Maryland Bar Bulletin
Publications : Bar Bulletin : March 2010

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 BAR BULLETIN FOCUS: INTELLECTUAL PROPERTY  

A great benefit of the Internet is the availability of information and analysis on just about anything. Vacationers can find reviews of hotels where they may stay; electronics purchasers can perform due diligence on the sought-after product through a myriad of on-line forums. Ideally, the Internet helps consumers reach what economic theorists call the state of "perfect information", so consumers are making a fully informed decision.

The problem with these review forums, however, is when a company's product or service receives bad reviews. The more insidious problem – and one recently addressed by the Fourth Circuit – is when the bad reviews are solicited and collected by a competitor or an entity plotting to benefit from the displeasure with the targeted goods or services.

The rights of a maligned company to stop negative reviews – even when the negative reviews were encouraged by an entity hoping to file suit based on problems with the services being reviewed – were hampered by the Fourth Circuit's decision in Nemet Chevrolet, Ltd. v. Consumeraffairs.com, Inc.,  591 F.3d 250 (4th Cir., 2009). Nemet balanced two aspects of the Communications Decency Act of 1996, 47 U.S.C. §230 (CDA), concluding that the website in question, which solicited and encouraged negative reviews, was more of an "interactive computer service provider" than an "information content provider."

The CDA grew out of the notion than an Internet provider should be immune from the improprieties of its users. In tangible media, a publisher can control its content; in contrast, an Internet service provider or forum host cannot always control what is carried through its service or in its discussion groups.

The website in question in Nemet defines itself as "empower[ing] consumers by providing a forum for their complaints and a means for them to be contacted by lawyers if their complaints have legal merit." Consumeraffairs.com looks for complaints, rather than creating an open forum for all comments, and publishes the complaints. In Nemet, the plaintiff claimed that by soliciting, and even editing, the comments, the defendant should be deemed to be creating the content. Additionally, the plaintiff alleged that the defendant fabricated some of the postings. The plaintiff pled that it had no customers matching the identity of some of the individuals said to be making the complaints.

The case proceeded to appeal based on the motion to dismiss for failure to state a claim. The court found that the immunity provided in CDA §230(f)(2) applied, and dismissed the claims. The core issue was whether Consumeraffairs.com's activities constituted "an interactive computer service," and was thus immune from suit under §230(f)(2), or whether the defendant participated enough in the creation of the content so as to be an "information content provider," and not immune under §230(f)(3) of the CDA." Nemet did not sufficiently allege that the content was produced by the defendant, and not a third party.

The court cited other jurisdictions for the proposition that an entity is liable only for speech properly attributable to them, and not attributable to a third party (Universal Commc'n Sys., Inc. v. Lycos, Inc., 478 F.3d 413 (1st Cir. 2007)) (Doe v. MySpace, Inc., 528 F.3d 413 (5th Cir. 2008)) (Chicago Lawyers' Comm. For Civil Rights Under Law, Inc. v. Craigs list, Inc., 519 F.3d 666 (7th Cir. 2008)). Courts generally have applied the §230 immunity not only to entities that provide connectivity to the Internet, but also to entities that organize forums and are seemingly more content-focused. Immunity reaches to general review sites soliciting positive or negative comments on their forum, so long as the forum hosts themselves are not posting the information. However, Nemet  recognized that if a forum host is asking a consumer to provide illegal information, then the §230 immunity is not applicable, citing  Fair Housing Council v. Roommates.com, LLC, 521 F.3d 1157, 1162 (9th Cir. 2008) (en banc), in which the information solicited was illegal to consider in the Fair Housing context. In Nemet, the court found that the information Consumeraffairs.com was soliciting about Nemet Chevrolet was not illegal, even though it was harmful to Nemet's reputation.

The Nemet court's strict reading of the plaintiff's pleadings, due in part to the court's adherence to stricter guideline outlined by the Supreme Court in Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009), may have doomed the plaintiff and did not allow Nemet Chevrolet to explore whether Consumeraffairs.com was concocting some of the reviews. The lesson from Nemet may be that an entity feeling aggrieved by complaints in a forum should find and properly plead that the website operator has either acted illegally or created the content themselves. Otherwise, the §230 immunity could negate any chance to stop disparaging comments posted on a website.

Ned T. Himmelrich is the Head of the Intellectual Property and Technology Department at Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC.


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Publications : Bar Bulletin: March 2010

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