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Use of Competitor’s Name in Keyword Advertising Ruled Not a Violation of Publicity Rights – Habush v. Cannon, 2013 WL 627251 (Wis. Ct. App. Feb. 21, 2013)

Can your business competitor use your name to promote itself and never mention your name to the public?  Keyword advertising makes that possible.  A competitor can bid on keyword search terms consisting of your company name to make links to its website appear whenever a person searches for your name on the Internet.  A law firm that fell prey to such an advertising strategy decided to sue its competitor for violating its publicity rights, which is a form of invasion of privacy.

Robert Habush and Daniel Rottier are shareholders in Habush Habush & Rottier, a well-known personal injury law firm in Wisconsin.  Another Wisconsin law firm also specializing in personal injury law, Cannon & Dunphy (C&D), bid on the keyword search terms “Habush” and “Rottier” through Google, Yahoo!, and Bing.  As a result, when a person searched for “Habush” or “Rottier” in one of the three search engines, links to C&D’s website would appear at the top of the list of “sponsored” results, i.e., those links produced by keywords that been bid on and paid for by advertisers.  Sponsored results generally appear above the “organic results” generated by the search engine’s algorithm.

Habush and Rottier sued C&D for violating Wisconsin’s invasion of privacy statute.  Under the statute, a person’s privacy could be invaded  by “[t]he use, for advertising purposes or for purposes of trade, of the name . . . of any living person, without having first obtained the written consent of the person . . . .”  The main question was whether C&D engaged in a “use” of Habush and Rottier’s names.

Habush and Rottier argued that any attempt to benefit from the commercial or other value of a person’s name or image is a “use.”  Under this interpretation, C&D “used” the names of Habush and Rottier.  C&D countered that the statute covers only “use” that is visible to the public.  Under that perspective, bidding on names for keyword advertising purposes is not a “use” because the public does not see the use of the names.

The court found both interpretations reasonable, but adopted C&D’s interpretation.  The court held back from ruling that unauthorized use of a name can never be an invasion of privacy unless the use is visible to the public, but it agreed with C&D that bidding on a competitor’s name to get one’s ad placed near links to the competitor’s website in search results is not a violation of the competitor’s publicity rights.

The court analogized competitive keyword advertising to “proximity advertising.”  Examples of proximity advertising include: a new car dealership opens across the street from an established car dealership; a business advertises on billboards next to a competitor’s billboards; a lawyer places a Yellow Pages ad near the phone listing of competing lawyers.  Although a competitor is trying to take advantage of the name of an established business in each of these scenarios, none involves an impermissible “use”, such as when a competitor puts the name of an established business in its ad or on its product.  The court similarly did not see a problem with using a third party—in this case, a search engine—to engage in proximity advertising.

LegalTXTS Notes: This is a pretty novel case because most competitive keyword advertising cases are based on theories of trademark infringement or dilution.  Since Habush and Rottier are personal names, they might not have acquired sufficient second secondary meaning to qualify for trademark protection, so publicity rights was invoked as a creative alternative.

Hawai‘i has its own publicity rights statute, so would the outcome have been different had the lawsuit been filed in Hawai‘i?  Hawai‘i courts have not had the occasion to interpret the statute, but if you buy the reasoning of the court in Habush, the answer is probably not.  The Hawai‘i statute is similar enough to the Wisconsin statute for the logic of Habush to apply.

As a partner in a law firm (and therefore a business owner), I’m not sure how I feel about Habush.  I think the court rightly rejected the interpretation that any attempt to benefit from the commercial value of a person’s qualifies as a violation of publicity rights.  That’s a pretty broad proposition.  But something about the decision makes it hard to swallow.  There’s an element of deception the court doesn’t adequately address.  I wonder if, instead of claiming violation of publicity rights, Habush and Rottier could have sued under an unfair competition theory.

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Court Finds That State Law Claims Against Online Forum Operator For Misappropriation, Theft, and Tortious Interference Hinge on “Publisher” or “Speaker” Status–Stevo Design, Inc. v. SBR Marketing Ltd., 2013 WL 308996 (D. Nev. Jan. 25, 2013)

A Nevada federal court held that Communications Decency Act (CDA) immunity barred state tort claims asserted in a lawsuit involving the dissemination of sports betting information.  The court’s holding was based on a liberal interpretation of what it means to be a “publisher” or “speaker” under section 230 of the CDA.

Stevo Design, Inc. (Stevo) sells licenses for access to its sports betting reports.  SBR operates a website with a discussion forum where users may post messages relating to sports betting and handicapping and to send messages to other users.  SBR encourages activity on its website by awarding loyalty points to users for doing different things on the website, including posting original content.  The loyalty points may be redeemed for credits at offshore gambling websites.  Stevo claimed that SBR and its users published Stevo’s protected works on the SBR website without obtaining a license.

In addition to bringing claims for copyright and trademark infringement, Stevo asserted a slew of state-law claims against SBR.  SBR asked the court to dismiss these state-law claims.  The court first determined if SBR qualified for CDA immunity.  The key question was whether SBR had a hand in developing the online content at issue.  If so, then SBR does not enjoy CDA immunity.

Relying on Fair Housing Council of San Fernando Valley v. Roomates.com, 521 F.3d 1157 (9th Cir. 2008), the court concluded that SBR did not “develop” the offending online content.  SBR encouraged its users to post original content.  It did not specifically encourage its users to publish information illegally on the website.  The fact that SBR users could freely contribute loyalty points to each other further evidenced the minimal role that SBR played in monitoring the content of forum posts.  That SBR “sporadically” tried to eliminate infringing content did not persuade the court that SBR was a developer of unlawful content—the CDA allows interactive computer services to perform some editing of user-generated content without becoming liable for all unlawful messages they do not edit or delete.

Having determined that SBR qualified for CDA immunity, the court next considered the impact of immunity on the state-law claims.  CDA immunity effectively precludes the operator of the interactive computer service from being considered the “publisher or speaker” of user-generated content.  As a result, only claims requiring the defendant to be the “publisher or speaker” are barred by CDA immunity.  Applying the meaning of “publisher or speaker” status liberally, the court concluded that CDA immunity barred each of the state-law claims:

Misappropriation of trade secrets: Misappropriation involves either “acquisition” or “disclosure” of a trade secret.  The court easily found that “disclosure” of trade secrets through user posts on the SBR website to require there to have been publishing or “speaking.  The court found “acquisition” to be a closer question, but the only kind of acquisition alleged in the complaint involved user posts on the SBR website, so the CDA barred that kind of misappropriation as well.

Misappropriation of licensable commercial property:  The court is not sure such a claim exists under Florida common law, but assuming it is a form of misappropriation, the plaintiff must have suffered competitive injury due to the defendant’s taking of information.  Stevo alleged that SBR injured it giving away its copyrighted information for free.  The only way SBR could have done that was by disclosing the information, i.e., it acted as a publisher or speaker.

Contributory misappropriation of licensable commercial property:  This claim merely required that SBR induced others to speak or publish.  The court refused to allow circumvention of CDA by alleging that the defendant induced publication or speech instead of itself doing the publishing or speaking.  Since SBR did not tell users what kind of information to include in their posts or encourage infringing content, it enjoyed immunity from this claim.

Civil theft:  Common law theft is defined as obtaining or using the property of another with intent to appropriate the property to his or her unauthorized use.  The only plausible way SBR procured or used Stevo’s property was through publication.  This claim is barred.

Tortious interference with contractual relations:  This claim requires interference with a business relationship.  The only interference that could be inferred from the complaint involved SBR’s publication of Stevo’s works.  As this claim depended on SBR’s status as the publisher, it is barred.

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Check out the article on Internet firings posted on HR Hero’s “Technology for HR” blog.  The article talks about the firing of the Applebee’s waitress who snapped a picture of a receipt on which the customer,  a pastor, wrote: “I give God 10%  Why do you get 18?”  and posted it on Reddit.  I was happy to provide commentary for the article on Applebee’s social media policy and suggest tips for employers dealing with embarrassing Internet activity of employees like the Applebee’s incident.

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The Senate Judiciary Committee of the Hawaii legislature just voted to approve the “Steven Tyler Act” (SB465), an anti-paparazzi law named after the Aerosmith lead singer, who personally showed up to testify in favor of the bill at a hearing today.  The Tyler Act, which apparently was prompted by Tyler’s experience with paparazzi near his Maui home, attracted written testimony from an assortment of celebrities including Britney Spears, Neil Diamond, Tommy Lee, and Avril Lavigne.  My favorite testimony letter was Ozzy Osbourne’s because it had a little cartoon drawing of Ozzy in the bottom right corner.

ozzy

Cartoon from written testimony on SB465 by Ozzy Osbourne, 2/6/13

The final fate of the Tyler Act remains uncertain, but now that it’s taken an important step forward, I thought I’d share my thoughts on the bill in its current form.  (The Tyler Act isn’t exactly related to technology law, but I’m blogging about it because I also practice in First Amendment, privacy, and media law.)

It’s important to understand that the Tyler Act mimics California’s anti-paparazzi law (which is currently facing its own legal challenges).  As much as legal commentators panned the California law, the Tyler Act should attract its fair share of criticism, if not more, because its language is much more loose and vague.  And that’s not good when it comes to writing a law.  You know the Aerosmith song “I Don’t Wanna Miss a Thing”?  Well, there are quite a few things the Tyler Act misses.  Here are some examples.

The centerpiece of the California law is the creation of a new tort called “constructive invasion of privacy.”  This kind of invasion of privacy is “constructive” in that it doesn’t require the defendant to have physically trespassed onto the plaintiff’s property.  Use of a “visual or auditory enhancing device” is enough.  So, a person using a telephoto zoom lens to snap pictures of J-Lo on the balcony of her home could be liable for invasion of privacy without having stepped foot onto J-Lo’s property.  The idea is that use of devices to intrude into someone’s private space is just as invasive as physically entering into their space.

The Tyler Act uses the term “constructive invasion of privacy,” but it doesn’t exactly track the theory behind the tort.  Here’s the main liability section of the Tyler Act:

A person is liable for a civil action of constructive invasion of privacy if the person captures or intends to capture, in a manner that is offensive to a reasonable person, through any means a visual image, sound recording, or other physical impression of another person while that person is engaging in a personal or familial activity with a reasonable expectation of privacy.

See any reference to “visual or auditory enhancing device”?  There is none.  The Tyler Act says a person could commit a constructive invasion of privacy “through any means.”  A cheapie disposal camera would do it.  So would the audio recording app on your iPhone.  And if devices lacking in any “enhancement” feature do the trick to capture a “visual image, sound recording, or other physical impression of another person,” query whether there was an invasion of personal space, constructive or otherwise.  (Note that if an invasion into private space truly occurred, even in the absence of a physical invasion, Hawai‘i law already provides a remedy through the common law tort of intrusion into seclusion, which is a form of invasion of privacy.)

But the problems with the Tyler Act don’t stop there.  The Act applies when the plaintiff is engages in a “personal or familial activity.”  That language also appears in the California law, which is defined as “intimate details of the plaintiff’s personal life, interactions with the plaintiff’s family or significant others, or other aspects of the plaintiff’s private affairs or concerns.”  Cal. Civ. Code § 1708.8(l).  The definition excludes “illegal or otherwise criminal activity ….”  The meaning of “personal or familial definition” is pretty vague even with that definition, but at least the California law includes a definition.  The Tyler Act doesn’t!  It’s anyone’s guess what “personal or familiar activity” means under the Tyler Act.

Similarly, the Tyler Act doesn’t define “offensive” or “reasonable expectation of privacy.”  Nor does it contain an exception for publicizing matters of “legitimate public concern,” unlike the California law.  This is problematic because it imposes liability for conduct not remotely resembling the opportunistic antics of paparazzi.  Suppose a celebrity’s Kauai mansion catches on fire, spreading flames to her neighbor’s homes.  The celebrity rushes out to the sidewalk with her kids, watching as firefighters put out the blaze.  A photojournalist arrives on the scene and takes a picture of the celebrity and her kids from across the street.  He then sells the photo to a local daily newspaper, which uses it alongside a front-page article about the fire.  That’s hardly TMZ-style content, but under the vague language of the Tyler Act, the photojournalist and newspaper could be sued for constructive invasion of privacy.

Now, you might ask, why would the newspaper be liable?  That’s because the Tyler Act says:

Any person who transmits, publishes, broadcasts, sells, offers for sale, uses any visual image, sound recording, or other physical impression, or who subsequently retransmits, republishes, rebroadcasts, resells, reoffers to sell, or reuses any visual image, sound recording, or other physical impression that was taken or captured in violation of this section shall constitute a violation of this section if:

(1)  The person had actual knowledge that the visual image, sound recording, or other physical impression was taken or captured in violation of this section; and

(2)  The person received compensation, consideration, or remuneration, monetary or otherwise, for the rights to the unlawfully obtained visual image, sound recording, or other physical impression.

(Emphasis added)

Imposing liability for publishing information obtained in violation of the Tyler Act runs into First Amendment problems.  Under Supreme Court precedent, the First Amendment protects speech that publishes the contents of a communication that was illegally intercepted as long as the publisher itself did nothing illegal to obtain the communication.  See Bartnicki v. Vopper, 532 U.S. 514 (2001).  Even more troubling is the Tyler Act’s authorization of courts to issue injunctions against future violations of the Act.  Since publication of information obtained in violation of the Tyler Act could itself violate the Act, a court could literally issue an order “halting the presses.”  That’s called a prior restraint, which is regarded by courts as the most offensive of First Amendment violations.

There are other problems with the way the Tyler Act is written – like the absence of an exception to liability for actions taken in a legitimate law enforcement investigation, or the fact that the Act is not limited to actions taken in Hawai‘i (unlike the California anti-paparazzi law, whose applicability is limited to actions within California) – but I think the point is made well enough.  Although the Tyler Act is well-intentioned, more thought and care needs to go into making it a clear, constitutional law that doesn’t inadvertently turn well-meaning fans, reporters, and publishers into law-breakers.