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IP/Entertainment Case Law Updates

Hepp v. Facebook

Third Circuit holds that Section 230 immunity under Communications Decency Act does not preclude claims based on state intellectual property laws, reviving suit by Philadelphia-based newscaster against Facebook for violation of her state law right of publicity.

Karen Hepp, a Philadelphia-based newscaster, filed suit against Facebook and other platforms after discovering in 2018 that her photograph was being used in an advertisement for a dating app appearing on Facebook and was also being shared on the online forum Reddit and image-hosting website Imgur. Hepp’s complaint against Facebook, Reddit, Imgur and others asserted claims for violation of her right of publicity under Pennsylvania statutory and common law. The district court dismissed Hepp’s complaint with prejudice, ruling that the three companies were entitled to immunity pursuant to Section 230(c) of the Communications Decency Act (CDA). On Hepp’s appeal, the third Circuit reversed and remanded, finding that Section 230 does not provide immunity from state law-based intellectual property claims and that Hepp’s right of publicity claims under Pennsylvania law were such claims. 

Section 230 of the CDA was passed in 1996 and was intended to preserve “the vibrant and competitive free market” of the internet, “unfettered by Federal or State regulation,” by immunizing internet companies from publisher liability for content posted by users of websites while allowing those companies to moderate the content. Section 230(e)(2) provides a carve-out to this immunity, decreeing that “[n]othing in [Section 230] shall be construed to limit or expand any law pertaining to intellectual property.”  

Facebook—which was left as the only appellee after it was determined that the district court did not have personal jurisdiction over Reddit or Imgur—argued that the text and structure of Section 230(e), as well as policy considerations, support an interpretation that the limitations to Section 230 immunity provided in Section 230(e) apply to federal laws by default, only including state laws where Congress specified.  

Hepp argued that the intellectual property law carve-out of Section 230(e)(2) applies to her state law right of publicity claims as well, removing the immunity that would otherwise be provided to the defendant companies by Section 230(c). Finding “precious few cases interpreting Sec. 230’s intellectual property provision,” the Third Circuit ultimately relied on Atlantic Recording Corp. v. Project Playlist, Inc., a 2009 case from the Southern District of New York involving both state and federal copyright claims, when it reasoned that because the text of Section 230(e) specifies in four places whether local, state or federal law applied, Congress knew it could limit the intellectual property carve-out to federal intellectual property laws but chose not to.

While the Third Circuit agreed with Facebook as to Congress’ policy goals in enacting Section 230, it disagreed with the remainder of Facebook’s assessment, finding instead that state property laws—including intellectual property laws—play an important role in facilitating markets, and that therefore, excluding state-based intellectual property laws from Section 230 immunity would support Congress’ policy goals. The Third Circuit also concluded that if state-based right of publicity laws were “disregarded on the internet,” individuals would not have any incentive to build their commercial reputation and endorse goods and services, diminishing the market efficiency and vibrancy of the internet.

After determining that the Section 230(e)(2) limitation immunity applies to state intellectual property laws, the Third Circuit then analyzed whether Hepp’s statutory right of publicity claim is a “law pertaining to intellectual property,” as stated in Section 230(e)(2). Consulting dictionaries for the meaning of the phrase “intellectual property,” the Third Circuit determined that “‘intellectual property’ has a recognized meaning which includes the right of publicity.” The court also found similarities between Pennsylvania’s right of publicity statute and other property laws because the statute grants individuals a monopoly in their likeness and allows for “property-like relief,” such as the right to obtain injunctive relief against trespassers. The Third Circuit found the right of publicity to be closely analogous to trademark in that both areas of law protect commercial goodwill. Having reached those conclusions, the Third Circuit held that Hepp’s statutory right of publicity claim under Pennsylvania law pertains to intellectual property and that the carve-out limitation of Section 230(e)(2) applies, removing Facebook’s immunity from the claim.

Summary prepared by Linna Chen and Kyle Petersen 

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