|Case Law: Gucci v. Hall (CDA does not provide ISPs immunity against trademark violations)|
GUCCI AMERICA, INC.,
Plaintiff, -against- HALL & ASSOCIATES, DENISE HALL, and MINDSPRING
ENTERPRISES, INC., Defendants.
00 Civ. 549 (RMB)
UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
U.S. Dist. LEXIS 2627
March 14, 2001, Decided
March 14, 2001, Filed
Mindspring's motion to dismiss denied.
For GUCCI AMERICA, INC., plaintiff: Milton Springut,
Tal S. Benschar, Kalow, Springut & Bressler, L.L.P., New York, NY.
For HALL & ASSOCIATES, DENISE HALL, defendants:
John Walter Dunne, Robert P. Lynn, Jr., LLC, Mineola, NY.
RICHARD M. BERMAN, U.S.D.J.
RICHARD M. BERMAN
DECISION AND ORDER
Plaintiff Gucci America,
Inc. ("Plaintiff" or "Gucci") filed this action against
defendants Hall & Associates and Denise Hall (together, "Hall")
and Hall's Web page hosting service, Mindspring Enterprises, Inc. ("Mindspring"
and, together with Hall, "Defendants") n1 asserting claims for
trademark infringement, false designation of origin and false descriptions and
representations, and unfair competition. Plaintiff also asserts a claim for
breach of a prior settlement agreement, dated on or about June 1, 1997 (the
"Settlement Agreement"), between Hall and Gucci. n2 Plaintiff seeks
injunctive relief, damages and costs. Mindspring now moves to dismiss
Plaintiff's claims pursuant to Rule 12(b)(6) of the Federal Rules of Civil
Procedure ("Fed. R. Civ. p."). n3 For the reasons stated below,
Mindspring's motion is denied.
n1 On February 4, 2000,
Mindspring merged with another company to form EarthLink, Inc. The Court will
continue to use the name Mindspring. [*2]
n2 Gucci alleges that,
despite the Settlement Agreement, Hall has continued to distribute and sell
jewelry in connection with trademarked Gucci accessories and apparel. (Compl. P
n3 Hall is not a party to
this motion. (See Mindspring's Mot. at 2 n.2)
Plaintiff owns the
trademark and trade name "GUCCI" which is utilized on and in
connection with various articles of jewelry, fashion accessories, wearing
apparel and related services (the "Gucci Trademark"). (Compl. P 4.)
Mindspring, an Internet Service Provider ("ISP"), provides Web page
hosting services to Hall, n4 (at least) at the Uniform Resource Locator
("URL") n5 www.goldhaus.com (the "goldhaus website"). (Id. P
3C.) n6 By e-mail communications dated March 26, 1999 and March 27, 1999,
Mindspring allegedly was twice notified by Plaintiff that Hall was using
Mindspring's services to aid in acts of trademark infringement and unfair
competition, including the advertising of jewelry on the goldhaus website which
bore (and infringed) the Gucci Trademark. (Id.) Plaintiff alleges that, despite
the [*3] emails, Mindspring
continued to permit Hall to use Mindspring's Internet services to infringe
Plaintiff's trademark rights, with actual knowledge of, or in reckless disregard
of, Plaintiff's rights and Hall's infringement. (Id.) "The activities of
Mindspring ... constitute willful and intentional infringement of plaintiff
Gucci's registered trademark; are in total disregard of plaintiff Gucci's rights
and were commenced and have continued in spite of Mindspring's knowledge that
the use of the Gucci Trademark or a copy or a colorable imitation thereof, was
and is in direct contravention of plaintiff Gucci's rights." (Id. P 33.)
n4 In Columbia Ins. Co. v.
Seescandy.com, the Court summarized the function of an ISP:
ISPs provide two basic services to their
clients: access and presence. Access services consist of an account through
which the client can access the Internet and send e-mail. A presence account
generally includes hard drive space that permits the client to have a web page
or file transfer site. Persons who wish to run a site at their own domain,
rather than at the domain of their service provider, can either make the
significant investment in computer hardware, networking hardware, and high-speed
access necessary to make their domains available on the Internet or can rent
space and services from a service provider. This latter alternative, which is
analogous to renting from a landlord who makes available offices in an office
complex, is called domain hosting.
F.R.D. 573, 578 n.1 (N.D. Cal. 1999). [*4]
n5 "A domain name
refers to a computer, and does not refer to a particular file, such as a web
page. Instead, a particular file on the Internet, such as a web page, is
identified by its Uniform Resource Locator ("URL"), which includes the
domain name, identifies the file, and indicates the protocol required to access
the file." America Online, Inc. v. Huang, 106 F. Supp. 2d 848, 851 n.5 (E.D.
Mindspring hosted Hall's website on Mindspring's internet server, enabling
others to access the website. (Mindspring's Mem. at 2.)
Plaintiff asserts claims
against Mindspring for direct and contributory trademark infringement under
Section 32(1) of the Trademark Act of 1946 (the "Lanham Act"), 15
U.S.C. § 1114(1), false
designations of origin and false descriptions and representations under Section
43(a) of the Lanham Act, 15 U.S.C. § 1125(a),
and trademark infringement and unfair competition under New York common law.
(See Compl. PP 1, 18, 23, 31-35.) Mindspring's instant motion is premised upon
two grounds: [*5]
(i) that the Communications Decency Act of 1996, 47 U.S.C. §
230 ("Section 230"), "immunizes Mindspring from
liability for information posted [on the goldhaus website] by [Hall]," (Mindspring's
Mem. at 3); and (ii) that "Plaintiff's theory of trademark infringement is
barred by the First Amendment," (id. at 10).
II. Standard of Review
"[A] complaint should
not be dismissed for failure to state a claim unless it appears beyond doubt
that the plaintiff can prove no set of facts in support of his claim which would
entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed.
2d 80, 78 S. Ct. 99 (1957). "In reviewing a [Fed. R. Civ. P.] 12(b)(6)
motion, this Court must accept the factual allegations of the complaint as true
and must draw all reasonable inferences in favor of the plaintiff." Bernheim
v. Litt, 79 F.3d 318, 321 (2d Cir. 1996) (citing Hernandez v. Coughlin,
18 F.3d 133, 136 (2d Cir.), cert. denied, 513 U.S. 836, 130 L. Ed. 2d 63,
115 S. Ct. 117 (1994)). The movant's burden is very substantial, as
"the issue is not whether a plaintiff is likely to prevail [*6]
ultimately, 'but whether the claimant is entitled to offer evidence to
support the claims.'" Gant v. Wallingford Bd. of Educ., 69 F.3d 669 (2d
Cir. 1995) (quoting Weisman v. LeLandais, 532 F.2d 308, 311 (2d Cir.
1976) (per curiam)). In sum, "the motion to dismiss for failure to
state a claim is disfavored and is seldom granted." Bower v. Weisman,
639 F. Supp. 532, 539 (S.D.N.Y. 1986) (citing Arfons v. E.I. DuPont de
Nermours & Co., 261 F.2d 434, 435 (2d Cir. 1958)).
A. Mindspring Is Not
Immune From Plaintiff's Claims
As Mindspring acknowledges
in its motion papers, the interpretation of Section 230 as applied to the
(intellectual property) facts presented here is an issue of first impression.
(See Mindspring's Mem. at 6.) Mindspring argues that Section 230(c)(1)
"immunizes [it] from liability for information posted [on the goldhaus
website] by [Hall]." (Mindspring's Mem. at 3.) Section 230(c)(1) provides:
"No provider or user of an interactive computer service shall be treated as
the publisher or speaker of any information provided by another information
content provider. [*7] " 47
U.S.C. § 230(c)(1). Section
230(f)(2) defines "interactive computer service" as "any
information service, system, or access software provider that provides or
enables computer access by multiple users to a computer server, including
specifically a service or system that provides access to the Internet and such
systems operated or services offered by libraries or educational
institutions." Id. § 230(f)(2).
Section 230(f)(3) defines "information content provider" as "any
person or entity that is responsible, in whole or in part, for the creation or
development of information provided through the Internet or any other
interactive computer service." Id. §
Plaintiff does not dispute
that Mindspring, as an ISP, is an "interactive computer service." (See
Compl. P 3C.) Moreover, the complaint clearly identifies Hall as the
"information content provider." (See Compl. PP 3C, 14-16.) Rather,
Plaintiff argues that Mindspring is not immune under §
230(c)(1) from Plaintiff's claims because of the language of Section
230(e)(2), (see Pl.'s Mem. at 3-4): "Nothing in this section shall be
construed to limit or expand any law pertaining
intellectual property." 47 U.S.C. §
230(e)(2). The "law[s] pertaining to intellectual
property," under which Plaintiff contends that Mindspring is liable, are
"a straightforward application of long-established printer-publisher
liability and contributory infringement under the Lanham Act," (Pl.'s Mem.
at 14). The Court believes that the pivotal issue for consideration here is
whether Plaintiff's complaint would withstand a motion to dismiss even in the
absence of § 230. The Court
believes that the answer to this question is "yes." n7
n7 The Court hastens to
add that it is in no way ruling here upon the ultimate merits of Plaintiff's
1. Plain Language Of
"It is axiomatic that
the plain meaning of a statute controls its interpretation ...." Lee v.
Bankers Trust Co., 166 F.3d 540, 544 (2d Cir. 1999) (citing Greenery
Rehabilitation Group, Inc. v. Hammon, 150 F.3d 226, 231 (2d Cir. 1998)).
"When looking at its language, [*9]
a court should presume that the statute says what it means." Aslanidis
v. United States Lines, Inc., 7 F.3d 1067, 1072-73 (2d Cir. 1993) (citing Connecticut
Nat'l Bank v. Germain, 503 U.S. 249, 254, 117 L. Ed. 2d 391, 112 S. Ct. 1146
(1992)); accord United States v. Piervinanzi, 23 F.3d 670, 677 (2d Cir.
1994). "Unless otherwise defined, individual statutory words are
assumed to carry their ordinary, contemporary, common meaning." Hammon,
150 F.3d at 231 (quotation and citations omitted); accord Perrin v.
United States, 444 U.S. 37, 42, 62 L. Ed. 2d 199, 100 S. Ct. 311 (1979).
"Indeed, when the words of a statute are unambiguous, this first cannon is
also the last [and] judicial inquiry is complete." Piervinanzi, 23 F.3d
at 677 (quotations and citations omitted).
unambiguously constrains the Court to construe Section 230(c)(1) in a manner
that would neither "limit or expand any law pertaining to intellectual
property." 47 U.S.C. § 230(e)(2).
Thus, the inquiry involves the application of existing intellectual property
law. Under existing intellectual [*10] property
law, publishers may, under certain circumstances, be held liable for
infringement. See 15 U.S.C. § 1114(2)(A)(B);
see also Century 21 Real Estate Corp. of Northern Illinois v. R.M. Post,
Inc., 1988 U.S. Dist. LEXIS 8739, No. 88 C 0077, 1988 WL 84741 (N.D.
Ill. Aug. 9, 1988) (denying motion to dismiss where yellow pages' publishers
were alleged to have infringed by listing trademark of (former) licensee who no
longer had right to use trademark). Moreover, the United States Supreme Court
has held, under the doctrine of contributory infringement, that "if a
manufacturer or distributor ... continues to supply its product to one whom it
knows or has reason to know is engaging in trademark infringement," the
manufacturer or distributor itself may held be liable for infringement. Inwood
Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 854, 72 L. Ed. 2d 606, 102 S. Ct.
2182 (1982); see also Religious Technology Ctr. v. Netcom On-Line
Communication Servs., 907 F. Supp. 1361, 1375 (N.D. Cal. 1995) (holding that
an ISP with knowledge of the infringement may be held liable for contributory
copyright infringement). Immunizing Mindspring [*11]
from Plaintiff's claims, therefore, would "limit" the laws
pertaining to intellectual property in contravention of §
230(e)(2). See Mirriam-Webster's Collegiate Dictionary 676 (10th ed.
1998) (defining "limit," when used as a verb, to mean "to
restrict the bounds or limits of"). n8 The plain language of Section
230(e)(2) precludes Mindspring's claim of immunity.
n8 The Court of Appeals
for the Second Circuit has relied on Webster's dictionary to determine the
ordinary meaning of individual statutory words. See, e.g., Hammon, 150 F.3d
at 232; Piervinanzi, 23 F.3d at 677.
recognizes the "appeal" of the Court's reading of Section 230(e)(2), (Mindspring's
Mem. at 6), Mindspring nevertheless argues that immunity from Plaintiff's claims
"would not 'limit' any law pertaining to intellectual property, since
liability for trademark infringement has never previously been imposed on an ISP
in this situation," (id.). Mindspring further contends that the [*12]
inclusion of the words "or expand" in Section 230(e)(2), and
the omission of "or expand" from the other subsections of Section
230(e), n9 suggests that Mindspring's interpretation is the "most
reasonable interpretation" because "otherwise, the language 'or
expand' has no purpose." (Mindspring's Reply at 4.)
n9 In addition to
addressing intellectual property laws, Section 230(e) sets forth certain
limitations upon the immunity created by Section 230 under federal criminal law,
state law that is "consistent" with Section 230, and federal and state
privacy law. See 47 U.S.C. § 230(e).
The Court respectfully
disagrees for the reason that Mindspring's reading is in conflict with the plain
language of the statute. Mindspring argues that Section 230(e)(2) directs courts
to leave "the state of the law ... as it was when the law was enacted --
neither 'limited' nor 'expanded.'" (Mindspring's Reply at 3.) However,
nowhere does Section 230 state that the laws to which it refers are, as
Mindspring [*13] suggests, limited
to the intellectual property laws as they existed in 1996. n10 The Court
declines to incorporate or read into the statute a temporal limit. See Grin
v. Shine, 187 U.S. 181, 186, 47 L. Ed. 130, 23 S. Ct. 98 (1902) ("We
are not bound to import words into the statute which are not found there
...."), cited with approval in Austin v. Healey, 5 F.3d 598, 602 (2d
Cir. 1993) (declining to import a special delegation requirement into a
n10 Congress passed
section 230 as part of the Communications Decency Act of 1996. Mindspring
alleges that "Section 230(e)(2) could only expand intellectual property
rights if it were construed to permit claims against ISPs that did not exist
before it was adopted." (Mindspring's Reply at 4 n.6.)
The Court rejects the
suggestion that the words of Section 230(e)(2) are ambiguous and, therefore,
finds no need to resort to other cannons of statutory construction. See Lee,
166 F.3d at 544 ("Legislative history [*14] and other tools of interpretation may be relied upon only if the terms
of the statute are ambiguous.") (citing Aslanidis, 7 F.3d at 1073).
n11 Even assuming it were
appropriate to employ additional cannons of construction, the Court's
interpretation of Section 230(e)(2) would not change. "Section 230's
legislative history provides no clues as to the meaning of the unadorned 17
words that comprise [Section 230(e)(2)]." (Mindspring's Mem. at 6-7). See
infra, at III.A.3 for further discussion of legislative history.
Moreover, the captions to
Section 230(e) ("Effect on other laws") and subsection (e)(2)
("No effect on intellectual property law") support the Court's
reading. See Almendarez-Torres v. United States, 523 U.S. 224, 234, 140 L.
Ed. 2d 350, 118 S. Ct. 1219 (1998) ("The title of a statute and the
heading of a section are tools available for the resolution of a doubt about the
meaning of a statute." (quotations and citation omitted)). Also, inclusion
of the words "or expand" in Section 230(e)(2) and their omission from
other subsections of Section 230 do not lead ineluctably to the conclusion that
"Section 230(e)(2) cannot be read to bar Section 230 immunity in all
trademark cases," (Mindspring's Mem. at 7). As Plaintiff theorizes,
"the difference in language can be accounted for simply by the fact that
Congress was concerned that Section 230 might somehow be construed to expand as
well as limit intellectual property rights, whereas there seems little reason to
believe that Section 230 might be construed to expand the criminal laws or
privacy laws referenced in the other subsections." (Pl.'s Mem. at 6.)
Although the plain meaning
of Section 230(e)(2) ends the instant inquiry with respect to Mindspring's
motion to dismiss, the Court explains below its disagreement with Mindspring's
remaining arguments. See Hammon, 150 F.3d at 233 ("Although our
review of the plain meaning of [the statute] ends our inquiry, we note that we
do not believe that [the related regulation] or its history provide any support
for the [appellee's] conclusion ....").
2. Case Law
Mindspring contends that
the case law interpreting Section 230 -- but not specifically subsection (e)(2)
-- supports its' interpretation. (See generally Mindspring's Mem. at 5-10.) n12
Mindspring quotes the Court of Appeals in Zeran v. America Online, Inc.:
"the plain language of Section 230 'creates a federal immunity to any cause
of action that would make service providers liable for information originating
with a third-party user of the service.'" 129 F.3d 327, 330 (4th Cir.
1997) (See Mindspring's Mem. at 5 (emphasis in original).) The quoted
language is not apposite here. In Zeran, plaintiff brought a negligence action
against America Online ("AOL") alleging that [*16]
AOL had "unreasonably delayed in removing defamatory messages posted
by an unidentified third party, refused to post retractions of those messages,
and failed to screen for similar posting thereafter." 129 F.3d at 328.
The District Court "granted judgment for AOL on the grounds that [Section
230] bars Zeran's claims." Id. In affirming, the Court of Appeals stated:
Zeran seeks to hold AOL liable for defamatory
speech initiated by a third party. ...
By its plain language, § 230 creates a federal immunity to any cause of action that would make
service providers liable for information originating with a third party user of
the service. Specifically, § 230
precludes courts from entertaining claims that would place a computer service
provider in a publisher's role. Thus, lawsuits seeking to hold a service
provider liable for the exercise of a publisher's traditional editorial
functions--such as deciding whether to publish, withdraw, postpone or alter
The purpose of this statutory immunity is not
difficult to discern. Congress recognized the threat that tort-based lawsuits
pose to freedom of speech in the new and burgeoning [*17]
Internet medium. The imposition of tort liability on service
providers for the communications of others represented, for Congress, simply
another form of intrusive government regulation of speech ....
Congress made a policy choice ... not to deter
harmful online speech through the separate route of imposing tort liability
on companies that serve as intermediaries for other parties' potentially
at 330-31 (emphasis added). The Zeran quotation, in context, refers to
defamation and other forms of tort liability. The instant claims are grounded in
the law of intellectual property and, therefore, do not, on a motion to dismiss,
implicate Section 230 immunity. n13
n12 "This is a case
of first impression with respect to the interpretation of Section
230(e)(2)." (Mindspring's Mem. at 6.)
n13 Similarly, Blumenthal
v. Drudge, 992 F. Supp. 44 (D.D.C. 1998) and Ben Ezra, Weinstein and Co.
v. America Online, Inc., 206 F.3d 980 (10th Cir. 2000), cert. denied, 121
S. Ct. 69, 148 L. Ed. 2d 33, 69 U.S.L.W. 3225 (U.S. 2000), like Zeran,
involve either defamation or other common law torts relating to the
dissemination of damaging information, but do not involve intellectual property
rights. See Ben Ezra, 206 F.3d at 983-86 (defamation and negligence); Drudge,
992 F. Supp. at 46, 49-53 (defamation); see also Doe v. America Online,
Inc., 2001 Fla. LEXIS 449, No. SC94355, 2001 WL 228446 (Fla. Mar. 8,
By letter dated Nov. 16,
2000, Mindspring cites Stoner v. e Bay Inc., 56 U.S.P.Q.2D (BNA) 1852, No.
305666, 2000 WL 1705637 (Cal. Super. Ct. Nov. 1, 2000), in which, the
California Superior Court held that eBay was immune (under Section 230) from
liability pursuant to Cal. Bus. & Prof. Code § 17200. Plaintiff responds that Stoner "has no relevance to this
case" because, "although the plaintiff there apparently complained
about sales of 'bootleg sound recordings ... [he did not] bring typical
intellectual property causes of actions, such as claims for copyright, trademark
or patent infringement," but rather sued under Cal. Bus. & Prof. Code
§ 17200 whose "'sweeping
language' has been construed to reach 'anything which can properly be called a
business practice and that at the same time is forbidden by law.'" (Pl.'s
Letter dated Nov. 21, 2000 (quoting Stop Youth Addiction, Inc. v. Lucky
Stores, Inc., 17 Cal. 4th 553, 950 P.2d 1086, 1090 (Cal. 1998)).)
Mindspring also argues
that Lockheed Martin Corp. v. Network Solutions, Inc., 985 F. Supp. 949 (C.D.
Cal. 1997), aff'd, 194 F.3d 980 (9th Cir. 1999), "rejected the
application of contributory [trademark] infringement in the Internet
context." (Mindspring's Mem. at 9.) Plaintiff counters that Lockheed Martin
held only that a "domain name registrar could not be held liable [for
trademark infringement] because its involvement is limited to the registration
of the domain name and not its use in commerce ...." (Id. at 13.)
"Indeed," argues Plaintiff, "Lockheed Martin contrasted the
domain name registrar's role with that of ISPs and indicated that the latter may
well be liable for contributory trademark infringement." (Id. at 14.)
The Court agrees that
Lockheed Martin does not foreclose the possibility that ISPs may be liable for
contributory trademark infringement:
[Network Solutions, Inc.'s] role in the Internet is
distinguishable from that of an Internet service provider whose computers
provide the actual storage and communications for infringing material, and who
therefore might be more accurately compared [*19] to the flea market vendors in [ Fonovisa Inc. v. Cherry Auction,
Inc., 76 F.3d 259 (9th Cir. 1996)] and [ Hard Rock Cafe Licensing Corp.
v. Concession Servs., Inc., 955 F.2d 1143 (7th Cir. 1992)]. n14
F. Supp. at 962. Moreover, in a footnote to the above passage, reprinted in
part below, the District Court specifically described Section 230 as providing
"tort immunity," and distinguished claims asserted under the law of
The Court notes, however, that the tort law analogy
used in Fonovisa and Hard Rock probably would not apply to Internet service
providers any better than it applies to NSI. ... See Zeran v. America Online,
Inc., 129 F.3d 327, 330-31 (4th Cir. 1997) (noting the Congress created a
tort immunity for Internet service providers in [Section 230] ...); but see
[Section 230(e)(2)] (providing that the tort immunity does not limit or expand
any law pertaining to intellectual property).
F. Supp. at 962 n.7 (emphasis added). n15
n14 Hard Rock and Fonovisa
held that a defendant can be held liable for contributory trademark infringement
under the test set forth in Inwood Lab., Inc. v. Ives Lab., Inc., 456 U.S.
844, 72 L. Ed. 2d 606, 102 S. Ct. 2182 (1982), where the defendant exercised
"direct control and monitoring of the instrumentality used by a third party
to infringe the plaintiff's mark." Lockheed Martin, 194 F.3d at 984.
n15 Lockheed Martin also
suggests that an ISP may be held liable for printer liability under 15 U.S.C.
§ 1114(2)(A). In Lockheed
Martin, the court rejected plaintiff's § 1114(2)(A)
claim because "[plaintiff's] assertion misapprehends NSI's function as a
domain name registrar." The court stated that "NSI is not an Internet
service provider. [NSI] does not provide host computers for Web sites or other
Internet resources." 985 F. Supp. at 958.
Mindspring suggests that
certain copyright law developments, for which "there have been no
comparable developments in the area of trademark law," (Mindspring's Mem.
at 8), support its contention that "immunizing Mindspring under Section 230
does not limit existing trademark law in any way," (id. at 10.)
Specifically, Mindspring argues that the principles of Religious Technology
Ctr. v. Netcom On-Line Communication Servs., Inc., 907 F. Supp. 1361 (N.D. Cal.
1995) "were incorporated into statutory law when Congress adopted ...
the Digital Millennium Copyright Act [of 1998]" ("DMCA") (Mindspring's
[*21] Mem. at 8). n16 Mindspring
concludes that Congress, having had the opportunity (when enacting the DMCA) to
alter the extent to which ISPs may assert statutory immunity from trademark
infringement, "has not done so." (Id. at 10.)
n16 Netcom held that an
ISP may be liable for contributory copyright infringement where the service
provider has knowledge of the infringement. 907 F. Supp. at 1373.
The Court respectfully
disagrees with Mindspring's conclusion and finds that Congress' enactment of the
DMCA -- pertaining only to copyright infringement -- two years after Section 230
was passed, lends further support to the proposition that Section 230 does not
automatically immunize ISPs from all intellectual property infringement claims.
To find otherwise would render the immunities created by the DMCA from copyright
infringement actions superfluous. See Lojuk v. Johnson, 770 F.2d 619, 623
(7th Cir. 1985) (affirming District Court where interpretation of statute as
providing [*22] absolute immunity
would render superfluous a narrower immunity authorized in a later added
subsection of the statute).
3. Legislative History
concedes that no legislative history exists regarding subsection (e)(2), it,
nevertheless, argues that the general legislative history of Section 230
supports its position. (Mindspring's Mem. at 6-7.) "The purpose of [Section
230] was to immunize online service providers from liability for content that
they did not produce, while at the same time preserving their discretion to
adopt editorial policies that could result in the deletion of objectionable
content." (Mindspring's Mem. at 5.) Plaintiff responds that "the
legislative history indicates that Section 230 was meant to overrule cases
holding ISPs liable for defamation, particularly Stratton-Oakmont, Inc. v.
Prodigy Servs. Co., 1995 N.Y. Misc. LEXIS 229 (N.Y. Sup. Ct. 1995)."
n17 (Pl.'s Mem. at 2.)
n17 In Stratton Oakmont,
the plaintiffs, a securities investment banking firm and its president, asserted
that defendant Prodigy Services Company, an ISP, was liable for allegedly
defamatory statements made about the plaintiffs by an unidentified user of one
of Prodigy's bulletin boards. In finding Prodigy liable, the court determined
that Prodigy "exercised sufficient editorial control over its computer
bulletin boards to render it a publisher with the same responsibilities as a
newspaper." Stratton Oakmont, 1995 N.Y. Misc. LEXIS 229, at *7.
The Court, for purposes of
resolving the instant motion, agrees with Plaintiff. The legislative history
cited by Mindspring indicates only that Section 230(c) immunizes ISPs from
defamation and other, non-intellectual property, state law claims arising from
third-party content. See H.R. Conf. Rep. 458, 104th Cong. 2d Sess. 194 (Jan. 31,
1996) ("One of the specific purposes of [Section 230] is to overrule
[Stratton-Oakmont] and any other similar decisions which have treated
[interactive computer service] providers and users as publishers or speakers of
content that is not their own because they have restricted access to
B. Plaintiff's Claims Are
Not Barred By The First Amendment
Mindspring contends that
Plaintiff "is advocating the adoption of a 'trademark plaintiff's veto,' in
which an ISP would be held to strict [or notice-based] liability n18 if it does
not immediately censor speech that is the subject of a dispute," and that
"this theory of liability conflicts with the First Amendment because it
would force ISPs, who are in no position to adjudicate conflicting claims, to
restrict summarily online speech." (Mindspring's Mem. at [*24]
10.) Plaintiff counters that (1) "commercial speech which deceives
or causes confusion is not protected by the First Amendment," (Pl.'s Mem.
at 16-17); (2) "the innocent infringer defense adequately protects the
constitutional rights of parties like Mindspring," (id. at 20); and (3)
"Congress has already made the contrary policy judgment by excluding
intellectual property laws from Section 230's immunity," (id. at 15).
n18 Mindspring refers to
"strict liability" and also to "notice-based liability"
somewhat interchangeably. (See Mindspring's Mem. at 10-12; Mindspring's Reply at
1. Infringing Commercial
claims against Mindspring are not "barred" by the First Amendment
because they challenge allegedly infringing commercial speech used to identify
the source of a product. n19 (See Compl. PP 14, 15b, 16, 20, 21, 25, 26, 33,
34.) See Planned Parenthood Fed'n of Am., Inc. v. Bucci, 1997 U.S. Dist.
LEXIS 3338, No. 97 Civ. 0629 (KMW), 1997 WL 133313, at *10 (S.D.N.Y.
Mar. 24, 1997) [*25]
(Internet case) ("Trademark infringement law does not curtail or
prohibit the exercise of the First Amendment right to free speech. ...
Defendant's use of another entity's mark is entitled to First Amendment
protection when his use of that mark is part of a communicative message, not
when it is used to identify the source of a product.").
n19 To prevail on a Lanham
Act claim, a plaintiff must prove that the "use in commerce" of the
trademark in connection with goods or services is "likely to cause
confusion, to cause mistake, or to deceive," 15 U.S.C. § §
1114(1) & 1125(a)(1)(A), or "misrepresents the nature,
characteristics, qualities or geographic origin" of such goods or services,
id. § 1125(a)(1)(B). See Sports
Authority, Inc. v. Prime Hospitality Corp., 89 F.3d 955, 960 (2d Cir. 1996).
A plaintiff in New York must make a similar showing to establish its common law
claims. See Forschner Group, Inc. v. Arrow Trading Co., 124 F.3d 402, 408 (2d
The Lanham Act cases cited
by Mindspring expressing First Amendment concerns involve the use of a
trademarked term that had an additional expressive element or was part of a
communicative message that went beyond commercial identification of the source
of a product. See, e.g., Rogers v. Grimaldi, 875 F.2d 994, 999 (2d Cir.
1989); Cliffs Notes, Inc. v. Bantam Doubleday Dell Publ'g Group, Inc.,
886 F.2d 490, 494-95 (2d Cir. 1989); Yankee Publ'g Inc. v. News Am.
Publ'g Inc., 809 F. Supp. 267, 275-76 (S.D.N.Y. 1992). Mindspring's reliance
on American Civil Liberties Union of Georgia v. Miller, 977 F. Supp. 1228
(N.D. Ga. 1997), is also not dispositive. In Miller, Internet users brought
an action for declaratory and injunctive relief challenging the
constitutionality of a state criminal statute which prohibited Internet
transmissions that falsely identify the sender, or that use trade names or logos
that falsely state or imply that the sender was legally authorized to use them.
See 977 F. Supp. at 1230. The District Court granted plaintiffs' motion
for a preliminary injunction, (see id. at 1235), [*27]
ruling that the statute was both unconstitutionally "overbroad"
and "vague," ( id. at 1233-34.) However, Miller is
distinguishable from the instant case: the District Court in Miller stated that
the language of the Lanham Act, as contrasted with the criminal statute at issue
here, is both more limited in scope (see id. at 1233 n.6), and more
precisely defined, (see id. at 1234.)
2. Innocent Infringer
The liability limitation
afforded under the "innocent infringer" defense, contained in Section
32(2) of the Lanham Act, codified at 15 U.S.C. § 1114(2) ("Section 32(2)"), appears to detract from
Mindspring's argument that Plaintiff's claims "conflict with the First
Amendment," (Mindspring Mem. at 10). Section 32(2) provides in pertinent
(2) Notwithstanding any
other provision of this Act, the remedies given to the Owner of a right
infringed under this Act or to a person bringing an action under section 1125(a)
or (d) of this title shall be limited as follows:
(A) Where an infringer or
violator is engaged solely in the business of printing the mark or violating
matter for others [*28] and
establishes that he or she was an innocent infringer or innocent violator, the
owner of the right infringed or person bringing the action under section 1125(a)
of this title shall be entitled as against such infringer or violator only to an
injunction against future printing.
(B) Where the infringement
or violation complained of is contained in or is part of paid advertising matter
in a newspaper, magazine, or other similar periodical or in an electronic
communication as defined in section 2510(12) of title 18, United States Code,
the remedies of the owner of the right infringed or person bringing the action
under section 1125(a) of this title as against the publisher or distributor of
such newspaper, magazine, or other similar periodical or electronic
communication shall be limited to an injunction against the presentation of such
advertising matter in future issues of such newspapers, magazines, or other
similar periodicals or in future transmissions of such electronic
communications. The limitations of this subparagraph shall apply only to
innocent infringers and innocent violators. ...
U.S.C. § 1114(2)(A)-(B).
Section 32(2) limits
trademark [*29] plaintiffs'
remedies against printers and publishers or distributors "for others"
of "electronic communication[s]" who are "innocent infringers"
to (prospective) injunctions against future printings or transmissions of the
infringing material. n20 See 15 U.S.C. §
1114(2)(A)-(B). Although "the phrase 'innocent infringer' is not
defined in the statute," World Wrestling Fed'n v. Posters, Inc., No. 99 C
1806, 2000 WL 1409831, at *2 (N.D. Ill. Sept. 26, 2000), it has been
construed to embrace the "actual malice" standard set forth in New
York Times v. Sullivan, 376 U.S. 254, 11 L. Ed. 2d 686, 84 S. Ct. 710 (1964),
i.e. an infringer is "innocent" unless it acted either (1) with
knowledge of the infringement or (2) with reckless disregard as to whether the
material infringed the trademark owner's rights. See World Wrestling Fed'n,
2000 WL 1409831, at *3; NBA Properties v. Untertainment Records LLC, 1999
U.S. Dist. LEXIS 7780, No. 99 Civ. 2933 (HB), 1999 WL 335147, at *14
(S.D.N.Y. May 26, 1999). Under Sullivan, defamation plaintiffs who show
"actual malice" may, in appropriate circumstances, recover damages
without [*30] running afoul of the
First Amendment. See 376 U.S. at 279-80. That trademark plaintiffs also
must meet this "heightened standard" and show "actual
malice" to recover damages, NBA Properties, 1999 WL 335147, at
*13-*16, suggests that the innocent infringer defense satisfies the requirements
of the First Amendment in the context of trademark infringement. n21
n20 Congress amended
Section 32(2) in 1988 to include electronic media. Trademark Law Revisions Act
of 1988, Pub. L. 100-667, Title I, § 127,
102 Stat. 3943; see 134 Cong. Rec. H10411-02 (Oct. 19, 1988) (Remarks of Rep.
Kastenmeier) (Section 32(2), as amended, "is updated to include electronic
media, incorporating the definition set forth in the Electronic Communications
Privacy Act, codified at 18 U.S.C. [§ ] 2510(12)."). As defined in
the Electronic Communications Privacy Act, the term "electronic
communication," used in Section 32(2), means "any transfer of signs,
signals, writing, images, sounds, data, or intelligence of any nature
transmitted in whole or in part by a wire, radio, electromagnetic,
photoelectronic or photooptical system that affects interstate or foreign
commerce ...." 18 U.S.C. § 2510(12).
Moreover, "providers of Internet services ... have traditionally been
viewed as subject to the Electronic Communications [Privacy] Act." In re
U.S., 36 F. Supp. 2d 430, 432 (D. Mass. 1999) (citing McVeigh v. Cohen,
983 F. Supp. 215, 219 (D.D.C. 1998) ("The Electronic Communications
[Privacy] Act, enacted by Congress to address privacy concerns on the Internet,
allows the government to obtain information from an online service
Mindspring suggests that
"the purpose of the 1988 amendments was to extend the innocent infringer
defense to radio and television," but that "Congress could not have
contemplated applying the Lanham Act to commercial websites (or to ISPs) in
1988, since the World Wide Web did not yet exist, nor did the business of
providing Internet access." (Mindspring's Reply at 6.) Plaintiff
(persuasively) counters that the definition of "electronic
communication" set forth in the Electronic Communications Privacy Act
"precisely describes the typical commercial internet website such as
maintained by Hall and Associates ... with the aid of Mindspring's facilities
and services." (Pl's. Mem. at 12.) [*31]
n21 The "stringent
requirements under the actual malice standard," NBA Properties, 1999 WL
335147, at *15, impose a "heavy burden of proof'" on plaintiffs, Contemporary
Mission, Inc. v. New York Times, 842 F.2d 612, 621 (2d Cir. 1988) (quotation
and citation omitted). In Bose Corp. v. Consumers Union of United States, the
Supreme Court stated that "the burden of proving 'actual malice' requires
the plaintiff to demonstrate with clear and convincing evidence that the
defendant realized that his statement was false or that he subjectively
entertained serious doubt as to the truth of his statement." 466 U.S.
485, 511 n.30, 104 S. Ct. 1949, 80 L. Ed. 2d 502 (1984) (citations omitted);
see also Contemporary Mission, 842 F.2d at 621, 624 ("[A] finding of
actual malice cannot be predicated merely on a charge that a reasonable
publisher would have further investigated before publishing.").
The strictures of the
"innocent infringer defense" (and the corresponding requirement that
plaintiffs demonstrate "knowledge" under the contributory infringement
doctrine) undermines [*32] Mindspring's
argument that accepting Plaintiff's claims would subject Mindspring to
"strict liability" or "notice-based liability" for trademark
infringement, thereby creating a "trademark plaintiff's veto." (Mindspring's
Mem. at 10-12.) n22 This result is not pre-ordained. See, e.g., World
Wrestling Fed'n, 2000 WL 1409831, at *2-*4, NBA Properties, 1999 WL
335147, at *15 *16; see also Inwood Labs., 456 U.S. at 854 ("If
a manufacturer or distributor ... continues to supply its product to one whom it
knows or has reason to know is engaging in trademark infringement, the
manufacturer or distributor is contributorily responsible ...."); Polymer
Tech. Corp. v. Mimran, 975 F.2d 58, 64 (2d Cir. 1992); Polo Ralph Lauren
Corp. v. Chinatown Gift Shop, 855 F. Supp. 648, 650 (S.D.N.Y. 1994).
n22 The Court reiterates
that in denying a motion to dismiss, it in no way is passing upon the ultimate
merits of Plaintiff's claims.
[*33] trademark plaintiffs
bear a high burden in establishing "knowledge" of contributory
infringement. The Court in Lockheed Martin, for example, held that a trademark
owner's mere assertion that its domain name is infringed is insufficient to
impute knowledge of infringement. See 985 F. Supp. at 963. Moreover,
while "uncertainty of infringement [is] relevant to the question of an
alleged contributory infringer's knowledge[,] .... [a] trademark owner's demand
letter is insufficient to resolve this inherent uncertainty." Id. at
3. Internet Context
"As a general matter, enforcement of trademark law is limited by the First
Amendment .... This principle is particularly important with respect to freedom
of speech on the Internet." (Mindspring's Mem. at 10-11.) Plaintiff
counters that "the Internet is [not] so different in kind from other media
as to constitute a new Constitutional actor." (Pl.'s Mem. at 23.) The
Second Circuit has employed the First Amendment/trademark rights analysis, supra
at III.B.1, in the Internet context. See Name.Space, Inc. v. Network
Solutions, Inc., 202 F.3d 573, 585-86 (2d Cir. 2000); [*34]
n23 see also OBH, Inc. v. Spotlight Magazine, Inc., 86 F. Supp. 2d
176, 197 (W.D.N.Y. 2000) ("'Domain names ... per se are neither
automatically entitled to nor excluded from the protections of the First
Amendment ....' Whether a particular domain name is entitled to protection under
the First Amendment depends on the extent of its communicative message."
(quoting and citing Name.Space, 202 F.3d at 586)).
n23 In Name.Space, the
Second Circuit stated in part:
While we hold that existing [generic Top
Level Domains ("gTLDs")] do not constitute protected speech under the
First Amendment, we do not preclude the possibility that certain domain names
and new gTLDs, could indeed amount to protected speech. The time may come when
new gTLDs could be used for "an expressive purpose such as commentary,
parody, news reporting or criticism," comprising communicative messages by
the author and/or operator of the website in order to influence the public's
decision to visit that website, or even to disseminate a particular point of
F.3d at 586 (quoting United We Stand Am., Inc v. United We Stand Am.
N.Y., Inc., 128 F.3d 86, 93 (2d Cir. 1997)).
Mindspring's reliance on Zeran,
ACLU v. Reno, 217 F.3d 162 (3d Cir. 2000), and other non-trademark cases is
not compelling. For instance, Zeran's discussion that "liability upon
notice has a chilling effect on the freedom of Internet speech," 129
F.3d at 333, is not presented in the context (existing here) of balancing
First Amendment and trademark rights, but rather in the context of ascertaining
that "liability upon notice would defeat the dual purposes advanced by §
230." Id. As the Zeran Court noted, Section 230 reflects a
"policy choice," not a First Amendment imperative, to immunize ISPs
from defamation and other "tort-based lawsuits," driven, in part, by
free speech concerns. See id. at 330-31. Congress also made the (policy)
choice that Section 230 has "no effect on intellectual property law." 47
U.S.C. § 230(e)(2).
statement, quoted by Mindspring, that "there are crucial differences
between a 'brick and mortar outlet' and the online Web that dramatically affect
a First Amendment analysis," 217 F.3d at 175, while no doubt true,
was made in a different context. [*36]
In Reno, the Court of Appeals granted a preliminary injunction against
the enforcement of the Child Online Protection Act of 1998 ("COPA"), 47
U.S.C. § 231, on the ground
that COPA's use of the "contemporary community standards" test of Miller
v. California, 413 U.S. 15, 24, 37 L. Ed. 2d 419, 93 S. Ct. 2607 (1973), to
define "material that is harmful to minors," rendered the statute
unconstitutionally "overbroad." 217 F.3d at 173-180.
Unlike a "brick and mortar outlet" with a
specific geographic locale, and unlike the voluntary physical mailing from one
geographic location to another, as in Miller, the ... Web is not geographically
constrained. ... Web publishers are without any means to limit access to their
sites based on the geographic location of particular Internet users.
at 175. The distinguishing properties of cyberspace that prompted the Court
of Appeals to find that "Miller's 'community standards' test ... has no
applicability to the Internet and the Web," id. at 180, do not
impel the conclusion, promulgated by Mindspring, that the Internet context [*37]
necessarily alters First Amendment/trademark rights analysis.
For the foregoing reasons,
Mindspring's motion to dismiss [9-1] is denied. Counsel are directed forwith to
contact Court Deputy Christine Murray (at (212) 805-6715) to arrange a
settlement/scheduling conference with the Court. The parties are directed to
engage in good faith settlement negotiations prior to the conference.
Dated: New York, New York
March 14, 2001
RICHARD M. BERMAN, U.S.D.J.
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