Call Her Daddy, the importance of branding, and CDA is back, back again.
Barstool and the tale as old as time
Barstool is a media conglomerate that started with a focus on sports and branched out into other arenas pretty successfully. The company is headed up by Dave Portnoy who has his own abrasive yet comedic online persona. They also host a popular podcast, Call Her Daddy. I practice law at an intellectual property firm in California and when I read in the New York Times that a legal dispute and Internet drama had come to a head I took a dive down the rabbit hole to try and figure out what happened.
The court of public opinion desperately wants someone to be wrong or at fault. But is that the right way to think of these kinds of disputes?
https://www.nytimes.com/2020/05/19/style/call-her-daddy-podcast.html
The Call Her Daddy podcast was created by Alexandra Cooper and Sofia Franklyn. Barstool signed a deal with them where initially they made a $75,000 dollar salary and Barstool retained all the intellectual property. The contract allowed for renegotiation and when Call Her Daddy became one of Barstool's biggest podcasts the hosts decided to renegotiate. The hosts retained counsel to help them out and began the process. In the course of negotiations, Barstool appears to have agreed to a $500,000 dollar salary for the hosts, to transfer the intellectual property to them, and to a series of other perks. Whether those perks or that salary push them to industry standards I'm not entirely sure. It depends on where they landed and because they didn't actually land anywhere you can't really say one way or another if they were getting robbed by Barstool. But, to Barstool's credit, they appear to have attempted to earnestly negotiate with the hosts for a deal that would make them happy, at least according to the host that ultimately remained with Barstool. Getting the intellectual property from Barstool is undoubtedly a gigantic win for the hosts.
What happens next is a tale as old as time. The attorney representing the hosts couldn't get them on the same page. And, ultimately, the hosts couldn't get to a place where they both agreed on what a contract with Barstool should look like. A lot of online commentary focuses on who should be blamed or who is at fault. Dave Portnoy accused Sofia Franklyn's boyfriend and entertainment lawyer of sabotaging negotiations. Franklyn probably feels like Barstool never agreed to make it to industry standard for a podcast that rakes in millions. Alexandra Cooper seems to think Sofia Franklyn could never be satisfied.
Being mad or allocating blame or fault at one party or another is the wrong way of thinking about the issue. Like a lot of events in life, there is no bad guy. There is no good guy. There are only interested parties trying to solve an optimization problem related to how they're compensated and allocate resources. It's fundamental to talk early and often to your business partners and counsel about your goals and objectives and how to achieve them. Otherwise, you could end up with a proverbial divorce. Alexandra Cooper remained with Barstool as a host of Call Her Daddy and Sofia Franklyn will not continue the show.
The importance of trademarks and branding
Alexandra Cooper and Sofia Franklyn created some valuable intellectual property and this is as good a segue as any to talk about trademarks. The intellectual property associated with Call Her Daddy is effectively the entirety of the show including all the branding assets and name. Developing good branding early on is vital and entrepreneurs tend to totally misunderstand what that means from a legal perspective.
Trademarks fall into a few different categories for what would register with the US Patent and Trademark Office. Marks get sorted as fanciful, arbitrary, and suggestive marks. XEROX, for example, is a fanciful mark because it's a completely made-up term. "Call Her Daddy" is a nice, arbitrary mark that sailed easily through the examination and publication process with the USPTO. A suggestive mark is one that suggests a quality of the goods and services offered. Coppertone, for example, suggests a desirable quality in suntan lotion.
I push clients to try and make up a term. Life is a lot easier if you make something up out of thin air and fanciful marks are the strongest category of marks. But clients tend to get tunnel vision and want to pick a mark that describes their goods and services. These marks aren't registrable. "We sell cars. We want our mark to be CARS!" Well, the USPTO examining attorneys will think you're bananas for trying to register that. But if you call your vehicles the BANANA it won't encounter a descriptiveness refusal. If you're questioning the value of an arbitrary mark like a banana used in association with vehicles I'm willing to bet either you or your friends currently carry around a $1,000+ phone featuring a half-eaten piece of fruit as the source identifier. Apple is a $1 trillion company.
https://www.investopedia.com/news/apple-now-bigger-these-5-things/
CDA 230 is back. Back again. Tell a friend. But don't tell them on Social Media.
CDA 230 is back in the news. It's one of the topics that interest me because I do some work with Internet law and CDA 230, the statute that provides a liability shield for platforms where users submit content. It's also why a site like Reddit, where I moderate several communities, could ever exist. It's currently in the news because the President of the United States signed an Executive Order about it. You can read that order here:
https://www.whitehouse.gov/presidential-actions/executive-order-preventing-online-censorship/?
So why the sudden regulation of social media companies? The President recently found himself upset with getting fact-checked by Twitter. The resultant language of the Executive Order is aimed at checking social media companies for viewpoint discrimination.
As a starting point for discussion, it's important to understand what CDA 230 actually does. The statute itself provides, “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.” 47 U.S.C. § 230 (c)(2). An “information content provider” is defined as “any person or entity that is responsible, in whole or in part, for the creation or development of information provided through the Internet or any other interactive computer service.” 47 U.S.C. § 230 (f)(2).
So, CDA 230 provides a liability shield for platforms that host user-generated content. When a platform publishes its own statements they would not have a liability shield through CDA 230 for that content. Thus, CDA 230 does not treat every entity as either a content provider or a service provider. A company can be a content provider in some respects and a service provider in others. When a platform publishes content, for that content to be legally actionable it would have to break some law. An item as mundane as a fact check that accurately states facts probably doesn't run afoul of any existing laws, for example.
The notion that once a platform publishes anything makes them forever a publisher is fiction. To my knowledge, there's no case law supporting such a proposition. For example, if you post a comment on a New York Times article falsely alleging that your neighbor is a pedophile, the New York Times can’t be sued for defamation because of your comment, even though they are a publisher in many respects. The Executive Order relies on misunderstandings of Pruneyard and Packingham. Packingham addressed a North Carolina law that prohibited registered sex offenders from accessing social networking websites with minority-age users. The Court struck down the law and held that for a government “to foreclose access to social media altogether is to prevent the user from engaging in the legitimate exercise of First Amendment rights.” Pruneyard addressed an affirmative right to speech arising under the California constitution—not the U.S. Constitution. It struck down a private restriction on speech in a shopping mall—private property generally open to the public. The decision has since been narrowed repeatedly by the California Supreme Court. And in the event of a conflict between CDA 230 and the California constitution, CDA 230 would control. Neither case holds that a site like Twitter or Reddit is a public square or cannot kick people off their platform and there's no case law that supports that notion. On the whole, CDA 230 typically comes down in favor of the content host. One court conducted a study of a little over three hundred Section 230 cases and found that in the vast majority of cases the court came down in favor of immunity. Hill v. StubHub, Inc., 727 S.E.2d 550, 558 (N.C. Ct. App. 2012).
It’s also somewhat telling that the administration used an Executive Order instead of an actual challenge in the courts. The Executive Order reads like a mishmash of previously failed arguments; its reasoning weak. The Order doesn’t have the effect of a judicial decision on the statute, it doesn’t create law, and because its reasoning is so poor and its procedure so flawed, it’s unlikely to be followed by courts.
So what does the Executive Order actually do if the foundations for it aren't grounded in current legal reality? It invites certain agencies to engage in rulemaking and clarification with respect to CDA 230. But these agencies lack rulemaking authority over CDA230, and FTC Section 5 authority probably doesn’t extend to regulate speech in the absence of anti-competitive conduct. So this is a bit like directing a golden retriever to consider lowering the federal reserve rate by fifty basis points—what’s the dog going to do with that? It also directs agencies to withhold federal advertising dollars from sites they deem restrict speech. Does it do anything of much significance at least in the immediate future? Not that I can tell, but it'll be important to watch what the FCC and FTC decide to do with the Executive Order.
Is there a take away from all this that's useful? I'm often reminded of this popular XKCD regarding free speech.
