A Novel Section 230 Interpretation

Your friend and mine, section 230. Last week's opinion by the Ninth Circuit court regarding the Perfect 10, Inc. v. CCBill LLC case affirmed some of the findings of the district court that had previously heard the case, reversed others, and ultimately sent the case back for further determination of a few key issues. Although the final outcome has yet to be decided, the opinion has already resulted in a fair amount of discussion among those who have a particular interest in our old friend, section 230 of the Communications Decency Act.

The case revolves around intellectual property, but since at least some of the property in question was distributed via the Internet, section 230 came into play—in a rather novel way, actually.

The immunity created by § 230(c)(1) is limited by § 230(e)(2), which requires the court to "construe Section230(c)(1) in a manner that would neither 'limit or expand any law pertaining to intellectual property.' " Gucci Am., Inc. v. Hall & Assocs., 135 F. Supp. 2d 409, 413 (S.D.N.Y. 2001) (quoting § 230(e)(2)). As a result, the CDA does not clothe service providers in immunity from "law[s] pertaining to intellectual property."

The CDA does not contain an express definition of "intellectual property," and there are many types of claims in both state and federal law which may—or may not—be characterized as "intellectual property" claims. While the scope of federal intellectual property law is relatively well-established, state laws protecting "intellectual property," however defined, are by no means uniform. Such laws may bear various names, provide for varying causes of action and remedies, and have varying purposes and policy goals. Because material on a website may be viewed across the Internet, and thus in more than one state at a time, permitting the reach of any particular state's definition of intellectual property to dictate the contours of this federal immunity would be contrary to Congress's expressed goal of insulating the development of the Internet from the various state-law regimes.

This is where things get interesting—and where some observers raise an eyebrow—because the language suggests that states' intellectual-property laws are, in the end, trumped by federal law.

In the absence of a definition from Congress, we construe the term "intellectual property" to mean "federal intellectual property."Accordingly, CCBill and CWIE are eligible for CDA immunity for all of the state claims raised by Perfect 10.

Whether the shock wave generated by this interpretation ultimately results in a reexamination of the CDA by Congress—or perhaps more directly affects state law—remains to be seen, but the recurring issues surrounding the Internet's notorious disregard for boundaries aren't going to go away. The solution, at least for now, appears to be the more uniform application of federal law—section 230 in this case—in order to avoid legal chaos, and because it just seems reasonable to extend the broadest possible umbrella where the Internet is concerned.

One of the remaining questions, which the district court will examine, is whether or not two entities involved in the case actually operate a particular Web site . . .

Because Perfect 10 has raised a triable issue whether CCBill and CWIE directly infringed Perfect 10 copyrights by operating hornybees.com, and because the district court did not address this issue in its order granting summary judgment in favor of Perfect 10, we remand this issue for a determination by the district court.

. . . because if it turns out they do, the protection offered by section 230—and the Digital Millennium Copyright Act as well—will disappear into thin air.

If CCBill and CWIE operate hornybees.com, no immunity for infringement on that site is available under either the DMCA or the CDA.


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