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On Friday, the Northern District of California upheld YouTube defendant’s motion to dismiss a lawsuit filed by Ripple Labs, a “corporate blockchain company,” and its CEO Bradley Garlinghouse. The complaint concerned alleged trademark infringement, misappropriation of identity and publicity rights and unfair competition law claims against YouTube and was filed with permission to edit.
Initially, plaintiffs filed a lawsuit in April against YouTube for allowing scammers to impersonate their CEO using their trademarks and publicly available content from CEO Garlinghouse, including interviews, in order to make it look like the scammers were Ripple. The scammers then engaged in a fraudulent scheme involving the plaintiffs’ cryptocurrency called XRP.
Plaintiffs are suing YouTube for allegedly failing to adequately address the scam. They alleged contributory trademark infringement under the Lanham Act, the misappropriation of Garlinghouse’s identity and its right to advertise in violation of California law, as well as violations of the California Unfair Competition Act (UCL) based on the trademark and state law allegations. In September, Ripple Labs filed an objection to YouTube’s motion to dismiss it arguing that YouTube had violated and ignored takedown notices submitted by plaintiffs.
In particular, YouTube moved to reject “(1) the Lanham Act claim in part on the grounds that the plaintiffs did not plausibly invoke its knowledge of the trademark infringement, and (2) state law argues which is immune from liability under § 230 (c) (1) of the Communications Decency Act (CDA) … because it is not a content provider. “
The court noted that plaintiffs “allegedly notified YouTube of the trademark infringement via takedown notices and allege that YouTube” ignored or failed to address many of the[ir] takedown requests. “Therefore, the court said that these claims” relate to the delay in killing offensive channels (not a failure to do so entirely). “For example, plaintiffs claimed that YouTube took about two months to respond to some takedown notices, three weeks and one week for others. As a result, the court ruled that “[t]emits[,] so[,] is whether the plaintiffs’ allegations of YouTube’s delay in removing the scam and the hijacked channels – which used Ripple’s brand content – plausibly support a claim for contributing to the trademark infringement. ”
According to the order, “[t]o be responsible for the trademark infringement, a defendant must have (1) intentionally induced the main infringer to infringe, or (2) continued to supply an infringing product to a counterfeiter knowing that the infringer is tagging incorrectly the particular product supplied. “However, the court held that”[u]in these cases, plaintiffs have plausibly not invoked a claim for contributing to the trademark infringement. “Specifically, the first allegation regarding the contributory infringement and YouTube’s response to takedown notices, but the alleged misuse of Garlinghouse’s identity is not a trademark infringement claim. The court found that the “plaintiffs complaint combines the two categories. Plaintiffs must identify their trademark infringement complaints (related to a specific YouTube user’s account) and failure to YouTube response or delayed response to specific complaints. Without a delineation between the two categories, the court cannot assess whether YouTube was simultaneously aware of the misconduct and continued to provide its services. ” Therefore, the court cannot reasonably infer that YouTube is responsible for this alleged conduct. In addition, the court added that the delays, including one week, several weeks and two months, “are shorter than the delays that the courts have generally found liable for legal action.” Furthermore, the court said that, based on the information, YouTube was not required to deal with the scam in advance. The court said that because the plaintiffs do not sufficiently distinguish between the notices, they are not plausibly invoking a complaint because the court cannot determine whether YouTube had constructive knowledge of the scam.
The court ruled that YouTube is immune under Section 230 of the Communications Decency Act from state vindication, Garlinghouse’s identity misappropriation and its right to publicity, and California UCL violation. Also, because there is no federal claim, the court has no additional jurisdiction over state claims.
Ripple Labs is represented by Boies Schiller & Flexner. YouTube is represented by Wilson Sonsini Goodrich & Rosati.
