Top 10 Internet Law Developments of 2016

By Eric Goldman

Posted on January 13, 2017


Donald Trump’s election as president pretty much dominated our thoughts about 2016 (though Brexit was pretty significant too). So I decided to break up my annual top 10 list into two separate top 5 lists, one election-related, one not.


Top 5 Non-Election Related Items


#5: Congress Passes Defend Trade Secrets Act. The most important IP-related statute since the America Invents Act. It will almost certainly make everyone’s list as one of the top 10 IP developments of the 2010s. Due to the DTSA, virtually every trade secret lawsuit now will be a federal case; and the DTSA gives trade secret plaintiffs several new toys to supplement their already-extensive arsenal.


#4: Copyright Office Guts the Section 512 Safe Harbor. How do you feel about copyright formalities? We generally avoid them because they can lead to forfeitures disproportionate to the owner’s mistake. Yet the Copyright Office unilaterally, without any direction from Congress, imposed a new formality on maintaining the DMCA online safe harbors: service providers must now renew their agent designations every 3 years or no-safe-harbor-for-you. (As a bonus, all prior designations made over the last 18 years also got the renew-or-F-you treatment). So you can look forward to “enjoying” many future online secondary copyright infringement cases where the 512 safe harbors are unavailable.


#3: Hulk Hogan/Gawker/Peter Thiel. Let’s start with a proposition I think is not controversial: in almost all cases, nonconsensual pornography is not OK. So it’s hard to cheer Gawker’s publication of a video of Terry Bollea a/k/a Hulk Hogan having sex with his friend’s wife Heather Clem. Couldn’t a textual description of the video have sufficed without overexposing either Bollea’s or Clem’s private sexual activity? In theory, yes. However, the video proved Hulk has repeatedly lied in public about his sex life. If Gawker simply claimed it had video evidence Hulk had lied, and Hulk publicly denied it, then what? Publishing the video was essential to validating Gawker’s factual claims in the public’s eye. A jury disagreed and awarded Hulk $140M. Gawker settled the case for $31M and exited the industry. That alone would be a major Internet Law development. But then…


…we learned that billionaire Peter Thiel (previously best known as part of the PayPal Mafia, but now best known as about the only tech industry person in Silicon Valley to publicly support Trump) had waged a decade-long campaign to destroy Gawker as a way of avenging Gawker’s outing of Thiel. Thiel actively sought out plaintiffs against Gawker and funded their lawsuits. The rules for media coverage of billionaires have always been different because billionaires can afford to engage in lawfare against defendants–even media defendants who buy ink by the gallon. But Thiel showed how crowdsourcing lawfare against media defendants is far more effective. It exponentially increases the threat vectors and effectively ensures that the billionaire will win, either by finding/funding enough successful plaintiffs (like Hulk) or just by draining the defendant via legal fees. So we now know that virtually every single media enterprise remains in the market only because some billionaire hasn’t declared lawfare against them. Who would be crazy enough to invest in a future media enterprise knowing these rules?


Although a federal anti-SLAPP law isn’t a complete solution, it would be a helpful counterweight to billionaire lawfare against media defendants. This seems like it should rank higher on Congress’ priority list than, say, gutting the House Ethics’ Office…


#2: Crypto Wars Redux/DOJ v. Apple. According to the FBI, they only wanted to crack one phone. Just one phone… Bullshit. Their demands that Apple break the encryption on one of the San Bernardino shooter’s phones was a proxy war over citizens’ right to encrypt their phones. In the view of most law enforcement agencies, if they can’t crack encryption and cellphones “go dark,” the terrorists win and we are all fucked. But in an era where it feels like every law enforcement agency already can know everything about their citizens whenever they want, it sometimes feels like encryption is the only remaining defense against an omniscient surveillance state.


Then the O. Henry twist….after demanding Apple create a backdoor because the FBI insisted there was no other way to access the phone, the FBI quietly dropped the demand because it found a way to crack the encryption without the court’s or Apple’s help. So the net effect: the FBI lied to the American public about the risks of encryption; then it proved that none of us are safe from law enforcement’s rapacious demands to know everything about us.


#1: Section 230 Melts Down. It was such a bad year for Section 230 jurisprudence that I prepared a separate list of top 10 worst Section 230 decisions.


Other items considered:


* Congress Passes Consumer Review Fairness Act. This law should effectively make sure we’re never prevented from reviewing products and services in the marketplace.

* Naruto’s Monkey Selfie. “Copyright Act does not ‘plainly’ extend the concept of authorship or statutory standing to animals.”

* Oracle v. Google. The jury’s fair use ruling–which allows Google’s reimplementation of Java’s APIs–was a good resolution to an unfortunate case, but we have to wait-and-see if the Federal Circuit messes up the case again.

* Google Books Lawsuit. It took a decade for Google to prove that scanning books and displaying snippets was fair use. Google–and every other profit=maximizing company–likely won’t undertake such costly legal infrastructure development again any time soon.

* EMI v. MP3Tunes. On the heels of its sturdy 512 defense win in Vimeo, the Second Circuit shows just how much trouble for defendants it caused with YouTube’s 2012 “win” over Viacom.

* Ninth Circuit’s CFAA Angst (Facebook v. Vachaci and US v. Nosal). What are the contours of the CFAA in the Ninth Circuit? That’s a really good question.

* Anarchy Rules Online Contract Formation Law. I will metaphorically shank anyone who uses the term “browsewrap” non-sarcastically in my presence.

* FTC Sues 1-800 Contacts Over Competitive Restrictions of Keyword Ads. The keyword ad litigation wars are pretty much over, and the FTC is trying to force a hard stop.

* Terrorist Content Online. Virtually all terrorist content is protected by the First Amendment. However, it’s still being characterized, and pursued, by many regulators, plaintiffs and online providers as verboten content per se. Bad things happen when we develop an orthodoxy that content doesn’t deserve to exist even though the First Amendment protects it.

* Salsoul v. Madonna. De minimis sampling isn’t copyright infringement.

* Spokeo v. Robins. The Supreme Court issued an important ruling about Article III standing. I hope someday we’ll understand what it means.

* FTC v. AT&T Mobility. Who gets to regulate Internet access providers’ advertising practices? For now, the Ninth Circuit has completely sidelined the FTC in favor of the FCC.


Top 5 Election Related Items


#5: Polling Failures. Big data and smart analytics are two stalwarts of the 21st century, but even golden boy Nate Silver failed us this time.


#4: Hillary’s Emails. As Secretary of State, Hillary used a personal email server for official government correspondence. This raised two problems: (1) the server was insecure, creating the possibility that snooping hackers could grab classified and other sensitive material (though no evidence has actually emerged that the servers were actually hacked), and (2) the server created an end-run around FOIA, and subsequent efforts to pry back FOIA-able materials exposed 33,000 missing emails. To me, Hillary’s attempted end-run around FOIA, combined with the increased security risk from using an insecure server, made her decision indefensible. However, this decision would be a 3 or 4 on the meter of politicians’ transgressions (out of 10). For many Hillary supporters gobsmacked by our President-Elect’s daily acts of hypocrisy, petulance, conflicts-of-interests, brinksmanship, nepotism, kleptocracy and other gaffes, the retort “But her emails!” is a pained lament about seemingly misplaced voter priorities.


#3: The Integrity of Voting Technologies. Our President-Elect raised many questions about the integrity of our voting process (the term “rigged” became a warning–and a joke). After he won unexpectedly, despite the pollsters’ predictions, many people started wondering if, in fact, he had been right all along–which, of course, further degraded the perceived legitimacy of Trump’s election among folks who care about intellectual integrity. No real evidence emerged that our voting technology failed us, but we have many reasons to believe our voting technology remains vulnerable to unwanted manipulation. If we want to build a republic that will last another few centuries, we must invest substantially in upgrading our voting infrastructure to ameliorate those threats, however hypothetical they may seem. Unfortunately, there is zero chance we’ll actually do that, which means we will live with omnipresent paranoia about the reliability of our voting infrastructure in all future elections.


We also learned that our elections are in fact completely “rigged” through voter suppression techniques like unnecessary voter qualification requirements and political gerrymandering. Until we take demonstrable steps to ensure voting inclusiveness and representativeness, our republic’s motto “by the people” will remain aspirational instead of factual. If I were making a list of top social issues our country must address, voting rights would rank in my top 10.


#2: Cyber-Insecurity (Plus Bulk Disclosures of Hacked Emails). Watching politicians debate “The Cyber” is more painful than lemon juice and a paper cut. Even if that rhetoric is mockable, the technological infrastructure of our politicians and political organizations are vulnerable, and adversaries–including, apparently, Russia–are having a party rifling through the goodies. No matter how much we invest in cybersecurity–and clearly we need to invest more than we are–hacking of political adversaries will remain standard fare so long as it works and the perpetrators face no real consequences.


After hacks, in some cases hacked documents are publicly released in bulk. That was used to devastating effect with the Sony hack, which laid bare many of the deepest secrets of the company–and the people it corresponded with. Similarly, lifetimes’ worth of stored politicians’ emails are being displayed for public consumption. “Dance like no one is watching; email like it may one day be read aloud in a deposition.”


#1: “Fake News”/Lies, “Post-Truth” Voters and Filter Bubbles. We have four interrelated problems:


1) Profiteers are manufacturing “fake news” funded by under-policed ad networks

2) Google, Facebook and other key online intermediaries have not built sorting algorithms sufficient to prevent the viral spread of lies and bogus info. Furthermore, their algorithms may be creating “filter bubbles” and “echo chambers” that theorists predicted 15+ years ago would doom our democracy.

3) Trusted media organizations, adhering to traditional journalistic practices, can be gamed by a “serious” political candidate who repeatedly and deliberately promulgates lies and bogus info. So even seemingly credible sources of information are amplifying false information.

4) A surprisingly large segment of our population doesn’t care about the veracity of facts and are perfectly willing to tolerate lies and “fake news” without any retribution against non-credible sources.


Perhaps we can fix #1-3, but can we fix #4? How do we “make” people care about the “truth” (i.e., a platonic ideal of truth, not their own self-manufactured “truth”)? And if we can’t, does it matter if we fix the other problems?


More generally: is this just a matter of doing a better job educating citizens about how to be savvy information consumers, or will our society forevermore have a group of voters who make decisions based on false “facts” that coincide with their beliefs, regardless of veracity? As Thomas Jefferson wrote, “wherever the people are well informed they can be trusted with their own government.” At this point, I’m not sure what it means to be “well informed”; but I do know that if we don’t figure out how to prevent false information from distorting our political decision-making, our republic cannot survive.


Lists from prior years.


Previous top 10 lists from 2015, 2014, 2013, 2012, 2011, 2010, 2009, 2008, 2007 and 2006. Before that, John Ottaviani and I put together a list of top Internet IP cases for 2005, 2004 and 2003.



The preceding is republished on TAP with permission by its author, Professor Eric Goldman, Professor of Law and Co-Director of the Santa Clara High Tech Law Institute at Santa Clara University. “Top 10 Internet Law Developments of 2016” was originally published January 10, 2017 in the Technology & Marketing Law Blog.