Under § 230 of the Communications Decency Act, “[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” This allows organizations publishing online reviews to avoid being held liable for defamation when one of their users posts a defamatory review. Because § 230 protects service providers from liability even after they have notice, they have no incentive to remove defamatory reviews and the victim of the review is left with little recourse – even suing the original author of the review will not stop the harm caused by the review.
Though § 230 provides protection for service providers, it also contains a carve-out for intellectual property. Section 230(e)(2) states, “Nothing in this section shall be construed to limit or expand any law pertaining to intellectual property.” Rather than being protected under § 230, service providers are granted a safe harbor from copyright infringement under § 512(c) of the Digital Millennium Copyright Act (DMCA) of 1998. The pivotal difference between § 512(c) and § 230 is that, unlike § 230, § 512(c) requires service providers to remove infringing content once they receive notice.
If courts continue to grant assignment of the copyright for defamatory posts, it could provide an equitable solution to the problem posed by the § 230 safe harbor. Service providers would remain immune to defamation liability, avoiding the chilling effect on Internet speech that concerned the court in Zeran, while giving the victims of online defamation a means of forcing service providers to remove the offending speech once it has been proven defamatory in court, avoiding any further reputational harm.
While this approach may seem to provide an equitable solution to the problem caused by § 230, it is not without its problems. Section 201(e) prohibits any government body from transferring the ownership of or exclusive rights to a copyrighted work. 17 U.S.C. § 201(e). In 2011, the S.D.N.Y. rejected an Amended Settlement Agreement regarding Google’s digitization of books, citing, among other things, concerns that the ASA would violate § 201(e) as it amounted to a court approving the involuntary transfer of the copyright on orphaned books. In that opinion, Judge Chin stated, “the notion that a court-approved settlement agreement can release the copyright interests of individual rights owners who have not voluntarily consented to transfer is a troubling one.” Though legislative history for § 201(e) suggests that it does not apply to certain legal proceedings like bankruptcy and foreclosure, it likely prohibits the involuntary transfer of copyrights as a defamation remedy.
Furthermore, when users post content online, the terms of service for the websites they use typically require them to agree to irrevocable licenses on the content submitted. For example, Ripoff Report, the website at the center of the Goren case includes language in their terms of service that states users grant “an irrevocable, perpetual, fully-paid, worldwide exclusive license to use” the content submitted. Mr. Goren is alleging that Ripoff Report violated the publication right of the post when it altered the date stamp on the post to avoid its Google ban. Since Ripoff Report has a license to use the content, this may not be a winning argument unless the license granted is invalidated.
There is a tension here between what seems like the equitable solution (removing the defamatory content) and the letter of the law. While § 230 provides a much-needed safe harbor for service providers, it ignores the fact that victims of defamation are often left without adequate remedy. The content is often posted by anonymous users who are difficult to track and may not be able to compensate the victim, particularly when the defamation caused commercial harm as with Mr. Goren. This is only exacerbated when service providers refuse to take down the offending content, leaving plaintiffs no better off than if they had never sued in the first place. This leads to cases like Goren in which attorneys and judges will resort to legal gymnastics in order to make the victim whole. As we can see with the § 201(e) restriction, this brings in additional issues that simply make the process more costly for all parties. If more cases like this start to crop up, it may cause a movement to alter § 230 to be more like the § 512(c), under which service providers would be required to remove defamatory content once they had actual notice of the content, though this could lead to abuse similar to meritless DMCA takedowns. Though changing § 230 to more closely resemble § 512(c) would not be perfect, it might make it easier and less costly for victims of online defamation to be made whole.
Zeran v. America Online, Inc., 129 F.3d 327, 332 (4th Cir. 1997) (“The simple fact of notice surely cannot transform one from an original publisher to a distributor in the eyes of the law. To the contrary, once a computer service provider receives notice of a potentially defamatory posting, it is thrust into the role of a traditional publisher. The computer service provider must decide whether to publish, edit, or withdraw the posting. … Liability upon notice would defeat the dual purposes advanced by § 230 of the CDA. Like the strict liability imposed by the Stratton Oakmont court, liability upon notice reinforces service providers’ incentives to restrict speech and abstain from self-regulation. … Thus, like strict liability, liability upon notice has a chilling effect on the freedom of Internet speech.”).
 “A service provider shall not be liable… if… upon notification of claimed infringement as described in paragraph (3), [it] responds expeditiously to remove, or disable access to, the material that is claimed to be infringing or to be the subject of infringing activity.” 17 U.S.C.A § 512(c)(1)(C).
Author’s Guild v. Google, Inc., 770 F.Supp.2d 666, 681 (S.D.N.Y. 2011).
 H.R. Rep. No. 94-1476, at 124 (1976) (“Traditional legal actions that may involve transfer of ownership, such as bankruptcy proceedings and mortgage foreclosures, are not within the scope of this subsection; the authors in such cases have voluntarily consented to these legal processes by their overt actions-for example, by filing in bankruptcy or by hypothecating a copyright”)
Bankruptcy and foreclosure are not covered by the provision because they are voluntarily entered into by the copyright owner, unlike a defamation suit. See, 3 Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 10.04 (Section 201(e) does “not inhibit transfers of ownership pursuant to proceedings in bankruptcy and mortgage foreclosures, since in such cases the author, by his overt conduct in filing in bankruptcy, or hypothecating a copyright, has consented to such a transfer”); Howard B. Abrams, The Law of Copyright § 4.47 (The language of § 201(e) “suggests that a valid state court judgment against an author could not be enforced by a judicial lien on a copyright or any of the exclusive rights in a copyright that had not been subject to a prior transfer by the author”).
Andrew Moore is a J.D. candidate, ’15, at the NYU School of Law.