plaintiffs adequately allege unfairness:

the harm to Plaintiffs is tremendous: an all-encompassing invasion of Plaintiffs’ privacy, whereby virtually everything about them—including their contact information, partially redacted social security number, criminal history, family history, and even whether they got an abortion, to name just a few—is transmitted to strangers without their knowledge, let alone their consent…CLEAR dossiers may deeply damage Plaintiffs by directly contravening their right to keep private their most intimate and personal information….The unauthorized dissemination of virtually every piece of Plaintiffs’ personal information on the CLEAR platform may constitute a severe invasion of privacy.

TR argued that it only republishes already-published information. The court responds that TR allegedly advertises CLEAR by promising access to unpublished and inaccessible material; and its data aggregation would be a problem to the court even if TR is right:

compiling bits of Plaintiffs’ personal information scattered throughout the internet (and allegedly in non-public sources) into a dossier is a significant invasion of privacy because it is much easier to access that information in one place. Otherwise why would CLEAR subscribers pay to access the dossiers? That some of Plaintiffs’ personal information on the CLEAR dossiers comes from publicly available sources does not diminish the significant harm Plaintiffs suffer from the sale of that compiled information to whomever is willing to pay for it.

Unfortunately, the judge backs this up with citations to harms caused by government-created dossiers. Conflating government invasions of privacy with private sector activity is a common but categorical error, and it undermines the credibility and persuasiveness of the judge’s analysis.

The court says equitable relief for the unfairness claim is possible because “the injury here is an invasion of privacy that can never be fully remedied through damages.”

Unjust Enrichment. The court wades into the pitched jurisprudential battle over whether unjust enrichment is a standalone claim or not. The court says Hartford Casualty Insurance Co. v. J.R. Marketing, L.L.C, 353 P.3d 319, 322 (Cal. 2015) definitively resolved that unjust enrichment is a standalone claim. There are plenty of cases since then holding there’s no standalone claim, so this area remains jumbled.

Section 23o. Consistent with its discussion about publicity rights, the court thinks TR is publishing first-party content, not third-party content: “Plaintiffs are not seeking to hold Thomson Reuters liable ‘as the publisher or speaker’ because they are not asking it to monitor third-party content; they are asking to moderate its own content.” In other words, the court treats TR as the dossiers ICP: “Here, there is no user-generated content—Thomson Reuters generates all the dossiers with Plaintiffs’ personal information that is posted on the CLEAR platform…It is nothing like the paradigm of an interactive computer service that permits posting of content by third parties.”

Ugh, really? Section 230 definitely applies to the “paradigm” 0f posting third-party content, but that’s not the only route to immunity. For example, Google gets Section 230 protection for its search results even though Google search assembles the database and remixes the search results without hosting the third-party content; and Section 230 can apply to FCRA claims to republishing private dossiers. Saying that TR “generates all the dossiers” is like saying “Google generates all the search results.” Section 230 applies if the material in the dossiers/search results comes from third parties, which it clearly does in this case. The court makes an obviously wrong Section 230 interpretation.

Remarkably, the court doesn’t cite the Accusearch case, which also denied Section 230 protection for data brokerage (in that case, pretexted phone records). Accusearch is distinguishable because the illegal content was generated after the sale, but it would have been closer to the court’s twisted Section 230 interpretation. So the court isn’t even citing its strongest precedent!

Note that there are several cases involving the advertising of personal dossiers where Section 230 didn’t apply, either. E.g. Lukis v. Whitepages, Knapke v. Classmates. The court implicitly distinguished those in the publicity rights discussion because they are closer to the cited Perkins and Fraley cases.

Anti-SLAPP. The court says CLEAR might not be a public forum because it’s paywalled, which might mean it’s not generally accessible to the public. Either way, “the unauthorized sale of people’s most personal and private information is not a matter of public interest, particularly when the information pertains to any individual regardless of whether they are a public figure or person of interest to the public.” Plus, the paywall degrades the likelihood the information informs public concerns: “that Thomson Reuters only shares Plaintiffs’ personal information with its CLEAR subscribers who specifically pay for it, and not with the general public, cuts heavily against concluding that Thomson Reuters’s conduct is of public concern.” Thus:

the sale of Plaintiffs’ personal information cannot be fairly characterized as journalistic. It is hard to conceive how the public has any interest—let alone a compelling interest protected by the First Amendment—in the raw personal information of every California resident, especially where it is not connected to a matter of public interest.

As many mainstream publications erect paywalls around socially vital conversations to prop up their business model, anti-SLAPP protection cannot turn on the presence of paywalls. This court’s suggestion otherwise could have dramatic consequences for anti-SLAPP law.

Implications. This is a troubling opinion because it is so clearly results-oriented. This court’s hostility to data brokerage is deep and unrelenting, and that creates multiple rough edges that could attract attention on appeal.

If this ruling survives appeal, it could become a foundational ruling limiting data brokerage. It suggests that 17200 UCL bans data brokerage despite the fact that California law clearly contemplates that data brokerage is legal. For example, the CCPA tolerates data brokerage, and there’s a scheme for data brokers to register with the state. The court’s handling of that obvious statutory conflict was unsatisfying.

The court reacted negatively to the comprehensive nature of the CLEAR dossier, but its reasoning doesn’t have a bright-line quantitative threshold. That invites the standard law professor slippery slope questions: how extensive must a dossier be to trigger the court’s antipathy? If the data broker is selling just one item of data, is that equally problematic? If not, why not?

The court’s treatment of Section 230 was also problematic. It highlights the ongoing doctrinal conflicts between Section 230 and privacy law. Judges may be increasingly open to prioritizing privacy over 230.

Case citation: Brooks v. Thomson Reuters Corp., 2021 WL 3621837 (N.D. Cal. Aug. 16, 2021).

Prior CCPA/CPRA Posts

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Section 230 Doesn’t Protect Yearbook Website’s Ads–Knapke v. Classmates

Eric Goldman — Thu, 19 Aug 2021 17:25:25 +0000

Classmates offers paywalled access to yearbook info. Classmates allows free searches, and the “search results provide a free preview of the services and products with a photo and name of an individual to entice the user to purchase Classmates’ services and products.” One of the individuals, Knapke, initiated a class action against Classmates for the ads. Classmates moves to dismiss. It does not go well.

Section 230. The court says:

The offending content is generated by Classmates and the advertisement is not merely some passive display of content created by another entity, even if it contains a picture from a school yearbook. In this context, Classmates is the content creator and not entitled to immunity under the CDA

This is quite similar to the uncited Fraley v. Facebook ruling from a decade ago. You may recall that Facebook featured its users in ads to other users. Facebook’s ads remixed third-party content, but Facebook generated the ad copy itself. The court similarly held that Section 230 didn’t apply to Facebook’s ad creation.

The court distinguishes Callahan v. Ancestry, which found 230 applied with respect to another yearbook database that promoted its contents by featuring people, because

the court focused on defendant’s online display of yearbooks created by third parties. Here, the focus is on Classmates’ use of a yearbook photo in stand-alone advertisements it uses to lure in potential customers. That form of customized advertisement is not protected under the CDA.

Ohio Publicity Rights. Knapke “has alleged that Classmates has used her persona—name and photograph—for a commercial purpose—selling Classmates’ products and services.” Classmates tried several arguments to dislodge this:

Classmates said that no one other than Knapke saw the ad, so it’s like the tree that fell in a forest with no one around to hear it. The court says publicity rights differ from false light, which does require communication to third parties, so no biggie.
Classmates said that Knapke’s image didn’t have commercial value. The court embraces a tautology: “Her persona is used to make the advertisement, which shows its commercial value.” In other words, any image in an ad is ipso facto commercially valuable. That circular “logic” reads the factor out of the law.
Classmates argued that no one in Ohio saw her image, so the Ohio publicity law can’t apply. The court responds that Knapke is domiciled in Ohio, and that’s good enough.
Classmates argued that its walled garden qualified as a “literary work” which can be promoted without running afoul of publicity rights. The court agrees that Classmates publishes a literary work, but says the ad content promoted more than the walled garden.
Classmates said Knapke’s publicity rights claim violates the First Amendment. The court says the case involves an ad, which gets intermediate scrutiny. The “Right of Publicity Law directly and appropriately advances Ohio’s substantial interest in enabling its citizens to protect the nonconsensual commercial exploitation of their likeness without overbroadly prohibiting commercial speech.”

Dormant Commerce Clause. The court does a Pike balancing test:

Classmates fails to offer any convincing rationale why the burden imposed on its interstate business is clearly excessive in light of Ohio’s desire to prevent non-consensual commercial use of Ohioans’ personas. The burden on Classmates itself is incidental to the Right of Publicity Law’s attempt to protect Ohioan’s property interest in their own persona. This protective measure serves the core, individual rights of Ohioans and Classmates provides no evidence the law was designed as an economic barrier to favor Ohio economic interests. Nor has Classmates shown that there is some less burdensome approach that could satisfy Ohio’s interests as to publicity rights. And it is worth noting that Classmates has availed itself of the benefits of doing business in Ohio by acquiring Ohio yearbooks expressly for the purpose of marketing access to them and related services to—by and large—Ohioans. And given the nature of the offending advertisement at issue—which Classmates created—it would appear that Classmates has the ability to simply alter the way in which it advertises its services to avoid the nonconsensual use of Ohioans’ personas.

This has turned into a dangerous lawsuit for Classmates. If they aren’t prepared to appeal the ruling (whenever it’s timely to do so) with the hope that appellate judges see things differently, they may find it prudent to cut their losses and settle.

Case citation: Knapke v. PeopleConnect Inc., 2021 WL 3510350 (W.D. Wash. Aug. 10, 2021)

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Trump Defeats Lawsuit Over Manipulated Viral Video He Tweeted–Cisneros v. Cook

Eric Goldman — Wed, 14 Jul 2021 15:33:36 +0000

This case relates to a joyous and heartwarming video you’ve probably seen, where two 2-year-old boys–one black, one white–run up to each other, give each other a big hug like they are long-lost friends, and then run down the sidewalk together in a playful spirit.

A Trumpster, Cook, remixed the video (I’m having a hard time finding it online because several services banned the remix). The court describes the remix:

Cook added a simulated CNN chyron reading “breaking news” to the footage, changed it to show F.M., the white child, running after M.H., the black child, and added captions reading “Terrified Todler [sic] Runs From Racist Baby” and “Racist Baby Probably A Trump Voter.” The shot then fades to a black screen with text stating “what actually happened”, and then shows F.M. and M.H. running towards each other and then embracing. The shot then fades to a black screen with the following message in all capital letters:

AMERICA IS NOT THE PROBLEM . . . FAKE NEWS IS. IF YOU SEE SOMETHING, SAY SOMETHING. ONLY YOU CAN PREVENT FAKE NEWS DUMPSTER FIRES.

(Exemplifying standard Trumpist projection, the remixed video with a fake CNN chyron warns viewers to be careful of fake news….? This kind of brazen duplicity caused my brain to warp daily during the Trump era).

Trump tweeted Cook’s video from his @RealDonaldTrump account. The opinion is vague at this point, but it appears that Trump uploaded it directly rather than retweeting the video from a third-party account. Trump’s campaign then retweeted it. Collectively, they caused the manipulated video to be seen 20+M times.

The parents of the boys depicted in the video sued Trump, the campaign, and Cook for violations of New York’s statutory publicity rights, IIED, NIED, and negligence. The court dismisses the lawsuit and says it’s a SLAPP under New York’s newly expanded anti-SLAPP law, but declines to award attorneys’ fees.

Publicity Rights. The court says the manipulated video was newsworthy because it addressed a matter of public concern. “It is common knowledge that one of the principal tactics of Trump’s presidential campaigns, as well as his presidency, was to incessantly attack the mainstream media as purveyors of ‘fake news’, including his claim that the media exaggerates the extent of racial division in this country. Thus, the video’s references to ‘fake news’ and its depiction of race relations, however distorted, are clearly newsworthy.”

Furthermore, because the manipulated video claimed to show “what actually happened,” the court says “any reasonable person watching the video knew, or should have known, that at least a portion of its contents was not real….the video is therefore a satire, albeit one which some may consider to be rather distasteful.”

Finally, the court says the manipulated video wasn’t an advertisement because it didn’t solicit patronage of any particular good or service. I’m fine characterizing the manipulated video as political commentary on a viral video, despite the fact that the Trump campaign effectively used this as a campaign ad.

IIED/NIED. The complaint alleged outrageous, but not extreme, conduct.

SLAPP. “this action involves free speech concerns which are not purely private in nature [but] their claims are supported by a substantial argument for the extension of existing law.”

Implications

It’s characteristically disgusting of Trump to coopt innocent two-year-olds to selfishly advance his own narrative. Our leaders should be protecting toddlers, not exploiting them. It compounds the injury that his “lamestream media” story is asinine and has had a devastatingly corrosive and deadly effect on our society.

Nevertheless, I think the court reached the right legal conclusions. Viral videos and related artifacts, like memes and GIFs, are special kinds of cultural assets. People depicted in those materials inherently lose some control over further reuse because they’ve entered our society’s discourse. I’m so glad the parents shared the video initially–it brought a little joy to my life and many others, at a time when all of us needed the lift. However, the inevitable consequences of a viral hit are spoofing, criticism, and remixing–including the remix made by Trump. As much as I’d love to see Trump held accountable for his many transgressions, he was well within his legal rights this time (though, as usual for him, he was well outside any ethical boundaries).

It may sound a little harsh to call the parents’ lawsuit a SLAPP, but it’s not wrong if we’re going to have meaningful anti-SLAPP protections. If anything, the court was generous in not awarding the attorneys’ fee shift. It was great that NY expanded its anti-SLAPP law, but what we really need is a robust federal anti-SLAPP law.

While I support Trump’s right to post the manipulated video, I also support the decisions by the social media services to label it as manipulated video or to remove it altogether as a valid exercise of their own free speech rights. I’ll have more to say about that in my forthcoming paper on online account terminations and content removals.

Case citation: Cisneros v. Cook, 157550/2020 (N.Y. Sup. Ct. July 9, 2021)

While blogging this case, I had this early-1970s gem stuck in my head: Three Dog Night, Black and White

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‘365 for Business’ Users’ Privacy Lawsuit Dismissed–Russo v. Microsoft

Venkat Balasubramani — Mon, 12 Jul 2021 19:07:39 +0000

Users of “Microsoft 365 For Business” allege oversharing by Microsoft, which translates into claims under (1) the Wiretap Act and the Stored Communications Act; (2) Washington’s Consumer Protection Act; (3) the Washington one-party consent phone statute; and (4) common law.

The court meanders through the allegations in the complaint, noting that “the precise nature of plaintiffs’ claims lack clarity.” The allegations, which span a wide range of products and contexts, don’t appear to focus on any specific disclosures by Microsoft. Instead, the allegations recount Microsoft’s numerous (robust) privacy-related representations made to customers. With respect to the alleged unauthorized disclosures by Microsoft, the complaint also relies on Microsoft’s own allegedly inconsistent statements regarding the extent of disclosure to third parties. For example, the complaint quotes from the all-encompassing definition of “customer data” as used by Microsoft, but then contrasts this with statements made by Microsoft to developers (where Microsoft touts the value of customer data):

94. Microsoft boasts that Security Graph API is built off the “uniquely broad and deep” insights Microsoft obtained for itself by scanning “400 billion” of its customers’ emails and “data from 700 million Azure user accounts.”

95. Microsoft also harvests business customer data to develop and sell to others a marketing product called Microsoft Audience Network, which Microsoft admits derives enormous value from processing customer data. In Microsoft’s own words:

What sets Microsoft Audience Ads apart is their rich user understanding that powers high performance. The Microsoft Graph consists of robust data sets, including search and web activity, LinkedIn professional profiles, demographics and more. The data is continually updated every second based on user activities. By mapping audience data on such an enormous scale, the Graph helps us spot trends and uncover insights, both of which allow you to effectively reach your customers.

96. Microsoft also uses business customer data to create other applications it sells to other customers, including Windows Defender Application Control, Azure Advanced Threat Protection, and Advanced Threat Protection.

The complaint does not address the plaintiffs’ specific experiences.

Standing: The court dismisses the complaint for lack of standing. With a quick nod to the Supreme Court’s Spokeo ruling, the court says that plaintiffs do not allege sufficient facts to demonstrate they have been injured by Microsoft’s conduct. In the court’s view, the factual allegations “are . . . too sparse and conclusory”. Interestingly, the court does not delve into Spokeo or mention TransUnion, the most recent Supreme Court case on Article III standing.

For good measure, the court walks through the specific claims and finds them all wanting.

Wiretap Act: The court covers a lot of ground in its discussion of the Wiretap Act claim:

Email scanning can state a claim under the Wiretap Act
Facebook Connect (and contact list sharing) cannot form the basis of a claim
Scanning of content would support a claim, but the precise nature of scanning is unclear (and the court says is “best left for summary judgment”)
Microsoft asserts as a defense that scanning is excluded because it is done in the ordinary course of business; the court likes that for two products (Cortana and Advanced Threat Protection) which the court says plaintiffs implicitly consented to by purchasing, but does not like this argument with respect to two other products (Graph and Security Graph APIs).

SCA: The court says it “already found that plaintiffs sufficiently allege . . . Microsoft intercepted the contents of communications for Graph and Security Graph APIs.” These allegations may state a claim under the Stored Communications Act, but the claims as to other features are dismissed with prejudice.

Claim under Washington’s CPA: The court says first that plaintiffs “overpayment theory” (that they would not have paid as much in price had they known of Microsoft’s lax privacy practices”) states a cognizable injury. However, the court says that the allegations does not satisfy Rule 9’s higher pleading standard for fraud-like claims.

Washington Privacy Act: Plaintiffs also asserted claims under Washington’s one-party consent statute. The court reiterates that because plaintiffs have not adequately alleged that their own communications were intercepted, they lack standing. However, the court dismisses the other defenses raised by Microsoft: (1) the statute covers conduct by companies as well as “persons” and (2) that statute covers communications that originate outside the state of Washington “as long as the interception occurs in Washington.”

Common Law Privacy Claim: Plaintiffs also brought a claim for common law intrusion upon seclusion. The court says that a business has no rights that this tort covers. There must be some allegation of personal intrusion, and there are none in the operative pleading.

Leave to Amend: While the court dismisses the lawsuit, it grants leave to amend. Plaintiffs’ deadline to amend is not yet up.

___

This lawsuit made my head hurt and just left me asking a bunch of questions.

Venue in Northern District of California feels like an odd choice. It appears that plaintiffs filed in this jurisdiction, but do either of the two parties prefer to be there? To me, the Western District of Washington is a somewhat friendlier forum for plaintiffs. While privacy plaintiffs have obtained victories (often significant ones) in the Northern District of California, there are also a long line of cases where judges have beat up on class action privacy complaints.

The complaint suffers because of its lack of specificity, particularly as to these particular plaintiffs. What are the plaintiffs’ options in these situations and what are plaintiffs’ best sources for factual allegations? Would it have been helpful to find a whistleblower/insider? Would technical due diligence have helped? How about a consumer request under one of the recently-enacted privacy statutes (of either California or Washington)? While one sympathizes with the plight of privacy plaintiffs, the court’s ruling seems correct that the scant allegations shouldn’t entitle plaintiffs to discovery. (Note: I thought Ed Bott’s initial article on this lawsuit was on point in many ways: “Class action joke: Three Microsoft customers walk into a court…” I highly recommend it. Among his conclusions are that the complaint is based on a misreading of Microsoft technical documents.)

The court dismisses on the basis of standing, but then spends a bunch of time focusing on the merits and in particular the claims under the Wiretap Act. In resolving the claims under the Wiretap Act, the court seems deep in the [factual] weeds. The court’s basis for dismissing certain claims with prejudice is unclear.

The plaintiffs had alleged claims under both the unfair and deceptive prongs of Washington’s CPA. For some reason, the court just focuses on the deceptiveness prong, applying Rule 9’s strict pleading requirement to dismiss the claims. Also, the court says in in its discussion of this claim that (1) plaintiff’s over-payment theory states a cognizable injury under the CPA and (2) “plaintiffs plead enough factual content to make it plausible.” This conclusion seems sufficient to confer standing of some sort, but the court never explains why this is not sufficient to confer Article III standing. ¯\_(ツ)_/¯ I’m not sure what to make of the court’s resolution of the CPA claim.

Case citation: Russo v. Microsoft, 4:20-cv-04818-YGR (N.D. Cal. June 30, 2021). Link to the Complaint [pdf], and to the order Granting Microsoft’s Motion to Dismiss

Ninth Circuit Reinstates Decade-Old Lawsuit Against Facebook For Tracking Logged-Out Users–In re Facebook Internet Tracking

Court Sends Google Assistant Privacy Lawsuit Back for a Redo

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Should We Adopt a Notice-and-Takedown Scheme for Deepfakes and Other Inauthentic Media?

Eric Goldman — Fri, 09 Jul 2021 15:22:11 +0000

Prof. Christa Laser (Cleveland-Marshall) and I engaged in a point/counterpoint about legal mechanisms to address inauthentic recordings and photos, including AI-assisted forged videos (a/k/a “deepfakes”). She argued for a notice-and-takedown scheme in some circumstances, including those creating fake pornographic images. I explained why any notice-and-takedown scheme would be misused to suppress legitimate depictions, which would help people avoid accountability for their actions.

One point I could have amplified more (I was under some tight word count limits): Takedowns of allegedly inauthentic media would target primary sources, but sometimes we need to see the evidence for ourselves, not just hear it described. In particular, people with privilege can use their position, and any implicit credibility it conveys, to cast doubt on the facts unless the facts are incontrovertible.

For example, former Rep. Katie Hill sued over the publication of intimate images that contributed to her departure from Congress. The court granted the defendants’ anti-SLAPP motion, explaining why we needed to see the images, not just hear about them:

the intimate images published by Defendant spoke to Plaintiff’s character and qualifications for her position, as they allegedly depicted Plaintiff with a campaign staffer whom she was alleged to have had a sexual affair with and appeared to show Plaintiff using a then-illegal drug and displaying a tattoo that was controversial because it resembled a white supremacy symbol that had become an issue during her congressional campaign. Accordingly, the images were a matter of ‘public issue or public interest.’…

Plaintiff has failed to carry her burden establishing that there is a probability of success on the merits on her claim under Civil Code section 1708.85. Section 1708.85(c)(5) provides for an exception from liability for images which are a matter of public concern. Here, Defendant has established that the images are a matter of public concern, as they speak to Plaintiff’s character and qualifications for her position as a Congresswoman, allegedly depicting an extramarital sexual relationship with a paid campaign staff member, the use of illegal drugs by a sitting Congresswoman, and a tattoo similar to the symbols formerly used by white supremacists.

Plaintiff’s argument that the images are not a matter of public concern because Defendant could have simply described the images rather than publishing them is unpersuasive, as the fact that information to be gleaned from an image may be disseminated in an alternative manner does not equate to a finding that the image itself is not a matter of public concern. …

The two photos at issue here are nowhere as explicit as the sex video tape in the Michaels case, and are not morbid as the photos in Jackson were described. The photos show a sitting Congresswoman engaging in conduct some might consider highly inappropriate and perhaps unlawful, with one exhibiting Plaintiff’s tattoo which looks similar to the symbols formerly used by white supremacists. The facts of which these photos speak are about Plaintiff’s character, judgment and qualifications for her congressional position.

Hill v. Heslep, 20STCV48797 (Cal. Superior Ct. April 7, 2021) (emphasis added).

My contribution to the colloquy only addressed some policy concerns of a notice-and-takedown scheme. A notice-and-takedown scheme would also face potentially significant Constitutional concerns (the anti-IMDb law isn’t perfectly analogous, but it’s representative of the problems) and, if the laws were implemented at the state law, Section 230 preemption as well.

The abstract:

Inauthentic media depictions can harm a person’s privacy and reputation and pose a risk to broader society, as well. “Deepfake” technology allows the creation of a type of inauthentic media using “deep machine learning” techniques, using a computer to quickly swap or simulate faces, voices, and movements.

In a blog post on the YourWitness Blog (yourwitness.csulaw.org), Professor Christa Laser argues that Notice and Takedown procedures available in copyright law can be expanded to protect persons from deepfakes. Professor Eric Goldman thinks that such a reform would inhibit the dissemination of truthful information.

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Ohio Bans Competitive Keyword Advertising by Lawyers

Eric Goldman — Sat, 19 Jun 2021 16:17:01 +0000

No one:

Absolutely no one:

Ohio Board of Professional Conduct (in the third decade of the 21st century….):

* * *

I guess we’re doing this again. It’s 2021, long past the time consumers have come to understand competitive keyword advertising, and yet a bar regulator issues an evidence-free and inappropriately brief opinion that competitive keyword ads deceive prospective clients. UGH.

The opinion addresses three rules of professional conduct:

Rule 7.1. “The simple act of purchasing a keyword, including another lawyer’s name, does not communicate anything about the purchasing lawyer or his or her services,” so no rule violation here.

Rule 8.4(c). “The purchase and use of a competitor lawyer’s or law firm’s name as a keyword for advertising is an act that is designed to deceive an Internet user,” so it violates this rule.

DAFUQ? There are many legitimate pro-social reasons why a lawyer might buy competitive keyword ads, including (1) comparative advertising, (2) offering complementary services, and (3) identifying potential victims of a bad lawyer’s services. Advertising efforts like these are not *designed* to deceive an Internet user; they are unlikely to actually deceive any Internet user, especially if the ad copy is clear about the advertiser’s identity; and any “initial” confusion an Internet user might experience can be quickly dispelled by the Internet user’s further investigation.

The board provided no citations for its empirical claim that competitive keyword advertising is *designed* to deceive, and there’s a mountain of evidence to the contrary. See, e.g., the FTC’s proceedings against 1-800 Contacts, which explained in excruciating detail how competitive keyword advertising benefits consumers–with citations.

As “support” for its interpretation, the board says: “It is possible that an unsophisticated consumer will not realize that the top search result is not that of the intended lawyer or law firm.” Again, DAFUQ? First, the board provides no empirical evidence for this claim. Who are these “unsophisticated” consumers? How many of them exist? Second, it’s been proven that many consumers searching for a brand name aren’t actually “intending” to find only search results about the brand. So the board is wrong in assuming that consumers have an “intended” lawyer associated with their search query. Third, how can the board manufacture this hypothetical without simultaneously addressing the possible educative impact of the associated ad copy? Fourth, the board implicitly acknowledges that “sophisticated” consumers will realize that the advertiser isn’t the “intended” lawyer, and the board’s rule categorically blocks that interaction. Given that, the board’s position is clearly overreaching, indefensible, and unconstitutional.

Rule 8.4(h). “The use of another lawyer’s name, without consent, to increase traffic to one’s own website and to further one’s own financial and business interests displays a lack of professional integrity. It calls into question the lawyer’s trustworthiness, sense of fairness to others, and respect for the rights of others, including those of fellow practitioners.” So there may be a Rule 8.4(h) violation.

I don’t know if the board solicited public input on this issue. If not, this kind of moralistic evidence-free statement is what happens when you only hear one side of the story. Many lawyers should be angry that the board smeared their reputation without having all of the facts.

* * *

I’ve complained before that restricting competitive keyword advertising by lawyers is like creating a quasi-intellectual property right, but without going through the proper legislative channels to do so. Conspicuously, the board’s opinion didn’t mention any intellectual property issues at all. That’s because the IP caselaw would reject the board’s result. Courts are clear that competitive keyword advertising alone doesn’t constitute trademark infringement:

Virtually no court has held that, on its own, a defendant’s purchase of a plaintiff’s mark as a keyword term is sufficient for liability.

Alzheimer’s Disease and Related Disorders Association, Inc. v. Alzheimer’s Foundation of America, Inc., 2018 WL 1918618 (S.D.N.Y. Apr. 20, 2018). Several other opinions have echoed this statement.

On the publicity rights side, the leading case remains Habush v. Cannon, which held that competitive keyword advertising didn’t violate the lawyers’ publicity rights.

Without any support from either trademark law or publicity rights law, the Ohio Board of Professional Conduct thus manufactured, in a 2 page opinion without any citations, a new intellectual property right for the state of Ohio.

* * *

The opinion also doesn’t engage with the other state bar opinions or rules directly on point. Here, the record is a little more mixed. In support of Ohio, North Carolina also banned competitive keyword ads by lawyers and even brought an enforcement action based on the rule. In opposition of Ohio, other states have mostly or completely blessed competitive keyword ads by lawyers, including Texas, Florida, and New Jersey. The Florida bar has invested extraordinary time researching this topic; and Texas issued a thoughtful opinion complete with citations. Why did Ohio diverge from those states, or at least not piggyback on the extensive efforts they invested in this issue? ¯\_(ツ)_/¯

* * *

I call your attention to my co-authored 2016 article, “Regulation of Lawyers’ Use of Competitive Keyword Advertising.” Yes, it’s directly on point. Yes, the Ohio Board of Professional Conduct should have read it before opining.

If I were an Ohio lawyer, I would contact the board asking them to reconsider this opinion and allow for public comment. The board can and should do better. I might also submit an FTC complaint to alert them of the board’s brazen attempt to restrict comparative advertising in an anti-competitive way.

Citation: Ohio Board of Professional Conduct Opinion 2021-04, “Competitive Keyword Online Advertising,” issued June 11, 2021

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New York’s New Post-Mortem Right of Publicity Law Comes Into Effect, Part 2 (Guest Blog Post)

Eric Goldman — Wed, 02 Jun 2021 14:06:37 +0000

by guest blogger Tyler Ochoa

On May 29, 2021, New York’s new post-mortem right of publicity law came into effect. The law is codified at N.Y. Civil Rights Law § 50-f. It provides for a post-mortem right of publicity for a “deceased personality” or a “deceased performer” for a period of 40 years after the person’s death. Because New York did not have any post-mortem right of publicity before the enactment of this statute in November 2020, this is a very big deal. However, there is a catch buried in an uncodified section of the enacted bill that severely limits the application of the new statute: it only applies to celebrities who die on or after the effective date. In other words, performers and personalities who are already deceased remain in the public domain for purposes of New York law.

(In the interests of full disclosure: in 2017. 2018, and 2019, I signed statements prepared by the Motion Picture Association of America (MPAA) opposing previous version of this bill. I was not asked to sign such a statement in 2020; and to my knowledge, the MPAA did not oppose passage of the amended bill in 2020. I do not have any inside information, but I believe that the lack of retroactivity, excluding previously deceased celebrities from the protection of the statute, was an important part of the compromise that led the MPAA to accept the amended bill.)

This is the second of a two-part series on the new law. In my prior post, I explained the development of existing law and previous controversies concerning post-mortem rights of publicity. If you aren’t familiar with the topic, I encourage you to read that first before reading this post. In this post, I’ll do a statutory analysis.

Analysis: New York’s New Post-Mortem Right of Publicity Statute

New York’s new post-mortem right of publicity law is codified at N.Y. Civil Rights Law § 50-f. The most important feature of the new statute is that it does not amend or repeal New York’s existing statutory right of privacy for living persons. Subsection 10 provides that “The provisions of this section are in addition to, but shall not supersede, any other rights or remedies available in law or equity.” Thus, the new statute leaves intact the existing New York statute for living persons and all of the case law interpreting it, and supplements it with the new statute for deceased people.

Subsection 2 of new § 50-f has two actionable prohibitions: one that protects a “deceased personality” and one that protects a “deceased performer.”

The Basic Right

Subsection 2(a) provides:

Any person who uses a deceased personality’s name, voice, signature, photograph, or likeness, in any manner, on or in products, merchandise, or goods, or for purposes of advertising or selling, or soliciting purchases of, products, merchandise, goods, or services, without prior consent from the person or persons specified in subdivision four of this section, shall be liable for any damages sustained by the person or persons injured as a result thereof.

This language is word-for-word identical to California’s post-mortem right of publicity statute, Civil Code § 3344.1(a)(1), so it will not be surprising if the New York courts turn to California case law when interpreting it. (By contrast, California’s right of publicity statute for living persons, Civil Code § 3344(a), requires that the use be made “knowingly.”) A “deceased personality” is defined in subsection (1)(b) as

any deceased natural person domiciled in this state at the time of death whose name, voice, signature, photograph, or likeness has commercial value at the time of his or her death, or because of his or her death, whether or not during the lifetime of that natural person the person used his or her name, voice, signature, photograph, or likeness on or in products, merchandise, or goods, or for purposes of advertising or selling, or solicitation of purchase of, products, merchandise, goods, or services.

Again, this definition is nearly identical with the one in California’s post-mortem statute [Civil Code § 3344.1(h)], except for the addition of the two clauses in italics above. Here we come to the first important limitation in New York’s statute: it only applies to people “domiciled in this state at the time of death.” Thus, New York is not recognizing a post-mortem right of publicity for celebrities who are domiciled elsewhere at the time of death. Although California’s statute contains no such limitation, California’s choice of law statute, Civil Code § 946, has similarly been interpreted to “require[] application of the law of the decedent’s domicile” in post-mortem right of publicity cases. See Cairns v. Franklin Mint Co., 292 F.3d 1139, 1146 (9th Cir. 2002).

The clause “whether or not [used] during the lifetime of that natural person” is included to make it absolutely clear that the statute rejects the handful of common-law cases that required such exploitation during one’s lifetime as a condition of having a post-mortem right of publicity. Those cases were based on the concept that a trademark must be “used” in order to create and retain any rights in the mark. Eventually, however, courts and legislatures alike rejected the notion that one’s name and likeness needed to be “used” for a right of publicity to exist.

Subsection 2(d)(i) excludes expressive works from the scope of the basic right:

it shall not be a violation of paragraph a of this subdivision if the work is a play, book, magazine, newspaper, or other literary work; musical work or composition; work of art or other visual work; work of political, public interest, educational or newsworthy value, including comment, criticism, parody or satire; audio or audiovisual work, radio or television program, if it is fictional or nonfictional entertainment; or an advertisement or commercial announcement for any of the foregoing works.

This limitation is similar to, but broader than, the corresponding section in California’s post-mortem statute. [Cal. Civ. Code § 3344.1(a)(2)] Specifically, the New York statute adds “or other literary work,” adds “or other visual work,” adds works with “public interest [or] educational” value, adds “audio or audiovisual work,” specifically mentions “comment, criticism, parody or satire,” and removes the limitation that only a “single and original” work of art is protected.

Subsection 2(d)(iii) provides: “it shall not be a violation of this section if the use of a name, voice, signature, photograph, or likeness occurs in connection with any news, public affairs, or sports program or account, regardless of format, medium or means of transmission, or any political campaign.” This subsection is nearly identical to the corresponding sections in the two California statutes, with the addition of the phrase “regardless of format, medium or means of transmission.” [Cal. Civ. Code §3344(d), § 3344.1(j)] But this subsection also seems a bit redundant: it is difficult to imagine any “news, public affairs, or sports program or account” or “any political campaign” that is not already covered by the subsection 2(d)(i) exclusion for a “work of political, public interest, educational or newsworthy value.” But the same redundancy exists in the California post-mortem statute as well. Perhaps the intent here is to avoid any inquiry into the value of the “program or account” or “campaign.” Undoubtedly the exclusions could have been drafted more efficiently; but it is difficult to complain that the exclusions are overbroad.

Subsection 2(d)(iii) does not expressly apply to the digital replica right discussed in the next section. At first glance, the omission makes sense: the use of digital replicas in political campaigns is problematic, and the statute limits actionable digital replicas to those that are deceptive and lack a prominent disclaimer. On the other hand, the digital replica right only applies to “deceased performers,” so living political figures are not included (this statute will have no impact on deepfakes in campaigns), and deceased political figures are only included if they are also “performers.” Also, subsection 2(d)(iii) is a defense to “this section,” whereas subsection 2(d)(i) is expressly limited to the rights in “paragraph a.” One suspects this is just a case of sloppy drafting; but as we will see, that sloppiness has greater consequences elsewhere in the statute.

Digital Replicas

The second prohibition, in subsection 2(b), is narrower:

Any person who uses a deceased performer’s digital replica in a scripted audiovisual work as a fictional character or for the live performance of a musical work shall be liable for any damages sustained by the person or persons injured as a result thereof if the use occurs without prior consent from the person or persons in subdivision four of this section, if the use is likely to deceive the public into thinking it was authorized by the person or persons specified in subdivision four of this section.

This prohibition is the first of its kind in the nation; it does not have any counterpart in the law of any other state. It has five elements: a deceased performer, a digital replica, two prohibited uses, without consent, and a likelihood of deception.

A “deceased performer” is defined in subsection 1(a) as: “a deceased natural person domiciled in this state at the time of death who, for gain or livelihood, was regularly engaged in acting, singing, dancing, or playing a musical instrument.” Like the basic right, this prohibition also applies only to people “domiciled in this state at the time of death.” New York is not recognizing any rights for performers who are domiciled elsewhere at the time of death. The definition overlaps considerably with that of a “deceased personality,” but they are not identical: the “deceased performer” does not have to have any kind of commercial value, but they do have to have been paid. (I would interpret “gain” to require pecuniary or monetary gain, or perhaps an exchange of goods or services in kind; I am confident that “gain” will not include any emotional or psychic well-being that one obtains from performing.) Notably, most athletes are not included in the definition of “deceased performer,” but dancers are. (I imagine paid cheerleaders would fall within the definition, as would street dancers and musicians who “pass the hat” to solicit cash donations.)

A “digital replica” is defined in subsection 1(c) as:

a newly created, original, computer-generated, electronic performance by an individual in a separate and newly created, original expressive sound recording or audiovisual work in which the individual did not actually perform, that is so realistic that a reasonable observer would believe it is a performance by the individual being portrayed and no other individual.

Digital replicas, also known as “deepfakes,” are often created using machine learning, by scanning a person’s prior performances and analyzing them to create a digital model of their facial features and vocal inflections, and then applying that digital model to new content. Sometimes “motion capture” technology is used on a live person to get the basic movements of the performance, to which the digital model is then applied. For examples of digital replicas, see these videos featuring deepfakes of former President Barack Obama (1, 2).

(The statute defines a “sound recording” in subsection 1(d); the definition is identical to the definition in the federal Copyright Act [17 U.S.C. § 101]. The statute does not define an “audiovisual work,” but it seems reasonable to assume that courts may and will borrow the definition of that term from the federal Copyright Act as well.)

The definition of “digital replica” also excludes certain material:

A digital replica does not include the electronic reproduction, computer generated or other digital remastering of an expressive sound recording or audiovisual work consisting of an individual’s original or recorded performance, nor the making or duplication of another recording that consists entirely of the independent fixation of other sounds, even if such sounds imitate or simulate the voice of the individual.

The latter exclusion helps avoid a conflict with (and certain preemption by) the federal Copyright Act, which expressly permits such “sound-alike” recordings. [17 U.S.C. § 114(b)]

The statute only prohibits two uses of “digital replicas”: “in a scripted audiovisual work as a fictional character or for the live performance of a musical work.” It is unfortunate that this subsection contains a possible ambiguity: must the “live performance of a musical work” be embedded “in a scripted audiovisual work” or not? Given that one of the earliest examples of deepfake technology was a hologram of Michael Jackson performing at the Billboard Music Awards in 2014, the best interpretation is that the limitation “in a scripted audiovisual work” only applies to the use “as a fictional character.” But the ambiguity could have been avoided by switching the order of the two uses or by setting the second use off with paired commas.

But why is the second use limited to a “live” performance of a musical work? Again, this was probably done to avoid a conflict with the federal Copyright Act, which expressly allows “sound-alike” recordings that “consist entirely of the independent fixation of other sounds.” (Query whether a digital model created by an artificial intelligence trained with actual recordings is an “independent fixation of other sounds.”) Also, why is the first use limited to a “scripted” audiovisual work? Artificial intelligence can also be used to create improvised interactive dialogue. Note also that use of a digital replica as a “nonfictional” character is permitted.

Finally, the digital replica prohibitions require a likelihood of deception. This limitation is so important that it was included twice: once in the definition of “digital replica” (“so realistic that a reasonable observer would believe it is a performance by the individual being portrayed”) and once in the prohibition itself (“if the use is likely to deceive the public into thinking it was authorized by the person or persons specified in subdivision four”). This limitation was probably included to avoid a conflict with the First Amendment. Subsection 2(b), however, provides an easy out for the replica user: a prominent disclaimer:

A use shall not be considered likely to deceive the public into thinking it was authorized by the person or persons specified … if the person making such use provides a conspicuous disclaimer in the credits of the scripted audiovisual work, and in any related advertisement in which the digital replica appears, stating that the use of the digital replica has not been authorized by the person or persons specified ….

One imagines there will be litigation over how “conspicuous” the disclaimer must be; but it is also possible that a custom and practice will develop that will satisfy most prospective plaintiffs.

Subsection 2(d)(ii) excludes a somewhat more limited list of expressive works from the scope of the digital replica right:

it shall not be a violation of paragraph b of this subdivision if the work is of parody, satire, commentary, or criticism; works of political or newsworthy value, or similar works, such as documentaries, docudramas, or historical or biographical works, regardless of the degree of fictionalization; a representation of a deceased performer as himself or herself, regardless of the degree of fictionalization, except in a live performance of a musical work; de minimis or incidental; or an advertisement or commercial announcement for any of the foregoing works.

Since the digital replica right is limited to simulated “performances,” the omission of literary works and works of art is of no consequence. It is difficult to understand, however, why works of “public interest [or] educational” value are omitted from the list; but the examples given are broad enough to include most such works within the meaning of the word “newsworthy.”

Duration of the Post-Mortem Rights

Under subsection 8, “[a]n action shall not be brought under this section by reason of any use of a deceased personality’s name, voice, signature, photograph, or likeness occurring after the expiration of forty years after the death of the deceased personality.” No explanation is given why the term of protection was set at 40 years after death. The term seems midway in between Virginia (20 years after death) and California (70 years after death).

The language of subsection 8 expressly applies only to the basic right of a “deceased personality” and not to the prohibition against using a “digital replica” of a “deceased performer.” One imagines that a court will infer, using the canon of expressio unius est exclusio alterius (expression of one thing implies exclusion of other similar things), that the 40-year term limit does not apply to deceased performers, with the result that the digital replica prohibition is perpetual. Indeed, given that the digital replica right is limited to deceptive uses that lack a prominent disclaimer, that is an entirely plausible interpretation.

That interpretation would be persuasive, however, except for one salient fact: the terms “deceased performer” and “digital replica” are also omitted from almost every other subsection in the statute after subsection 2, including the sections that specify who owns and can enforce the rights, how the rights are transferred, and how to register the rights. Like subsection 8, subsections 3, 6, and 7 specifically mention only the rights of a “deceased personality” and not the rights of a “deceased performer.” (Subsection 9, however, mentions both.) It is difficult to believe that the Legislature intended that all of these provisions apply only to the basic right of a “deceased personality,” and not to the “digital replica” rights of a “deceased performer.” It seems far more likely that the Legislature drafted the statute only with “deceased personalities” in mind, and that it later added the prohibition concerning “digital replicas” of “deceased performers” without amending the rest of the statute to conform to the addition. This is a serious omission, and it begs for immediate legislative action to clarify which sections do and do not apply also to “deceased performers.”

Absent legislative clarification: the definition of “deceased personality” is broad enough to include any “deceased performer” (the only additional element is the person’s “commercial value”), and a court could read the term “likeness” to include any digital likenesses, including digital replicas, in those subsections where such a reading makes sense. But it is not consistent with the judicial role for a court to use such an expansive reading in some subsections but not in others. Closer examination of the legislative history may reveal a more definitive answer.

Non-Retroactivity

The codified statute [N.Y. Civ. Rights L. § 50-f] does not specify whether the statute is retroactive or not. That detail is found in an uncodified section of the enacted bill [S. 05959D]. Section 1 enacts new § 50-f. Section 2 enacts new § 52-c, which prohibits “a sexually explicit depiction of an individual.” (That section is not covered in this blog post.) Section 3 provides: “This act shall take effect on the one hundred eightieth day after it shall have become a law, and shall apply to all living individuals and deceased individuals who died on or after such date.”

The first clause of section 3 is straightforward: the act was signed by Governor Cuomo on November 30, 2020, so it comes into effect on May 29, 2021. It is the second clause that is critical: the new post-mortem rights of publicity are not retroactive. Instead, they apply only to “living individuals and deceased individuals who died or after such date.” The heirs of deceased personalities and performers that died before May 29, 2021, are simply out of luck.

As I mentioned at the outset, I believe that this clause, excluding previously deceased celebrities from the protection of the statute, was an important part of the compromise that led the MPAA to accept the amended bill. Under the act, studios can continue to exploit previously deceased celebrities that appeared in their motion pictures all they want. From now on, they will have to get licenses from the living performers who appears in their movies and television shows; but because of statutory and common-law rights of publicity in other states, they have already been doing that for many decades now. The rights of previously deceased celebrities who were domiciled in New York at the time of death, such as Marilyn Monroe, will continue to remain in the public domain as a matter of state law. (Be careful, however, about federal copyrights and trademarks owned by the estates and licensees of previously deceased celebrities.)

Additional Defenses

In addition to the three specific limitations mentioned above, subsection 2(d) contains one additional defense, and subsection 9 contains another.

Subsection 2(d)(iv) provides:

it shall not be a violation of this section if the use is of a name, voice, signature, photograph, or likeness in a commercial medium solely because the material containing the use is commercially sponsored or contains paid advertising or product placement, or includes within it a use in connection with a product, article of merchandise, good, or service. Rather, it shall be a question of fact whether or not the use of the deceased personality’s name, voice, signature, photograph, or likeness was so directly connected with the commercial sponsorship or with the paid advertising or product placement as to constitute a use for which consent is required under this subdivision.

In other words, the fact that newspapers and magazines contain print ads, and that radio and television shows contains commercials and product placement, does not by itself make the use actionable as one made “for purposes of advertising or selling, or soliciting purchases of, products, merchandise, goods, or services.” [Subsection 2(a)] Beginning with the word “solely,” subsection (d)(iv) is nearly identical to the corresponding section in the California statute [Cal. Civ. Code § 3344.1(k)], except that 2(d)(iv) includes “or product placement” in two places, and it adds the phrase “or includes within it a use in connection with a product, article of merchandise, good, or service.”

Subsection 2(e) contains an exclusion from the subsection 2(d) exemption:

In relation to a violation of paragraph a of this subdivision, if a work that is protected under paragraph d of this subdivision includes within it a use in connection with a product, article of merchandise, good, or service, this use shall not be exempt under paragraph d of this subdivision, notwithstanding the unprotected use’s inclusion in a work otherwise exempt under paragraph d of this subdivision, if the claimant proves that this use is so directly connected with a product, article of merchandise, good, or service as to constitute an act of advertising, selling, or soliciting purchases of that product, article of merchandise, good, or service by the deceased personality without prior consent for the use under paragraph a of this subdivision from the person or persons specified in subdivision four of this section.

Subsection 2(e) is directed toward “product placement” within an expressive work. But subsection 2(d) already takes product placement into account, and it states that the degree of connection between the deceased personality and the product placement “shall be a question of fact.” What does subsection 2(e) add to that? Both subsections provide that the use must be “directly connected” with the product to be actionable. Subsection 2(e) adds the “claimant” has the burden of proof on this issue, which is a welcome clarification. Other than that, however, this section seems entirely redundant of subsection 2(d).

Subsection 2(e) is nearly identical with the corresponding subsection in the California statute. [Cal. Civ. Code § 3344 (a)(3)] But in California, the “product placement” exception is separate from the provision regarding other paid advertising, and it specifically applies to the exemption for expressive works. In New York, the “product placement” exception is repeated in the provision regarding other paid advertising, and it only applies to the subsection 2(d)(iv) exemption for works containing paid advertising, rather than to the subsection 2(d)(i) exemption for all expressive works. In other words, in California the two subsections overlap but are not completely redundant. In New York, they appear to be almost completely redundant (except perhaps for the burden of proof). Moreover, even though subsection 2(d)(iv) exempts certain uses from “this section,” and not just from “paragraph a,” it only expressly addresses the basic right and not the digital replica right. Offhand, I cannot think of a fact situation where the distinction will make a difference in the legal outcome; but it is another example of sloppy drafting.

Subsection 9 provides a defense for owners and employees of the medium of distribution:

Nothing in this section shall apply to the owners or employees of any medium used for advertising, including, but not limited to, newspapers, magazines, radio and television networks and stations, cable television systems, billboards, and transit advertisements, by whom any advertisement or solicitation in violation of this section is published or disseminated, unless it is established that the owners or employees had actual knowledge by prior notification of the unauthorized use of the deceased performer’s digital replica or deceased personality’s name, voice, signature, photograph, or likeness as prohibited by this section.

Again, this subsection is virtually identical to the corresponding subsection in the California statute [Cal. Civ. Code § 3344.1(l)], which was enacted in the 1990s. The phrase “including, but not limited to” covers owners and employees of media that did not exist at that time, such as streaming services.

Remedies

If a violation is found, subsection 2(c)(i) provides for “the greater of two thousand dollars or the compensatory damages suffered by the injured party or parties, and any profits from the unauthorized use” that do not overlap compensatory damages. Given the placement of the comma, it would be a stretch to find that the statute was ambiguous; the $2000 is an alternative to compensatory damages only, and profits may be awarded in addition to either measure of damages. (Mathematically, it means ($2000 or CD) + P, rather than $2000 or (CD + P).) This is notable because it is different from the federal Copyright Act, which makes statutory damages an alternative to the sum of damages and profits. [17 U.S.C. § 504(a)] This subsection is identical to the corresponding section of the California post-mortem statute [Cal. Civ. Code § 3344.1(a)(1)], except that the statutory damages have been increased from $750 in California to $2000 in New York.

Subsection 2(c)(ii) allocates the burden of proof: “in establishing profits under this subdivision, the injured party or parties shall be required to present proof only of the gross revenue attributable to the unauthorized use, and the person who violated this section is required to prove his or her deductible expenses.” This burden-shifting mechanism is also used in the California statute, as well as the federal Copyright Act .[17 U.S.C. § 504(b)] It works well for merchandising cases (or sales of infringing copies); it works very poorly for indirect profits, where a person’s likeness (or an infringing work) is used to advertise the sale of a product that is not itself infringing. How much of the profit from the sale of a non-infringing article should be attributed to an infringing advertisement? In my view, the proper comparison is how much profit would have been made with a non-infringing advertisement, rather than how much profit would have been made with no advertisement at all.

Finally, subsection 2(c)(iii) allows for the recovery of punitive damages. This remedy is also provided for in the California statute. (By contrast, punitive damages are not available for copyright infringement; but the statutory damages for copyright infringement are potentially much larger, up to $30,000, and they can be increased up to $150,000 for willful infringements. [17 U.S.C. § 504(c)])

Ownership and Registration

Subsections 3 through 7 of the new statute govern ownership of the post-mortem rights. Four of the subsections are nearly identical with California’s post mortem statute; but unlike California, the subsection on intestate succession relies on New York’s default provisions rather than specifying particular heirs.

Subsection 3 provides that “The rights recognized under this section are property rights, freely transferable or descendible, in whole or in part, by contract, license, gift, or by means of any trust or any other testamentary instrument.” As Professor Rothman has argued, the assignability of the right of publicity is problematic; it allows large corporations to become the “owner” of the right and to enforce it against the celebrity’s or family’s own wishes.

Subsection 4 provides that consent shall be obtained from the person or persons to whom the right has been transferred under subsection 3, or by the person or persons who obtain it by intestate succession under subsection 5.

Subsection 5 provides that if there is no transfer during one’s lifetime or by will upon one’s death, then the right shall pass by the laws of intestate succession. When that occurs, the right may be exercised and enforced by those persons holding at least a 51% interest, with a duty to make an accounting to the minority owners. (One ambiguity: does this imply that when there are joint owners under subsection 3, the consent under subsection 4 must be unanimous? Or does it simply reiterate what would otherwise be the default rule applicable to joint owners under subsection 3?) Subsection 6 provides that if there is no assignment and there are no heirs, the right terminates.

Subsection 7 provides that an owner or licensee can register with the New York Secretary of State, who must post all such claims of ownership on a publicly available website. A successor in interest or licensee “shall not have a cause of action for a use prohibited by this section that occurs before the successor in interest or licensee registers a claim of the rights.”

Other Provisions

Subsection 10 provides that “The provisions of this section are in addition to, but shall not supersede, any other rights or remedies available in law or equity.” As noted above, New York does not have a common-law right of publicity for either living persons or deceased persons. Thus, the new statute leaves intact the existing New York right of publicity statute for living persons, and merely supplements it with the new statute for deceased ones.

Subsection 11 provides:

This section shall apply to the adjudication of liability and the imposition of any damages or other remedies in cases in which the liability, damages, and other remedies arise from acts occurring directly in this state. For purposes of this section, acts giving rise to liability shall be limited to the use, on or in products, merchandise, goods, or services, or the advertising or selling, or soliciting purchases of, products, merchandise, goods, or services prohibited by this section.

This subsection is identical to the corresponding provision in the California statute. [Cal. Civ. Code § 3344.1(n)] In Cairns v. Franklin Mint Co., 292 F.3d 1139, 1146 (9th Cir. 2002), the plaintiff (Lord Simon Cairns, executor of the estate of Diana, Princess of Wales) argued that this section was a choice-of-law clause, meaning that California law applied regardless of the domicile of the decedent. The Ninth Circuit disagreed, noting that the California Legislature had expressly rejected an amendment that would have made California law applicable regardless of the domicile of the decedent. Instead, the Ninth Circuit held that California’s default choice-of-law statute, Civil Code § 946, “required application of the law of the decedent’s domicile” in post-mortem right of publicity cases. Since Diana was domiciled in England at the time of her death, and England does not recognize a post-mortem right of publicity, the claims of her estate were dismissed.

As noted above, the New York statute only applies to a “deceased personality” or “deceased performer” who was domiciled in New York at the time of his or her death. Thus, the argument that subsection 11 is a choice-of-law clause would make little sense for plaintiffs. Instead, the first sentence merely limits the scope of the statute, so that it does not have any extraterritorial application. The second sentence is more problematic: if taken literally, it would nullify the digital replica right, except in cases of advertising. Again, this appears to be a consequence of sloppy drafting: when the digital replica right was added to previous versions of the bill, no one checked to see how it interacted with the other provisions. I would expect a court to hold that the second sentence only applies to the basic right in subsection 2(a).

Finally, subsection 12 provides: “Nothing in this section shall be construed to limit, or to enlarge, the protections that 47 U.S.C. § 230 confers on an interactive computer service for content provided by another information content provider, as such terms are defined in 47 U.S.C. § 230.” This subsection is entirely unnecessary. Under the Supremacy Clause of the U.S. Constitution, art. VI, § 2, New York has no power to “limit … the protections” that a federal statute confers, even if it wanted to. When federal law and state law conflict, federal law is supreme and state law is preempted. New York could provide more protection for an “interactive computer service” if it wanted to, but nothing in the new statute does that. Why someone thought this section was necessary is beyond me, but it does no harm.

Conclusion

Although the enactment of a post-mortem right of publicity in New York is momentous, the statute itself is of limited applicability. It only applies to deceased personalities and performers who were domiciled in New York at the time of their deaths. It does not apply to previously deceased personalities and performers, but only to those who die on or after its effective date: May 29, 2021. The basic right applies only to advertising and merchandising uses, and not to any expressive works; and its term of 40 years after the person’s death is moderate in comparison with other states. Finally, the digital replica right only applies to those digital replicas that are deceptive and lack a conspicuous disclaimer. Overall, the new law is more balanced and limited than previous proposed versions of the statute.

The digital replica right breaks new ground. The biggest ambiguity is whether the 40-year post-mortem term also applies to the digital replica right or not. Otherwise, the similarity of many of the sections of the new statute to California’s post-mortem right of publicity is striking. One imagines that California case law interpreting its statute will be considered as persuasive authority in New York.

One struggles to find evidence that the previous lack of a post-mortem right of publicity in New York has caused any substantial harm to its residents. Advertisements featuring dead celebrities already violated false endorsement laws or the laws of other states. The main effect will be on the market for merchandise featuring dead celebrities; but because the statute does not apply to previously deceased celebrities, it will take a while for the impact on that market to be felt. When it is felt, prices for celebrity merchandise are likely to rise. But while it was lobbied for as benefitting the heirs of dead celebrities, most of the benefit will go to large corporations that were savvy enough to negotiate assignments or licenses during the celebrities’ lifetimes.

Celebrities ought to go into the public domain when they die. But even if it has little public benefit, the enactment of a post-mortem right of publicity in New York will likely do little, if any, additional harm.

The post New York’s New Post-Mortem Right of Publicity Law Comes Into Effect, Part 2 (Guest Blog Post) appeared first on Technology & Marketing Law Blog.

New York’s New Post-Mortem Right of Publicity Law Comes Into Effect, Part 1 (Guest Blog Post)

Eric Goldman — Tue, 01 Jun 2021 14:42:16 +0000

by guest blogger Tyler Ochoa

This is the first of a two-part series on the new law. In this post, I’ll explain the development of existing law and previous controversies concerning post-mortem rights of publicity. In the second post, I’ll do a statutory analysis.

Background: New York’s Existing Statutory Right of Privacy

In 1890, Samuel Warren and Louis Brandeis published their famous article The Right to Privacy, 4 Harv. L. Rev. 193 (1890). In it, they argued for a “right to be let alone,” including the right of a person to prevent the publication of their photograph: “since the latest advances in photographic art have rendered it possible to take pictures surreptitiously, the doctrines of contract and of trust are inadequate to support the required protection, and the law of tort must be resorted to.” Id. at 211.

A decade later, the article became the focus of a litigated case. Abigail Roberson, age 17, was distressed to discover that a photograph of her was being used in an advertisement for the Franklin Mills Flour Company. She sued for a violation of her right to privacy. The case reached the New York Court of Appeals (the highest court in New York) in 1902, which held 4-3 that the common law did not recognize a right of privacy and she could not recover. Roberson v. Rochester Folding Box Co., 171 N.Y. 538, 64 N.E. 442 (1902).

The backlash to the Roberson decision was so strong that in 1903, the New York Legislature enacted what is now New York Civil Rights Law sections 50 and 51:

50. A person, firm or corporation that uses for advertising purposes, or for the purposes of trade, the name, portrait or picture of any living person without having first obtained the written consent of such person, or if a minor of his or her parent or guardian, is guilty of a misdemeanor.

51. Any person whose name, portrait, picture or voice is used within this state for advertising purposes or for the purposes of trade without the written consent first obtained as above provided may maintain an equitable action in the supreme court of this state against the person, firm or corporation so using his name, portrait, picture or voice, to prevent and restrain the use thereof; and may also sue and recover damages for any injuries sustained by reason of such use….

This was the first statutory recognition of any type of right of privacy in the United States. As amended (“voice” was added in 1995), this statute is still the foundation for the right of privacy in New York. Note, however, that section 50 is expressly limited to “any living person,” and that implicitly, section 51 is also so limited (“as above provided”).

Abigail Roberson didn’t get any money, but she did get the last laugh. In 1904, the man who had written the majority opinion, Chief Judge Alton B. Parker, became the Democrat nominee for President against the incumbent, Republican Theodore Roosevelt. During the campaign, he complained that he and his family were being harassed by photographers (today we call them “paparazzi”): “I reserve the right to put my hands in my pockets and assume comfortable attitudes without being everlastingly afraid that I shall be snapped by some fellow with a camera.” In response, Roberson wrote a letter published on the front page of the New York Times: “I take this opportunity to remind you that you have no such right as that which you assert. I have very high authority for my statement, being nothing less than a decision of the Court of Appeals of this State wherein you wrote the prevailing opinion…. I am forced to the conclusion that this incident well illustrates the truth of the old saying that it makes a lot of difference whose ox is gored.”

Background: The Common-Law Right of Publicity

In 1905, Georgia became the first state to adopt a common-law right of privacy. The facts of the case were quite similar to Roberson: a studio photograph of Paolo Pavesich was used without his permission in an advertisement for life insurance. The Georgia Supreme Court unanimously held that “the publication of one’s picture without his consent by another as an advertisement” is an invasion of “the right of privacy.” Pavesich v. New England Life Insurance Co., 122 Ga. 190, 220, 50 S.E. 68 (1905). (One suspects it is not a coincidence that male judges were more sympathetic to a man whose photo was used without permission than to a woman in the same position; but the Georgia judges were no doubt also aware of the controversy that the Roberson decision had caused.) A number of states followed suit; and within a few decades the right of privacy was firmly established. There were a few dissenting voices, however, that suggested celebrities could not complain about an invasion of their “privacy” when they had sought the public limelight. See O’Brien v. Pabst Sales Co., 124 F.2d 167 (5th Cir. 1941).

In the 1950s, two baseball card companies went to war. The market leader was Bowman Gum Company, which had signed contracts with a number of ball players permitting it to use their likenesses on baseball cards. Most of those contracts also provided for exclusivity: the player promised not to allow other companies to do the same. The upstart was Topps Chewing Gum, Inc., which paid more money to obtain releases from many of the same ball players to publish its baseball cards. After Bowman was purchased by Haelan Laboratories, it filed suit against Topps for tortious interference with contract.

But Haelan had at least two problems with its case. The first was that knowledge was an essential element of the tort of interference with contract, and Haelan could not always prove that Topps had knowledge of the exclusivity clauses. (In some instances, this was because the releases had had been obtained by a third party, Russell, which assigned the contracts to Topps.) The second was the New York statute, which gave the right to the players to decide whether to allow their photos to be published. Haelan could have sued the players for breach of contract, but it didn’t want them to alienate them. What Haelan wanted was an assignable property right, so that it could enforce the players’ contractual promises of exclusivity against a third party. But Topps argued convincingly that the statutory right of privacy was a personal right that could not be assigned and could only be enforced by the person depicted.

In the famous opinion of Haelan Laboratories, Inc. v. Topps Chewing Gum, Inc., 202 F.2d 866 (2d Cir. 1953), the Second Circuit responded by inventing a “right of publicity” that was assignable:

We think that, in addition to and independent of that right of privacy (which in New York derives from statute), a man has a right in the publicity value of his photograph, i.e., the right to grant the exclusive privilege of publishing his picture, and that such a grant may validly be made “in gross,” i.e., without an accompanying transfer of a business or of anything else….

This right might be called a “right of publicity.” For it is common knowledge that many prominent persons (especially actors and ball-players), far from having their feelings bruised through public exposure of their likenesses, would feel sorely deprived if they no longer received money for authorizing advertisements, popularizing their countenances, displayed in newspapers, magazines, busses, trains and subways. This right of publicity would usually yield them no money unless it could be made the subject of an exclusive grant which barred any other advertiser from using their pictures.

Following Haelan, the newly-minted “right of publicity” received the endorsement of two influential commentators. The first was Melville Nimmer, who later became a professor at UCLA School of Law and authored a leading treatise on U.S. copyright law. In The Right of Publicity, 19 L. & Contemp. Probs. 203 (1954), Nimmer praised the Second Circuit’s decision in Haelan and recommended its adoption nationwide. Six years later, William Prosser, Dean of the University of California at Berkeley School of Law and author of the treatise Prosser on Torts, authored an influential article entitled simply Privacy, 48 Cal. L. Rev. 383 (1960), in which he named four categories of invasions of privacy, including “appropriation, for the defendant’s advantage, of the plaintiff’s name or likeness.” Prosser’s four privacy torts were incorporated into the Restatement (Second) of Torts (1977), for which he was the Reporter. As a result, many other states adopted a common-law right, whether named privacy or publicity, that became an assignable intellectual property right.

Note that Haelan was in federal court because of diversity of citizenship between the parties. Accordingly, under the doctrine of Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938), the substantive law to be applied by the federal court was New York law, rather than general federal common law. Thirty years later, the New York Court of Appeals held that the Second Circuit’s Erie prediction was incorrect. In Stephano v. News Group Publications, Inc., 64 N.Y.2d 174 (1984), it held that “Since the ‘right of publicity’ is encompassed under the Civil Rights Law as an aspect of the right of privacy, which … is exclusively statutory in this State, the plaintiff cannot claim an independent common-law right of publicity.” Id. at 183 (emphasis added).

But the Stephano decision came thirty years too late. By the time it was decided, the right of publicity was already firmly embedded in the common law of many other states. In her book, The Right of Publicity: Privacy Reimagined for a Public World (Harv. Univ. Press 2018), Professor Jennifer Rothman argues that Haelan was a wrong turn that should be abolished, and that states should return to a right of privacy that is personal and is not assignable, so that celebrities (and not corporations) retain control over their own images.

Background: The Post-Mortem Right of Publicity

During the thirty years that the federal courts were confidently (but incorrectly) predicting that New York would recognize a common-law right of publicity, in many states there arose the question of whether the right of publicity should continue to exist post-mortem, so that a person’s heirs could enforce the right of publicity against others after the person’s death.

In the 1970s and 1980s, a number of district courts and the Second Circuit predicted that New York would recognize a post-mortem right of publicity that was descendible. See, e.g., Factors Etc., Inc. v. Pro Arts, Inc., 579 F.2d 215, 220-22 (2d Cir. 1978) (Elvis Presley); Price v. Hal Roach Studios, Inc., 400 F. Supp. 836, 844-45 (S.D.N.Y. 1975) (Laurel and Hardy). Georgia likewise held that its common-law right of publicity was descendible. Martin Luther King, Jr. Center for Social Change, Inc. v. American Heritage Prods., Inc., 250 Ga. 135, 296 S.E.2d 697 (1982).

In 1979, however, the California Supreme Court held that there was no post-mortem right of publicity for a deceased celebrity. (The lead case, ironically, involved actor Bela Lugosi, whose most famous role was the undead Count Dracula in the 1927 Broadway production and the 1931 film adaptation.) Lugosi v. Universal Pictures, 25 Cal. 3d 813, 160 Cal. Rptr. 323, 603 P.3d 425 (1979); Guglielmi v. Spelling-Goldberg Prods., 25 Cal. 3d 860, 160 Cal. Rptr. 352, 603 P.2d 454 (1979) (Rudolph Valentino). One year later, the Sixth Circuit predicted that Tennessee likewise would not recognize a post-mortem right of publicity. Memphis Development Foundation v. Factors Etc., Inc., 616 F.2d 956 (6th Cir. 1980) (Elvis Presley).

As a result, during the first half of the 1980s, plaintiffs with post-mortem right of publicity claims sought to apply get their cases heard in New York, while defendants sought to use the law of either California or Tennessee. See Factors Etc., Inc. v. Pro Arts, Inc., 652 F.2d 278, 280-81 (2d Cir. 1981) (applying Tennessee law), opinion on denial of reh’g, 701 F.2d 11 (2d Cir. 1983); Groucho Marx Prods. v. Day & Night Co., 689 F.2d 317 (2d Cir. 1982) (Marx Brothers).

But there was an abrupt reversal of the law in 1984. That year, the New York Court of Appeals held in Stephano that there was no common-law right of publicity in New York (post-mortem or otherwise), rendering invalid all of the cases that had held to the contrary. Also in that year, California enacted its statutory post-mortem right of publicity (Cal. Civ. Code § 990, later amended and renumbered as Cal. Civ. Code § 3344.1) and Tennessee also enacted a statutory post-mortem right of publicity (Tenn. Code § 47-25-1105). Suddenly, the strategic positions of the parties were reversed: plaintiffs with post-mortem right of publicity claims wanted to apply the law of either California or Tennessee, while defendants wanted to apply the law of New York.

This disparity between the twin poles of the entertainment industry, California and New York, played out in a remarkable long-running dispute over the post-mortem right of publicity of actress Marilyn Monroe. At the time of her death in 1962, Monroe owned both a house in California and an apartment in New York. She lived in California when she was making movies, but she lived in New York in between movies. Although she died in California, for tax reasons her will was submitted for probate in New York, and her estate relied on testimony supporting its position that she was “domiciled” in New York at the time of her death. Four decades later, however, in parallel litigation with photographers in California and New York, her estate took the position that she had been domiciled in California, and was therefore entitled to its statutory 70-year post-mortem right of publicity. Eventually, however, the Ninth Circuit held that her estate was judicially estopped from claiming she was domiciled in California, terminating her post-mortem right of publicity. (For the full story, see my previous blog post titled Marilyn Monroe’s Image is Cast Into the Public Domain — Sort Of).

Thus, for the past four decades, California has had a statutory post-mortem right of publicity (originally 50 years after death, now 70 years after death), while New York has no post-mortem right of publicity of any kind. During the long-running litigation involving Marilyn Monroe, her estate tried several times to get the New York Legislature to enact a post-mortem right of publicity statute. It failed each time, largely because of opposition from the MPAA. That is why the enactment of a post-mortem right of publicity statute in New York, after so many failed attempts, is such a big deal.

For more on the post-mortem right of publicity, see my previous blog post titled How Long Does a Post-Mortem Right of Publicity Last?–Hebrew University v. GM. (That ruling, limiting the duration of Albert Einstein’s post-mortem right of publicity to 50 years, was so controversial that it was later vacated upon settlement, by agreement between the parties. See Hebrew University of Jerusalem v. General Motors, Inc., 2015 WL 9653154 (C.D. Cal. Jan. 12, 2015).)

Check out part 2 of this series.

The post New York’s New Post-Mortem Right of Publicity Law Comes Into Effect, Part 1 (Guest Blog Post) appeared first on Technology & Marketing Law Blog.

Social Media Ownership Disputes Part II: Bridal Wear Company Takes Back Control of Instagram Account from Ex-Employee

Venkat Balasubramani — Mon, 08 Mar 2021 15:05:12 +0000

This is Part II of a review of recent social media ownership disputes. In Part I, I looked at how the Satanic Temple of Washington could not use the CFAA or ACPA to get its Facebook accounts back. Part II involves a bridal wear business’ (JLM Couture) successful reclaim of its Instagram and other social media accounts. In this case, a New York federal judge granted a preliminary injunction against the defendant, Hayley Paige Gutman, prohibiting her from interfering with plaintiff’s use of the account, which generally gave control over the account to JLM.

[Eric’s comment: if you’re like me and you have no idea who Hayley Paige Gutman is, this Cornell alumni magazine spotlight might help. Also, this Business Insider story provides a chronology of this high-profile and messy dispute, featuring an unfortunately public war of words.]

The big difference between the cases: JLM and Gutman had an agreement that addressed JLM’s right to use Gutman’s name. The agreement, which the parties entered into in 2011 (and which was extended at JLM’s option through 2022), also allowed JLM to register a range of trademarks using Ms. Gutman’s name, had solid work-for-hire language, and included a non-compete. The court’s opening paragraph of the findings of fact tells you how this is likely to go:

In the Contract, Ms. Gutman agreed, inter alia, to perform certain duties and granted Plaintiff certain exclusive rights to use and trademark the name “Hayley Paige” and variations thereof. . . . Ms. Gutman also granted Plaintiff “the exclusive world-wide right and license to use her name ‘Hayley’, ‘Paige’, ‘Hayley Paige Gutman’, ‘Hayley Gutman’, ‘Hayley Paige’ or any derivative thereof ([defined] collectively [as] the ‘Designer’s Name’)” for certain purposes during the stated term of the Contract and for two years thereafter. . . . Explicitly in exchange “for the assignment to the Company of the Designer’s Name and the Trademarks,” JLM agreed to pay Ms. Gutman as consideration, in addition to her base pay and additional sales volume-related compensation, and for ten years following the termination of her employment with the company, a further percentage of “net revenues derived from the sale of goods under the Designer’s Name and Trademarks based on the Designer’s [N]ame.” . . . The parties engaged in “rounds of negotiations” over the terms of the Contract, during which Ms. Gutman referenced a “Kenneth Pool example” and asked to “add perpetuity language.” . . . Ms. Gutman represented to Plaintiff during the negotiations that she had an attorney review the Contract during the negotiations, a statement she now claims was untrue. . . .

JLM successfully obtained registrations in various “Hailey Paige” related marks. Ms. Gutman consented to these registrations, as the agreement required.

Ms. Gutman had a Facebook page prior to joining JLM, and she opened an Instagram page after she signed the agreement. She testified that since “Hailey Paige” was taken, she went with “@misshayleypaige”. She used the account to post both personal and professional items, but she involved JLM in many aspects of managing the account. She sought JLM’s help and proposed hiring the Social Media Director to oversee the Instagram account. The court cites several examples where she discusses JLM’s posts to the account. JLM also used the account in its off-line marketing efforts, such as including the account handle on “hang tags” of physical garments. In other words, things were very intertwined in terms of JLM’s use of an Instagram account bearing Ms. Gutman, an employee’s, name. (It appears that Ms. Gutman was also working with JLM on a wedding-focused “emoji app,” although this was not directly relevant in the preliminary injunction ruling.)

Separately, while she continued to work with JLM, Ms. Gutman also entered into so-called “influencer” agreements with non-bridal wear brands such as Chosen Foods (a salad dressing company) and Optimum Whey (a supplement). The latter arrangement was not directly with the brand but was through her then-fiancé.

The employment contract could be extended by JLM and could only be terminated by JLM. In 2019, JLM extended the contract and the parties engaged in unsuccessful negotiations regarding Ms. Gutman’s ongoing social media duties.

In November 2020, the account had 1+ million followers. Ms. Gutman informed JLM that she would no longer post “JLM related business” to the account.

JLM sued in December 2020. The court issued a TRO requiring Ms. Gutman to turn over control of various accounts to JLM. Now before the court is JLM’s request for a preliminary injunction. It’s granted in large part.

Breach of contract: The court comes to the following conclusions with respect to the breach of contract claim and likelihood of success on that claim:

Term: Ms. Gutman remained bound by the agreement during the term, notwithstanding her voluntary resignation via YouTube video.
Scope: The agreement broadly conveys to JLM the right to use Ms. Gutman’s name and “any derivative thereof” in connection with products Gutman was involved in. This “unambiguously encompasses ‘misshayleypage’ and ‘@Misshayleypaige’.”
Breach: The contract prohibits Ms. Gutman from using her name or related marks to promote third party products or services. Her separate influencer agreements violated this restriction. Ms. Gutman’s refusal to assist JLM with posting content to the account is also a breach. (While Ms. Gutman noted the then-ongoing negotiations regarding her future assistance on social media as evidence that the existing agreement did not encompass these duties, the court rejects this attempt, finding the language unambiguous.)
Account content: The court also finds that any JLM-related material she posted to the account is owned by JLM. The court says “the contents of the account are a work for hire.”
Non-competition: The court also gives its initial stamp of approval to the non-compete provisions of the agreement and finds that Ms. Gutman’s February 2021 announcement that she would participate virtually at a bridal expo potentially violates the non-compete.

Trademark infringement: The trademark infringement claim appears premised on Ms. Gutman’s use of the account “as her personal influencer platform.” Here’s the court’s summary:

factors one, two, three, five, and six weigh in favor of consumer confusion, factor four weighs against, and factors seven and eight are neutral. Ms. Gutman’s bad faith in using her trademarked name in commerce separate from her work for Plaintiff weighs particularly heavily in the Court’s balancing, given the evidence that she sought to exploit her work for Plaintiff while avoiding a direct contractual relationship with the Optimum Whey enterprise until after she had renegotiated the Contract. In assessing the totality of the likely impression on a consumer, the Court also notes that the “misshayleypaige” term has been used to identify the Account in connection with both Plaintiff’s goods and the third-party goods. The use of an identical mark on an Account where consumers had previously seen Plaintiff’s goods and also began to see promotion of third-party goods, increases the likelihood of confusion as to affiliation should Ms. Gutman be able to continue to use the handle and Designer’s Name in commercial activities on social media. Accordingly, the Court finds that consumer confusion is likely to result from Ms. Gutman’s use of the Designer’s Name, its registered trademarks, or similar variations in commerce to promote other products or to promote Ms. Gutman herself as an influencer able to promote other vendors’ products.

Non-disparagement: JLM also sought injunctive relief prohibiting Gutman from speaking on the litigation and about JLM’s tactics. The court is worried about prior restraints and does not enjoin Ms. Gutman from speaking generally about JLM and this litigation.

Irreparable Harm: While contract cases do not typically involve irreparable harm, this case involves a trademark claim, and not giving JLM control over the account runs the risk of undermining JLM’s goodwill and marketing efforts (to which it has contributed significant resources). Additionally, the agreement in place between the parties says that a breach can result in irreparable harm, which is something courts can consider when determining whether to award injunctions in contract cases. Ultimately, the court decides, it’s a good case for injunctive relief (after considering the remaining preliminary injunction factors). [Eric’s note: a reminder that the Trademark Modernization Act reinstituted the rule that trademark violations create a rebuttable presumption of irreparable harm.]

___

This is a great case that covers a lot of ground. The docket is overflowing and worth digging into. The big takeaway of course is that there’s a written agreement between the litigants, which distinguishes this case from other social media ownership cases out there. The agreement isn’t necessarily perfect (no agreement is), but it does a nice job of protecting JLM’s rights. Unfortunately, the agreement appears to be filed under seal, although given the docket’s volume, I can’t say I combed through it carefully. In any event, the court liberally quotes from the agreement and it has many helpful provisions. It’s worth noting that the agreement does not expressly cover the social media accounts in question.

The trademark claim also differentiates this case. The fact that the brand in question is a person’s name complicates matters. There are special requirements for registrations of surnames but those did not come into play here. JLM obtained express rights to register the name and variations of it, which puts JLM in a good position vis a vis the social media accounts. Interestingly, the contract appears to allow JLM to own the marks in perpetuity, which raises the question of whether Ms. Gutman faces the practical risk of not being able to use her own name in future bridal wear-related endeavors. (Per the agreement, Ms. Gutman did receive some sort of portion of the revenues from the sales of products to which her name was attached.)

The non-compete was not central to JLM’s argument and thus the court did not scrutinize it carefully. Non-competes are increasingly subject to special restrictions. In 2020, the State of Washington passed legislation with limitations when and how non-competes can be enforced.

There are dueling experts who offer testimony on whether the account was a “mega influencer” account or something less. The court labels this a semantic dispute. Data regarding the financial arrangements regarding influencers don’t always make their way into court records, so from that standpoint it’s interesting to see experts weigh in on this. (It would be interesting to go back and see whether the non-bridal wear influencer posts complied with the FTC’s endorsement guidelines.)

The big question is what happens with the account going forward. Does Ms. Gutman have to assist in its operation, or does she have to just hand it off to JLM? Would the court allow her to post some sort of personal (or agreed-to) message to followers in the event she were to create a separate personal account?

Other coverage of the dispute:

Hayley Paige and Bridal Company Are at War Over Use of Her Name, Instagram Handle (The Fashion Law)

‘Say Yes To The Dress’ star suffers legal setback in Instagram account case

Case citation: JLM Couture v. Gutman, No. 20 CV 10575-LTS-SLC (S.D.N.Y. March 4, 2021)

Part I: Social Media Ownership Disputes, Part I: the Satanic Temple of Washington Can’t Get Its Facebook Pages Back

When Does A Parody Twitter Account Constitute Criminal Identity Theft?–Sims v. Monaghan

Trademark Owner Sues Over Alleged Twittersquatting–Coventry First, LLC v. Does

Steps Brand Owners Can Take to Deal With Brandjacking on Social Networks

Battle Over LinkedIn Account Between Employer and Employee Largely Gutted–Eagle v. Morgan

“Social Media and Trademark Law” Talk Notes

Court Denies Kravitz’s Motion to Dismiss PhoneDog’s Amended Claims — PhoneDog v. Kravitz

An Update on PhoneDog v. Kravitz, the Employee Twitter Account Case

Another Set of Parties Duel Over Social Media Contacts — Eagle v. Sawabeh

Employee’s Claims Against Employer for Unauthorized Use of Social Media Accounts Move Forward–Maremont v. SF Design Group

Courts Says Employer’s Lawsuit Against Ex-Employee Over Retention and Use of Twitter Account can Proceed–PhoneDog v. Kravitz

Ex-Employee Converted Social Media/Website Passwords by Keeping Them From Her Employer–Ardis Health v. Nankivell

Court Declines to Dismiss or Transfer Lawsuit Over @OMGFacts Twitter Account — Deck v. Spartz, Inc.

Employee’s Twitter and Facebook Impersonation Claims Against Employer Move Forward — Maremont v. Fredman Design Group

MySpace Profile and Friends List May Be Trade Secrets (?)–Christou v. Beatport

The post Social Media Ownership Disputes Part II: Bridal Wear Company Takes Back Control of Instagram Account from Ex-Employee appeared first on Technology & Marketing Law Blog.

Section 230 Covers Republication of Old Yearbooks–Callahan v. Ancestry

Eric Goldman — Wed, 03 Mar 2021 16:07:35 +0000

Ancestry.com publishes 450,000 old yearbooks in the form of 730M records that contain, at least, “the person’s name, photograph, school name, yearbook year, and city or town (at the time of the yearbook).” Ancestry doesn’t disclose how it acquires the yearbooks (it does ask for donations, but it’s hard to believe it got 450,000 donations). It sells access to yearbook records about specific individuals. Ancestry markets the records by featuring individuals, with their photos, from the database. The plaintiffs allegedly have individual records in the yearbook databases and were allegedly featured in email marketing. The plaintiffs sued Ancestry for California 3344 publicity rights violations, UCL, intrusion into seclusion, and unjust enrichment.

An example of an Ancestry record about one of the plaintiffs:

Article III. The fact that Ancestry commercializes the yearbooks isn’t an Article III harm by itself. (The court quotes the great Judge Grewal line that a “plaintiff must do more than point to the dollars in a defendant’s pocket; he must sufficiently allege that in the process he lost dollars of his own”). The court distinguishes Fraley v. Facebook because “Ancestry’s use of the plaintiffs’ profiles does not imply an endorsement of Ancestry’s products or an equivalent interest.” Unfortunately, the court doesn’t show what an email ad looked like, which would help assess if the ad creates an express or implied endorsement (I didn’t see an example of email marketing in the complaint, either). Instead, the court agrees with Cohen v. Facebook that the plaintiffs “did not show that they had a commercial interest in their images that precluded the platform’s use of them.” Weirdly, the court implies that Article III harms would occur only when plaintiffs have a “commercial interest in their images,” like celebrities, though publicity rights equally apply to all individuals.

The fact that Ancestry allegedly committed a statutory violation (of CA’s publicity rights statute) doesn’t bootstrap into automatic Article III standing because the statute expressly applies only if plaintiffs suffer an injury.

Section 230. Ancestry procured the yearbooks from third parties, so it presumptively qualifies for Section 230. It’s so well-accepted in the Ninth Circuit that Section 230 applies to publicity rights that the court doesn’t even discuss that issue. The plaintiffs argued that it lacked proper consent from the yearbook sources, so that meant it didn’t get the yearbooks from another information content provider. I don’t recall seeing this precise argument made before, and it’s as crazy as it sounds. The court responds plainly: “no case supports the conclusion that § 230(a)(1) immunity applies only if the website operator obtained the third-party content from the original author.” Indeed, I could cite dozens of Section 230 cases where the uploading user clearly wasn’t the original author (my go-to cite in this circumstance is the D’Alonzo case).

Citing Fraley, the plaintiffs also argued that Ancestry lost Section 230 because it “extracts yearbook data (names, photographs, and yearbook date), puts the content on its webpages and in its email solicitations, adds information (such as an estimated birth year and age), and adds interactive buttons (such as a button prompting a user to upgrade to a more expensive subscription).” Citing Kimzey v. Yelp and Coffee v. Google, the court explains:

In contrast to the Fraley transformation of personal likes into endorsements, Ancestry did not transform data and instead offered data in a form — a platform with different functionalities — that did not alter the content. Adding an interactive button and providing access on a different platform do not create content. They just add functionality…

Ancestry — by taking information and photos from the donated yearbooks and republishing them on its website in an altered format — engaged in “a publisher’s traditional editorial functions [that] [] do not transform an individual into a content provider within the meaning of § 230.”

(Another apropos citation might have been Marshall’s Locksmith v. Google).

The court grants Ancestry’s motion to dismiss with leave to amend, but rejected Ancestry’s anti-SLAPP motion because “decades-old yearbooks are not demonstrably an issue of public interest.”

I’m a little surprised the court didn’t discuss Lukis v. Whitepages, which rejected a 230 defense for a database selling “background reports.” That case said Section 230 didn’t apply because Whitepages assembled data from multiple sources, while Ancestry apparently remixed content just from yearbooks. Still, both sold individual records extracted from larger data corpuses, so I would have appreciated a compare/contrast.

Case citation: Callahan v. Ancestry.com Inc., 2021 WL 783524 (N.D. Cal. March 1, 2021). The complaint.

UPDATE: The plaintiff filed an amended complaint and the court dismissed it again, this time with prejudice.

The opinion distinguishes the Lukis precedent by saying it didn’t address standing; and if it did, the Lukis plaintiff alleged financial harm, which this plaintiff didn’t do.

As for Section 230, the plaintiffs cast doubt on the provenance of the yearbooks, but the court says the yearbooks are third-party content, no matter what. The court distinguishes Batzel: “Ancestry of course cannot publish private information that the provider did not intend to be posted online. But here, the information was not private and, whether the yearbooks were donated by other former students or obtained from other sources, Ancestry is demonstrably not the content creator and instead is publishing third-party content provided to it for publication.”

Callahan v. Ancestry.com Inc., 2021 WL 2433893 (N.D. Cal. June 15, 2021)

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