3rd circuit splits from 9th, celebrity can sue Facebook for unauthorized photo

A 3D printed Facebook logo is placed on a keyboard in this illustration taken on March 25, 2020. REUTERS / Dado Ruvic

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(Reuters) – If the doomsday predictions are correct, a Philadelphia morning news anchor and two federal appeals judges have just smashed the internet.

On Thursday, a divided 3rd United States Court of Appeals ruled in Hepp v. Facebook, Inc. news anchor Karen Hepp can sue Facebook for running an ad for a dating service that featured an unauthorized photo of Hepp, a local celebrity in Philadelphia. The 3rd Circuit majority held that Section 230 of the Communications Decency Act did not exclude Hepp’s prosecution, as the broad immunity of the law for Internet publishers includes an exception for intellectual property claims under the federal and state law.

The majority – Justices Peter Phipps and Thomas Hardiman, in an opinion from Hardiman – said its interpretation was textual, since Congress did not specifically distinguish between state and federal intellectual property rights by enacting an exception to Section 230 immunity. But Hardiman also said the court’s ruling was in line with the law’s goal of “preserving the vibrant and competitive free market that currently exists for the Internet.”

In a dissent, Justice Robert Cowen vigorously disapproved. Cowen lamented the “drastic” majority decision, which he said had opened the door to chaos, in the form of a liability risk under the state’s privacy protection laws. privacy that can – or not! – be fairly defined as intellectual property claims. This is exactly the kind of unpredictability Congress was trying to avoid when it passed Section 230 to encourage free speech and “unfettered” innovation on the Internet, Cowen said.

Facebook friends of the Electronic Frontier Foundation and other groups have been even more catastrophic in their predictions of the consequences of the theory that the majority of Circuit 3 has just adopted: “It will upset the legal landscape that has promoted a Internet flourished for decades, ”says the amici brief. The sites and online services, it is assumed, will be thrown into a panic by their risk of exposure to claims without basis in state law. Some will take “drastic measures” to avoid liability, the EFF said. Many others, according to the brief, “will simply refuse to host user-generated content – and we will all be the poorest.”

I’m sure you won’t be surprised to learn that Hepp’s attorney, Samuel Fineman of Cohen Fineman, thinks these doomsday predictions are far exaggerated. Fineman said the warnings of a muzzled internet curled up in fear of state law publicity claims are “poppycock” and “a red herring.” Online businesses, he said, no longer need the pampering they received when the internet was in its infancy. “This decision is a new up-to-date analysis based on the facts as they stand today,” Fineman said.

The 3rd Circuit majority pointed out in Thursday’s ruling that internet companies have never been inundated with state-law intellectual property claims, despite an explicit 2009 ruling by the Atlantic Recording Corporation against Project Playlist, Inc of U.S. District Judge Denny Chin of Manhattan. that such claims are viable under the Section 230 exception. It has been more than 10 years since that ruling, the majority said, and there is no evidence of the chaotic “disarray” predicted by Facebook and his friends.

One thing is certain: the new 3rd Circuit ruling will not end the debate on the implications of allowing intellectual property claims in state law against Internet companies. The decision marks a distinct split from the 2007 9th Circuit’s decision in Perfect 10, Inc v. CCBill LLC, who held that the Section 230 exception for intellectual property claims allows Internet companies to be prosecuted only for alleged violations of federal intellectual property laws – – no claims under the state law. The 9th Circuit has expressly stated that interpreting the exception to include state claims “would be contrary to the expressed objective of Congress of isolating the development of the Internet from the various legal regimes of states.”

Facebook attorney Craig Primis of Kirkland & Ellis didn’t answer my question about the 3rd Circuit ruling, but given Cowen’s dissent and the majority split with the 9th Circuit, I have no doubts that the company will seek a 3rd Circuit bench review and, if that fails, file a petition with the United States Supreme Court. The 3rd Circuit dismissed Hepp’s claims against the online chat site Reddit Inc and the photo-sharing site Imgur Inc on jurisdictional grounds. Fineman declined to say whether Hepp would request a review of this participation.

The majority of the 3rd Circuit stressed that their actual decision for Hepp is quite narrow. Interpreting the scope of the section 230 exception was only a first step in the court’s analysis. The judges then had to decide whether Pennsylvania’s advertising law was an intellectual property issue. The court ruled that the law invokes intellectual property law because it only provides a cause of action for people who have cultivated their reputation by “investing time, effort and money.”

Hepp has a valuable real estate interest in the image she developed, said 3rd Circuit, because she made that investment. But Pennsylvania law sets the bar high for advertising claims, the 3rd Circuit said, and its ruling does not deal with the law of any other state.

“Our holding is not opening the floodgates,” said the majority.

The court also said Hepp’s lawsuit is no more a threat to free speech than a claim by a brand owner whose intellectual property has been misused by an infringer. Like brand owners, Hepp argues that unauthorized use of her image will confuse consumers and endanger the goodwill she has developed. Trademarks claim to “generally avoid infringing on freedom of expression by attacking deceptive commercial speech,” Circuit 3 said. “The same goes for Hepp’s legal claim against Facebook. Thus, Hepp’s legal claim against Facebook concerns the commercial effect on its intellectual property, and not copyrighted speech.

Hepp Fineman’s lawyer told me he was happy to represent a client ready to fight for anyone who worked hard to develop their image. “She’s a horsewoman,” he said. “She supports her brand.”

The opinions expressed here are those of the author. Reuters News, under the principles of trust, is committed to respecting integrity, independence and freedom from bias.

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The opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the principles of trust, is committed to respecting integrity, independence and freedom from bias.

Alison frankel

Alison Frankel has covered high-stakes commercial litigation as a columnist for Reuters since 2011. A graduate of Dartmouth University, she worked as a reporter in New York covering the legal and law industry for more than three decades. Prior to joining Reuters, she was a writer and editor for The American Lawyer. Frankel is the author of Double Eagle: The Epic Story of the World’s Most Valuable Coin. Contact her at [email protected]

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