lanham act – Techdirt (original) (raw)

Court To RFK Jr.: Fact-Checking Doesn’t Violate 1st Amendment Nor Does Section 230 Make Meta A State Actor

from the that's-not-how-any-of-this-works dept

You may recall that RFK Jr.’s nonsense-peddling anti-vax organization “Children’s Health Defense” (CHD) sued Meta back in 2020 for the apparent crime of fact-checking and limiting the reach of the anti-vax nonsense it posted. Three years ago, the case was tossed out of court (easily) with the court pointing out that Meta is (*gasp*) a private entity that has the right to do all of this under its own free speech rights. The court needed to explain that the First Amendment applies to the government, and Meta is not the government.

Yes, Meta looked to the CDC for guidance on vaccine info, but that did not turn it into a state actor. It was a pretty clear and easy ruling smacking down CHD (represented, in part, by disgraced Yale law professor Jed Rubenfeld). So, of course RFK Jr. and CHD appealed.

Last week, the Ninth Circuit smacked them down again. And we learn that it’s going to go… very… slowly… to hopefully help RFK Jr. and Rubenfeld understand these things this time:

To begin by stating the obvious, Meta, the owner of Facebook, is a private corporation, not a government agency.

Yes, the majority opinion admits that there are some rare cases where private corporations can be turned into state actors, but this ain’t one of them.

CHD’s state-action theory fails at this threshold step. We begin our analysis by identifying the “specific conduct of which the plaintiff complains.” Wright, 48 F.4th at 1122 (quoting American Mfrs. Mut. Ins. Co. v. Sullivan, 526 U.S. 40, 51 (1999)). CHD challenges Meta’s “policy of censoring” posts conveying what it describes as “accurate information . . . challenging current government orthodoxy on . . . vaccine safety and efficacy.” But “the source of the alleged . . . harm,” Ohno, 723 F.3d at 994, is Meta’s own “policy of censoring,” not any provision of federal law. The closest CHD comes to alleging a federal “rule of conduct” is the CDC’s identification of “vaccine misinformation” and “vaccine hesitancy” as top priorities in 2019. But as we explain in more detail below, those statements fall far short of suggesting any actionable federal “rule” that Meta was required to follow. And CHD does not allege that any specific actions Meta took on its platforms were traceable to those generalized federal concerns about vaccine misinformation.

And, even if it could pass that first step, it would also fail at the second step of the test:

CHD’s failure to satisfy the first part of the test is fatal to its state action claim. See Lindke v. Freed, 601 U.S. 187, 198, 201 (2024); but see O’Handley, 62 F.4th at 1157 (noting that our cases “have not been entirely consistent on this point”). Even so, CHD also fails under the second part. As we have explained, the Supreme Court has identified four tests for when a private party “may fairly be said to be a state actor”: (1) the public function test, (2) the joint action test, (3) the state compulsion test, and (4) the nexus test. Lugar, 457 U.S. at 937, 939.

CHD invokes two of those theories of state action as well as a hybrid of the two. First, it argues that Meta and the federal government agreed to a joint course of action that deprived CHD of its constitutional rights. Second, it argues that Meta deprived it of its constitutional rights because government actors pressured Meta into doing so. Third, it argues that the “convergence” of “joint action” and “pressure,” as well as the “immunity” Meta enjoys under 47 U.S.C. § 230, make its allegations that the government used Meta to censor disfavored speech all the more plausible. CHD cannot prevail on any of these theories.

The majority opinion makes clear that CHD never grapples with the basic idea that the reason Meta might have taken action on CHD’s anti-vax nonsense was that it didn’t want kids to die because of anti-vax nonsense. Instead, it assumes without evidence that it must be the government censoring them.

But the facts that CHD alleges do not make that inference plausible in light of the obvious alternative—that the government hoped Meta would cooperate because it has a similar view about the safety and efficacy of vaccines.

Furthermore, the Court cites the recent Murthy decision at the Supreme Court (on a tangentially related issue) and highlighted how Meta frequently pushed back or disagreed with points raised by the government.

In any event, even if we were to consider the documents, they do not make it any more plausible that Meta has taken any specific action on the government’s say-so. To the contrary, they indicate that Meta and the government have regularly disagreed about what policies to implement and how to enforce them. See Murthy, 144 S. Ct. at 1987 (highlighting evidence “that White House officials had flagged content that did not violate company policy”). Even if Meta has removed or restricted some of the content of which the government disapproves, the evidence suggests that Meta “had independent incentives to moderate content and . . . exercised [its] own judgment” in so doing.

As for the fact that Meta offers a portal for some to submit reports, that doesn’t change the fact that it’s still judging those reports against its own policies and not just obeying the government.

That the government submitted requests for removal of specific content through a “portal” Meta created to facilitate such communication does not give rise to a plausible inference of joint action. Exactly the same was true in O’Handley, where Twitter had created a “Partner Support Portal” through which the government flagged posts to which it objected. 62 F.4th at 1160. Meta was entitled to encourage such input from the government as long as “the company’s employees decided how to utilize this information based on their own reading of the flagged posts.” Id. It does not become an agent of the government just because it decides that the CDC sometimes has a point.

The majority opinion also addresses the question of whether or not Meta was coerced. It first notes that if that were the issue, then Meta itself probably wouldn’t be the right defendant, the government would be. But then it notes the near total lack of evidence of coercion.

CHD has not alleged facts that allow us to infer that the government coerced Meta into implementing a specific policy. Instead, it cites statements by Members of Congress criticizing social media companies for allowing “misinformation” to spread on their platforms and urging them to combat such content because the government would hold them “accountable” if they did not. Like the “generalized federal concern[s]” in Mathis II, those statements do not establish coercion because they do not support the inference that the government pressured Meta into taking any specific action with respect to speech about vaccines. Mathis II, 75 F.3d at 502. Indeed, some of the statements on which CHD relies relate to alleged misinformation more generally, such as a statement from then-candidate Biden objecting to a Facebook ad that falsely claimed that he blackmailed Ukrainian officials. All CHD has pleaded is that Meta was aware of a generalized federal concern with misinformation on social media platforms and that Meta took steps to address that concern. See id. If Meta implemented its policy at least in part to stave off lawmakers’ efforts to regulate, it was allowed to do so without turning itself into an arm of the federal government.

To be honest, I’m not so sure of the last line there. If it’s true that Meta implemented policies because it wanted to avoid regulation, that strikes me as a potential First Amendment violation, but again, one that should be targeted at the government, not Meta.

The opinion also notes that angry letters from Rep. Adam Schiff and Senator Amy Klobuchar did not appear to cross the coercive line, despite being aggressive.

But in contrast to cases where courts have found coercion, the letters did not require Meta to take any particular action and did not threaten penalties for noncompliance….

Again, I think the opinion goes a bit too far here in suggesting that legislators mostly don’t have coercive power by themselves, giving them more leeway to send these kinds of letters.

Unlike “an executive official with unilateral power that could be wielded in an unfair way if the recipient did not acquiesce,” a single legislator lacks “unilateral regulatory authority.” Id. A letter from a legislator would therefore “more naturally be viewed as relying on her persuasive authority rather than on the coercive power of the government.”

I think that’s wrong. I’ve made the case that it’s bad when legislators threaten to punish companies for speech, and it’s frustrating that both Democrats and Republicans seem to do it regularly. Here, the 9th Circuit seems to bless that which is a bit frustrating and could lead to more attempts by legislators to suppress speech.

The Court then dismisses CHD’s absolutely laughable Section 230 state action theory. This was Rubenfeld’s baby. In January 2021, Rubenfeld co-authored one of the dumbest WSJ op-eds we’ve ever seen with a then mostly unknown “biotech exec” named Vivek Ramaswamy, arguing that Section 230 made social media companies into state actors. A few months later, Rubenfeld joined RFK Jr.’s legal team to push this theory in court.

It failed at the district court level and it fails here again on appeal.

The immunity from liability conferred by section 230 is undoubtedly a significant benefit to companies like Meta that operate social media platforms. It might even be the case that such platforms could not operate at their present scale without section 230. But many companies rely, in one way or another, on a favorable regulatory environment or the goodwill of the government. If that were enough for state action, every large government contractor would be a state actor. But that is not the law.

The opinion notes that this crazy theory is based on a near complete misunderstanding of case law and how Section 230 works. Indeed, the Court calls out this argument as “exceptionally odd.”

It would be exceptionally odd to say that the government, through section 230, has expressed any preference at all as to the removal of anti-vaccine speech, because the statute was enacted years before the government was concerned with speech related to vaccines, and the statute makes no reference to that kind of speech. Rather, as the text of section 230(c)(2)(A) makes clear—and as the title of the statute (i.e., the “Communications Decency Act”) confirms—a major concern of Congress was the ability of providers to restrict sexually explicit content, including forms of such content that enjoy constitutional protection. It is not difficult to find examples of Members of Congress expressing concern about sexually explicit but constitutionally protected content, and many providers, including Facebook, do in fact restrict it.See, e.g., 141 Cong. Rec. 22,045 (1995) (statement of Rep. Wyden) (“We are all against smut and pornography . . . .”); id. at 22,047 (statement of Rep. Goodlatte) (“Congress has a responsibility to help encourage the private sector to protect our children from being exposed to obscene and indecent material on the Internet.”); Shielding Children’s Retinas from Egregious Exposure on the Net (SCREEN) Act, S. 5259, 117th Cong. (2022); Adult Nudity and Sexual Activity, Meta, https://transparency.fb.com/policies/communitystandards/adult-nudity-sexual-activity _[h_ttps://perma.cc/ SJ63-LNEA] (“We restrict the display of nudity or sexual activity because some people in our community may be sensitive to this type of content.”). While platforms may or may not share Congress’s moral concerns, they have independent commercial reasons to suppress sexually explicit content. “Such alignment does not transform private conduct into state action.”

Indeed, it points to the ridiculous logical conclusion of this Rubenfeld/Ramaswamy argument:

If we were to accept CHD’s argument, it is difficult to see why would-be purveyors of pornography would not be able to assert a First Amendment challenge on the theory that, viewed in light of section 230, statements from lawmakers urging internet providers to restrict sexually explicit material have somehow made Meta a state actor when it excludes constitutionally protected pornography from Facebook. So far as we are aware, no court has ever accepted such a theory

Furthermore, the Court makes clear that moderation decisions are up to the private companies, not the courts. And if people don’t like it, the answer is market forces and competition.

Our decision should not be taken as an endorsement of Meta’s policies about what content to restrict on Facebook. It is for the owners of social media platforms, not for us, to decide what, if any, limits should apply to speech on those platforms. That does not mean that such decisions are wholly unchecked, only that the necessary checks come from competition in the market—including, as we have seen, in the market for corporate control. If competition is thought to be inadequate, it may be a subject for antitrust litigation, or perhaps for appropriate legislation or regulation. But it is not up to the courts to supervise social media platforms through the blunt instrument of taking First Amendment doctrines developed for the government and applying them to private companies. Whether the result is “good or bad policy,” that limitation on the power of the courts is a “fundamental fact of our political order,” and it dictates our decision today

Even more ridiculous than the claims around content being taken down, CHD also claimed that the fact checks on their posts violated [checks notes… checks notes again] the Lanham Act, which is the law that covers things like trademark infringement and some forms of misleading advertising. The Court here basically does a “what the fuck are you guys talking about” to Kennedy and Rubenfeld.

By that definition, Meta did not engage in “commercial speech”—and, thus, was not acting “in commercial advertising or promotion”—when it labeled some of CHD’s posts false or directed users to fact-checking websites. Meta’s commentary on CHD’s posts did not represent an effort to advertise or promote anything, and it did not propose any commercial transaction, even indirectly.

And just to make it even dumber, CHD also had a RICO claim. Because, of course they did. Yet again, we will point you to Ken White’s “It’s not RICO dammit” lawsplainer, but the Court here does its own version:

The causal chain that CHD proposes is, to put it mildly, indirect. CHD contends that Meta deceived Facebook users who visited CHD’s page by mislabeling its posts as false. The labels that Meta placed on CHD’s posts included links to fact-checkers’ websites. If a user followed a link, the factchecker’s website would display an explanation of the alleged falsity in CHD’s post. On the side of the page, the fact-checker had a donation button for the organization. Meanwhile, Meta had disabled the donation button on CHD’s Facebook page. If a user decided to donate to the fact-checking organization, CHD maintains, that money would come out of CHD’s pocket, because CHD and factcheckers allegedly compete for donations in the field of health information.

The alleged fraud— Meta’s mislabeling of CHD’s posts— is several steps removed from the conduct directly responsible for CHD’s asserted injury: users’ depriving CHD of their donation dollars. At a minimum, the sequence relies on users’ independent propensities to intend to donate to CHD, click the link to a fact-checker’s site, and be moved to reallocate funds to that organization. This causal chain is far too attenuated to establish the direct relationship that RICO requires. Proximate cause “is meant to prevent these types of intricate, uncertain inquiries from overrunning RICO litigation.” Anza, 547 U.S. at 460.

CHD’s theory also strains credulity. It is not plausible that someone contemplating donating to CHD would look at CHD’s Facebook page, see the warning label placed there, and decide instead to donate to . . . a fact-checking organization. See Twombly, 550 U.S. at 555. The district court noted that CHD did not allege that any visitors to its page had in fact donated to other organizations because of Meta’s fraudulent scheme. CHD is correct that an actual transfer of money or property is not an element of wire fraud, as “[t]he wire fraud statute punishes the scheme, not its success.” Pasquantino v. United States, 544 U.S. 349, 371 (2005) (alteration in original) (quoting United States v. Pierce, 224 F.3d 158, 166 (2d Cir. 2000)). But the fact that no donations were diverted provides at least some reason to think that no one would have expected or intended the diversion of donations.

I love how the judge includes the… incredulous pause ellipses in that last highlighted section.

Oh, and I have to go back to one point. CHD had originally offered an even dumber RICO theory which it dropped, but the Court still mentions it:

In the complaint, CHD described a scheme whereby Meta placed warning labels on CHD’s posts with the intent to “clear the field” of CHD’s alternative point of view, thus keeping vaccine manufacturers in business so that they would buy ads on Facebook and ensure that Zuckerberg obtained a return on his investments in vaccine technology.

That’s brain worm logic speaking, folks.

There is a partial dissent from (Trump-appointed, natch) Judge Daniel Collins, who says that maybe, if you squint, there is a legitimate First Amendment claim. In part, this is because Collins thinks CHD should be able to submit additional material that wasn’t heard by the district court, which is not how any of this tends to work. You have to present everything at the lower court. The appeals court isn’t supposed to consider any new material beyond, say, new court rulings that might impact this ruling.

Collins then also seems to buy into Rubenfeld’s nutty 230-makes-you-a-state actor argument. He goes on for a while giving the history of Section 230 (including a footnote pointing out, correctly but pedantically, that it’s Section 230 of the Communications Act of 1934, but not Section 230 of the Communications Decency Act as most people call it — a point that only certain law professors talk about). The history is mostly accurate, highlighting the Stratton Oakmont decision and how it would be impossible to run an internet service if that had stood.

But then… it takes some leaps. It takes some giant leaps with massive factual errors. Embarrassing for a judge to be making:

The truly gigantic scale of Meta’s platforms, and the enormous power that Meta thereby exercises over the speech of others, are thus direct consequences of, and critically dependent upon, the distinctive immunity reflected in § 230. That is, because such massive third-party-speech platforms could not operate on such a scale in the absence of something like § 230, the very ability of Meta to exercise such unrestrained power to censor the speech of so many tens of millions of other people exists only by virtue of the legislative grace reflected in § 230’s broad immunity. Moreover, as the above discussion makes clear, it was Congress’s declared purpose, in conferring such immunity, to allow platform operators to exercise this sort of wide discretion about what speech to allow and what to remove. In this respect, the immunity granted by § 230 differs critically from other government-enabled benefits, such as the limited liability associated with the corporate form. The generic benefits of incorporation are available to all for nearly every kind of substantive endeavor, and the limitation of liability associated with incorporation thus constitutes a form of generally applicable non-speech regulation. In sharp contrast, both in its purpose and in its effect, § 230’s immunity is entirely a speech-related benefit—it is, by its very design, an immunity created precisely to give its beneficiaries the practical ability to censor the speech of large numbers of other persons.7 Against this backdrop, whenever Meta selectively censors the speech of third parties on its massive platforms, it is quite literally exercising a government-conferred special power over the speech of millions of others. The same simply cannot be said of newspapers making decisions about what stories to run or bookstores choosing what books to carry

I do not suggest that there is anything inappropriate in Meta’s having taken advantage of § 230’s immunity in building its mega-platforms. On the contrary, the fact that it and other companies have built such widely accessible platforms has created unprecedented practical opportunities for ordinary individuals to share their ideas with the world at large. That is, in a sense, exactly what § 230 aimed to accomplish, and in that particular respect the statute has been a success. But it is important to keep in mind that the vast practical power that Meta exercises over the speech of millions of others ultimately rests on a government-granted privilege to which Meta is not constitutionally entitled.

Those highlighted sections are simply incorrect. Meta is constitutionally entitled to the ability to moderate thanks to the First Amendment. Section 230 simplifies the procedural aspects of it, in that companies need not fight an expensive and drawn-out First Amendment battle over it, as Section 230 shortcuts that procedurally by granting the immunity that ends cases much faster. Though it ends them the same way it would end otherwise, thanks to the First Amendment.

So, basically the key point that Judge Collins rests his dissent on is fundamentally incorrect. And it’s odd that he ignores the recent Moody ruling and even last year’s Taamneh ruling that basically explains why this is wrong.

Collins also seems to fall for the false idea that Section 230 requires a site to be a platform or a publisher, which is just wrong.

Rather, because its ability to operate its massive platform rests dispositively on the immunity granted as a matter of legislative grace in § 230, Meta is a bit of a novel legal chimera: it has the immunity of a conduit with respect to third-party speech, based precisely on the overriding legal premise that it is not a publisher; its platforms’ massive scale and general availability to the public further make Meta resemble a conduit more than any sort of publisher; but Meta has, as a practical matter, a statutory freedom to suppress or delete any third-party speech while remaining liable only for its own affirmative speech

But that’s literally wrong as well. Despite how it’s covered by many politicians and the media, Section 230 does not say that a website is not a publisher. It says that it shall not be treated as a publisher for third-party content even though it is engaging in publishing activities.

Incredibly, Collins even cites (earlier in his dissent) the 9th Circuit’s Barnes ruling which lays this out. In Barnes, the 9th Circuit is quite clear that Section 230 protects Yahoo from being held liable for third-party content explicitly because it is doing everything a publisher would do. Section 230 just removes liability from third-party content so that a website is not treated as a publisher, even when it is acting as a publisher.

In that case, the Court laid out all the reasons why Yahoo was acting as a publisher. It called what Yahoo engaged in “action that is quintessentially that of a publisher.” Then, it notes it couldn’t be held liable for those activities thanks to Section 230 (eventually Yahoo did lose that case, but under a different legal theory, related to promissory estoppel, but that’s another issue).

Collins even cites this very language from the Barnes decision:

As we stated in Barnes, “removing content is something publishers do, and to impose liability on the basis of such conduct necessarily involves treating the liable party as a publisher of the content it failed to remove.” Id. “Subsection (c)(1), by itself, shields from liability all publication decisions, whether to edit, to remove, or to post, with respect to content generated entirely by third parties.”

So it’s bizarre that pages later, Collins falsely claims that Section 230 means that Meta is claiming not to be a publisher. As the Barnes case makes clear, Section 230 says you don’t treat the publisher of third-party content as a publisher of first-party content. But they’re both publishers of a sort. And Collins seemed to acknowledge this 20 pages earlier… and then… forgot?

Thankfully, Collin’s dissent is only a dissent and not the majority.

Still, as we noted back in May, RFK Jr. and Rubenfeld teamed up a second time to sue Meta yet again, once again claiming that Meta moderating him is a First Amendment violation. That’s a wholly different lawsuit, with the major difference being… that because RFK Jr. is a presidential candidate (lol), somehow this now makes it a First Amendment violation for Meta to moderate his nonsense.

So the Ninth Circuit should have yet another chance to explain the First Amendment to them both yet again.

Filed Under: 1st amendment, 9th circuit, content moderation, daniel collins, jed rubenfeld, lanham act, rfk jr., rico, section 230, state actor
Companies: children's health defense, meta

‘Free Speech Absolutist’ Elon Musk Files Obvious SLAPP Suit Against Non-Profit Critic

from the musk-is-more-of-a-slappist-than-a-free-speech-absolutist dept

There’s so much to dig into on this one. First off, just to state my own bias upfront, I’m not a fan of the Center for Countering Digital Hate (CCDH). Literally just a few days ago I wrote about one of its highly questionable studies and how it’s being used (badly) to justify a terrible bill in California. Beyond that, I think that the organization has a history of publishing overhyped reports that the media (and some politicians) love, but which do not accurately reflect reality.

So, when CCDH produced a report recently claiming that there was a surge in hateful content on ExTwitter, I didn’t cover it, because I don’t trust the group’s methodology to be sound, even if it is likely true that ExTwitter has enabled more hateful content. It also wasn’t that surprising or newsworthy when Linda Yaccarino, CEO of ExTwitter, hit back at the report, claiming it was wrong and that the company was successfully suppressing hateful speech using its visibility filtering tools (side note: this is somewhat ironic, given how people still insist that Elon took over Twitter to get rid of “shadowbanning,” when he’s not just doubled down on visibility filtering, but strongly advocates for it).

But then things blew up in the last few days. It came out on Monday that ExTwitter had sent a pompous, over-the-top, nonsensical threat letter to CCDH from Elon Musk’s personal attack dog, Alex Spiro. Even as much as I disagree with CCDH and their methodology, the letter from Spiro is laughable in its vexatious nonsense:

I write on behalf of my client X Corp., which operates the Twitter platform. It has come to our attention that you and your organization, the Center for Countering Digital Hate, (“CCDH”), have made a series of troubling and baseless claims that appear calculated to harm Twitter generally, and its digital advertising business specifically. CCDH regularly posts articles making inflammatory, outrageous, and false or misleading assertions about Twitter and its operations, which CCDH holds out to the general public as supported by “research.” CCDH fixes this label on its outlandish conclusions about Twitter despite failing to conduct (or even attempt) anything resembling the rigorous design process, analytical procedures, or peer review that a reasonable person would expect to accompany research product published by any reputable organization.

Spiro calls out CCDH’s questionable methodology, which (again) I agree is poor. But poor research methodology does not violate the law, and sending a threatening letter over it seems like a clear SLAPP situation. Spiro’s letter implies a defamation claim:

CCDH’s claims in this article are false, misleading, or both, and they are not supported by anything that could credibly be called research. The article provides no methodology for its selection or testing of tweets, no baseline for Twitter’s enforcement time frame, and no explanation as to why the 100 chosen tweets represent an appropriate sample of the nearly 500 million tweets sent per day from which to generalize about the platform’s content moderation practices. And despite purporting to conclude that Twitter favors Twitter Blue subscribers by allowing them to “break its rules with impunity,” the article provides no evidence of differing treatment in content moderation actions against Twitter Blue subscribers and non-subscribers, and indeed reflects no effort to conduct any testing to support this claim, which appears under its headline. The article cites no sources other than different, similarly threadbare posts on CCDH’s own website, and fails to identify the qualifications of any of the researchers who worked on the article.4 In other words, the article is little more than a series of inflammatory, misleading, and unsupported claims based on a cursory review of random tweets.

Even more bizarrely, it suggests there’s a “false designation of origin” claim under the Lanham Act. Which makes zero sense and just seems like flinging shit at the wall.

CCDH’s lawyers hit back on Monday, explaining why this was all nonsense:

We write in response to the ridiculous letter you sent our clients on behalf of X Corp., which operates the Twitter (or the new “X”) platform, dated July 20, 2023. (A copy of your July 20 letter is attached.) In that letter, you claim that CCDH has supposedly made “inflammatory, outrageous, and false or misleading assertions about Twitter” and suggest it has engaged in some sort of conspiracy “to drive advertisers off Twitter by smearing the company and its owner.” These allegations not only have no basis in fact (your letter states none), but they represent a disturbing effort to intimidate those who have the courage to advocate against incitement, hate speech and harmful content online, to conduct research and analysis regarding the drivers of such disinformation, and to publicly release the findings of that research, even when the findings may be critical of certain platforms

As you know, CCDH recently published an article concerning the proliferation of hate speech on Twitter and the company’s failure to address it. That article involved CCDH’s review of 100 hateful tweets that contained racist, homophobic, neo-Nazi, antisemitic, or conspiracy content—i.e., content that plainly violates Twitter’s own policies in this regard. One tweet, for example, stated that “black culture has done more damage [than] the [Ku Klux] [K]lan ever did.” Another referenced the white supremacist ideology known as “replacement theory,” claiming that “[t]he Jewish Mafia wants to replace us all with brown people.” And yet another explicitly encouraged violence against the LGBTQ+ community, suggesting that LGBTQ+ rights activists need “IRON IN THEIR DIET. Preferably from a #AFiringSquad.” CCDH staff reported all 100 tweets using Twitter’s own designated reporting tool. Four days later, 99 of the 100 tweets identified by CCDH remained available on Twitter.

Tellingly, after CCDH published this article, Twitter did not spend its time and resources addressing the hate and disinformation that CCDH had identified, despite Twitter’s purported commitment to addressing hate speech on its platform. Instead, your clients decided to “shoot the messenger” by attempting to intimidate CCDH and Mr. Ahmed. In your July 20 letter, for example, you write that “CCDH’s claims in [its report] are false, misleading, or both”—although you point to no actual inaccuracy—“and they are not supported by anything that could credibly be called research”—although the article describes the basis for its conclusions and the methodology it used. While it is true that CCDH did not undertake a review of the “500 million tweets” that you claim are posted on Twitter each day, CCDH never claimed to have done so. In fact, under Mr. Musk’s leadership, Twitter has taken steps to curtail research on the platform. To criticize CCDH for being too limited in its research while simultaneously taking steps to close the platform off to independent research and analysis is the very height of hypocrisy.

The response letter also took on the ridiculous suggestion of a Lanham Act claim:

But your July 20 letter doesn’t stop there. You go on to state that there is “no doubt that CCDH intends to harm Twitter’s business” and warn that you are “investigating” whether CCDH has violated Section 43(a) of the Lanham Act. That threat is bogus and you know it. None of the examples cited in your letter constitutes the kind of advertisement or commercial speech that would trigger the Lanham Act. To the contrary, the statements you complain about constitute political, journalistic, and research work on matters of significant public concern, which obviously are not constrained by the Lanham Act in any way. Moreover, as a nonprofit working to stop online hate, CCDH is obviously not in competition with Twitter, which makes your allegations of a Lanham Act injury even more fanciful. Your assertion that the goal in CCDH’s research and reporting is to benefit Twitter’s competitors also ignores the fact that CCDH has published critical, highly-publicized reports about other platforms, including Instagram, Facebook, and TikTok. Simply put, there is no bona fide legal grievance here. Your effort to wield that threat anyway, on a law firm’s letterhead, is a transparent attempt to silence honest criticism. Obviously, such conduct could hardly be more inconsistent with the commitment to free speech purportedly held by Twitter’s current leadership.

I mean, all of this is nonsense. Spiro’s threat letter was clearly a ridiculous (and poorly argued) intimidation tactic. And it’s doubly hilarious that it claims CCDH’s methodology doesn’t count because the sample size is too small, when Musk’s entire faked reason for trying to get out of the Twitter deal was too much spam, based on a similarly misleading sample size.

But, more to the point, Elon has pretended all along to be a supporter of free speech. Many of us have pointed out what a ridiculously false statement that is, and Musk has a long history of suppressing and attacking critics.

Anyway… around the same time that CCDH was sending this letter, ExTwitter and Musk were (stupidly) filing an actual lawsuit against CCDH. The case is clearly a SLAPP suit, but (oddly) ExTwitter is not represented by Spiro or his firm Quinn Emanuel. Nor does it make any of the claims suggested in the letter (defamation or a Lanham Act claim).

Instead, the lawsuit is even dumber. Filed by the law firm of White & Case (which is big enough to know better than to file vexatious SLAPP suits) the claims are breach of contract (?!?) and a CFAA violation for hacking the site. Then there are the usual throw-in claims of “intentional interference” and an “inducing breach of contract.”

The claims are ridiculous, but they are a strong reminder that SLAPP suits come in many forms, and don’t just need to be about defamation. Of course, having this actual lawsuit preceded by Spiro’s weak-ass attempt at intimidation, which strongly implies defamation, only helps to prove that the actual nonsense claims here are pure SLAPPs and a direct attack on free speech by someone who cosplays online as a “free speech absolutist.”

Let’s do a quick explanation for why these claims are frivolous:

CCDH intentionally and unlawfully accessed data it sought regarding the X platform in two ways. CCDH US, as a registered user of X, scraped data from X’s platform in violation of the express terms of its agreement with X Corp. CCDH also convinced an unknown third party — in violation of that third party’s contractual obligations — to improperly share login credentials to a secured database that CCDH then accessed, and retrieved information from, on multiple occasions without authorization. CCDH, in turn, selectively quoted data it obtained via those methods. It did so out of context in public reports and articles it prepared to make it appear as if X is overwhelmed by harmful content, and then used that contrived narrative to call for companies to stop advertising on X.

The specifics here are that ExTwitter is claiming someone gave CCDH access to ExTwitter’s account with Brandwatch. Brandwatch has a tool for advertisers to monitor their brands on social media. Twitter has an ongoing relationship with Brandwatch (likely using the Twitter API) to help customers of Brandwatch (generally advertisers) see what’s happening on social media.

ExTwitter claims that someone with a Brandwatch account gave CCDH access to their dashboard:

Twitter is informed and believes, and on that basis alleges, that none of the Defendants (except for the third party who is included as Doe Defendant and improperly shared its login credentials with CCDH) are or ever have been customers of Brandwatch, and have never been provided with login credentials that would enable them to permissibly access the data with authorization. None of the Defendants (again, except for the third party who improperly shared its login credentials with CCDH) are or ever have been parties to the Brandwatch Agreements. And neither X nor Brandwatch has ever consented, in any form or in any way, to any of Defendants (except the third party who provided CCDH with its login credentials and who is named as a Doe Defendant) the data that X Corp. provided to Brandwatch under the Brandwatch Agreements.

In order to prepare and publish the so-called “research” reports and articles about X, CCDH has — since at least March 2011 — necessarily obtained access to and accessed the Licensed Materials improperly and without authorization. Indeed, CCDH has admitted as much, citing Brandwatch—a platform it never had any right to access—as a source of its data in its “research” reports, despite that data being accessible only to authorized users via login credentials, which the CCDH was not. These actions were unknown to Brandwatch and to X until recently

Even if true, this is no basis for ExTwitter to sue CCDH. It might (in theory, but probably not in reality) have a claim against Brandwatch or the Brandwatch user. Or, more likely, Brandwatch might have a claim against its users for breaching its contract. But there’s no transitive property that gives ExTwitter a legitimate claim against CCDH.

This is all just fluff and nonsense.

There’s also this:

Twitter is informed and believes, and on that basis alleges, that CCDH’s conduct as described herein is intended to do more than further CCDH’s own censorship efforts.

Again, I disagree with CCDH’s methodology and its goals. I think it’s a terrible organization that gets way too much attention for its shoddy research and biased takes. But what is described above is literally the quintessential definition of free speech. CCDH cannot meaningfully “censor” anything. The only thing it can do is use its own free speech rights to try to convince others to disassociate from someone.

That’s free speech. That’s the marketplace of ideas.

I can disagree with CCDH’s position and its research and arguments, and still recognize that it has every right to advocate for whatever it wants to advocate for. That’s not censorship, Elon, that’s free speech.

So, the breach of contract claims are a total joke. It’s not the contract between ExTwitter and CCDH that was broken. And the CFAA claims are even more disgusting. We’ve obviously written about the horror that is the CFAA many times before. The Computer Fraud and Abuse Act, passed because Ronald Reagan was confused and thought the movie War Games was true, has been widely abused for years by companies (and law enforcement) using bogus claims of “unauthorized access” to attack people who do things on their computers that they just don’t like. The broad nature of the law has lead to it being called “the law that sticks” because it’s often used when all other laws would fail.

Thankfully, over the past few years, the courts have pushed back on the most egregious uses of the CFAA, but it’s still a bad law. And here, the CFAA claims are particularly laughable:

Defendants, except for the third party who provided CCDH with its login credentials, have violated the CFAA by knowingly, and with intent to defraud X Corp., accessing a protected computer, without authorization, and by means of such conduct furthered the fraud and obtained one or more things of value

Bullshit. Again, this claim only makes (very slightly, but not really) sense if it were Brandwatch making it, not ExTwitter. The complaint makes it clear that the computer systems in question were Brandwatch’s, not ExTwitter’s:

Defendants (except for the third party who is included as a Doe Defendant and improperly shared its login credentials with CCDH) were never validly given login credentials to access the data provided under the Brandwatch Agreements. Those Defendants nonetheless, knowing the data was secured pursuant to the Brandwatch Agreements and that those Defendants did not have authorization to access it, convinced an unknown third party, who is likely a Brandwatch customer, to share its login credentials with the remaining Defendants. Those Defendants then accessed that data without authorization, as admitted in CCDH’s reports and articles discussed above, in furtherance of obtaining data regarding X that those Defendants could mischaracterize as part of its campaign to call on companies to stop advertising on X.

And the “loss” part, which is a necessary part of a CFAA claim, is particularly ridiculous even by CFAA standards, in which “losses” are often quite absurd.

X has suffered loss as a result of these violations, including, without limitation, amounts expended attempting to conduct internal investigations in efforts to ascertain the nature and scope of CCDH’s unauthorized access to the data, significant employee resources and time to participate and assist in those investigations, and attorneys’ fees in aid of those investigations and in enforcing the relevant agreements. These losses amount to well over $5,000 aggregated over a one-year period

Yes. That’s right. Elon is claiming that the “loss” under the CFAA is the fact that ExTwitter employees had to investigate how it was that CCDH was getting the information it used to make fun of Twitter.

This is all hogwash. No matter what you think of CCDH, it has every right to analyze Twitter and post its own interpretation of how well the company is handling hateful content, just as I (or Musk) have the right to respond and point out the problems with their opinions or analysis.

That is free speech.

What is not free speech is using the power of the state to file vexatious, bogus lawsuits to try to intimidate them for their speech. The fact that the case filed has entirely different (but equally ridiculous) legal theories than the letter that preceded it really only serves to underline that the intent of this was to find the best way to intimidate critics. The lawyer filing this case, Jonathan Hawk, is an experienced lawyer working for a giant law firm. He must know that this case is a vexatious, nonsense SLAPP suit, but he still agreed to file it. It’s disgusting.

While California has an anti-SLAPP law, as some have noted, this case may not be applicable to it. The CFAA claim is a federal claim, and California’s anti-SLAPP law (while it can be used in federal court) can’t be used against federal law (this is why we NEED A FEDERAL ANTI-SLAPP law). And, while the breach of contract claim might be arguable under California’s anti-SLAPP, ExTwitter can and will argue it’s not really about speech… In other words, this is still going to be a pain for CCDH. (Edited to provide a clearer explanation of the anti-SLAPP issue…).

I asked 1st Amendment Ken White to dig into the California anti-SLAPP analysis, and he explained why it (unfortunately) likely won’t apply here:

When evaluating an anti-SLAPP motion, California courts look to the legal nature of the claim, not the plaintiff’s intent in bringing it. A case that the plaintiff filed because of protected activity, or in retaliation against protected activity, doesn’t come under the statute unless the legal claims are based on protected activity. This is sometimes called the “gravamen” test. So, for instance, if a landlord sues to evict you and cites your non-payment of rent, even if you claim that the real motive is your organizing tenants to protest the landlord, the anti-SLAPP statute doesn’t apply because the gravamen of the claim – the thrust of the claim – isn’t your protected speech. Here, the defendant can’t use the anti-SLAPP statute to attack the CFAA claim because it’s a federal cause of action. In addition, I think it’s going to be tricky showing that the gravamen of the other claims is the speech as opposed to breach of the contract regarding access to the data. It’s not a sure loss, but it’s a problem.

And, again, this is why we really need a strong federal anti-SLAPP law to deal with situations like this.

But, let’s be 100% clear about this: Elon Musk is not a free speech absolutist or a free speech supporter. He’s a thin-skinned free speech suppressor willing to file vexatious SLAPP suits to intimidate those who criticize him.

Filed Under: alex spiro, california, cfaa, criticism, defamation, elon musk, free speech, intimidation, jonathan hawk, lanham act, research, slapp suit, trademark
Companies: ccdh, twitter, x

Once Again, Supreme Court Suggests That The 1st Amendment Must Stand Aside For ‘Intellectual Property’

from the drink-up dept

A few weeks back, we wrote about the Supreme Court’s decision in the case between the Andy Warhol Foundation and Lynn Goldsmith, regarding the copyright on certain images that Warhol painted based on a Goldsmith photograph, and exploring under what conditions it was protected by fair use. We felt that the Court completely ignored the 1st Amendment interests at play, but there were many people (including close friends) who have argued that the ruling was “narrow” and not so problematic. We shall see.

Last week, the Supreme Court also ruled in another case that we’ve written about a few times, regarding whiskey maker Jack Daniels and dog chew toy maker VIP products, which made a chew toy called “Bad Spaniels” made to parody the well known Jack Daniels’ bottle.

There were lots of issues regarding trademark law at play in the case, and it has bounced around the courts for years, but the key question before the Supreme Court here regarded what test should be used in cases of parody. Normally (though not always), as regular Techdirt readers will know, trademark law goes by the “likelihood of confusion” question for determining whether or not a use is infringing. Since the crux of trademark law is about recognizing the origin of the product, the question of whether or not there’s any confusion is often the most important.

That said, a case from a few decades ago, Rogers v. Grimaldi, established a test for trademark when there were 1st Amendment free expression issues at play, designed to make sure it’s protecting speech. In this case, the 9th Circuit used the Rogers test to dump the case, saying that there was no trademark infringement. Jack Daniels challenged the use of the Rogers test, leading many to fear a ruling that would cut back on free speech protections, especially given how often bogus trademark claims are used to stifle speech. This is why there were so many amicus briefs in the case from free speech groups.

In many ways, this ruling had some similarities to the Warhol case, in that it feels narrowly focused, and many people we agree with breathed a sigh of relief, saying that the ruling isn’t that bad, as it leaves the Rogers test mostly intact. And, as with the Warhol case, I agree that the ruling absolutely could have been a lot worse.

But, there were still some elements that I find worrisome, in the same way that there were elements of the Warhol case that were worrisome. And, those elements were… actually kind of similar. In both cases, the Supreme Court justices more or less suggest that the 1st Amendment sometimes needs to stand aside in “intellectual property” cases.

Specifically, in this case, the Supreme Court said that the Bad Spaniels case could be decided based on traditional trademark terms regarding likelihood of confusion, rather than even getting to the Rogers test and questions related to free expression and the 1st Amendment:

The Ninth Circuit was mistaken to believe that the First Amendment demanded such a result. The court thought that trademark law would otherwise “fail[] to account for the full weight of the public’s interest in free expression.” 953 F. 3d, at 1174. But as the Mattel (i.e., Barbie) court noted, when a challenged trademark use functions as “source-identifying,” trademark rights “play well with the First Amendment”: “Whatever first amendment rights you may have in calling the brew you make in your bathtub ‘Pepsi’” are “outweighed by the buyer’s interest in not being fooled into buying it.” 296 F. 3d, at 900. Or in less colorful terms: “[T]o the extent a trademark is confusing” as to a product’s source “the law can protect consumers and trademark owners.” Tam, 582 U. S., at 252 (Kennedy, J., concurring in part and concurring in judgment); see Friedman v. Rogers, 440 U. S. 1, 15 (1979) (rejecting a First Amendment challenge to a law restricting trade names because of the “substantial” interest in “protecting the public from [their] deceptive and misleading use”). Or yet again, in an especially clear rendering: “[T]he trademark law generally prevails over the First Amendment” when “another’s trademark (or a confusingly similar mark) is used without permission” as a means of “source identification.” Yankee Publishing Inc. v. News Am. Publishing Inc., 809 F. Supp. 267, 276 (SDNY 1992) (Leval, J.) (emphasis deleted). So for those uses, the First Amendment does not demand a threshold inquiry like the Rogers test. When a mark is used as a mark (except, potentially, in rare situations), the likelihood-of-confusion inquiry does enough work to account for the interest in free expression.

In this case, the Supreme Court basically sent the case back to the 9th Circuit to review for “likelihood of confusion,” which VIP Products is likely to win anyway.

But, still, as in the Warhol case, the court here seems to be suggesting that if something is a core “intellectual property” issue we set aside the 1st Amendment concerns. And, as we noted in Warhol, that’s going to lead to some problematic results.

As EFF (who noted that the decision was mostly good) notes in its writeup of the ruling, we should be concerned as to where this leads:

Finally, it’s troubling that the Court went directly from concluding that source-identifying trademark uses fall within trademark law’s “heartland” to concluding that no further First Amendment scrutiny was needed. That approach is in line with a frustrating trend in trademark and copyright cases to dispense with the traditional—and more protective—forms of First Amendment analysis applied to restrictions on speech in other areas of law. Congress’s own efforts to accommodate free speech concerns notwithstanding, statutory rights never trump Constitutional rights, and we’re disappointed that the Court did not evaluate the issues here accordingly.

To me that’s the key, in both this case and in the Warhol case. The Justices in both seem to suggest that copyright law or trademark law should simply step in front of the 1st Amendment. But that can’t be. Laws cannot override the Constitution, and in both cases, it seems that a 1st Amendment analysis is necessary at some point.

Otherwise, we are repeatedly going to run into future cases where copyright and trademark law is used to silence speech, in which courts won’t even consider the expressive concerns, because they’ll argue the Supreme Court has said that copyright and trademark law override the 1st Amendment.

Filed Under: 1st amendment, dog toys, free speech, lanham act, likelihood of confusion, parody, rogers test, supreme court, trademark
Companies: jack daniels, vip products

Judge Alsup Dismisses Nearly All Of Alex Berenson Frivolous Lawsuit Against Twitter

from the still-not-how-any-of-this-works dept

Back in December we wrote about just how absolutely, pathetically ridiculous Alex Berenson’s lawsuit against Twitter was. As you’ll recall, Berenson, who has accurately been described as the “pandemic’s wrongest man“, got kicked off Twitter after posting a non-stop stream of utter nonsense, completely misinterpreting vaccine data in ways that weren’t just embarrassing but that likely were causing people to die. The lawsuit against Twitter trotted out a number of laughable theories, including that it violated the 1st Amendment to kick him off, and that it was “unfair competition” and a “breach of contract” among other things. We went through how laughable all of these were, but didn’t spend that much time on it because, really, there’s only so much time one should waste on such things.

There have been a bunch of filings back and forth in the lawsuit, with each of Berenson’s more ridiculous than the previous one, but we didn’t write about them because we were waiting for the judge to rule. Of course, last Wednesday night Berenson went on Fox News, natch, to tell the heir of a frozen food fortune that “our lawsuit, I think, is stronger than a lot of other lawsuits that have not survived the motion-to-dismiss stage.”

Two days later, Judge William Alsup (not known for putting up with very much bullshit) has dismissed nearly all of the lawsuit. Of course, one tiny bit of it has survived, just barely (and not for long), so in this way I guess Berenson actually got one thing right. His lawsuit is just ever so slightly “stronger” than a lot of other lawsuits. But not really.

Alsup has dismissed all of the speech arguments: the 1st Amendment claims, the unfair competition claims, etc, and did so incredibly easily by pointing to Section 230 and noting that Berenson has no claim here, despite his earlier confidence that his lawsuit was somehow “different.” It wasn’t. It’s worth noting that Alsup dismisses under 230(c)(2), which is a bit surprising, since most of these kinds of cases just point to (c)(1) and are done with it. As a refresher, (c)(1) is the part that says you can’t hold a website liable for someone else’s content, while (c)(2) is the more awkwardly worded part about no liability for “good faith” moderation actions. Many, many courts have realized, correctly, that (c)(2) barely matters in the face of (c)(1), because even if you had bad faith moderation, the website would still be immune because any liability would be based on the user’s content.

But here, Alsup notes that even under (c)(2) Berenson has no argument at all:

For an internet platform like Twitter, Section 230 precludes liability for removing content and preventing content from being posted that the platform finds would cause its users harm, such as misinformation regarding COVID-19. Plaintiff’s allegations regarding the leadup to his account suspension do not provide a sufficient factual underpinning for his conclusion Twitter lacked good faith. Twitter constructed a robust five-strike COVID-19 misinformation policy and, even if it applied those strikes in error, that alone would not show bad faith. Rather, the allegations are consistent with Twitter’s good faith effort to respond to clearly objectionable content posted by users on its platform

That’s it. That forecloses the core of the lawsuit. There isn’t that much discussion about it , because there doesn’t need to be. Alsup also completely trashes the specific 1st Amendment claim:

Aside from Section 230, plaintiff fails to even state a First Amendment claim. The free speech clause only prohibits government abridgement of speech — plaintiff concedes Twitter is a private company (Compl. ¶15). Manhattan Cmty. Access Corp. v. Halleck, 139 S. Ct. 1921, 1928 (2019). Twitter’s actions here, moreover, do not constitute state action under the joint action test because the combination of (1) the shift in Twitter’s enforcement position, and (2) general cajoling from various federal officials regarding misinformation on social media platforms do not plausibly assert Twitter conspired or was otherwise a willful participant in government action. See Heineke v. Santa Clara Univ., 965 F.3d 1009, 1014 (9th Cir. 2020). For the same reasons, plaintiff has not alleged state action under the governmental nexus test either, which is generally subsumed by the joint action test. Naoko Ohno v. Yuko Yasuma, 723 F.3d 984, 995 n.13 (9th Cir. 2013). Twitter “may be a paradigmatic public square on the Internet, but it is not transformed into a state actor solely by providing a forum for speech.” Prager Univ. v. Google LLC, 951 F.3d 991, 997 (9th Cir. 2020) (cleaned up, quotation omitted).

The Lanham Act claims? Also dismissed in a single paragraph:

Aside from Section 230, the Lanham Act claim also fails anyway. The Lanham Act “prohibits any person from misrepresenting her or another person’s goods or services in ‘commercial advertising or promotion.’” Ariix, LLC v. NutriSearch Corp., 985 F.3d 1107, 1114–15 (9th Cir. 2021) (quoting 15 U.S.C. § 1125(a)(1)(B)). Neither Twitter’s labelling of plaintiff’s tweets, nor its statement regarding the suspension of his account plausibly propose a commercial transaction. See United States v. United Foods, Inc., 533 U.S. 405, 409 (2001). They are not advertisements, nor do they refer to a particular product, and the theory that Twitter’s statements were made in the context in which plaintiff offers his services is too attenuated. See Hunt v. City of L.A., 638 F.3d 703, 715 (9th Cir. 2011) (citation omitted). Applying common sense, this order concludes Twitter’s warning labels and suspension notice constitute non-commercial speech aimed instead at promoting the veracity of tweets regarding COVID-19

Judge Alsup notes it’s not even worth going into Berenson’s laughable claims that Twitter is a common carrier under the California Constitution (it’s not) because Section 230 takes care of that anyway.

There are two claims that live on, though it’s unlikely they’ll last for very long. But let’s dig in on those two claims. They are part of his “breach of contract” claims and the “promissory estoppel” claim. These are all really based on a case that we’ve talked about before, one from about a decade ago, Barnes v. Yahoo, in which someone was able to get around Section 230 because a Yahoo employee had promised that they would “take care of” the content that was being complained about. Based on that, the courts ruled that a direct promise had been made, and breaking that was effectively breaking a contract.

When the original lawsuit came out, I had initially written up an analysis of why Berenson’s situation was so different from Barnes that the similar claims in the lawsuit were unlikely to fly, but dropped it because it seemed like a lot of words to explain something that was unlikely to amount to much. However, here it lives on, although there’s ever indication that Alsup will do away with it shortly.

The issue is that the claims lean very, very heavily on some email exchanges Berenson had with a Twitter comms exec, in which the exec told Berenson he didn’t believe that his tweets were likely the target of policy changes, and that if he heard anything else he’d try to let him know, and said he’d try to make sure Berenson was “given a heads up” before anything happened. That’s not anything even remotely in the vicinity of a promise that the company would never take action on Berenson, so not at all like the Barnes scenario.

Either way Judge Alsup, in his standard methodical manner, allows for very, very limited discovery to establish whether or not there was any actual contract here that was breached, and any actual promises made that would trip the promissory estoppel flag. Twitter will have to cough up some details of how it flagged Berenson’s account, and how it determined he had hit the “five strikes” threshold to have the account suspended. It also needs to share some of its communications about Berenson and the termination of his account.

Two separate lawyers I spoke to with litigation experience said this appears to be Alsup being extremely thorough and just making sure there really isn’t some secret thing going on in Twitter, and that the company followed the necessary steps in banning Berenson.

Of course, many foolish people are celebrating. This includes Berenson, who is claiming an extremely premature victory on his Substack, saying that Twitter “is going to have a hella time slithering out of” these discovery demands which he (incorrectly) calls “broad.” In another post he still appears to be claiming that this is a “fight for free speech” even as all the free speech parts were dismissed without leave to amend. Also, because an editor at Politico incorrectly titled its piece on this ruling “Twitter loses bid to toss Alex Berenson lawsuit” with a subhead that “the free speech complaint against Twitter will be allowed to proceed.” (The article is actually good, but the headline and subhed are wrong).

The free speech parts of the lawsuit were all tossed. There’s only the issue of breach of contract and promissory estoppel here, and the judge is allowing narrow discovery on those issues just to see if there’s any smoking gun. If there isn’t, those two claims will get tossed as well. It is, of course, always possible that discovery will turn up some internal nonsense at Twitter, but this case is very much on the rocks.

Filed Under: 1st amendment, alex berenson, free speech, lanham act, promissory estoppel, section 230, unfair competition, william alsup
Companies: twitter

If Something Is Advertised As A Knockoff Product… Is It No Longer Counterfeiting?

from the likelihood-of-amusing dept

People throw around a variety of terms that sometimes need to have more specific meanings. When talking about physical goods, when people talk about “knockoffs” or “counterfeits” they’re usually referring to a trademark issue. And, in some sense, this is what trademark is supposed to be about. For many years we’ve argued that trademark should not be lumped in with patents and copyrights, as the concept, purpose, intent, and even Constitutional underpinnings are entirely different. It’s extremely frustrating to see people lump in patents, copyrights, and trademarks as “intellectual property” as if they were all similar. They are not. And trademarks are especially different.

Indeed, we’ve always said that (unlike with the other two) trademarks are mostly a consumer protection law, so that you know who is actually making the things you’re buying, and you know the origin of it. That is, we let Coke have a trademark on the Coca-Cola branding so that consumers don’t get tricked into buying something that isn’t Coke, while believing it is. This is why a key part of trademark law has always been the “likelihood of confusion.” If there’s no likelihood of confusion, than there isn’t a trademark violation.

But here’s an interesting question: if someone is making a counterfeit product… is it still violating trademark laws against counterfeiting if buyers know it’s counterfeit? A recent 9th Circuit Court ruling suggests… perhaps not. The case is not about this issue directly, but is about two separate companies who each (independently it appears) came up with products called “Eye Dew.” One, Arcona, created an eye cream that in a tall cylindrical silver bottle. Arcona registered a trademark on the name. Around the same time (or even possibly a bit earlier), a different company, Farmacy Beauty, developed its own eye cream, also named EYE DEW. The packaging of the two products looks very, very different:

The ruling in the case finds that because the Lanham Act requires there to be a likelihood of confusion, and people are unlikely to be confused between these two products, then there’s no counterfeiting claim. The court notes that while it has been recognized that a pure trademark infringement claim requires a likelihood of confusion, the 9th Circuit had never ruled directly on the question of whether or not a counterfeiting claim does, even though both stem from the Lanham Act. However, noting that everyone agrees that trademark claims require it, and the plain language of the statute says so, the court confirms:

We thus hold that a counterfeit claim requires a showing of likelihood of confusion under Section 1114.

And while the case is not about this, it raises a somewhat fascinating question first posed by law professor Mark Lemley. He notes that under this ruling, brands may not be able to go after obvious knockoffs if the knockoffs don’t confuse anyone:

Ninth Circuit holds that trademark counterfeiting claims require a likelihood of confusion, and you can't presume confusion from identical marks. While that seems logical, it may make it hard for brands to sue obvious knockoffs that don't confuse anyone.https://t.co/o9TnBQYh5F

— Mark Lemley (@marklemley) October 2, 2020

This is interesting on a few levels. First off, we’ve highlighted many studies showing that the vast majority of people buying knockoff products know they’re knockoffs, and they buy them aspirationally — knowing they can’t afford the real thing, but wanting to build themselves up to buying the real thing, by first buying a knockoff. We’ve used those studies to question the common wisdom (often used by customs and border patrol and ICE) about the “dangers” of counterfeits. If no consumers are fooled or harmed, then what’s the issue? And that’s especially true if they weren’t going to purchase a legitimate version in the first place.

But this raises an even more interesting question to me: under this ruling, could a company not just make cheap knockoffs of a famous brand’s products, but then avoid some level of liability by clearly advertising them as knockoffs? I wouldn’t suggest doing that without a huge legal budget, but a strong argument can be made that if you made it abundantly clear that your fake Louis Vuitton handbag was a fake Louis Vuitton handbag, and that buyers could not buy it without understanding that fact — then there might not be any claim. There would be no likelihood of confusion. There would be no harm.

It’s such an intriguing idea, I’m now kind of hoping that someone (again, someone with fantastic trademark/counterfeiting lawyers, and a large legal war chest) tests this out. If you do, send me some sample counterfeit merchandise as a thank you.

Filed Under: 9th circuit, consumer protection, counterfeit, counterfeits, eye dew, fake goods, lanham act, likelihood of confusion, trademark
Companies: arcona, farmacy beauty

Bringing Free Speech Back: Trump Promises To Sue CNN Over Its Biased Coverage Based On Dumbest Legal Theory Ever

from the ken,-is-charles-harder-a-good-lawyer? dept

By way of disclosure, I will mention that (as you may be aware), Charles Harder was the lawyer who represented Shiva Ayyadurai in his lawsuit against us, and who has a decently long history of both threatening and filing lawsuits against media properties — some of which have been more successful than others. Harder appears to have used his reputation for killing off Gawker to get ever more prominent clients, on whose behalf he has sent plenty of laughable threat letters trying to silence obviously protected speech, from Roger Ailes to Harvey Weinstein to Donald Trump. I will leave it as an exercise to the reader to determine if you see a pattern in some of Harder’s clients and the representation he has provided for them.

Apparently the President still employs Harder. Late last week he sent what has to be one of the most ridiculous threat letters I’ve seen (and that’s saying something) to CNN promising to sue the company for its “biased” coverage of the possible Trump impeachment process. Everything about the letter is pretty crazy, especially from a President whose fans like to pretend he he supports free speech. He does not. And Harder’s ridiculous letter makes this clear. The letter doesn’t claim defamation (which would be laughable on its own) but a rather… let’s say “unique”… interpretation of the Lanham Act’s “truth in advertising” aspects to argue that its coverage of the President doesn’t match up with its promises to be “fair and balanced.”

Your website expressly represents to the public, in writing, that you are ?journalists,? ?truth seekers,? ?united by a mission to inform, engage and empower the world,? and you ?stand for excellence in journalism and [your] products.? See https://www.CNN.com/About (emphasis added). Your slogan is ?The Most Trusted Name in News?. Your Facebook account claims you are ?widely known to be ? the most trusted source for news and information.? Your anchor, Don Lemon, stated on June 6, 2019, as a keynote speaker at Financial Times Live Future of News: ?We don?t profess to be a liberal network, we?re a news network ? we have a commitment to the truth and to facts, which has really been paramount, especially always at CNN.? Mr. Zucker said in an interview with Variety, published on August 2, 2016: ?[O]ur air, as opposed to others?, is truly fair and balanced.? (Emphasis added.)

The letter then goes on to cite the Society of Professional Journalists’ Code of Ethics, claiming that CNN is violating them. This is silly on multiple levels. First of all, Harder seems to ignore a key part of that code of ethics that explicitly states:

The SPJ Code of Ethics is a statement of abiding principles supported by additional explanations and position papers (at spj.org) that address changing journalistic practices. It is not a set of rules, rather a guide that encourages all who engage in journalism to take responsibility for the information they provide, regardless of medium. The code should be read as a whole; individual principles should not be taken out of context. It is not, nor can it be under the First Amendment, legally enforceable.

Yet, Harder acts as if it’s some sort of legally enforceable document that somehow overrides the 1st Amendment. Which is weird.

From there, Harder cites a new video from notorious misrepresenters Project Veritas as proof that CNN is violating these ethical rules that are not law, and which it’s not at all clear they’re actually violating in the first place. Much of the complaint is whether or not CNN staff is “biased” against the President, and whether or not it lets opinion journalism appear in its “news” coverage.

Of course, this is all particularly hilarious because, as bad as CNN might be on that front, the same would apply doubly so to the President’s favorite TV news station, Fox News, whose own motto is famously (if hilariously) “Fair and Balanced” when it is anything but, and took a famously adversarial position to the previous administration. Keep that in mind when you read this next line in Harder’s letter:

Never in the history of this country has a President been the subject of such a sustained barrage of unfair, unfounded, unethical and unlawful attacks by so-called ?mainstream? news, as the current situation.

It can easily be argued that that isn’t even true when compared to the previous administration and Fox News. And, of course, there’s a long, long history of journalistic outlets targeting opposing Presidents (including being accused (perhaps exaggeratedly) of being responsible for the assassination of President McKinley). The idea that CNN’s coverage of the President is somehow unique in history is hilarious and unsupported by reality.

As for the actual legal claims they’re vague, but utter nonsense:

Your actions are in violation of the Lanham Act (15 U.S.C. § 1051 et seq.), among other applicable laws, by constituting misrepresentations to the public, to your advertisers, and others. Accordingly, my clients intend to file legal action against you, to seek compensatory damages, treble damages, punitive damages, injunctive relief, reimbursement of legal costs, and all other available legal and equitable remedies, to the maximum extent permitted by law.

As well known, well respected lawyer Ted Boutrous stated on Twitter, this entire letter is silly:

This is an absolutely ridiculous letter. No serious lawyer would ever think of sending such a frivolous letter making such a baseless threat. https://t.co/omdWCE50fv

— Ted Boutrous (@BoutrousTed) October 18, 2019

CNN’s response to the letter was pretty short and succinct:

?This is nothing more than a desperate PR stunt and doesn?t merit a response, CNN said in a statement.

Exactly. While Harder’s letter promises a lawsuit on this, it would not be surprising if no such lawsuit materializes, as it’s an almost guaranteed loser. As law professor Alexandra Roberts points out, while Harder’s Lanham Act claims are not at all clearly stated, he’s likely (especially given the context of the rest of the letter) suggesting a “false advertising” claim, but for that to be legit, he would have to show commercial harm to President Trump, which would be… quite something to attempt.

Separately, Roberts makes another important point: since the letter isn’t even a standard “cease and desist” threat letter, but rather includes a statement about a planned legal action, CNN (if it so chose) could actually go to court and ask for a declaratory judgment on this matter, effectively forcing Trump/Harder to explain to the court whatever ludicrous legal theory they have, only to almost certainly have it laughed out of court. It looks like CNN won’t bother doing so, but that sure would be fascinating to watch.

Filed Under: 1st amendment, bias, charles harder, coverage, donald trump, false advertising, free speech, journalism, lanham act, news
Companies: cnn

Ninth Circuit Reverses Course While Quoting Its Own Precedent Saying Otherwise; Says Section 230 Doesn't Cover Anti-Competitive Moderation

from the our-earlier-finding,-while-good,-is-now-not-good,-so... dept

The Ninth Circuit Appeals Court has resuscitated a lawsuit against Malwarebytes filed by litigious software company Enigma. Enigma Software tends to sue people who say bad things about its antivirus offerings and since there’s a lot of people doing that, the company seems to spend a fair amount of time in court.

Enigma ran into the Section 230 wall in the lower court by claiming Malwarebytes’ designation of its software as a threat was an unfair business practice. It said Malwarebytes scans were locating its offerings on people’s computers, informing them the software was shady, and quarantining it. Enigma alleged this was anti-competitive. And if it wasn’t that, it was probably some sort of trademark thing, blah blah blah Lanham Act. (This claim sneaks into a lot of lawsuits involving Section 230 protections and Enigma tried this tactic in a defamation lawsuit it filed against BleepingComputer. It’s a dodge, not a cognizable legal argument.)

Malwarebytes prevailed at the district court level by citing a Ninth Circuit Appeals Court ruling finding that filtering software or services is also protected by Section 230 of the CDA. In the cited case, antivirus software company Kaspersky secured a dismissal from a lawsuit brought by an aggrieved adware purveyor. That decision said any material a provider feels is objectionable (in this case, adware) can be removed by the provider.

That’s what the court said then. What it’s saying now is something different, and that appears to be only because the Ninth Circuit feels Malwarebytes and Enigma Software are actually competitors, even if Enigma has yet to earn the same amount of respect Malwarebytes has. From the decision [PDF]:

This case differs from Zango in that here the parties are competitors. In this appeal Enigma contends that the “otherwise objectionable” catchall is not broad enough to encompass a provider’s objection to a rival’s software in order to suppress competition. Enigma points to Judge Fisher’s concurrence in Zango warning against an overly expansive interpretation of the provision that could lead to anticompetitive results. We heed that warning and reverse the district court’s decision that read Zango to require such an interpretation. We hold that the phrase “otherwise objectionable” does not include software that the provider finds objectionable for anticompetitive reasons.

That’s a pretty broad interpretation of a decision the Ninth Circuit says it’s not going to interpret broadly. Malwarebytes has plenty of legitimate reasons to protect its users from Enigma’s offerings that go beyond neutering a competitor. Enigma’s reputation seems to have improved over the last couple of years, but its history is littered with rogue software designations, questionable customer service tactics, and, of course, the tendency to sue anyone who doesn’t view Enigma as positively as Enigma views itself.

So, designating this competitor’s software as questionable isn’t necessarily about keeping a competitor off users’ computers. That subtlety is lost in this reversal by the Ninth Circuit, which feels Enigma has plausibly alleged anti-competitive practices.

It also (perhaps more correctly) finds that Enigma can continue pursuing its Lanham Act claims about trademark infringement. The court (correctly) notes Section 230 does not provide immunity against intellectual property claims. Not that the false advertising claim raised here has any merit. It doesn’t. But being right on this point doesn’t make the decision any better. Litigants hoping to dodge Section 230 immunity tend to throw in trademark-related claims as filler, hoping this bogus deployment of their intellectual property protections will allow them to survive a motion to dismiss. It works here. So that means litigants will keep cramming these bullshit claims into their bullshit lawsuits.

Not only does this make things worse for defendants in the circuit (and there will be a lot of them considering how many tech companies are located in California) but it ignores one crucial aspect of Malwarebytes’ designation of Enigma software as dangerous: Malwarebytes flagged Enigma’s software in response to users’ preferences.

Malwarebytes and Enigma have been direct competitors since 2008, the year of Malwarebytes’s inception. In their first eight years as competitors, neither Enigma nor Malwarebytes flagged the other’s software as threatening or unwanted. In late 2016, however, Malwarebytes revised its PUP-detection criteria to include any program that, according to Malwarebytes, users did not seem to like.

After the revision, Malwarebytes’s software immediately began flagging Enigma’s most popular programs— RegHunter and SpyHunter—as PUPs. Thereafter, anytime a user with Malwarebytes’s software tried to download those Enigma programs, the user was alerted of a security risk and, according to Enigma’s complaint, the download was prohibited, i.e. Malwarebytes “quarantined” the programs.

This move was predicated on users’ preferences, which puts it about as close to user-generated content as possible, without allowing users to directly control Malwarebytes’ threat database.

The end result is what matters, at least in the Appeals Court’s limited analysis. Section 230 was supposed to increase competitiveness, not limit it, so…

We cannot accept Malwarebytes’s position, as it appears contrary to CDA’s history and purpose. Congress expressly provided that the CDA aims “to preserve the vibrant and competitive free market that presently exists for the Internet and other interactive computer services” and to “remove disincentives for the development and utilization of blocking and filtering technologies.” § 230(b)(2)–(3). Congress said it gave providers discretion to identify objectionable content in large part to protect competition, not suppress it. Id. In other words, Congress wanted to encourage the development of filtration technologies, not to enable software developers to drive each other out of business.

On the plus side, it also doesn’t buy Enigma’s argument that Section 230 immunity only involves the policing of material that is sexual and/or violent in nature. It covers more than that, but does not — at least in this opinion — protect the blocking of competitors’ software offerings.

The dissent says this is the wrong decision to make. Section 230’s language does cover Malwarebytes’ flagging of Enigma software. If the law needs to be fixed, legislators need to fix it. The court shouldn’t litter the circuit with bad precedent in lieu of Congressional action.

The majority opinion seeks to limit the statute based on the fact that the parties are competitors. See Majority Opinion, p. 4. However, nothing in the statutory provisions or our majority opinion in Zango supports such a distinction. Rather the “broad language” of the Act specifically encompasses “any action voluntarily taken [by a provider] to restrict access to . . . material that the provider . . . considers to be . . . otherwise objectionable.” 47 U.S.C. § 230(c)(2)(A) (emphasis added). Under the language of the Act, so long as the provider’s action is taken to remove “otherwise objectionable” material, the restriction of access is immunized. See id. The majority’s real complaint is not that the district court construed the statute too broadly, but that the statute is written too broadly. However, that defect, if it is a defect, is one beyond our authority to correct.

But that’s not what happened here. Enigma will get to drag this litigation out even longer. It may not even win it. But it will serve as a warning to others tempted to flag Enigma’s offerings as less-than-desirable. And that’s probably the only win it really needs.

Filed Under: 9th circuit, competition, content moderation, lanham act, malware, section 230
Companies: enigma, malwarebytes

Supreme Court Now Says That The Trademark Office Can't Reject 'Immoral Or Scandalous' Trademarks

from the well-fuck-yeah(tm) dept

This should have been pretty much a foregone conclusion after the Supreme Court’s ruling two years ago in Simon Tam’s case about The Slants trademark. In that case, the Supreme court ruled that part of the Lanham Act that said the government could deny trademarks on “disparaging” marks was an unconstitutional violation of the First Amendment. However, that ruling was a bit messy. The court agreed that the law was unconstitutional under the 1st Amendment, but had two different theories as to why, neither of which got a majority. So the specific law that said the PTO could reject “disparaging” marks was tossed, but technically other content-based restrictions, such as those for “immoral and scandalous” remarks remained on the books. So, pretty quickly that got challenged as well, and now the Supreme Court instead has said that’s unconstitutional too.

The basic reasoning should be obvious: under the First Amendment, the government cannot be in the business of judging the appropriateness of content (for what it’s worth, this is also why Senator Josh Hawley’s silly bill is unconstitutional). Here, the majority decision, written by Justice Kagan, made pretty quick work of the ruling, basically just saying that the same thing that they said in the Tam case applies here as well.

If the ?immoral or scandalous? bar similarly discriminates on the basis of viewpoint, it must also collide with our First Amendment doctrine. The Government does not argue otherwise. In briefs and oral argument, the Government offers a theory for upholding the bar if it is viewpoint-neutral (essentially, that the bar would then be a reasonable condition on a government benefit). See Brief for Petitioner 14?26. But the Government agrees that under Tam it may not ?deny registration based on the views expressed? by a mark. Tr. of Oral Arg. 24. ?As the Court?s Tam decision establishes,? the Government says,?the criteria for federal trademark registration? must be ?viewpoint-neutral to survive Free Speech Clause review.? Pet. for Cert. 19. So the key question becomes: Is the ?immoral or scandalous? criterion in the Lanham Act viewpoint-neutral or viewpoint-based?

It is viewpoint-based. The meanings of ?immoral? and?scandalous? are not mysterious, but resort to some dictionaries still helps to lay bare the problem. When is expressive material ?immoral?? According to a standard definition, when it is ?inconsistent with rectitude, purity,or good morals?; ?wicked?; or ?vicious.? Webster?s New International Dictionary 1246 (2d ed. 1949). Or again, when it is ?opposed to or violating morality?; or ?morally evil.? Shorter Oxford English Dictionary 961 (3d ed. 1947). So the Lanham Act permits registration of marks that champion society?s sense of rectitude and morality, but not marks that denigrate those concepts. And when is such material ?scandalous?? Says a typical definition, when it ?giv[es] offense to the conscience or moral feelings?; ?excite[s] reprobation?; or ?call[s] out condemnation.? Webster?s New International Dictionary, at 2229. Or again, when it is ?shocking to the sense of truth, decency,or propriety?; ?disgraceful?; ?offensive?; or ?disreputable.? Funk & Wagnalls New Standard Dictionary 2186 (1944). So the Lanham Act allows registration of marks when their messages accord with, but not when their messages defy, society?s sense of decency or propriety. Put the pair of overlapping terms together and the statute, on its face, distinguishes between two opposed sets of ideas: those aligned with conventional moral standards and those hostile to them; those inducing societal nods of approval and those provoking offense and condemnation. The statute favors the former, and disfavors the latter. ?Love rules?? ?Always be good?? Registration follows. ?Hate rules?? ?Always be cruel?? Not according to the Lanham Act?s ?immoral or scandalous? bar.

The facial viewpoint bias in the law results in viewpoint-discriminatory application.

The ruling mocks the Government’s position that some of the examples shown of the PTO rejecting marks were “mistakes,” as well as the request to basically read the law entirely differently than it’s written.

How, then, can the Government claim that the ?immoral or scandalous? bar is viewpoint-neutral? The Government basically asks us to treat decisions like those described above as PTO examiners? mistakes. See Brief for Petitioner 46. Still more, the Government tells us to ignore how the Lanham Act?s language, on its face, disfavors some ideas. In urging that course, the Government does not dispute that the statutory language?and words used to define it?have just that effect. At oral argument, the Government conceded: ?[I]f you just looked at the words like ?shocking? and ?offensive? on their face and gave them their ordinary meanings[,] they could easily encompass material that was shocking [or offensive] because it expressed an outrageous point of view or a point of view that most members? of society reject. Tr. of Oral Arg. 6. But no matter, says the Government, because the statute is ?susceptible of? a limiting construction that would remove this viewpoint bias. Id., at 7 (arguing that the Court should ?attempt to construe [the] statute in a way that would render it constitutional?). The Government?s idea, abstractly phrased, is to narrow the statutory bar to ?marks that are offensive [or] shocking to a substantial segment of the public because of their mode of expression, independent of any views that they may express.? Id., at 11 (emphasis added); see Brief for Petitioner 27?28. More concretely, the Government explains that this reinterpretation would mostly restrict the PTO to refusing marks that are ?vulgar??meaning ?lewd,? ?sexually explicit or profane.? Id., at 27, 30. Such a reconfigured bar, the Government says, would not turn on viewpoint, and so we could uphold it.

But we cannot accept the Government?s proposal, because the statute says something markedly different. This Court, of course, may interpret ?ambiguous statutory language? to ?avoid serious constitutional doubts.?

Easy.

Except, of course, with this court, very little is easy. There are a bunch of concurring opinions, with some dissenting in part. Justice Alito kicks it off with a short concurring opinion bravely talking up the principles of free speech, before then insisting that Congress could still write a law to block “FUCT” because he, personally seems to feel such a word is too vulgar for society or something. It’s… bizarre.

For the reasons explained in the opinion of the Court, the provision of the Lanham Act at issue in this case violates the Free Speech Clause of the First Amendment because it discriminates on the basis of viewpoint and cannot be fixed without rewriting the statute. Viewpoint discrimination is poison to a free society. But in many countries with constitutions or legal traditions that claim to protect freedom of speech, serious viewpoint discrimination is now tolerated, and such discrimination has become increasingly prevalent in this country. At a time when free speech is under attack, it is especially important for this Court to remain firm on the principle that the First Amendment does not tolerate viewpoint discrimination. We reaffirm that principle today.

Our decision is not based on moral relativism but on the recognition that a law banning speech deemed by government officials to be ?immoral? or ?scandalous? can easily be exploited for illegitimate ends. Our decision does not prevent Congress from adopting a more carefully focused statute that precludes the registration of marks containing vulgar terms that play no real part in the expression of ideas. The particular mark in question in this case could be denied registration under such a statute. The term suggested by that mark is not needed to express any idea and, in fact, as commonly used today, generally signifies nothing except emotion and a severely limited vocabulary.The registration of such marks serves only to further coarsen our popular culture. But we are not legislators and cannot substitute a new statute for the one now in force.

I have a fair bit of difficulty figuring out how Alito’s argument in that latter paragraph could possibly be consistent with the 1st Amendment, but, hey, he’s the Supreme Court Justice, and I’m not. Justice Roberts takes a slightly similar position, saying that it’s fine to say the ban on “immoral” marks is unconstitutional, but surely “scandalous” is viewpoint neutral, because vulgarity. This, again, seems like a bizarre attempt at line drawing. Justice Breyer complains about the standard used in the majority ruling, calling it too rigid, and wants more of a balancing test (which, if I remember correctly, has mostly been rejected by the Court in 1st Amendment cases). Sotomayor, like Alito, worries that this will lead to a rush of vulgar and obscene trademarks:

The coming rush to register such trademarks?and the Government?s immediate powerlessness to say no?is eminently avoidable. Rather than read the relevant text as the majority does, it is equally possible to read that provision?s bar on the registration of ?scandalous? marks to address only obscenity, vulgarity, and profanity. Such a narrowing construction would save that duly enacted legislative text by rendering it a reasonable, viewpoint-neutral restriction on speech that is permissible in the context of a beneficial governmental initiative like the trademark-registration system. I would apply that narrowing construction to the term ?scandalous? and accordingly reject petitioner Erik Brunetti?s facial challenge

Again, I have trouble seeing how this makes any sense. And, frankly, if there is a mad dash to register vulgar trademarks, well, that only matters if those marks are valued in commerce. If people want to buy vulgar t-shirts or whatnot, that’s kind of on them. It’s not Congress’ job to stop vulgar t-shirts, which should be fairly obvious from the 1st Amendment. At least the majority got it right.

Filed Under: 1st amendment, erik brunetti, fuct, immoral, lanham act, scandalous, supreme court, trademarks

Bizarre Decision Keeps Hope Alive In Enigma Software's Defamation Suit Against BleepingComputer

from the 'viewed-in-the-light-most-favorable-to-ignoring-tons-of-precedent...' dept

Enigma Software joined the long line of aggrieved companies who feel that legal threats and questionable lawsuits are the best form of reputation management. It sued BleepingComputer over a “defamatory review” — which was actually just a forum post by a member that detailed (with supporting links) its questionable SpyHunter software and its “rogue tactics” over the years.

In addition to the defamation claims, Enigma Software also argued that BleepingComputer only did this to steer site readers towards its own products, alleging a handful of Lanham Act violations.

Unfortunately, Enigma Software’s dubious claims have survived a motion to dismiss by BleepingComputer, thanks to some similarly dubious reasoning [PDF] by the judge presiding over the case. Not only are the Lanham Act claims given far too much credence (thanks to some twisted judicial analysis that assumes that because trademark is a part of the Lanham Act, false advertising claims under the Lanham Act are also intellectual property claims, exempt from Section 230 of the CDA), but the court’s decision to allow the lawsuit to process also punches a few more holes in Section 230 protections.

Because the author of the post was a third-party contributor, BleepingComputer should not have been held responsible for the content of the post. However, the court appears to be bothered that the user in question was referred to as a “staff member” by BleepingComputer, even if it was actually a volunteer administrative post and BleepingComputer did not directly control the content of the user’s contributions.

Eric Goldman, in his analysis of the decision, points out that BleepingComputer could have done a better job delineating between actual site administrators and those just helping out, along with providing more comprehensive disclaimers about “superusers” and their contributions to the site.

So what did Bleeping do wrong? In retrospect, calling super-users “staff members” is probably not the best titling. At least to this judge, “staff” sounds too much like “employee.” The court also says that site disclosures saying super-users could be “trusted to give correct…answers” meant that Bleeping communicated that these super-users were authorized to post on its behalf. I don’t see that interpretation of the disclosure at all, but it’s also easy to imagine rewording Bleeping’s disclosures to downgrade the risks. For example, Bleeping could make disclosures that super-users had been selected because of their consistently reliable advice, but they remain independent and fallible.

That being said, the court’s decision does more damage to Section 230 protections by holding websites responsible for the content of certain third-party posts. This determination may be only temporary and fall apart as the lawsuit proceeds, but it still gives those filing questionable lawsuits a glimmer of hope that their dubious claims might survive to fight another day. If nothing else, the assertions made by the court will keep the lawyers fed.

Still, I’m irritated by the court’s glossy handling of the Section 230 super-user precedent. I’m also frustrated by the court’s insensitivity to how this ruling undermines Section 230. It green-lights plaintiffs to allege that a user was the site’s implied agent to survive a Section 230 motion to dismiss, even if those allegations fail later in the case. Everyone loses (except the lawyers, of course) when unmeritorious cases get past a Section 230 motion to dismiss.

Other issues present themselves as well in this decision. The statute of limitations of defamation (one year) gets an extension, thanks to the court considering certain links to older posts as “republication,” flying in the face of several other decisions on the same topic. (It actually doesn’t say quite as much, but refuses to “resolve the issue” at this point.)

And, on the subject of linking to content to support claims made in an allegedly defamatory post, the court seems to find that something done to deter claims of defamation is actually just the creation of a defamatory echo chamber.

The court says this conclusion is reinforced by Bleeping’s and Quietman7’s self-laudatory statements about their credibility and expertise. Thus, the court distinguishes the recent trend of judges presuming that readers don’t take online comments seriously (a trend partially attributable to the NY Sandals case). Also, “[t]he manner of Quietman7’s written presentation—one using footnotes and citations—conveyed further that his advice was based on an ‘investigation’ of verifiable facts.” (Contrast the cases holding that linking to source materials can reduce defamation liability). The court disregards Quietman7’s qualifier statements “[m]y personal recommendation” and “[i]n my opinion.”

One of the most infuriating assertions made in this decision is that Enigma Software is still, somehow, a private entity that only needs to make the most minimal of damage assertions to continue pursuing this lawsuit.

The court rejects Bleeping’s argument that Enigma is a limited-purpose public figure (which would require Enigma to allege facts showing Bleeping had actual malice) because Enigma’s complaint “does not allege any facts suggesting that ESG has taken a public position on the integrity of its business practices or the quality of its products.” FFS. While focusing on the complaint’s four corners is technically permissible under the legal standards for a motion to dismiss, the judge is allowed to take judicial notice of public statements where Enigma–LIKE EVERY OTHER BUSINESS IN THE UNIVERSE SINCE THE BEGINNING OF TIME–says it does a great job.

While this is not a decision in favor of one party or another, the judge’s determinations make it clear that BleepingComputer will be paying a whole lot more in legal fees before this lawsuit (hopefully) is resolved in its favor. Enigma’s claims — not including the severely-stretched “unfair competition” assertions — were so threadbare as to be almost nonexistent. Its defamation accusations included words not actually used in the post and some complete rewriting of certain post sentences in order to shore up its bogus claims.

Goldman’s very thorough assessment of the decision does find that BleepingComputer could have done a few things in a smarter way to avoid potential Section 230 entanglements, but his overall take is that a decent anti-SLAPP law would have gone a long way towards making this lawsuit disappear before dragging the defendants into expensive discovery proceedings. While he grants that motions to dismiss are viewed in the light most favorable to the non-moving party (Enigma Software), the court here has gone out of its way to keep a highly-questionable defamation lawsuit alive — and has done damage to Section 230 protections in doing so.

Filed Under: anti-slapp, cda 230, criticism, forums, lanham act, reviews, section 230, spyhunter
Companies: bleepingcomputer, enigma software

Appeals Court Says US Government Cannot Deny Trademarks For Being 'Disparaging'

from the fans-of-that-dc-football-team-celebrate dept

While everyone’s been focused on the big dispute over the name of the NFL team from Washington DC… and whether or not it’s appropriate for the US Patent and Trademark Office to take back the team’s trademark, observant trademark watchers knew that the case to watch on this issue involved a dispute over the trademark for the band “The Slants.” The band, whose members are Asian Americans, sued after the USPTO rejected their attempt to trademark the name of the band, claiming that the name was a disparaging term for Asians. The key argument: is it a violation of the First Amendment for the Lanham Act (the law under which registered Federal trademarks exist) to allow the USPTO to reject trademarks for being disparaging. Specifically, Section 2(a) says that:

No trademark… shall be refused registration… unless it… Consists of or comprises immoral, deceptive, or scandalous matter; or matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute…

And thus, the question is whether or not this is a law regulating speech based on content, which is not allowed under the First Amendment. I’ve struggled with this issue in the past, originally coming down on the side of saying that it’s not a First Amendment violation, because not giving someone a trademark doesn’t do anything to restrict speech. In fact, I originally argued, it does the opposite. Rejecting a trademark leaves speech more open for anyone to use.

Over the past twelve months, however, after discussing the issue with a bunch of lawyers (on both sides of the issue), I’ve changed my mind, and I see the key point: this is still a law that is based on the content of speech, and that’s problematic under the First Amendment. And, now in the case involving the Slants, court of appeals for the Federal Circuit (CAFC) has agreed. The Lanham Act’s prohibition on issuing trademarks if they’re disparaging is unconstitutional.

The key issue: “content-based regulations are presumptively invalid.” And this is a content-based regulation.

It is beyond dispute that § 2(a) discriminates on the basis of content in the sense that it ?applies to particular speech because of the topic discussed.?… Section 2(a) prevents the registration of disparaging marks?it cannot reasonably be argued that this is not a content-based restriction or that it is a contentneutral regulation of speech. And the test for disparagement? whether a substantial composite of the referenced group would find the mark disparaging?makes clear that it is the nature of the message conveyed by the speech which is being regulated. If the mark is found disparaging by the referenced group, it is denied registration. ?Listeners? reaction to speech is not a content-neutral basis for regulation.?

The court rejects the claim by the government that the rejection is still “content neutral” because it would reject the same term even if it were meant to be supportive, rather than disparaging. In fact, it points out that The Slants clearly are not trying to be insulting to Asian Americans as proof of this. But the court notes that this claim is basically completely bullshit:

The government?s starting point?that it rejects marks conveying diametrically opposed viewpoints, if they contain the same offensive word?is incorrect. The PTO looks at what message the referenced group takes from the applicant?s mark in the context of the applicant?s use, and it denies registration only if the message received is a negative one. Thus, an applicant can register a mark if he shows it is perceived by the referenced group in a positive way, even if the mark contains language that would be offensive in another context. For example, the PTO registered the mark DYKES ON BIKES, U.S. Reg. No. 3,323,803, after the applicant showed the term was often enough used with pride among the relevant population. In Squaw Valley, the Board allowed the registration of the mark SQUAW VALLEY in connection with one of the appliedfor classes of goods (namely, skiing-related products), but not in connection with a different class of goods…. Section 2(a) does not treat identical marks the same. A mark that is viewed by a substantial composite of the referenced group as disparaging is rejected. It is thus the viewpoint of the message conveyed which causes the government to burden the speech. This form of regulation cannot reasonably be argued to be content neutral or viewpoint neutral.

The court goes on to note other examples of rejected trademarks, noting that it clearly involves the Trademark Office deciding the nature of expressive speech and whether or not it is appropriate.

As for my original argument that rejecting a trademark restricts no speech, the court (rightly, I now believe) rejects that argument as well, basically saying that it still serves to silence certain forms of speech by choosing to remove a benefit based on the content of that speech. And that creates a burden based on content, which is not allowed under the First Amendment.

The general principle is clear: ?Lawmakers may no more silence unwanted speech by burdening its utterance than by censoring its content.? … ?[T]he government?s ability to impose content-based burdens on speech raises the specter that the government may effectively drive certain ideas or viewpoints from the marketplace.? … A law may burden speech even when it does so indirectly. In Sorrell, the challenged statute did not directly ban speech, but rather forbade certain pharmaceutical marketing executives from obtaining and using information that could help them market their products more effectively…. The Court found that the state ?ha[d] burdened a form of protected expression,? while leaving ?unburdened those speakers whose messages are in accord with its own views.? …

Here, too, § 2(a) burdens some speakers and benefits others. And while it is true that a trademark owner may use its mark in commerce even without federal registration, it has been widely recognized that federal trademark registration bestows truly significant and financially valuable benefits upon markholders….

Denial of these benefits creates a serious disincentive to adopt a mark which the government may deem offensive or disparaging.

It further notes that the vagueness in what may or may not be granted a trademark also leads to uncertainty, and “such uncertainty of speech-affecting standards has long been recognized as a First Amendment problem” that may contribute “significantly to the chilling effect on speech.”

The court also rejects the argument that because granting a trademark is simply a form of government speech, there’s no First Amendment issue here either. The court basically says “uh, no,” and points out that under this theory, anything covered by copyright would become “government speech” immune from the First Amendment.

This argument is meritless. Trademark registration is a regulatory activity. These manifestations of government registration do not convert the underlying speech to government speech. And if they do, then copyright registration would likewise amount to government speech. Copyright registration has identical accoutrements?the registrant can attach the © symbol to its work, registered copyrights are listed in a government database, and the copyright owner receives a certificate of registration. The logical extension of the government?s argument is that these indicia of registration convert the underlying speech into government speech unprotected by the First Amendment. Thus, the government would be free, under this logic, to prohibit the copyright registration of any work deemed immoral, scandalous, or disparaging to others. This sort of censorship is not consistent with the First Amendment or government speech jurisprudence.

Various attempts to say that trademarks are just “commercial speech” and thus get less scrutiny are rejected throughout the ruling, noting that it’s the expressive speech of users that would be hindered by keeping trademark law as is. And then even if it is commercial speech, the court still says this part of the Lanham Act is no good:

First, we ask whether the regulated activity is lawful and not misleading…. Unlike many other provisions of § 2, the disparagement provision does not address misleading, deceptive, or unlawful marks. There is nothing illegal or misleading about a disparaging trademark like Mr. Tam?s mark.

Next, for speech that is lawful and not misleading, a substantial government interest must justify the regulation…. But § 2(a) immediately fails at this step. The entire interest of the government in § 2(a) depends on disapproval of the message. That is an insufficient interest to pass the test of intermediate scrutiny, as the Supreme Court made clear in Sorrell… (law must not ?seek to suppress a disfavored message?);

What about not spending taxpayer money approving racist messages? Well, the court points out, trademark registration is funded by applicants, not taxpayers, so that one fails too.

And, yes, the court admits, racist and disparaging speech may be troubling and we may not like it, but that doesn’t mean the government should be in the business of deciding what is and what is not appropriate.

Moreover, at the level of generality at which the government invokes ?racial tolerance,? it is hard to see how one could find that § 2(a) ?directly and materially advanc[es]? this interest and is narrowly tailored to achieve that objective…. Disparaging speech abounds on the Internet and in books and songs bearing government registered copyrights. And the PTO has granted trademark registrations of many marks with a racially charged character.

The court concludes by noting that it’s not endorsing disparaging speech — even the name of the band in this case. It’s not endorsing a trademark on “The Slants.” It’s just noting that §2(a) appears to be unconstitutional for violating the First Amendment.

Although we find the disparagement provision of § 2(a) unconstitutional, nothing we say should be viewed as an endorsement of the mark at issue. We recognize that invalidating this provision may lead to the wider registration of marks that offend vulnerable communities. Even Mr. Tam, who seeks to reappropriate the term ?slants,? may offend members of his community with his use of the mark…. But much the same can be (and has been) said of many decisions upholding First Amendment protection of speech that is hurtful or worse. Whatever our personal feelings about the mark at issue here, or other disparaging marks, the First Amendment forbids government regulators to deny registration because they find the speech likely to offend others. Even when speech ?inflict[s] great pain,? our Constitution protects it ?to ensure that we do not stifle public debate.?… The First Amendment protects Mr. Tam?s speech, and the speech of other trademark applicants.

There is also a concurring opinion that says that beyond the fact that Section 2(a) is a violation of the First Amendment it’s also a violation of the Fifth Amendment for being “unconstitutionally vague,” specifically arguing that the term “may disparage” leaves things wide open in a way that is unconstitutional. There’s another concurrence that includes a partial dissent, arguing that the commercial speech argument is not correct, and noting that the Trademark Office is not rejecting speech that offends the government, but rather which offends “a substantial composite of the referenced group.” Finally, there are two more dissents. The first is on the First Amendment issue, saying that the USPTO’s rejection of a trademark doesn’t harm anyone’s free expression rights. The second one argues that the government has a “substantial interest” in refusing to allow such trademarks. Feel free to read the arguments on that below.

What will be interesting is if the government seeks to appeal this to the Supreme Court (and whether or not the Supreme Court takes the case). It’s possible that any Supreme Court decision may wait and depend on a ruling in the case about the Redskins trademark (which is in the 4th Circuit). If that court rules differently then it’s much more likely that the Supreme Court will take on this issue to clear up the circuit split. If the 4th Circuit sides with the Redskins, then there will be two such rulings on the books in different circuits. But, for Redskins fans who don’t want that name to go away, today’s court ruling is a big win in your favor. And while I’ll admit I’m no fan of the Redskins name, I’m now pretty firmly in the camp that agrees with the First Amendment argument that it’s not the government’s place to decide whether the speech is disparaging or not.

Filed Under: disparaging, first amendment, free speech, lanham act, redskins, slants, trademark, uspto