By Wendy Heilbut
March 27, 2018

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Platforms such as Etsy, Spotify, SoundCloud, and media platforms such as Facebook, Twitter and HuffingtonPost currently face a very delicate balancing act between, on the one hand, keeping material that is either prohibited by law or against the goals of the platform, off the site; and on the other hand, creating a space for the unfettered exchange of ideas, works of art, goods or other materials on its platform. While neither the law nor the legislature moves fast enough to keep up with this rapidly changing and developing space, there are a few clues from which the platform owners can safely proceed.

In the copyright field, just last month, a federal district court in New York ruled that Tweets, re-posted on major media sites, could violate the original photographer’s copyright protections[1]. Prior to the Goldman decision, a prevalent test was the ‘Server Test,’ whereby platforms could only be held liable for intellectual property infringement if the image was hosted on the publisher’s server[2]. The break from the ‘Server Test’ follows a recent US Supreme Court decision regarding copyright infringement of network television shows by an internet host[3]. The Court found that while the end-user did “click” to select a show, the internet platform was granting its subscribers performances of currently airing cable shows in violation of the cable company’s copyright protection of “performance.”[4]

 

This judicial trend represents a move away from protecting intellectual property for its creativity and progress of knowledge and treating it more analogous to tort or patent law where legality spins on ownership and individual rights of the IP holder. DMCA still reigns and platforms can, and should, continue look to this legislation for guidance, but we’re now seeing the judicial branch’s interpretation of hosting copyrighted material narrow.

Similarly, in the trademark area, platforms that deal in goods or services face concerns when a user gains registration of a trademark with the USPTO for a term that when used on the platform, is merely descriptive. For example, sellers on Etsy or eBay who have gained a trademark registration for a slogan commonly used to describe a type of decoration (e.g. WILD WEST PARTY POM POM or BRUNCH AND BUBBLY BRIDAL SHOWER) will implore the platform to police any and all use of their registered trademark on the site. The platform is then forced to remove the goods of users that are using the term in a merely descriptive manner either without a review process or, with a burdensome and oftentimes expensive review process all running counter to the goals of the platform. To hold a platform holder liable for trademark infringement, a plaintiff must show (1) knowledge of the infringement by the platform host and (2) control of the infringing instrumentality. The first prong, knowledge, requires that the platform host either intentionally induced an infringement or it continued to supply its products to one who it knew, or had reason to know, was engaging in trademark infringement. Current case law spins a host’s liability on actual mislabeling and knowledge or induction of another’s mislabeling.[5]

 

While much of what is to come is still unchartered territory, we recommend platform holders create a policy and implement it irrespective of the disputed content. For copyrights, platforms can no longer hide behind the “server test” and assume insulation from the law because they do not actually “host” the copyright-protected material or their site. Trademarks, even if registered nefariously, can put platforms on the wrong side of intellectual property protection if they do not enforce the trademark of another on their site. Creating a company policy, applied objectively, and created with the unique goals of the given platform in mind, can proactively keep a platform on the winning side of an intellectual property challenge.

Today we’re seeing Facebook re-configure its algorithm to sort and filter news and personal postings differently in the wake of recent news that foreign entities were able to use the social media platform to disseminate “fake” information throughout the U.S. It is likely legislative regulations are just one cooperative congressional term away!

Do you need help and guidance crafting a policy for your platform? We love helping you maintain your business goals while following the trends in this choppy and uncertain area.

 

[1] Goldman v. Breitbart News Network, et al., No. 17-cv-3114 (S.D.N.Y. Feb 15, 2017).

[2] See e.g., Perfect 10, Inc. v. Amazon Inc., LLC, 487 F.3d 701 (9th Cir. 2007).

[3] American Broadcasting Cos. v. Aereo, 134 S. Ct. 2498 (2014).

[4] Id.

[5] Tiffany (NJ) Inc. v. eBay Inc., 600 F.3d 93 (2d Cir. 2010), Louis Vuitton Malletier, S.A. v. Akanoc Solutions, Inc., 658 F.3d 936 (9th Cir. 2011), Chloe SAS v. Sawabeh Information Services Co., No. 2:11-cv-04147-GAF-MAN, 2013 BL 286656 (C.D. Cal. Oct. 8, 2013), 1-800 Contacts, Inc. v. Lens.com, Inc., 722 F.3d 1229 (10th Cir. 2013).