The Intellectual Property Door in Section 230: Hepp v. Facebook

The Third Circuit held that Section 230 does not immunize platforms from state right-of-publicity claims, splitting from the Ninth Circuit on the law's intellectual-property carve-out.

In Hepp v. Facebook, Nos. 20-2725 & 20-2885 (3d Cir. Sept. 23, 2021), the United States Court of Appeals for the Third Circuit answered a question that had divided courts for years and that sits at the center of the influencer economy: does Section 230 of the Communications Decency Act immunize an online platform against a state right-of-publicity claim? Karen Hepp, a Philadelphia television news anchor, discovered that a photograph of her — captured without consent by a convenience-store security camera — was circulating online, including in a Facebook advertisement for a dating service called FirstMet. She sued under Pennsylvania’s right-of-publicity statute. In a 2-1 decision by Judge Hardiman, the court held that Section 230’s intellectual-property carve-out preserves such claims, reversing dismissal as to Facebook and opening a square circuit split with the Ninth Circuit.

At a glance

Case: Hepp v. Facebook, Nos. 20-2725 & 20-2885; 14 F.4th 204 (3d Cir. Sept. 23, 2021) (Hardiman, J., joined by Phipps, J.; Cowen, J., concurring in part and dissenting in part).
Issue: Whether 47 U.S.C. § 230(e)(2) — which says nothing in Section 230 shall “limit or expand any law pertaining to intellectual property” — preserves state right-of-publicity claims against platforms.
Holding: Yes. The right of publicity is a “law pertaining to intellectual property,” and § 230(e)(2) is not limited to federal IP, so Section 230’s immunity does not bar Hepp’s Pennsylvania statutory claim against Facebook.
Why it matters: It is the first federal court of appeals to read the IP exception to reach state publicity rights, splitting from the Ninth Circuit’s Perfect 10 v. ccBill and exposing platforms to state likeness liability in the Third Circuit.

Section 230 and the carve-out everyone forgets

Section 230(c)(1) is the celebrated provision that “[n]o provider … of an interactive computer service shall be treated as the publisher or speaker” of third-party content. It is the legal foundation of user-generated platforms. But Section 230 contains express exceptions, and § 230(e)(2) is the one that matters here: “Nothing in this section shall be construed to limit or expand any law pertaining to intellectual property.” If a claim sounds in intellectual property, Section 230 simply does not apply.

The litigated ambiguity is two-fold. First, does “intellectual property” include the right of publicity — a state-law interest variously framed as a privacy, property, or unfair-competition right? Second, even if publicity is IP, does the carve-out reach state IP law, or only federal regimes like the Copyright Act, Patent Act, and Lanham Act? The Ninth Circuit, in Perfect 10, Inc. v. CCBill LLC (2007), had answered the second question narrowly: to avoid a patchwork of fifty state liability rules, it limited § 230(e)(2) to federal intellectual property, immunizing platforms from state IP claims. Hepp rejected that approach.

The Third Circuit’s textual route

Judge Hardiman’s majority opinion is a study in plain-meaning statutory interpretation. The phrase is “any law pertaining to intellectual property” — not “any federal law.” Congress, the court observed, knew how to confine a provision to federal law and limit state effects when it wished; elsewhere in Section 230 it did exactly that. The absence of a “federal” modifier in § 230(e)(2), against that backdrop, was meaningful. Reading the limitation into the text, as the Ninth Circuit had, would require rewriting the statute rather than interpreting it.

The court then confirmed that the right of publicity is a “law pertaining to intellectual property.” Surveying legal dictionaries and common usage, the majority concluded that “intellectual property” carries an established meaning that includes the right of publicity. The right protects the commercial value a person builds in their identity — analogous, the court reasoned, to the way patent, copyright, and trademark protect investments of time, effort, and money. A news anchor’s recognizable persona, monetized in endorsements, is precisely the kind of cultivated commercial asset the right of publicity exists to defend.

The result: § 230(e)(2) preserves Hepp’s Pennsylvania statutory right-of-publicity claim, and Facebook cannot invoke Section 230 immunity against it. The court reversed the dismissal of the Facebook claim and remanded. (Hepp’s claims against Reddit and Imgur were dismissed on personal-jurisdiction grounds, a separate issue.)

The dissent and the floodgates

Judge Cowen dissented in relevant part. He would have followed Perfect 10 and held Facebook immune. His core worry was institutional: by extending the IP exception to state law, the majority subjects platforms to a fragmented and unpredictable body of fifty different state publicity regimes — exactly the balkanization the Ninth Circuit feared. He emphasized that the majority was breaking new ground as the first circuit to apply the exception to state IP, and cautioned that the decision risked opening the floodgates to state-law claims that Congress, in his view, meant Section 230 to foreclose.

The disagreement is not really about whether publicity is “IP.” It is about institutional design: whether the cost of a fractured state-by-state liability map outweighs fidelity to the statute’s unqualified text. The majority chose text; the dissent chose uniformity. That tension is now the fault line of a genuine circuit split.

Open questions

Will the split reach the Supreme Court? With the Third and Ninth Circuits openly at odds on a foundational platform-immunity question, the issue is a natural candidate for certiorari — but only if other circuits weigh in or a platform presses it.
How far does “pertaining to intellectual property” extend? If state right of publicity qualifies, do state trade-secret, trademark, or unfair-competition statutes also escape Section 230 in the Third Circuit? The opinion’s logic invites that argument.
What survives on remand? Hepp decides only that Section 230 does not bar the claim. Whether Facebook is actually liable under Pennsylvania law — including any First Amendment and knowledge defenses — remained to be litigated.

Implications

For platforms: Within the Third Circuit (Pennsylvania, New Jersey, Delaware), Section 230 is no shield against state right-of-publicity claims. Advertising and recommendation systems that surface user images in commercial contexts carry real exposure.
For influencers and public figures: A platform — not just the advertiser — can now be a viable defendant when your likeness is commercially exploited, at least in jurisdictions following Hepp.
For litigation strategy: Forum matters enormously. The same claim that survives in the Third Circuit may be immunized in the Ninth, making venue and choice-of-law pivotal in likeness disputes against platforms.
For compliance: Ad-tech and content-moderation teams should treat unconsented commercial uses of identifiable persons as a distinct, Section-230-proof risk category in Hepp jurisdictions.

Frequently asked questions

Does Hepp mean Facebook is liable for the ad? No. The court held only that Section 230 does not immunize Facebook from Hepp’s state right-of-publicity claim. Whether Facebook is actually liable under Pennsylvania law was sent back to the district court for further proceedings.

Why is the right of publicity treated as “intellectual property” here? Because Section 230(e)(2) preserves “any law pertaining to intellectual property,” and the Third Circuit concluded — based on the established meaning of the term and the right’s economic logic — that the right of publicity protects a cultivated commercial asset much like copyright, patent, and trademark do.

How does this differ from the Ninth Circuit’s rule? The Ninth Circuit, in Perfect 10 v. CCBill, read § 230(e)(2) to cover only federal intellectual property, immunizing platforms from state IP claims. Hepp rejected that limit, holding the exception reaches state law too — creating a direct circuit split.