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Designer Skin LLC v. S & L Vitamins, Inc., et al.
Unauthorized internet reseller of plaintiff’s products is not guilty of trademark infringement, and does not cause actionable initial interest confusion, by using plaintiff’s trademarks in meta tags of website at which plaintiff’s and its competitors’ products are sold, and in...

Universal Communication Systems, Inc., et al. v. Lycos, Inc., d/b/a Lycos Network, et al.

478 F.3d 413, No. 06-1826 (1st Cir., February 23, 2007)

Court dismisses cyberstalking and security law claims advanced by plaintiffs under Florida state law against defendant Lycos, holding such claims barred by the immunity afforded Lycos under Section 230 of the Communications Decency Act (“CDA”).  Such claims arose out of statements critical of plaintiff Universal Communication Systems (“UCS”) and its CEO, Michael Zwebner, that were posted by third parties on a message board found on a website operated by Lycos at the domain Raging Bull.com  Plaintiffs claimed that defendants, including Lycos, were involved in a scheme to manipulate plaintiff’s stock price.  Plaintiffs claimed that defendants shorted UCS stock, and then posted derogatory comments on RagingBull.com in an attempt to drive the stock price down.  Such a claim, held the court, sought to hold Lycos liable for its role in the publication of these statements, which were authored by third parties, and as such was barred by operation of the CDA.  The cyberstalking claim was similarly barred because the act on which such claim rested was the publication of derogatory statements on the RagingBull.com message board authored by third parties.  As such, this claim too, sought to hold Lycos liable for its role in the publication of such statements, and was barred by application of the CDA. 

The court also dismissed federal cyberstalking claims asserted by plaintiffs against Lycos under 47 USC Section 223, holding that this statute did not create a private right of action for a civil suit.

Finally, the Court dismissed trademark dilution claims advanced by plaintiffs under Florida state law.  These claims were premised on the use of UCS’ trademark as the name for a message board on Raging Bull.com at which third parties posted statements critical of plaintiffs.  The Court held that, despite the fact that the message boards contained advertising, such a use did not constitute the requisite use in commerce of plaintiffs’ mark.  In addition, such use of plaintiffs’ mark to describe a message board that contained statements about plaintiffs was not actionable under the dilution act. 

Third parties posted statements critical of plaintiff UCS and its chief executive officer on a message board found on a website operated by defendant Lycos as the domain Raging Bull.com  Upset with these posts, plaintiffs commenced this suit against both Lycos and those who allegedly authored the posts.  Plaintiffs advanced claims of cyberstalking and securities fraud under Florida law, cyberstalking under federal law, and trademark dilution under Florida law.  The securities fraud claim rested on plaintiffs’ assertion that the posts were part of a scheme to drive down the stock price of UCS, and profit thereby by ‘shorting’ the stock.

Lycos moved to dismiss the Florida cyberstalking and securities fraud claims, holding they were barred by operation of Section 230 of the Communications Decency Act.  The First Circuit agreed, and affirmed the district court’s dismissal of these claims.

To establish its entitlement to the protections of the CDA, Lycos must demonstrate that “(1) Lycos is a ‘provider or user of an interactive computer service’ (2) the claim is based on ‘information provided by another information content provider’ and (3) the claim would treat Lycos ‘as the publisher or speaker’ of that information.”

The First Circuit held that the CDA is to be “broadly construed.”  Indeed, immunity is afforded under the CDA even if the defendant continues to make third party content available after notice that such content is unlawful.  Said the Court:
It is, by now, well established that notice of the unlawful nature of the information provided is not enough to make it the service provider’s own speech.   We confirm that view and join the other courts that have held that Section 230 immunity applies even after notice of the potentially unlawful nature of the third-party content.

The Court held that Lycos qualified for the protections of the CDA.   As a website operator that made the Raging Bull website available, Lycos was a provider of an interactive computer service within the meaning of the CDA.  The content at issue was authored by third parties, enabling Lycos to meet the second of the Act’s prerequisites.

And finally, the claims sought to hold Lycos liable as a result of its role in the publication of those statements.  Thus, the cyberstalking claims were premised on the posting of the disparaging statements at issue on Lycos’ Raging Bull.com website.  Similarly, the securities fraud claim rested on the alleged use of such statements to manipulate plaintiffs’ stock price.  Said the Court:

We hold that, given the allegations in UCS’s complaint, liability for Lycos under either the Florida securities statute or the Florida cyberstalking statute would involve treating Lycos ‘as the publisher’ of ‘information provided by another information content provider.’  Thus, we affirm the district court’s ruling that both claims are barred by Section 230.

At bottom, held the Court, these claims impermissibly sought to hold defendant Lycos liable for its role in publishing third party content on its message boards.  Said the Court:

On the facts alleged, Congress intended that, within broad limits, message board operators would not be held responsible for the postings made by others on that board.  No amount of artful pleading can avoid that result.

The Court also dismissed plaintiffs’ federal cyberstalking claim, advanced under 47 USC Section 223, because this statute does not provide for a private right of action.

Finally, the First Circuit dismissed the trademark dilution claim plaintiffs advanced against Lycos under Fla. Stat. Section 495.151.  This claim was premised on the use of plaintiff’s trademark in the name of the message board that contained the comments critical of plaintiffs at issue.  While not endorsing the nominative fair use doctrine announced by the Ninth Circuit in New Kids on the Block, the Court held that the use of plaintiffs’ mark to accurately describe a message board that contained comments critical of plaintiffs was not an actionable use of plaintiffs’ mark under Florida’s dilution statute.  “[T]rademark law should not prevent Lycos from using the “UCSY” mark to indicate that a particular company is the subject of a particular message board.”

The Court also held that such a use of plaintiffs’ mark was not a commercial use of the mark, even if the message board contained advertisements.  Said the Court:

It certainly appears from the complaint that Lycos derives advertising revenues from the use of its web sites, including Raging Bull, and that Lycos is a commercial venture.  This does not imply, however, that Lycos’ use of the UCSY trade name is ‘commercial’ in the relevant sense under trademark law.

As a result, the Court dismissed plaintiffs’ Florida state law trademark dilution claim.

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