Who’s Your Drug Dealer? Snapchat and Section 230 Under Scrutiny

By: Caroline Dolan

While Snapchat may no longer feel as trendy as it once was, the social media platform is alive and well. However, the same cannot be said for all its adolescent users. Snapchat’s unique filters and features attract 406 million daily active users, but the app is being dubbed “a haven for drug trafficking” by grieving parents. Numerous parents are seeking justice for their children who used Snapchat to purchase drugs unknowingly laced with fentanyl. While Section 230 would normally immunize a social media platform from civil liability and be grounds for dismissal, a Los Angeles judge has denied Snapchat’s invocation of Section 230 immunity and overruled twelve of its sixteen demurrers. In other words, the judge has determined that the causes of action asserted by the Plaintiffs have merit and will continue through the litigation process. 

A Snapshot of Section 230 

The Communications Decency Act (“CDA”) of 1996 was passed in light of the internet’s rise and Congress’s desire to protect children from exposure to dangerous content, particularly pornography. However, out of fear that platforms would overly censor themselves to avoid violating the CDA, Congress passed the Internet Freedom and Family Empowerment Act, better known as Section 230. Section 230(c) governs the liability of providers of an “interactive computer service” and states that “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.” In other words, an “information content provider” like Twitter or Facebook cannot be held civilly liable for what you or your friend post. It also cannot be held liable for voluntarily moderating content in good faith. While Section 230 does not protect against federal crimes, ​​electronic communications privacy law, or intellectual property violations, it is still a wide-reaching shield and online platforms rarely hesitate to invoke it. 

The Suit Against Snap

Represented by the Social Media Victims Law Center, the Plaintiffs asserted that Snap’s product features and business choices resulted in the serious injury and foreseeable deaths of their children. The Plaintiffs alleged that Snap’s automatic message deletion, location mapping, and “quick-add” features create an inherently dangerous app and enable kids to connect with adult predators. The parents contend that Snap has been aware that the app is an “open air drug market,” yet failed to implement any meaningful changes to improve age and identity verifications or prevent foreseeable consequences. Notably, the Plaintiffs did not allege that Snap is liable for failing to eliminate or moderate the content of the third-parties selling drugs, but rather that the “feature-packed social media app” facilitates an unreasonably dangerous avenue for strangers to contact vulnerable adolescents. 

Snap demurred to all sixteen alleged causes of action and invoked general immunity under Section 230. It advocated for an extremely broad reading of the statute and asserted a “but for”/ “based on”/ “flows from” construction wherein, “if the alleged harm flows from the content provided by third parties, Section 230 applies.” In Snap’s view, it should be privy to Section 230 immunity because the Plaintiffs’ children would not have been injured but for the content of the third-party drug dealers.

The Ninth Circuit’s three-prong test established in Barnes v. Yahoo!, Inc. applies Section 230 immunity to “(1) a provider or user of an interactive computer service (2) whom a plaintiff seeks to treat, under a state law cause of action, as a publisher or speaker (3) of information provided by another information content provider.“ 

In Neville v. Snap, Inc., the judge agreed with Snap that as an (1) “interactive computer service,” Section 230 absolves it from liability as a (2) “publisher or speaker” of any (3) information posted by third-party users. However, the judge concluded that the Plaintiffs had not alleged that Snap was a “publisher or speaker.” Rather, the allegations centered on the purported unreasonably dangerous and defective product. The judge recognized the unsettled bounds of Section 230 but nonetheless found that the claims related to Snap’s product and business decisions were “independent … of the drug sellers’ posted content” and beyond Snap’s “incidental editorial functions” (e.g. choosing to publish, remove, or edit content), which Courts consistently have held as protected under Section 230.

Snapchat On The Docket

Section 230 does not have the same meaning or relevance as it did nearly forty years ago. Yet, it continues to tread through pressing issues related to AI technology, national security, and public health and safety. The Supreme Court has continued to sidestep these questions but may soon be forced to more clearly define this statute. Neville v. Snap, Inc. will seek to clarify the outer bounds of Section 230 as well as provide justice and solace to the victims’ families.

Bad Beat: Iowa Gambling Probe Allegedly Violated Student Athletes’ Constitutional Rights with Warrantless Geofence

By: Sam William Kuper

“I hope all of these athletes at Iowa (UI) and Iowa State (ISU) take the State of Iowa to the cleaners.” UI men’s wrestling coach Tom Brands did not mince words describing the recent fallout from actions taken by the Iowa Division of Criminal Investigation (DCI) against student athletes. Last year, over a dozen student athletes and students at UI and ISU were criminally charged and some were suspended by the NCAA under suspicion of illegal sports gambling. However, a recent motion by defendant Isaiah Lee, a former ISU football player, alleges that the  charges were a result of an unconstitutional “warrantless search.”

Initial Investigation

Back in May of 2023, the DCI initiated an investigation of UI and ISU student athletes suspected of sports gambling in violation of state and NCAA rules. 25 current or former UI and ISU athletes and student managers were charged because of the investigation. Many for “tampering with records”—an aggravated misdemeanor that carries a maximum sentence of up to two years in prison—for allegedly falsifying personal electronic sports wagering records by utilizing the accounts of others to place sports bets. 16 pleaded guilty, with most pleading guilty to the lesser charge of underage gambling. Some of those charged were subsequently suspended by the NCAA, with different punishments depending on whether their wagers were on their own games or that of other sports or schools. For example, Isaiah Lee faced permanent ineligibility for placing a bet against his own team in a game where ISU beat Texas 30-7.

Alleged “Warrantless Search”

Isaiah Lee’s January 22nd Motion to Compel outlines his version of the facts. First, it is important to understand that gambling companies such as FanDuel and DraftKings must verify the location of their mobile users to make sure they are in a jurisdiction where sports gambling is legal. They do so via the company GeoComply, who act as the “custodians of data and processing” on behalf of their customers.

In December of 2022, Special DCI Agent Brian Sanger was given access to GeoComply’s data visualization and data analytics tool, Kibana. He used the software tool to place a “Geofence”—a virtual fence on a desired geographic area that reveals data of users within that area—around an athletic facility at UI where access is restricted to athletes, coaches, and support personnel. After he found gambling apps were opened inside the geofence, he requested subpoenas to obtain identifying account and bet information—leading to criminal charges for the student athletes.

According to the motion, Sanger did not remember why he initiated the search, but that he was “concerned about things such as people infiltrating Iowa’s sports team to gain insider information or match fixing.” However, he apparently did so without “warrant[s], tips, complaints, or evidence that illegal gambling was occurring.” The purpose of the discovery motion is to compel the State to disclose the circumstances and communications surrounding how and why Sanger and the DCI came to be in use of Kibana, and the types of searches he performed with it. For context, GeoComply’s website states they only comply with data requests from law enforcement if it is “legally binding and valid.”

What is a Fourth Amendment regulated search?

The Fourth Amendment of the U.S. Constitution protects people from unreasonable searches and seizures by government actors (like Sanger). The modern “reasonable expectation of privacy” or “REP” test as to whether Fourth Amendment protections apply was stated in Justice Harlan’s concurrence in Katz v. United States (1967): (1) the person must have exhibited an actual (subjective) expectation of privacy; and (2) that expectation must be one that society is prepared to recognize as “reasonable.” If these requirements are met, then the Fourth Amendment applies and the government needs a warrant based on probable cause to search.

However, under the “third-party exposure doctrine,” a person has no legitimate expectation of privacy in what they knowingly expose to the public or third parties. For example, the Supreme Court has held that there is no REP in garbage left on the curb of your home for pickup. But this standard has been heavily controversial in the digital age, as modern consumers often “reveal a great deal of information about themselves to third parties”—such as Google, Facebook, and their cell phone providers. In the landmark case Carpenter v. United States (2018) a 5-4 court declined to extend this doctrine to tracking cell-site location information for longer than seven days—suggesting that users have a reasonable expectation of privacy in their location history despite its disclosure to parties like Google. In addition, the court held in Kyllo v. United States (2001) that “[w]here . . . the Government uses a device that is not in general public use, to explore details of the home that would previously have been unknowable without physical intrusion, the surveillance is a ‘search’ and is presumptively unreasonable without a warrant.” There, the government unconstitutionally used a thermal imaging device to scan the defendant’s home for heaters used in growing marijuana without a warrant. 

Did the student athletes have a REP?

The question of whether student athletes like Isaiah Lee are protected by the Fourth Amendment is complicated. While the first prong of the REP test is uncontroversially met, the second prong, along with the third-party exposure doctrine, raises many questions.

For example, what kind of location data was used? GeoComply’s website says they collect GPS, GSM, Wi-Fi, and IP Address data from the user’s device to verify location accuracy. Many universities, like UW, have a policy of turning over evidence of illegal activities on their network as soon as possible after detection. Thus, one would likely not have a REP of illegal activities while on UW’s network (however, UI does appear to have a greater level of privacy protection). But if, by chance, GeoComply only used GPS data, and the students were using solely their cellular network to access the gambling applications, there would likely be a stronger argument in favor of a REP.

With the alleged facts we have as of now, this case resembles Kyllo. The government used “a device that is not in general public use” (geofence software Kibana) “to explore details of the home that would previously have been unknowable without physical intrusion” (whether mobile phones in dorms and athletics facilities accessed gambling apps) without a warrant supported by probable cause. The debate is whether a public school’s dorms and athletics facilities should carry the same level of protection as a home.

What would be the remedy?

If the court finds Sanger’s use of the geofence software to be unconstitutional, the remedy would be the “exclusionary rule.” This would prevent the government from using the evidence gathered, along with any evidence gathered because of the original evidence (such as the identifying account information gathered because of the original geofence) in criminal prosecution. Thus, all the currently pending UI and ISU cases would likely be dismissed. But could the students then bring a civil action against Sanger under 42 U.S.C. 1983 for compensatory damages (such as lost wages from being suspended by the NCAA)? That is an entirely different question.

A Seat at the Table: USPTO’s Tribal Consultations Open Conversations Surrounding Indigenous Knowledge Rights 

By: Mackenzie Kinsella

Native American intellectual property (IP) has a history of being used without the permission and authorization from Indigenous communities. Indigenous IP encompasses traditional knowledge, genetic resources, and traditional cultural expressions. Traditional knowledge can include skills and practices concerning biodiversity, agriculture or health. Genetic resources could, for example, comprise of plants, seeds and medicine formulas. Traditional cultural expressions can involve folklore, symbols, designs, music, and performance

There is a complex and challenging relationship between IP systems and protection of Indigenous knowledge. Certain mechanisms for IP protection create gaps and barriers for Indigenous innovators. Often formal IP protections require the identification of specific individual creators and inventors, however, this “ownership” requirement stands in contrast with Indigenous conceptions of “ownership.” Additionally, Indigenous knowledge may not meet “originality” or “novelty” requirements under current IP standards. These gaps and barriers for Indigenous knowledge protection create opportunities for Indigenous knowledge to be used without consent from Tribes. 

Some examples of Indigenous IP being used without any tribal permission include, Stephanie Meyer’s use of the Quileute tribe’s origin story, which misappropriates and misrepresents Quileute traditions. Another example of misuse of Indigenous IP is Allergan’s use of the Saint Regis Mohawk tribe’s formula to make an eye drop drug, and transferring ownership of all of the Allergen’s eye drop patent back to the Tribe in order to attempt to attain sovereign immunity against specific legal challenges. These examples illustrate the difficulty and complexity that surrounds how Native Americans can protect their cultural properties. Current IP systems are not providing protection for Indigenous IP. However, the US Patent and Trademark Office (“USPTO”) is currently seeking input from Tribal Nations input regarding Indigenous IP.  

US Patent and Trademark Office Seeking Comments from Tribes

On October 24, 2023, the USPTO published two notices requesting input from Tribal Nations regarding protection of Indigenous IP. The USPTO intends to hold formal tribal consultations, which are two way government-to-government dialogues between Tribes and Federal agencies where Federal proposals are discussed. These tribal consultations are the first tribal consultations that the USPTO has held with Tribes. The USPTO’s proposed tribal consultations are to address any concerns regarding how the current IP system protects genetic resources and traditional knowledge that Tribes have. The consultations will be discussed with the World Intellectual Property Organization (WIPO), which is an organization that focuses on intellectual property world-wide and has been focused on protecting resources for Indigenous People. The WIPO Intergovernmental Committee’s negations could potentially lead to specific countries acceding to a treaty and creating legal instruments to protect genetic resources, traditional knowledge, and traditional cultural expression. These formal consultations have been applauded by the Native American Rights Fund (NARF) and the National Congress for American Indians (NCAI), the latter express how these consultations are necessary to move the United States federal government forward towards respecting Tribal Nations as the holders and guardians of these specific aspects of their cultures.

The First Notice by the USPTO offers 19 questions for Tribes and their representatives to provide their input on the IP protection of genetic resources and traditional knowledge. The First Notice comment period ended Monday January 22, 2024. The Second Notice by the USPTO involves hosting formal tribal consultations in January 2024. The USPTO alongside the WIPO, and other federal agencies will be focused on providing the USPTO insight into how Tribes foresee how the USPTO should make changes, and assist in defining what terms and phrases should be used

What Do These Formal Consultations Mean for Tribes? 

Previously, the USPTO has had a position of aligning with corporations and allowing access to Indigenous Intellectual Property at the expense of Indigenous communities. Now, the formal consultations, which will include federally recognized Tribal Nations, state-recognized Tribal Nations, and Native Hawaiians and their representatives, signal a shift in the USPTO’s previous position to one that recognizes the importance of protecting Indigenous People’s right to their intellectual and cultural property. The USPTO is interested in working with the WIPO to identify some soft laws regarding Indigenous knowledge. Some examples of this include publishing joint recommendations, best practices, and toolkits, which could be beneficial to Tribal Nations. However, Tribal organizations, like the Native American Rights Fund, have expressed that Indigenous peoples are concerned in how to ensure that these consultations are meaningful and produce an actual impact in the United States

In conclusion, these consultations provide hope for Indigenous communities to have the opportunity to express their concerns surrounding Indigenous knowledge. Furthermore, the ability to have a seat at this table, with the USPTO, signals a positive step towards ensuring the rights and heritage of Indigenous Peoples are safeguarded in the realm of IP. 

Financialization of Art: Off-the-Wall, or a Stroke of Genius?

By: Patrick Paulsen

One of the few universal features of human cultures is that of artistic expression. To express something creatively and aesthetically is fundamental. Just as fundamental perhaps, is the drive to bring such enterprises into the economic sphere. Of course, while some mediums of expression have long been intertwined with finance (such as plays, films, music), this blog seeks to explore the growing nexus between investing and markets for singular works of art, such as paintings, photographs, and sculptures.

Works of fine art are prohibitively expensive. With price tags reaching well over $100 million (for works by Van Gogh and Cézanne), and resales fetching anywhere from 3% to 86% net returns (for works by Warhol and Gilliam), the finances behind fine art sales have caught the eye of financiers, wealth managers, and retail investors. While scholarly conjecturing about the applicability of securities law to art sales have existed for decades, the rise of NFTs and fractional ownership services have increased the availability of, and conversation around, fine art as an investment tool.

Painting the Picture

Of all the ways to make money, why invest in fine art? While owning a masterpiece is something persons and corporations with vast resources may be interested in merely for extravagance, some reports indicate up to two thirds of fine art purchasers do so “solely as an investment to grow wealth.” Some industry insiders have even revealed that some clients “buy museum quality art, hold it in storage, and sell it for a significant profit, all without ever seeing the picture.” If fine art purchasers are missing the picture, then what is it they are seeing?

Despite major accounting firms, such as Deloitte, summarizing the characteristics of art investment as high-risk, illiquid, opaque, unregulated, with high transaction costs, at the mercy of erratic public taste and short-lived trends, 85% of wealth managers believe art and collectibles should be among those securities offered to clients (as of 2022, up from 53% in 2014).

There are several reasons why art and similar collectible classes are beneficial from an investment management perspective. First, fine art serves as excellent collateral for loan servicing. Due to their ability to be stored in centralized management facilities and high public value, art pieces provide wealth managers and high net worth individuals with appreciable assets which can be loaned against without even having to move the painting. Second, art pieces can serve as a diversification tool due to the art markets low correlation with that of stocks and bonds. This means that when traditional securities have volatile fluctuations in pricing, art collections maintain stability. And third, industry reports suggest that investing in fine art can serve a plethora of other purposes, including:

  • Hedging against inflation and currency devaluation
  • Little risk of principal loss (assuming proper due diligence)
  • Favorable tax treatment
  • Easy transfer and movement of the asset
  • Potential for revenues through exhibition loans.

Certain commentators have treated art investment as analogous to that of real estate. Noting that because paintings are physical objects, their price can be computed per square inch or square centimeter and compared to high end real estate. However, this exercise serves to emphasize the expense attached to painted “real estate.” Compare the works of Picasso, which can fetch on average $350, $1,300, and $2,000 per centimeter squared (depending on the muse) with a luxury co-op on Manhattan’s Upper East Side, priced at “only” $1.2 per centimeter squared).

Given the seemingly high barriers to entry, why would a typical retail investor care about auction prices at Sotheby’s?

Framing the Future

In the past, access to fine art investing was limited only to very rich individuals and firms, before becoming more available through boutique art collection funds. Nowadays, several companies are offering services which seek to make fine art investing available for ordinary individuals through the practice of selling fractional shares.

Masterworks, a pioneer in the field of expanding availability of investment in art, makes its portfolio of over 200 pieces (valued at over $700 million) available for individual purchase via the selling of fractional shares. Masterworks and similar firms create fractional shares by purchasing individual pieces worth millions, transferring the ownership of the asset into an LLC, and then selling individual shares of the LLC through offering registered with the SEC.

One example of this can be seen in MASTERWORKS 001, LLC, whose form 1-K on file with the SEC notes that its business purpose is to “facilitate investment in a single work of art created in 1979 by Andy Warhol.” The artwork in question, “1 Colored Marilyn (Reversal Series),” initially was securitized into 99,825 shares at an initial offering price of $20 a share. Masterworks is not alone. Other entrants into the field range from ARTSPLIT, based in Nigeria, which sells share in African art and music, to London-based Showpiece, which sell shares in fine art and collectibles.

While some see “these new investment models as a democratization of an otherwise hard-to-access market place,” both the financial sector and art world have reservations. On the one hand, the financial insiders, while increasingly hospitable, have worried about the lack of regulation and subjective pricing methods. Art as a market presents many legal concerns which ought to be addressed given its growing prominence. There are difficulties in classifying fine art as commodities or securities for regulators and state agencies. Further, due to the unique nature of the items involved, questions of forgery, title, and cultural consideration suggest that a more encapsulating legal regime is necessary going forward.

Art insiders, on the other hand, are concerned with the intrinsic conflict between art and money, as they believe entangling the two risks the incommensurable value of art once it is standardized and transformed into speculative objects. Of particular importance to lawyers, is how the sale and alienation of art pieces from given cultural heritage, interact with existing laws governing cultural and artifacts.

Final Touches

Works of cultural, historical, and aesthetic merit are increasingly being utilized as financial objects to achieve investment goals. While this process has been criticized by both the financial world and many within the art community, its growth has not been stunted. This is expected to continue, as the global art market continues to grow, and as more opportunities for individual investors to get in on the action arise. And while art financialization continues to be debated within the conversations surrounding the democratization of art, at least some benefits previously confined to the monied few, are now available to almost anyone.

Massive Copyright Lawsuit Threatens to Monopolize Reggaeton Music

By: Mayel Tapia-Fregoso

In the United States, copyright law protects original works of authorship that are fixed in a tangible medium. A song can receive two separate copyrights. First, a song can be copyrighted as a musical composition, including its lyrics. Second, the sound recording of that musical composition can also be copyrighted. While entire songs and their sound recordings can be copyrighted, small groupings of notes within a musical work are typically not protected. Recently, a lawsuit filed in the Central District of California names reggaeton stars Bad Bunny, Karol G, Daddy Yankee, and more than one hundred other artists in a copyright infringement lawsuit that has the potential to rock the music world and expand copyright protections for musical works. 

Browne v. Donalds

On April 1, 2021, Steely and Clevie Productions filed a copyright infringement lawsuit against more than one hundred defendants, alleging that their music infringed on Steely and Clevie’s copyrighted works. In the complaint, Steely and Clevie—a Jamaican reggae duo—allege that the defendants sampled the “dembow” rhythm without permission. Sampling is when artists take a portion of another artist’s sound recording and incorporate it into their own audio-only recording of a new song. Artists must obtain permission from the copyright owner of the song and the copyright owner of the sound recording they wish to sample to avoid a copyright infringement lawsuit. The copyright holder(s) of that musical work and sound recording have the option to refuse to license the work, unlike compulsory licensing involved in song covers.

In 1989, Steely and Clevie released the song “Fish Market,” which first featured the dembow rhythm. In 1990, they collaborated with artist Shaba Ranks, incorporating the beat into his song “Dem Bow,” which gave the dembow rhythm its moniker. Later that year, another artist, Dennis “the Menace” Haliburton, incorporated that same beat in his song, “Pounder Riddim.” According to Steely and Clevie’s complaint, the defendants sampled and “mathematically copied” the dembow rhythm from Pounder Riddim for decades. Many artists in the Dominican Republic would later adopt the dembow drum pattern, which became the foundation of reggaeton and Latin American pop music. Some of reggaeton’s biggest hit songs—Daddy Yankee’s “Gasolina,” Bad Bunny’s “Tití Me Preguntó,” and Karol G & Peso Pluma’s “Qlona”—are among thousands of songs that incorporate an iteration of the iconic rhythm. 

Attorneys for Steely and Clevie argue that reggaeton artists did not obtain a license for the “distinctive drum pattern that has become the foundation of the entire genre.” They claim that the industry has exploited the rhythm and has generated revenue from the infringing works. Attorneys for the defendants argue that Steely and Clevie seek to “monopolize” the reggaeton genre by “claiming exclusive rights to the rhythm and other unprotectable elements” shared by all reggaeton songs. The presiding judge, Andre Birotte Jr., expressed concerns for the “stifling” effect that a verdict for the plaintiffs could have on the music industry. The judge is tasked with ruling on the defendant’s motion to dismiss. 

Can Dembow be Copyrighted?

The lawsuit poses a number of questions. First, is the dembow rhythm protectable under copyright law? Under the Copyright Act of 1976, artists, composers, and publishers can copyright musical compositions and sound recordings. In a musical composition, typically, the lyrics of a work and the work’s melody are protectable. The melody includes “the order and rhythm of pitches that make up the main melody line of a piece of music.” However, “in most cases, the sequence of rhythms and “groove of a song” lie outside the protections of copyright law. Likewise, a song’s arrangement and structure is not copyrightable because two songs with the same structure may sound different. But rarely, a rhythm can be copyrighted if the plaintiffs can successfully prove that it is “substantially unique or original.” Courts have spent decades balancing the interests of copyright holders and the interests of the creative community to encourage the production of arts. 

Why Bring This Case Now?

Second, were Steely and Clevie truly the first to create the dembow rhythm or simply the first to “record the popular Jamaican street beat” in a fixed medium? In Jamaica and Latin America, it is common for artists to borrow and sample instrumental tracks without the threat of litigation. Early reggaeton artists in Puerto Rico were inspired by “Jamaica’s tradition of using popular instrumentals to propel new, live, and local performances.” Although Steely and Clevie’s Fish Market was the first song to “fix” the dembow instrumental rhythm, it may be impossible to determine if Fish Market inspired early reggaeton artists or if they were first inspired by the Jamaican music scene that was so popular throughout Latin America. In reggaeton’s early years, the genre had little economic value. By 2023, though, reggaeton music was responsible for billions of streams, helping propel Latin music to become the fourth most popular music genre in the world by stream volume. Now, more than 30 years after Fish Market’s release, Steely and Clevie seek to capitalize on reggaeton’s billion-dollar industry. 

The Case for Steely and Clevie

Steely and Clevie’s supporters argue that the Jamaican duo and other Jamaican artists that have inspired the highly successful genre deserve recognition for their contributions to reggaeton music. These proponents argue that, at its core, this case is about black artists’ music being exploited for profit. Reggaeton historian Katelina Eccleston believes that despite the tradition of reuse in Jamaican and Latin music, it shouldn’t preclude artists, like Steely and Clevie, from receiving songwriting credit. In her view, Jamaican genres have amassed worldwide popularity but “lack economic parity” with reggaeton because, across the Americas, artists with lighter skin complexions that dominate reggaeton are given greater privileges. Eccleston says, “Everybody wants Jamaican music and culture, but they don’t want to make sure Jamaicans can eat.” 

If Steely and Clevie are successful, there will likely be more lawsuits alleging infringement for appropriating popular rhythms, creating more confusion over the protectable musical elements in compositions due to the nuanced cultural components of this infringement case.