Copyright Law and Section 230 Support Ripoff Report, But Its Browsewrap Agreement Is Unconscionable

by Paul Alan Levy

Cases involving Xcentric Ventures, the company that owns Ripoff Report, frequently push the boundaries of the legal protections that are provided for the hosts of online expression, and we have often come to that company's defense even though some aspects of its business model leave something to be desired.  A brief that we filed today is no exception. Public Citizen joined together with the Electronic Frontier Foundation (and with the active participation of the Cyberlaw Clinic at the Berkman Center for Internet and Society) to file an amicus brief in a First Circuit case where a Boston lawyer tried, unsuccessfully, to find ways around both section 230's immunity and the longstanding stance of Ripoff Report never to take down critical reviews.  We agree with Xcentric in several respects vis-a-vis the plaintiff, but we take serious exception to a provision of the Terms of Service that it imposes on its users.

The Underlying Controversy

In this case, a very nasty review was posted about Boston lawyer Richard Goren; apparently the review was posted by a someone against whom Goren had represented a client in successful litigation.  Claiming that this single negative review caused both case referrals and inquiries from prospective new clients to dry up, Goren and his law firm (Small Justice) brought suit in Massachusetts state court, claiming defamation.  As best as I can tell from the record, the poster was no longer even living in Massachusetts by this time, but Goren served him at his old address, and eventually obtained a default judgment while promising that he would not seek any damages against the poster.  All he wanted, he said, was to get the review taken down.  To accomplish that, Goren used the judgment to execute on the copyright that the poster owned in his own review.  

Goren and his firm then sued Xcentric (the owner of Ripoff Report) in federal court alleging for copyright infringement, among other grounds.  Xcentric defended against the copyright claim both by arguing that, in the course of posting the review, the poster had agreed to give Xcentric an “exclusive license” as part of Xcentric’s browsewrap agreement (hence, the poster had no copyright interest to be seized), and by arguing that section 201(e) of the Copyright Code forbids involuntary transfers of copyright.   The trial court granted summary judgment on both grounds.  

In subsequent rulings, the trial judge has found the copyright infringement claim to be sufficiently baseless to warrant an award of attorney fees.  Goren also came up with several other arguments, which he repeats in his appellate brief, that we had no room to address in our amicus brief; and he persisted in demanding reconsideration of the summary judgment, which led to additional rounds of briefing. The attorney fee judgment against him at this point is well into the six figures.  Several of the district court documents are hosted here.  Eric Goldman posted a substantial discussion of the trial court decision.

Given the nature of the criticism to which Goren was subjected on Ripoff Report, it is easy to sympathize with his displeasure at the fact that he cannot get the review taken down (although, in the end, his litigation was overkill; indeed, he displayed the wisdom of that old saying about lawyers who represent themselves).  Moreover, there are aspects of Ripoff Report’s business model that can make it hard for the dispassionate observer to sympathize with its activities.  Its general policy forbidding removal has two main exceptions:  targets of criticism can pay for an “arbitration program” under which specific false statements can be redacted, and the much-more-expensive “Corporate Advocacy Program” through which criticisms can be buried in an ocean of praise. 

Still, the problem with Goren’s approach is that, if it succeeded, any dissatisfied target of criticism could employ it, and the success of that strategy would be wholly independent of the merits of the objections to the criticism, especially in a state, like Massachusetts, without a strong anti-SLAPP statute.

Arguments on Appeal

Our amicus brief urges affirmance of the summary judgment but to a large extent for reasons different from those presented by the parties. We begin by reminding the First Circuit why section 230's immunity for review-hosting sites plays such an important role in protecting the ability of ordinary people to speak out online against abuses by powerful figures who would like nothing more that to force the removal of criticisms by bringing or even threatening litigation and making it too expensive to keep critical speech online. (Xcentric’s appellate brief presents some sound policy explanations for its non-removal policy as well as for section 230's protection of that stance).   Next, we explain our agreement with Xcentric’s contention that the copyright code supported its summary judgment, but not only because of the statutory rule against involuntary transfer; we suggest several other bases for concluding that the use of copyright law to suppress criticism goes against the grain of copyright law.  

But at the same time, we have harsh words for Xcentric’s tricky browsewrap agreement, which uses the terminology of “exclusive license” to seize the copyright in its users’ complaints about “ripoffs.” I think it is fair to assume that even if posters were to look at the terms of service before clicking a box that agrees to the terms, very few of them would likely understand that the “exclusive license” means giving up the right to post those same criticisms elsewhere.  In lay terms, the terms of service are themselves a ripoff.  The brief, however, puts this more politely in terms of the way Arizona law treats contracts of adhesion.   (Interestingly, having learned that we would be arguing as amici against its exclusive license, Xcentric has urged the Court of Appeals not to reach that issue, rather than defending its browsewrap agreement on the merits).

Although I played a lead role in writing part of the brief and assembling the pieces, this was a true collaboration among the Litigation Group, the Berkman Center, and EFF; the biggest problem was that there was so much to say about each of the subjects that we wanted to address in the brief and only 7000 words in which to say it.  I  have never been a fan of writing briefs by committee but this brief certainly benefited from the contributions of three different litigating groups.

EFF has blogged about the case here; the Cyberlaw Clinic blogged it here.

And Xcentric's comment today indicates that to address our concern about the adverse impact of its copyright transfer, it is revising the adhesion contract that it imposes on users to provide that the posters have a perpetual license to post their complaints elsewhere.