A Utah federal court has dismissed a complaint by Koch Industries — the giant privately-held conglomerate of the politically controversial billionaire Koch brothers — over a prank press release issued in the company’s name. (EFF blogged about the court’s opinion and also posted a PDF of it here.)
The dispute began when anonymous pranksters calling themselves “Youth for Climate Truth” emailed a press release to news organizations that was formatted to look like an official Koch Industries one and included a link to a fake web site that imitated Koch’s. As the court explains it,
Defendants’ press release announced that Koch would “restructure its support for organizations that undertake climate change research and advocacy.” The release claimed that the company would withdraw funding from groups “whose positions on climate change could jeopardize America’s continued global competitiveness in the energy and chemical sectors.” Such sentiments were in stark contrast to the policy viewpoints usually expressed by Koch.
No journalists were fooled by the press release, but the hoax itself generated extensive news coverage. Koch Industries filed a “John Doe” suit against the anonymous perpetrators, making claims under trademark law, cybersquatting law, and the Computer Fraud and Abuse Act (CFAA). Koch also asked the court to issue a subpoena so that their ISP would unmask them. At first the court complied on the subpoena, but then the Does enlisted some Public Citizen lawyers to quash the subpoenas and, beyond that, to dismiss the suit for failure to state a claim. The court granted both requests. (More detailed analysis after the jump.)
While there is language throughout the decision about the First Amendment and free speech values, the decision actually rests largely on the court’s determination that the prank was noncommercial. Neither the press release nor the phony web site even mentioned “Youth for Climate Truth,” much less seeking to raise any money or sell any product. The court found that trademark claims require commercial use and that the federal cybersquatting statute requires that the defendant intended to “profit.” Since there appeared to be no allegation of commercial motive in the defendants’ political prank, those claims were dismissed.
As to Koch’s CFAA claims, the statute only penalizes someone who “intentionally accesses a computer without authorization or exceeds authorized access.” The defendants merely imitated the publicly-available appearance of the Koch web site, rather than intruding where they were not allowed. Pursuing a theory that has been rejected in other cases, Koch argued that its terms of service forbade such appropriation of site features and that violating them constituted a CFAA infraction. The court rejected this theory (though on relatively narrow grounds) because the terms of service were “available only through a hyperlink at the bottom of the [web] page.” Furthermore, the court found that Koch could not demonstrate the “harm” necessary for a CFAA claim.
The court finished its work by noting that, because there is no basis for the complaint, there is no basis for the subpoenas revealing the Does’ identities. It quashed them, and also issued an injunction prohibiting Koch from using or disclosing any information they had gained from discovery prior to this decision. The court placed this determination in the context of what it called a growing consensus that, “Before authorizing subpoenas seeking to strip speakers of their First Amendment right to anonymity, courts require plaintiffs to make a preliminary showing that their complaint has merit.”
This is a big decision for political impersonators and satirists. It repeats earlier 10th Circuit court’s rejection of the so-called “interference theory” — the notion that the mere act of meddling with a trademark gives rise to legal claims. If there is no plausible showing of direct commercial harm, then there is no legal remedy. And it joins the movement against routinely granting Doe subpoenas without any merits determination. Hopefully other courts will follow suit on both fronts.
On the other hand, the case may be unusual in the utter lack of any conceivable “commercial” hook. The pranksters were anonymous, they sought no money or even reputational benefit, nor did they appear in any commercially offered venue like a magazine. Other defendants may have a harder time getting such a clear early victory at the motion to dismiss stage.