Guest post by Mike Masnick from Techdirt
Over four years ago, we first wrote about the bizarre and convoluted attempt by a lawyer named Richard Goren to remove a negative review on Ripoff Report. As we noted, he may very well have a totally legitimate defamation claim against the guy who wrote the review, but it's the events that happened later that were questionable. Goren did sue the author of the post -- "Christian Dupont" -- for defamation and won a default judgment when Dupont ignored the lawsuit. But here's where things get problematic: the state court where the case was brought, as part of the default judgment, assigned the copyright on the posts to Goren. He then turned around and claimed that the post on Ripoff Report was infringing on his copyright and sued the company behind Ripoff Report, Xcentric (he also, somewhat bizarrely, added Dupont as a plaintiff in the case alongside himself -- something Ripoff Report claims was invalid). It also tossed in a bunch of other claims, including libel and intentional interference with prospective contractual relations.
The case has spent four years winding through the courts, and the 1st Circuit appeals court has now rejected Goren's argument, and done so fairly comprehensively. For the non-copyright claims, it was quite easy to dismiss them under CDA 230, as Ripoff Report was not the publisher of the works, and therefore, not liable for what was said -- and cites a number of well known cases highlighting how this is totally uncontroversial, including our own case as yet more evidence of the First Circuit recognizing the broad protection of CDA 230:
As we explained in Lycos, immunity under § 230 should be "broadly construed." 478 F.3d at 418-19. In fact, we noted there that Congress has expressed a "policy choice . . . not to deter harmful online speech through the . . . route of imposing tort liability on companies that serve as intermediaries for other parties' potentially injurious messages." Id. at 418(quoting Zeran v. Am. Online, Inc., 129 F.3d 327, 330-31 (4th Cir. 1997))(omissions in original). Given that legislative policy choice, we do not see how we can construe the CDA's definition of an ICP -- which provides that an ICP is a "person or entity that is responsible . . . for the creation or development of information[,]" 47 U.S.C. § 230(f)(3) -- to encompass Xcentric in this case.
Such a construction of this statutory definition of an ICP would flout Congress's intent by wrongly preventing an ICS like Xcentric from claiming immunity. Lycos, 478 F.3d at 418. As the plaintiffs recognize, Xcentric did not alter the content of the information DuPont posted such that Xcentric could be said to have been "responsible for . . . creat[ing] or develop[ing]" that content by reason of having actually authored it, whether in whole or in part. In addition, as the District Court found, nothing in the amended complaint indicates that Xcentric, simply by holding itself out as the copyright holder of the postings or by directing search engines to cache DuPont's postings on their websites, "specifically encourage[d]" the content set forth in DuPont's postings.
In fact, a sister circuit has rejected the view that an ICS, by merely providing such direction to search engines with respect to information the ICS has not altered, becomes an ICP of that information. See Kimzey v. Yelp! Inc., 836 F.3d 1263, 1270- 71 (9th Cir. 2016) ("Yelp is not liable for disseminating . . . [user-generated] content in essentially the same format to a search engine, as this action does not change the origin of the third-party content." (citing Ascentive, LLC v. Op. Corp., 842 F. Supp. 2d 450, 476 (E.D.N.Y. 2011))); see also Ayyadurai v. Floor64, Inc., No. 17-10011-FDS, 2017 WL 3896668, *17 (D. Mass. Sept. 6, 2017) (analyzing cases from other circuits which determined that "republishing and commenting upon user generated content, does not constitute 'creation or development.'" (citation omitted)). And we do not see why that conclusion should differ if the ICS also represents that it holds the copyright. Nor are we aware of any precedent that requires a contrary conclusion. Accordingly, we affirm the District Court's ruling on the motion to dismiss.
On to the copyright claims. The issue here is that when first posted, Ripoff Report required Dupont to agree to terms saying that anything you posted you were officially licensing to Ripoff Report, and that license was "irrevocable." This one seems like it should be easy. When the content was posted, an irrevocable license was granted, and thus even if the copyright later changes hands, as in this case, it's not infringing to keep the content up. To argue against this, Goren claimed that because it was a standard clickthrough license, it was not a valid license that Dupont had signed, first because there was no "consideration" given to the poster as required for a license to be valid. The court, correctly, rejects this argument:
The problem with this argument, however, is that, even if consideration is necessary in order for a party to grant an irrevocable nonexclusive license... performance can itself constitute consideration sufficient to establish a binding contract. And, in this case, the plaintiffs concede that Xcentric did actually post the reports at issue. Thus, given that performance, the plaintiffs offer no authority or persuasive argument as to why there is insufficient consideration for the conveyance of the irrevocable nonexclusive license in this case.
The next argument feels even more desperate. Goren argued that such an irrevocable license can't be valid because it's bad public policy, because libel is bad. The argument is only marginally more sophisticated than that, and the court again, is not impressed:
But, while the plaintiffs contend that there is a "strong public policy against per se libel[,]" the plaintiffs offer no basis for concluding that this public policy provides a reason to hold the nonexclusive license itself invalid. The fact that one holds such a license does not in and of itself protect one from liability for libeling another. Furthermore, even assuming that DuPont's postings were per se libelous, no aspect of copyright law protects the holder of such a license from liability for libel, and nothing in the District Court's opinion suggests otherwise. Thus, the plaintiffs' assertion that there is a public policy against per se libel fails to show that this nonexclusive license may not be enforced.
There were a few other aspects of the case (including some confusion over the lower court's ruling and whether or not it thought the license actually transferred the copyright itself to Xcentric), but on the key issues, things turned out basically exactly as we expected four years ago. CDA 230 protects against blaming the platform for the user's speech, and you can't worm your way around that by convincing a court in a default judgment to hand over the copyrights and then claim infringement over properly licensed content.
But there is one other important point here. Goren also has to pay Xcentric/Ripoff Report over $120,000 in legal fees and costs. In copyright cases, awarding attorneys fees is more common than in many other types of cases. The Supreme Court recognized this back in its Fogerty ruling in 1994, which it reinforced just last year in one of the Kirtsaeng cases. While there are specifics to the standard, the short version is that if the court thinks you're abusing the judicial system with your copyright case, not only do you lose, but you pay the other side's legal fees. And the appeals court agreed with the lower court that this clearly applied to this case, and pointed out that the district court properly analyzed the Fogerty factors -- and thus, Goren's little adventure into censorship-by-copyright, with a slight detour into default judgment land, is not just a failure, but a fairly costly one.