Practically anyone can start a website and get software that snags fresh online news from those who originate it. Website owners pluck the freshest, most interesting reports and quickly post condensed rewrites. That costs them little, and they then surround the rewrites with cut-rate ads. … Usually we all benefit when more efficient competitors enter the market and drive inefficient competitors out of business. But the Internet has not made “new media” publishers more efficient at gathering news than their print counterparts. It has made them more efficient at taking news from their print counterparts and using it to compete while the news is fresh.

I love the little linguistic touches here: snags, fresh, cut-rate ads, “new media” in scare quotes, and, of course, free-riding. There are more in the article, but ironically, I cannot link to the Marburgers’ full piece because it is behind an archives paywall. Fortunately, the Madison, Wisconsin newspaper ran essentially the same article. (Apparently, I am ruining the newspaper business by quoting, linking, and discussing in this fashion…)

I later learned from Techdirt that the Brothers Marburger have been on a little crusade on this subject. Their solution, no surprise, is to resuscitate the “hot news” rule under the 1918 INS v. AP decision. That would allow newspapers to prevent others from linking to their original reporting content. (Technical detail for lawyers: There has been some confusion about exactly what the Marburgers support. The op-ed proposes lifting federal copyright law’s preemption of state unfair competition and unjust enrichment claims. They assume, I think correctly, that this would open the door to INS-style claims. I am, just responding to what they wrote.).

In their op-ed, they seemed unconcerned about the way this would devastate fair use and shut down all the vibrant discussion in the blogosphere. But since no less an eminence than Richard Posner has mused along the same lines, this strikes me as an idea to which a forceful and rapid response is necessary. As more papers begin to fold, there may be a sentimental rush to impose some kind of radical solution like this. I am very sad and worried about the threat to journalism too, but this certainly is a cure worse than the disease.

So I did what any blogging law professor does in response: I wrote a “Taking Exception” reply for the Opinion page. They ran it, but of course it is behind that paywall too. So I’ve reprinted it below. (Does that make me a parasite?) I talk a little about the law in very general terms (even simplistic, you might say), but I also try to respond to their panicked rewrite of journalism history:

In their argument for a sweeping and unwise expansion of copyright law to protect newspapers from online “free riders,” David and Dan Marburger make several unjustified assumptions. I understand and share their concern that competition from digital sources may cut ad revenue for traditional outlets. But they seem to blame the whole problem on web sites like Newser.com or the Huffington Post that link to stories in many newspapers. This diagnosis is flawed, and their proposal would be a disastrous limit on free speech.

For starters, they ignore all the other long-term challenges facing newspapers, including changing reading habits, the arrival of 24-hour cable news, poor labor relations, and the movement of readers from traditional old cities to the suburbs and the Sun Belt. As television news matured in the mid-20th century, numerous dailies nationwide folded or merged (New York City went from eight to three), yet the authors baldly and incorrectly state that broadcast news did not depress newspaper circulation.

In light of this history, it is comical to blame aggregation web sites or blogs for all newspapers’ current woes. Copyright law already forbids reprinting the whole article or anything close to it. Usually, sites adhere to copyright’s fair use doctrine by posting only short blurbs and hyperlinks that highlight newspaper reports. Many readers will learn of stories they never would have found, and follow those links to the original publication. Anyone satisfied with just these little blurbs was never going to buy a regular newspaper subscription anyhow.

The Marburgers’ dangerous proposal would expand copyright and related unfair competition law to ban web sites (and presumably anyone else) from saying “The Daily Bugle ran a story this morning about the Mayor’s new budget” and quoting a paragraph of the article. Contrary to the authors’ assertions, a 1918 Supreme Court case about the Associated Press did allow news agencies to claim unacceptable monopolies over the facts they reported. Congress wisely abolished such special rights for media companies in 1976. Bringing them back would destroy the vibrant discussion found every day on countless blogs. (And perversely, it might prevent other traditional newspapers from giving credit to the original scoop when they write follow-up stories!)

Like the record industry, some newspaper publishers want to reshape copyright law so they can keep doing business exactly the same way, despite seismic societal and technological changes happening all around them. Special exclusive rights for media conglomerates will impoverish public discourse, and they won’t work anyhow.

These lawsuits would seem to be a boon for private entities that verify conformity with kosher laws, because consumers will need someone else to step in where the government cannot. Through the enforcement of certification marks, private groups can protect their distinctive seal of approval without violating the First Amendment. And indeed, as a New Yorker I know the intertwined “OU” symbol of the Orthodox Union indicating approval of a kosher product — based on their web site, they are very busy treif busters these days.

[UPDATE: I noticed after I published this that it is the 500th post on Info/Law. Hooray! ]

1. Judge Gertner will reduce the damages somewhat.
2. She will find that the statutory damages provisions of the Copyright Act do not contravene constitutional protections under the Gore line of cases.
3. The First Circuit will affirm.
4. The Supreme Court will deny cert.

I think the damages provision might be vulnerable in a specific defendant’s case (though Ms. Thomas-Rasset would be a better test than Mr. Tenenbaum here), but is safe on its face. In lawyerspeak, it’ll survive a facial challenge, but might fail as-applied.

The Gore limits depend in part on the concept of notice: defendants should know ahead of time how much they’d be liable for if they violate the law. No one expects punitive damages of 500:1 (Gore) or 145:1 (State Farm). But predicting liability – at least at its minimum / maximum amounts – is easy for copyright law. That’s a key difference between a statutory damages scheme, with a range specified by the legislature, and a common-law one where juries pick a number from a hat.

Second, the range of damages in the Copyright Act looks reasonable on its face. $30,000 per work (and up to $150,000 for willful infringement) is a lot, especially if it’s just to deter (or compensate for harm by) a single defendant. (General deterrence is out under Philip Morris v. Williams, which is sad for law & econ thinkers.) Imagine a business that runs off copies of “Harry Potter and the Deathly Hallows” in its basement and sells them. Copyright infringement of this one work is clear, but the business carefully shreds all evidence of sales. So, it’s impossible to prove actual damages; businesses are often risk-averse, meaning that higher awards of damages are needed to deter; and there’s only 1 copyrighted work at issue. Statutory damages are important to provide any deterrence – since proof of harm is under the infringer’s control – and since the infringement might be quite profitable, an award might need to be high (even $150K). Hence, the damages scheme is clearly rational in at least some cases.

The harder question is whether the unconstrained jury discretion for statutory damages could run afoul of due process protections. Individual downloaders tend to be pretty similar if you think about it: there’s not much difference between Thomas and Tenenbaum. So why is her penalty almost 4 times more per work than his, for the same type of infringement? Neither has much in the way of monetary resources, so they’re either undeterrable, or able to be deterred at a fairly low amount (marginal value of a dollar and all that). Here is where the damages scheme seems like it might be vulnerable: it does get hard to predict liability in some individual cases, and the wide range of damages looks a bit too much like absolute discretion. (Thought exercise: what if a jury could award any amount of damages per infringement? Would that improve deterrence against Tenenbaum and Thomas? Would it be significantly less accurate than the actual damages, which everyone agrees are pretty low in real terms? But such a framework would likely run afoul of constitutional limits.)

If this is right, it means that both sides should worry – as should Congress. Getting damages right is important, but preserving both procedural and substantive protections for defendants is just as much so. Comments and disagreement welcomed…

Here, you can browse and annotate the proposed settlement, section-by-section. … In addition, you can:

• Study our reading room of lawsuit documents
• Join the conversation in our forums
• Draft an amicus brief to the court on the wiki

This is a potentially exciting venture on two fronts. First, it may foster dialogue about the fiendishly complex settlement, which could have a huge impact on the shape of copyright law and the public domain for years to come. Because it is so complicated and doesn’t include much flash (and perhaps because so much attention is going to health care, climate change, Jon & Kate, and other pressing issues of the day), the settlement has not been as widely debated as it should be. Second, it will be another experiment in using the tools of the interactive internet to promote true civic engagement and debate.

But whether it will work depends in large part on whether people participate, so go check it out. The links posted on the site’s Introduction are a good place to start.

I don’t want to be harsh about Kaus – Section 230 is a little obscure – but I think any blogger, and especially one who’s a lawyer, should have some familiarity with it. (Citizen Media Law Project has a great summary of its effects, for example.) Kaus goes on to list five observations, which merit a bit of comment:

1. “lawyers for big journalistic outfits (like the Washington Post, which owns Slate) won’t require blogs to be edited.” Yep. Even some editing may pass 230 muster – see Batzel v. Smith.
2. “Most bloggers themselves are probably poor enough to be judgment-proof.” Also true, at least until Bill, Tim, and I land that lucrative Nike contract.
3. “unverified undernews would now have a prominent, semi-official, de facto-sanctioned home.” Yep – see AutoAdmit.
4. “Are they really going to apply this to organizations that pay freelance bloggers for their submissions?” The FTC doesn’t think so. Bill and I have been trying to figure this out.
5. “What about repeating these protected-by Sec. 230-but-unverified blog allegations in the core MSM?” Ah, the joys of cyberexceptionalism! A blogger posts something saying, “Sarah Palin resigns due to threats from wildlife sick of being shot at from helicopters.” The Boston Globe’s Web site republishes it – they’re immune under 230. The Boston Globe publishes exactly the same content in its print edition – no immunity. (They’ve got to depend on NYT v. Sullivan rather than the 230 shield.) So, the MSM has to be careful about how it deals with Web rumors, at least if they’re going to circulate them offline.

Kaus then confidently predicts Congress will amend the statute (”"But I find it difficult to believe that the broad web-site-protecting reading of Section 230 will hold up… When Congress sees how that phrase has been interpreted, it may (as they say) revisit the issue”). Um, no. It’s been around since 1996, and I know of no serious effort to amend it since. Scholars keep putting up alternatives, but Congress seems quite happy with Section 230, even when it gets interpreted in ways that prevent children who are sexually assaulted from recovering against the on-line sites where they met their assailants. If Congress isn’t going to help the kids, it’s not going to be too worried about Palin’s press image…

There’s been significant fear and loathing of this proposal. At a recent legal meetup in NYC, I suggested that there may be a barrier – Section 230 of the CDA – to the FTC’s enforcement of this move (if it is adopted). Several participants thought I was a nutjob for making this argument, so I thought I’d set it forth and see what you think.

Section 230(c)(1) of the Communications Decency Act (47 U.S.C. 230(c)(1)) forbids treating a “provider or user of an interactive computer service… as the publisher or speaker of any information provided by another information content provider.” There are statutory exceptions for intellectual property law (but compare Doe v. Friendfinder with Perfect10 v. CCBill on this), the Electronic Communications Privacy Act, criminal law, and compatible state laws. The 230 shield has been interpreted quite broadly, though Roommates.com and Barnes v. Yahoo! suggest some chinks in its protection. (As always, I recommend highly Ken Myers’s Wikimmunity article on this topic.)

I’d argue 230 cabins the FTC’s Section 5 authority. Imagine a blogger who gets free passes from DreamWorks to “Transformers: Revenge of the Fallen” and, against the weight of all common sense, writes a paean to the movie, without mentioning the free tix. She’s now run afoul of the FTC guidelines: there’s no reason for the blogger’s audience to think that she got in for free, and the connection seems material to the review. What if the FTC goes after DreamWorks? In effect, the FTC’s argument is that DreamWorks is the speaker here: it helped generate the post by giving the blogger free entry to the film. (This stance is made more powerful by the fact that Transformers 2 appears to suck.) But that’s exactly what Section 230 forbids: the FTC treats DreamWorks as responsible for the blogger’s content. It seems this should work in the other direction as well – trying to hold the blogger liable for failure to disclose treats her as linked with DreamWorks and speaking on the company’s behalf. (This posture seems a closer case, though, since it imposes liability directly on the speaker / author, although what makes the blogger liable is connection to another Internet content provider.)

The obvious FTC rejoiner is an agency theory: the compensation arrangement makes the blogger a DreamWorks agent for this post. But that interpretation would render 230 a dead letter; we could readily concoct consideration-based arguments for most 230 cases that cut the other way. On this theory, Dontdatehimgirl.com would be liable for encouraging users to post stories about cads – in exchange for a public airing of their complaints, the site gets desirable content. Doe v. Friendfinder wouldn’t have to rely on a flimsy right of publicity claim: Ms. Doe could simply go after Friendfinder for the quid pro quo of attractive content in exchange for use of the service.

The employee as commenter / poster angle poses the problem neatly. If a DreamWorks publicity representative writes a blog comment, at the direction of the company’s CEO, trashing Ice Age: Dawn of the Dinosaurs as “a Blue Sky Studios plot to brainwash our children,” it is uncontroversial to hold DreamWorks liable for her speech. Firms can only act through their employees. But if she writes the same comment from home, with no studio input, based on her belief that animated squirrels are the devil’s minions, we’d be reluctant to hold DreamWorks liable. So, perhaps agency must enter the 230 analysis through the determination of who the “Internet content provider” is. I think it makes sense to separate employee blogging along these lines, but it does convert Section 230 from a relatively clear rule to more of a standard.

I don’t necessarily like the outcome here. Bloggers have been quite resistant to disclosure mandates (and even strong norms, at times) and are shocked, shocked to think that anyone could buy their support! Having the FTC push back, even if only in extreme cases, could be quite helpful. And it’s not just bloggers who are affected by this analysis – it would likely hold for Internet writing and endorsements more generally. Finally, the FTC is certain to dislike this suggestion that its Section 5 power wanes on the Internet (even though experts like Eric Goldman argue that other agencies, such as the SEC, are similarly constrained). But presumably this is what Congress wanted, and at minimum the Commission needs a cogent analysis of why its proposals escape the 230 driftnet.

First, while waiting for my coffee to brew in the faculty lounge, my eye fell upon a front-page article [limited nonsubscriber access] in the Chronicle of Higher Education from last week that was lying on the table. An hour later, back at my desk, I stumbled upon this story in yesterday’s New York Times online. Both articles demonstrate that we have a serious problem — and both of them reported, as simple matters of fact, the wrong-headed legal interpretations that allow trademark-based censorship of film and television.

The Chronicle story explained how colleges and universities exercise control over the scripts of movies and television programs to ensure flattering fictional portrayals of their institutions. The author recounts how, for example, NYU “balked at racy plot lines” in the old TV teen soap Felicity, so the character instead enrolled at a fictional school very similar to NYU. In some cases, schools impose content restrictions as a condition for filming on campus (in addition to the thousands of dollars in rental fees they collect). That may be reasonable. But the main weapon the schools use is the assertion of expansive trademark rights in their names. The key passage from the article, with my emphases added:

Fleeting references to actual institutions should qualify as ‘fair use’ under trademark law, but anything more persistent requires permission. The threshold is confusion: If a viewer might infer an endorsement, a college that hasn’t signed off can sue. Cautious studio lawyers err on the side of letting colleges peek at the scripts.

Administrators often behave like film-ratings boards: They forbid violent or sexually explicit scripts, which could sully an institution’s good name. Some colleges are more persnickety, turning away fictional students who seem loutish or shady.

“Anything more than a fleeting reference” is a gross misstatement of the legal requirements of trademark law. If a writer really wants to send a fictional character to NYU or any other school, that alone does not give rise to actionable consumer confusion. The character can say the name of the school dozens of times, and even wear some collegiate sweatshirts too. At most, such references in works of fiction give rise to just the sort of “irrelevant confusion” that has so badly deformed trademark law.

Where would we be if, say, movie versions of One-Lor God and Man at Yale legally required permission from the universities they discuss (not always in flattering terms)? For that matter, why doesn’t the same logic require the schools’ trademark-based permission to talk about them in a book? Likewise, how could a film fully portray the struggles Dr. Kinsey faced in his research about sexuality without mentioning that he conducted them at Indiana University?

The Chronicle also discusses the movie Stealing Harvard, about a character who pilfers money to pay the tuition, which was originally called Stealing Stanford until that school objected. This may be a closer case of potential consumer confusion, but even here there is well-established case law that titles of artistic works can mention a trademark if it has relevance to the underlying work. And if Stanford in particular had somehow been important to the artistic message of a fictional work, surely we could not allow the subject of that message to stifle it without intruding very seriously on free speech.

Of course, as the quoted passage also notes, the excess caution of risk-averse gatekeepers often matters more than the actual scope of the law. I do hope that simpler law exempting such uses from the ambit of trademark law might embolden the timid studios — I’ve written that before and I am working on follow-up proposals this summer — but maybe that’s hoping too much.

The Times article tells, if anything, an even more alarming tale, though trademarks are a smaller part of it. A movie version of the great baseball book Moneyball (responsible, among other things, for inspiring law dean Jim Chen!) was set to begin filming in days, starring Brad Pitt and directed by Steven Soderbergh, but the studio has pulled the plug. Many Hollywood-style conflicts were involved (it reads like an episode of Entourage, actually), but one significant part was, again, over-expansive trademark law. The studio, Sony Pictures, had problems with Soderbergh’s revised script, according to the Times (again, with my emphases):

One reason [for Soderbergh's changes] was to win the approval of Major League Baseball, which was not happy with some factual liberties in [the original screenwriter's] version. Such approval is crucial in a baseball film that intends to use protected trademarks.

“Typically, on a film like this, we look at it for historical accuracy,” said Matthew Bourne, a vice president of Major League Baseball for public relations. “We’ve been in touch with Soderbergh and Sony, and they’ve been receptive to our requests.”

What baseball saw as accurate, Sony executives saw as being too much a documentary. Mr. Soderbergh, for instance, planned to film interviews with some of the people who were connected to the film’s story.

So, if a screenwriter wants to tell a story about a real team, baseball’s PR executives must approve of it first? To the degree that they can change the entire style of the movie? What if the character makes a pact with Satan to defeat the Yankees? How about an acclaimed Lou Gehrig biopic, or a cartoon about Babe Ruth’s talking bat? What about a mock trial of Pete Rose at Harvard Law School?

I wish these stories were unusual. But the casual way the journalists state the supposed law shows how widespread this (mis)understanding of trademark rights has become. And these incidents, like countless others (see here and here for examples), will never result in litigation, and therefore never result in decisions that might clarify the law. Rightsholders demand compliance, and movie or TV studios consider it too costly or troublesome to resist.

There oughta be a law!

First, the Court denied cert. in IMS Health v. Ayotte. This case involved data miners’ First Amendment challenge to a New Hampshire law that prohibits the transfer of physicians’ prescribing records for use by pharmaceutical company representatives in their efforts to promote certain drugs to individual doctors. The First Circuit’s thorough decision in the case upheld the law on two distinct grounds: the transfer of the records was conduct rather than speech; and anyway if it was commercial speech the law satisfied the narrow tailoring requirements of the Central Hudson test. There is somewhat mixed case law on the First Amendment status of data mining, but I think the pro-privacy side is winning overall. (For more on this complex topic, see Neil Richards’ great law review article). While it might have been nice if the Supreme Court took the case and delivered the death blow to data miners’ constitutional arguments, that would have been very risky; it is better to leave Judge Selya’s strong opinion — and New Hampshire’s law, imitated by some other states — in place. (EPIC has more information on this one.)

The second decision is close to my co-blogger Tim’s heart, as he has described before. The Supreme Court refused to review the Second Circuit’s opinion finding that Cablevision’s proposed new DVR system does not violate copyright law. (Public Knowledge has more discussion on this one.)

(And by the way, if you share my side interest in election law, today’s announcement that the Court will hear more arguments in the campaign finance case about the Hillary Clinton documentary rather than deciding it — and consider much broader issues about corporate political donations — is also a bombshell. Probably a very bad sign for advocates of campaign finance regulation. Lots of big news other than Ricci today!)

Among the newest is the recent lawsuit filed by St. Louis Cardinals manager Tony LaRussa against Twitter. A user who claimed to be LaRussa opened a Twitter account in his name and said some nasty things, including mocking references to the deaths of two Cardinals pitchers. Twitter denied initial reports that the suit had been settled in a somewhat bellicose blog post (remember, lawyers: it isn’t a settlement until the other guy’s client signs off). Twitter then removed the case (that is, transferred it) from state to federal court, where it currently remains active on the docket of the Northern District of California. (The best news coverage is here and here.) The phony LaRussa account was terminated long ago; impersonation violates Twitter’s terms of service.

LaRussa’s actual grievances sound like they should give rise to defamation or false light, or perhaps the appropriation tort. But these would all be blocked, quite routinely, by section 230. Of course, LaRussa could go after the individual impostor, assuming that person could be found. Instead, his lawyers framed much of his complaint in terms of trademark infringement. Why? It’s no coincidence that section 230(d) carves out IP (along with criminal law) from the special immunity, stating, “Nothing in this section shall be construed to limit or expand any law pertaining to intellectual property.”

But to prevail on the trademark infringement claim, LaRussa has to prove that the phony account was likely to confuse consumers into thinking he endorsed Twitter, thus harming him. That is why his complaint emphasizes:

The Site states in large lettering, ‘Tony LaRussa is using Twitter,’ and encourages users to ‘Join today to start receiving Tony LaRussa’s updates.” It also contains a picture of Plaintiff with his name printed next to ít. Beneath the picture, the Site contains written entries that are impliedly written by Plaintiff himself when in fact they are not.

In this particular case, proving confusion and harm will be very difficult, since (1) the account only had four followers; (2) it included a notation in the user’s profile section, “Bio Parodies are fun for everyone;” (3) it’s not clear a statement (even a false one) that LaRussa used the service can fairly be called an endorsement of the service (though the “endorsement” concept can be slippery, as I have written elsewhere). Trademark dilution does not require confusion or monetary harm, but LaRussa pleaded under federal dilution law, which allows only injunctive relief — now moot since the profile is gone — and completely exempts “noncommercial use” of a trademark.

More generally, however, this case highlights the possibility of a loophole for celebrities who can recast privacy-like claims under trademark law (and possibly also rights of publicity, if those are interpreted as intellectual property under the language of section 230(d)). Where would that leave us? Well, it shows (again) that the apparently bright lines of section 230 sometimes aren’t. But it might also create what I’d consider a pernicious double standard: celebrities maligned by anonymous online impostors could plead around section 230 by claiming trademark or publicity rights in their name, while many ordinary people victimized by defamation or cyber-bullying would have their claims blocked. Other law, defamation in particular, expects celebrities to have thicker skin and tolerates more insensitive speech about them. If LaRussa pulled off this suicide squeeze, that sensible dichotomy might get turned on its head.

[UPDATE: I plumb forgot to mention another crucial angle: Twitter now wants to sell verified accounts to celebrities (as in, “This is the real Tony LaRussa tweeting.”) Those wouldn’t fetch a very high price if the fake accounts from which the celebs are trying to distinguish themselves are unlawful and Twitter is liable for them.)