GUCCI AMERICA, INC.,
Plaintiff,
-against-
HALL & ASSOCIATES, DENISE HALL, and MINDSPRING ENTERPRISES, INC.,
Defendants.
00 Civ. 549 (RMB)
DECISION AND ORDER
Plaintiff Gucci America, Inc. (“Plaintiff” or “Gucci”) filed this action against defendants Hall & Associates and Denise Hall (together, “Hall”) and Hall’s Web page hosting service, Mindspring Enterprises, Inc. (“Mindspring” and, together with Hall, “Defendants”) [FN1] asserting claims for trademark infringement, false designation of origin and false descriptions and representations, and unfair competition. Plaintiff also asserts a claim for breach of a prior settlement agreement, dated on or about June 1, 1997 (the “Settlement Agreement”), between Hall and Gucci.[FN2] Plaintiff seeks injunctive relief, damages and costs. Mindspring now moves to dismiss Plaintiff’s claims pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure (“Fed. R. CiV. P.”).[FN3] For the reasons stated below, Mindspring’s motion is denied.
I. Background
Plaintiff owns the trademark and trade name “GUCCI” which is utilized on and in connection with various articles of jewelry, fashion accessories, wearing apparel and related services (the “Gucci Trademark”). (Compl. 4.) Mindspring, an Internet Service Provider (“ISP”), provides Web page hosting services to Hall,[FN4] (at least) at the Uniform Resource Locator(“URL)[FN5] www.goldhaus.com (the “goldhaus website”). (Id. 3C.)[FN6] By e-mail communications dated-March 26, 1999 and March 27. 1999. Mindspring alledgedly was twice notified by Plaintiff that Hall was using Mindspring’s services to aid in acts of trademark infringement and unfair competition, including the advertising of jewelry on the goldhaus website which bore (and infringed) the Gucci Trademark. (Id.) Plaintiff alleges that, despite the emails, Mindspring continued to permit Hall to use Mindspring’s Internet services to infringe Plaintiff’s trademark rights, with actual knowledge of, or in reckless disregard of, Plaintiff’s rights and Hall’s infringement. (Id.) “The activities of Mindspring … constitute willful and intentional infringement of plaintiff Gucci’s registered trademark, are in total disregard of plaintiff Gucci’s rights and were commenced and have continued in spite of Mindspring’s knowledge that the use of the Gucci Trademark or a copy or a colorable imitation thereof was and is in direct contravention of plaintiff Gucci’s rights.” (Id. 33.)
Plaintiff asserts claims against Mindspring for direct and contributory trademark infringement under Section 32(l) of the Trademark Act of 1946 (the “Lanham Act”), 15 U.S.C. 1114(l), false designations of origin and false descriptions and representations under Section 43(a) of the Lanham Act, 15 U.S.C. 1125(a), and trademark infringement and unfair competition under New York common law. (See Compl. 1, 18, 23, 31-35.) Mindspring’s instant motion is premised upon two grounds: (i) that the Communications Decency Act of 1996, 47 U.S.C. 230 (“Section 230″), immunizes Mindspring from liability for information posted (on the goldhaus website] by [Hall],” Mindspring’s Mem. at 3); and (ii) that “Plaintiff’s theory of trademark infringement is barred by the First Amendment,” (Id. at 10).
II. Standard of Review
“[A] complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Conley v. Gibson, 355 U.S. 41, 45-46 (1957). “In reviewing a (Fed. R. Civ. P.) 12(b)(6) motion, this Court must accept the factual allegations of the complaint as true and must draw all reasonable inferences in favor of the plaintiff.” Bernheim v. Litt, 79 F.3d 318, 321 (2d Cir. 1996) (citing Hernandez v. Coughlin, 18 F.3d 133, 136 (2d Cir.), cert. denied, 513 U.S. 836 (1994)). The movant’s burden is very substantial, as “[t]he issue is not whether a plaintiff is likely to prevail ultimately, ‘but whether the claimant is entitled to offer evidence to support the claims.’” Gant v. Wallingford Bd. of Educ., 69 F.3d 669 (2d Cir. 1995) (quoting Weisman v. LeLandais, 532 F.2d 308, 311 (2d Cir. 1976) (per curiam)). In sum, “[t]he motion to dismiss for failure to state a claim is disfavored and is seldom granted.” Bower v. Weisman, 639 F. Supp. 532, 539 (S.D.N.Y. 1986) (citing Arfons v. E.I. Dupont de Nermours & Co., 261 F.2d 434,435 (2d Cir. 1958)).
III. Analysis
A. Mindspring Is Not immune From Plaintiff’s Claims
As Mindspring acknowledges in its motion papers, the interpretation of Section 230 as applied to the (intellectual property) facts presented here is an issue of first impression. (See Mindspring’s Mem. at 6.) Mindspring argues that Section 230(c)(1) “immunizes [it] from liability for information posted [on the goldhaus website] by [Hall].” (Mindspring’s Mem. at 3.) Section 230(c)(1) provides: “No 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.” 47 U.S.C. 230(c)(1). Section 230(f)(2) defines “interactive computer service” as “any information service, system, or access software provider that provides or enables computer access by multiple users to a computer server, including specifically a service or system that provides access to the Internet and such systems operated or services offered by libraries or educational institutions.” Id. 230(f)(2). Section 230(f)(3) defines “information content provider” as “any person or entity that is responsible, in whole or in part, for the creation or development of information provided through the Internet or any other interactive computer service.” Id. 230(f)(3).
Plaintiff does not dispute that Mindspring, as an ISP, is an “interactive computer service.” (See Compl. 3C.) Moreover, the complaint clearly identifies Hall as the “information content provider.” (See Compl. 3C, 14-16.) Rather, Plainfiff argues that Mindspring is not immune under 230(c)(1) from Plaintiff’s claims because of the language of Section 230(e)(2), (see Pl.’s Mem. at 3-4): “Nothing in this section shall be construed to limit or expand any law pertaining to intellectual property.” 47 U.S.C. 230(e)(2). The “law[s] pertaining to intellectual property”, under which Plaintiff contends that Mindspring is liable, are “a straightforward application of long-established printer-publisher liability and contributory infringement under the Lanham Act”, (Pl.’s Mem. at 14). The Court believes that the pivotal issue for consideration here is whether Plaintiff’s complaint would withstand a motion to dismiss even in the absence of 230. The Court believes that the answer to this question is “yes.”[FN7]
1. Plain Language Of Section 230(e)(2)
“It is axiomatic that the plain meaning of a statute controls its interpretation . . .” Lee v. Bankers Trust Co., 166 F.3d 540, 544 (2d Cir. 1999) (citing Greenery Rehabilitation Group-Inc. v. Hammon, 150 F.3d 226, 231 (2d Cir. 1998)). “[W]hen looking at its language, a court should presume that the statute says what it means.” Aslanidis v. United States Lines, Inc., 7 F.3d 1067, 1072-73 (2d Cir. 1993) (citing Connecticut Nat’l Bank v. Germain, 503 U.S. 249, 254 (1992)); accord United States v. Piervinanzi 23 F.3d 670, 677 (2d Cir. 1994). “Unless otherwise defined, individual statutory words are assumed to carry their ordinary, contemporary, common meaning.” Hammon, 150 F.3d at 231 (quotation and citations omitted); accord Perrin v. United States, 444 U.S. 37, 42 (1979). “Indeed, when the words of a statute are unambiguous, this first cannon is also the last [and] judicial inquiry is complete”, Piervinanzi, 23 F.3d at 677 (quotations and citations omitted).
Section 230(e)(2) unambiguously constrains the Court to construe Section 230(c)(1) in a manner that would neither “limit or expand any law pertaining to intellectual property.” 47 U.S.C. 230(e)(2). Thus, the inquiry involves the application of existing intellectual property law. Under existincy intellectual property law, publishers may, under certain circumstances, be held liable for infringement. See 15 U.S.C. 1114(2)(A)(B); see also Centrury 21 Real Estate Corp. of Northern Illinois v. R.M. Post, Inc., No. 88 C 0077,1988 WL 84741 (N.D. Ill. Aug. 9, 1988) (denying motion to dismiss where yellow pages’ publishers were alleged to have infringed by listing trademark of (former) licensee who no longer had right to use trademark). Moreover, the United States Supreme Court has held, under the doctrine of contributory infringement, that “if a manufacturer or distributor … continues to supply its product to one whom it knows or has reason to know is engaging in trademark infringement”, the manufactum or distributor itself may held be liable fbr infringement. Inwood Labs, Inc. v. Ives Labs, Inc., 456 U.S. 844, 854 (1982); see also Religious Technology Ctr. v. Net-Com Online Communication Servs., 907 F. Supp. 1361, 1375 (N.D. Cal. 1995) (holding that an ISP with knowledge of the infringement may be held liable for contributory copyright infringement). Immunizing Mindspring from Plaintiff’s claims, therefore, would “limit” the laws pertaining to intellectual property in contravention of 230(e)(2). See Mirriam-Webster’s Collegiate Dictionary 676 (10th ed. 1998) (defining “limit,” when used as a verb, to mean “to restrict the bounds or limits of “).[FN8] The plain language of Section 230(e)(2) precludes Mindspring’s claim of immunity.
Although Mindspring recognizes the “appeal” of the Court’s reading of Section 230(e)(2), (Mindspring’s Mem. at 6), Mindspring nevertheless argues that immunity from Plaintiff’s claims “would not ‘limit’ any law pertaining to intellectual property, since liability for trademark infringement has never previously been imposed on an ISP in this sitmtion”, (id.). Mindspring Rather contends that the inclusion of the words “or expand” in Section 230(e)(2), and the omission of “or expand” from the other subsections of Section 230(e),[FN9] suggests that Mindspring’s interpretation is the “most reasonable interpretation” because “[o]therwise, the language ‘or expand’ has no purpose.” (Mindspring’s Reply at 4.)
The Court respectfully disagrees for the reason that Mindspring’s reading is in conflict with the plain language of the statute. Mindspring argues that Section 230(e)(2) directs courts to leave “the state of the law … as it was when the law was enacted – neither ‘limited’ nor ‘expanded.’” (Mindspfing’s Reply at 3.) However, nowhere does Section 230 state that the laws to which it refers are, as Mindspring suggests, limited to the intellectual property laws as they existed in 1996.[FN10] The Court declines to incorporate or read into the statute a temporal limit. See Grin v. Shine, 187 U.S. 181, 186 (1902) (“[W]e are not bound to import words into the statute which are not found there….”), cited with approval in Austin v. Healey, 5 F.3d 598, 602 (2d Cir. 1993) (declining to import a special delegation requirement into a statute).
The Court rejects the suggestion that the words of Section 230(e)(2) are ambiguous and, therefore, finds no need to resort to other cannons of statutory construction. See Lee, 166 F.3d at 544 (‘Legislative history and other tools of interpretation may be relied upon only if the terms of the statute are ambiguous.”) (citing Aslanidis, 7 F.3d at 1073). [FN11]
Although the plain meaning of Section 230(e)(2) ends the instant inquiry with respect to Mindspring’s motion to dismiss, the Court explains below its disagreement with Mindspring’s remaining arguments. See Hammon, 150 F.3d at 233 (“Although our review of the plain meaning of [the statute] ends our inquiry, we note that we do not believe that [the related regulation] or its history provide any support for the [appellee's] conclusion . . .”).
2. Case Law
Mindspring contends that the case law interpreting Section 230 – but not specifically subsection (e)(2) – supports its’ interpretation. (See generally Mindspring’s Mem. at 5-10.)[FN12] Mindspring quotes the Court of Appeals in Zeran v. America Online, Inc., “the plain language of Section 230 ‘creates a federal immunity to any cause of action that would make service providers liable for information originating with a third-party user of the service.’” 129 F.3d 327, 330 (4th Cir. 1997) (See Mindspring’s Mem. at 5 (emphasis in original).) The quoted language is not apposite here. In Zeran, plaintiff brought a negligence action against America Online (“AOL”) alleging that AOL had “unreasonably delayed in removing defamatory messages posted by an unidentified third party, refused to post retractions of those messages, and failed to screen for similar posting thereafter.” 129 F.3d at 328. The District Court “granted judgment for AOL on the grounds that [Section 230] bars Zeran’s claims.” Id. In affmning, the Court of Appeals stated:
Zeran seeks to hold AOL liable for defamatory speech initiated by a third party….
By its plain language, 230 creates a federal immunity to any cause of action that would make service providers liable for information originating with a third party user of the service. Specifically, 230 precludes courts from entertaining claims that would place a computer service provider in a publisher’s role. Thus, lawsuits seeking to hold a service provider liable for the exercise of a publisher’s traditional editorial functions–such as deciding whether to publish, withdraw, postpone or alter content–are barred.
The purpose of this statutory immunity is not difficult to discern. Congress recognized the threat that tort-based lawsuits pose to freedom of speech in the new and burgeoning Internet medium. The imposition of tort liability on service providers for the communications of others represented, for Congress, simply another form of intrusive government regulation of speech ….
Congress made a policy choice … not to deter harmful online speech through the separate route of imposing tort liability on companies that serve as intermediaries for other parties’ potentially injurious messages.
Id. at 330-31 (emphasis added). The Zeran quotation, in context, refers to defamation and other forms of tort liability. The instant claims are grounded in the law of intellectual property and, therefore, do not, on a motion to dismiss, implicate Section 230 immunity.[FN13] Mindspring also argues that Lockheed Martin Corp. v. Network Solutions, Inc., 985 F. Supp. 949 (C.D. Cal. 1997), aff’d, 194 F.3d 980 (9th Cir. 1,999), “rejected the application of contributory [trademark] infringement in the Internet context.” (Mindspring’s Mem. at 9.) Plaintiff counters that Lockheed Martin held only that a “domain name registrar could not be held liable [for trademark infringement) because its involvement is limited to the registration of the domain name and not its use in commerce . . ." Id. at 13.) "Indeed," argues Plaintiff, "Lockheed Martin contrasted the domain name registrar's role with that of ISPs and indicated that the latter may well be liable for contributory trademark iriftingement." Id. at 14.)
The Court agrees that Lockheed Martin does not foreclose the possibility that ISPs may be liable for contributory trademark infringement:
(Network Solutions, Inc.'s] role in the Internet is distinguishable from that of an Internet service provider whose computers provide the actual storage and communications for infringing material, and who therefore might be more accurately compared to the flea market vendors in [Fonovisa Inc. v. Cherry Auction, Inc., 76 F.3d 259 (9th Cir. 1996)) and Hard Rock Cafe Licensing Corp. v. Concession Servs., Inc., 955 F-2d 1143 (7th Cir. 1992)].[FN14]
985 F. Supp. at 962. Moreover, in a footnote to the above passage, reprinted in part below, the District Court specifically described Section 230 as providing “tort immunity”, and distinguished claims asserted under the law of intellectual property:
The Court notes, however, that the tort law analogy used in Fonovisa and Hard Rock probably would not apply to Internet service providers any better than it applies to NSI. … See Zeran v. America Online, Inc., 129 F.3d 327, 330-31 (4th Cir. 1997) (noting the Congress created a tort immunity for Internet service providers in [Section 2301 ... ); but see [Section 230(e)(2)] (providing that the tort immunity does not Unit or expand any law pertaining to intellectual property).
985 F. Supp. at 962 n.7 (emphasis added).[FN15]
Mindspring suggests that certain copyright law developments, for which “[t]here have been no comparable developments in the area of trademark law,” (Mindspring’s Mem. at 8), support its contention that “immunizing Mindspring under Section 230 does not Emit existing trademark law in any way,” (id. at 10.) Specifically, Mindspring argues that the principles of Religious Technology Ctr. v. Netcom On-Line Communication Serys., Inc., 907 F. Supp. 1361 (N.D. Cal. 1995) “were incorporated into statutory law when Congress adopted … the Digital Millennium Copyright Act [of 1998]” (“DMCN) (Mindspring’s Mem. at 8).[FN16] Mindspring concludes that Congress, having had the opportunity (when enacting the DMCA) to alter the extent to which ISPs may assert statutory immunity from trademark infringement, “has not done so.” (Id. at 10.)
The Court respectfully disagrees with Mindspring’s conclusion and finds that Congress’ enactment of the DMCA — pertaining only to copyright infringement — two years after Section 230 was passed, lends further support to the proposition that Section 230 does not automatically immunize ISPs from all intellectual property infringement claims. To find otherwise would render the immunities created by the DMCA from copyright infringement actions superfluous. See Lojuk v. Johnson, 770 F.2d 619, 623 (7th Cir. 1985) (affirming District Court where interpretation of statute as providing absolute immunity would render superfluous a narrower immunity authorized in a later added subsection of the statute).
3. Legislative History
