YouTube Defeats Lawsuit Over Cryptocurrency Scam-Ripple v. YouTube – Technology & Marketing Law Blog

Ripple Labs developed a cryptocurrency known as XRP. Scammers phished verified YouTube accounts after which used the hijacked accounts to publish YouTube movies–seemingly from Ripple–inducing shoppers to switch their XRP, what place they had been stolen. YouTube allegedly responded to takedown notices slowly. Ripple Labs and its CEO Brad Garlinghouse (of the Yahoo Peanut Butter manifesto infamy) then sued YouTube for contributory trademark infringement, publicity rights violations, and 17200. The court docket dismisses the claims.

Contributory Trademark Infringement. The court docket says that the grievance doesn’t adequately distinguish between Ripple’s trademark NOCIs and publicity rights NOCIs. That must be simple sufficient to repair in an amended grievance.

The court docket additionally says YouTube’s alleged delays in responding–“a week, several weeks, around two months”–was shorter than different courts had discovered actionable. Cite to Spy Phones v. Google. Undoubtedly, two months of delay, and even a number of weeks, can be far too lengthy to retain eligibility for the DMCA secure harbor. Apparently, the extra turnaround time displays structural variations between on-line marketplaces and YouTube. The court docket explains:

it is perhaps cheap to carry eBay to a decent time interval to discontinue its providers to somebody promoting faux Tiffany or Louis Vuitton merchandise: eBay and its distributors have a enterprise relationship, and eBay can terminate a vendor simply. eBay additionally derives income from the connection. And if eBay delays an investigation and a takedown, there is perhaps truth points about whether or not it purposefully or unjustifiably did so, presumably for self-serving causes….

An on-line social-media platform’s delay in investigating and eradicating scams just like the one right here just isn’t clearly analogous to {the marketplace}’s delay. Investigating a rip-off — involving phishing and hijacked person credentials — is (at minimal) totally different and certain extra sophisticated. For one, YouTube doesn’t management a hacker in the identical means {that a} market controls a vendor’s means to promote on the platform. Also, YouTube’s investigation entails reliable YouTube customers and a persistent, evolving rip-off creating “more victims by the day.” Its investigation differs in scope from {the marketplace}’s investigation of its vendor. The affect of discover (or within the language of the instances, “contemporary knowledge” of infringement) is totally different too. When a market is aware of about infringing merchandise, it will possibly terminate the infringing vendor. The solely factor that issues is discover of the trademark infringement. But when YouTube learns about hacked content material that features trademarked content material, the scope of its inquiry is also about safety of information and its customers and eliminating the rip-off.

Moreover, YouTube doesn’t present providers to or revenue from a hacker in the identical means {that a} market supplies providers to and income from a vendor. In some methods, it too is a sufferer of the hijacking. Its revenues from advertisements usually are not clearly equal to revenues ensuing from a enterprise contract between a market and a vendor.

Section 230. Section 230 eliminates the publicity rights and 17200 claims as a result of they’re primarily based on the rip-off movies uploaded by third events. The plaintiffs claimed that YouTube contributed to the rip-off as a result of it had verified the YouTube channels. The court docket mentioned the rip-off turned on the movies, not the verification. The court docket additionally dismissed a frivolous argument that exhibiting the variety of video views constituted content material improvement.

Interestingly, the court docket doesn’t deal with Section 230’s applicability to publicity rights claims; it simply silently assumes that Section 230 applies. This is smart as a result of the court docket is ruled by the 9th Circuit’s ccBill case, which says that Section 230 applies to state IP claims–like publicity rights. See additionally the Hepp case.

Case quotation: Ripple Labs Inc v. YouTube LLC, 2020 WL 6822891 (N.D. Cal. Nov. 20, 2020). The complaint.