On The Case

Online publishers face tough choice after 2nd Circuit refuses ‘embedded links’ appeal

(Reuters) - The 2nd U.S. Circuit Court of Appeals is apparently not worried that the end of the Internet is nigh.

On Monday, the appellate court declined to take up an interlocutory appeal by online publishers, including Gannett and Time Inc, challenging a February 2018 ruling that they can be liable for copyright infringement when their stories embed links to unauthorized content.

The publishers’ brief requesting the appeal claimed U.S. District Judge Katherine Forrest of Manhattan threw the future of online communications into turmoil when she rejected 9th Circuit precedent from 2007 that shields publishers from responsibility for linked content. Her summary judgment ruling against the online publishers, according to their brief, “upends settled expectations and transforms conduct that occurs millions of times a day online into potential acts of copyright infringement.”

The brief quoted commentary predicting Judge Forrest’s decision would fundamentally change the way the Internet operates and cited the judge’s own opinion certifying the interlocutory appeal, which acknowledged the high stakes and legal importance of her ruling.

But none of that was enough to convince the 2nd Circuit to take the case, which it declined in a one-paragraph clerk’s order calling an immediate appeal “unwarranted.”

The appellate court’s refusal defied conventional wisdom, which assumed the 2nd Circuit would agree to hear a case that has generated so much controversy, said Kenneth Norwick of Norwick & Schad. Norwick represents Justin Goldman, the plaintiff suing Gannett and the other publishers for reproducing, without authorization, his digital snapshot of New England Patriots quarterback Tom Brady walking down a street in the Hamptons with several members of the Boston Celtics. (The photo was considered newsworthy because the Celtics were thought to have enlisted Brady in their efforts to recruit NBA All-Star Kevin Durant.) Norwick’s brief opposing interlocutory appeal attributed reaction to Judge Forrest’s decision to a “a largely hysterical (and false)” campaign by online publishers looking out for their own profits.

“We can only surmise what the 2nd Circuit was thinking,” when it rejected the appeal, Norwick said. “My own interpretation: They weren’t persuaded by the attacks on Judge Forrest’s opinion and predictions of the imminent death of the Internet.”

The odds are always against appellate courts granting interlocutory appeals, so we shouldn’t really be surprised the 2nd Circuit turned down the online publishers. Their request also faced a disposition obstacle: Even if the 2nd Circuit reversed Judge Forrest and ruled online publishers cannot be liable for embedding links that contain unauthorized, copyrighted material, Goldman would still have infringement claims against defendants that reproduced his photo directly instead of just through embedded links. An interlocutory ruling by the 2nd Circuit, in other words, wouldn’t definitively end the case.

But it’s also true that the 2nd Circuit may not have felt compelled to rush to fix the Internet because, well, it doesn’t look like the Internet is broken. New York federal courts have not been flooded with copyright infringement suits by content producers complaining about embedded links that contained unauthorized material in the five months since Judge Forrest’s decision. As the publishers’ brief pointed out, citing a 2017 Bloomberg story, photographers have recently filed an avalanche of copyright suits in New York – but that onslaught preceded Judge Forrest’s ruling in the Goldman litigation. The judge’s ruling may have prompted web publishers to be more cautious about embedding tweets and Instagram posts than they used to be when they could count on protections from that 9th Circuit precedent. But their brief didn’t have much evidence that Judge Forrest’s ruling has, at least so far, been as catastrophic as the direst commentary predicted.

So what should online publishers worried about liability for embedded links do now that the 2nd Circuit has ended their hope of a quick reversal of Judge Forrest’s ruling?

They’re down to two choices: settling with Goldman or continuing to litigate in the trial court, with no guarantee they’ll ever get to argue the embedded link issue at the 2nd Circuit. Judge Forrest rejected defense motions to dismiss in 2017, but, as she said in her 2018 decision on infringement and embedded links, the publishers can still move for summary judgment on their fair use and Digital Millennium Copyright Act defenses. They’re also looking to counter Goldman’s assertion that he did not authorize reproduction of his photo, which he posted on a private Snapchat thread. Discovery had been stayed during briefing on the interlocutory appeal but will presumably kick off after the 2nd Circuit rebuff.

If publishers win summary judgment on fair use or DMCA grounds, they won’t have an opportunity to appeal Judge Forrest’s ruling on liability for embedded links, except as a counterappeal. On the other hand, if they settle, they certainly won’t get to the 2nd Circuit.

Norwick told me he doubts all of the defendants will settle, though Goldman has reached agreements with four of the eight defendants originally accused of infringement via embedded links. When I asked if he thought defendants would be more likely to exit the case after the 2nd Circuit rejection of their appeal, he said, “They know my phone number.”

The defendants that sought interlocutory appeal are represented by Davis Wright Tremaine (Time Inc), Ballard Spahr (Gannett) Winston & Strawn (Oath Holdings), Dewey Pegno & Kramarsky (New England Sports Network) and Lebowitz Law Offices (Heavy Inc).