PHILADELPHIA – A federal appeals court has reopened a Philadelphia newscaster’s lawsuit against Facebook over the unauthorized use of her image in ads for dating sites and sex-related products that run on the site.

A divided panel concluded that Facebook was not immune to Fox 29 host Karen Hepp’s claim that the ads violated her right to control her public image and reputation.

U.S. Circuit Judge Thomas Hardyman, writing for a 2-1 majority, ruled that the lawsuit falls under the narrow carve out for intellectual property claims under Section 230 of the Communications Decency Act. The Act largely protects Internet providers from liability for third-party content.

However, Hepp argued that he is a public figure whose image was used to sell “principled” goods and services on Facebook without permission or compensation.

The case is being closely watched by interest groups on both sides, and could reach the US Supreme Court with a ruling on the issue from the Ninth US Circuit in San Francisco.

The Electronic Frontier Foundation and other free-speech groups filed a brief in support of Facebook in the case, while the Screen Actors Guild filed one in support of Hep.

“In the twenty-five years since the Communications Civilization Act was passed, there are very few cases explaining the intellectual property provision of Section 230,” Hardyman wrote.

His panel concluded that the carving involved not only federal intellectual property laws, as found by the Ninth Circuit, but also state claims such as Hep.

“Facebook argues that 230 seeks to promote the free exchange of ideas on the Internet,” Hardyman wrote. “(But) simply put, a state law may also be a ‘law relating to intellectual property’.”

The matter will now go back to a lower court, unless Facebook appeals or asks for a hearing again. Washington-based attorney Craig Primus, who argued Facebook’s case, did not immediately return a call for comment.

The panel agreed with a lower court that Hep could not pursue similar claims against Reddit or the photo-sharing site Imgur in Pennsylvania because there was no evidence that it was part of their business activities in the state. Facebook chose not to challenge the issue of jurisdiction, leaving itself to defend the lawsuit.

The photo appears to have come from the security camera of a convenience store in New York several years ago, when Hepp worked for WNYW-TV. He is currently the Morning Host for Fox29 in Philadelphia. His lawyers believe it found its way to an online clearinghouse, where images can sometimes be downloaded for a fee.

“Because she was not paid, it is a violation of her right to publicity,” attorney Samuel Fineman said Thursday.

“She has a brand. Not only is she an anchor on Fox, but she has a monetary value to her face” based on her social media following, Fineman said. “The ads don’t suit her personality and brand,” he added. “