Google Wins the Right to Display Thumbnails and to "Frame" Copyrighted Material Used Without Permission:
A Mostly Sensible Ruling by the Ninth Circuit Court of Appeals

Last week, in Perfect 10, Inc. v. Amazon, the U.S. Court of Appeals for the Ninth Circuit rejected arguments that by providing thumbnail pictures and by "framing" copyrighted material without permission, Google's image search engine violates the Copyright Act.

The ruling was no doubt welcome news for Google and its shareholders. But it's also good news for Internet users. The decision is a generally sensible attempt to apply copyright law to the Internet without stifling innovation.

The Dispute

Perfect 10 operates a pornographic website on which it displays copyrighted images. Some unscrupulous operators of other pornographic websites download those images and then upload them to their own servers, where they display them--in clear violation of Perfect 10's copyrights. Most of these infringers are small fry, but collectively they put a dent in Perfect 10's business, and Google facilitates that denting by directing some of its users to the infringers' sites when they search Google Image.

A user who types, say, "naked human female" into the Google Image search engine (with "SafeSearch" turned off) will find his or her screen filled with thumbnail images of photo files posted on other websites. Some of these are copyrighted Perfect 10 images that have been illegally appropriated by other website operators.

The thumbnails--which are small, relatively low-resolution images--reside on Google's servers. Clicking on a thumbnail directs the user to the website on which the full-size image resides, although, using the default settings, the webpage on which the image can be found also appears in a frame within the lower portion of the Google screen.

Perfect 10's lawsuit challenged both Google's display of thumbnails and its framing of whole infringing pages. Perfect 10 won a partial victory in the district court, obtaining an injunction against Google's unauthorized display of thumbnails, but last week's ruling reversed that injunction.

Although technically not a final decision, the Ninth Circuit ruling mostly vindicates Google's legal position. It also has at least one odd potential consequence that should be welcome to bloggers, but disheartening to some copyright owners.

Framing and the "Server Test"

In rejecting Perfect 10's argument that Google's framing of other websites' images constituted copyright infringement by Google, the Ninth Circuit applied what the district court called the "server test." Copyright infringement requires copying, and when Google frames another website's content, Google does not create a copy of that content on its server. Rather, the Google site contains HTML code that refers the user's browser to the other website's page, from which the browser retrieves whatever content is found there, including copyright-infringing images.

Whether or not the server test correctly parses the literal language of the Copyright Act, it is more than a bit odd, as an example illustrates. Suppose Billy Blogger likes to display unlicensed copyrighted images on his website. Copying those images from their owners or licensed users onto his own server is illegal, but under the server test, Billy acts lawfully if, instead, he simply links to non-infringing images on other sites. With only the most rudimentary knowledge of HTML, Billy can accomplish this feat by linking to the individual object files for the relevant images (typically with a .jpg extension) rather than their entire context on the original host's website. As a result, a visitor to Billy's website will have no idea that the image she sees doesn't actually reside on Billy's server unless (for no apparent reason) she happens to choose to display the underlying HTML code.

The Digital Millennium Copyright Act Issue: Left to Be Addressed Elsewhere

To be sure, if Billy's code calls up an unauthorized version of the image--as in the actual Perfect 10 case--then Billy may be liable for contributory infringement. And in the actual Perfect 10 case, the Ninth Circuit held that Perfect 10 may be able to make out a claim of contributory infringement by Google if Perfect 10 can show, on remand to the district court, that Google could have, but failed to, take ready steps to avoid framing infringing images.

Google in turn claimed the protections of Section 512(d) of the Digital Millennium Copyright Act, which provides a safe harbor for search engines that innocently display infringing material unless and until receiving a specific request to remove or disable that material. But the Ninth Circuit did not directly address the Section 512(d) issue.

As a result, the Ninth Circuit left Google open to the potential of large exposure in unrelated litigation by Viacom against YouTube (which is owned by Google), currently pending in a New York federal court. (A ruling by the Ninth Circuit on the issue would not have been binding in New York, but it could have been influential.)

The Server Test: Acceptable Here, But Questionable in Other Cases

In the actual Perfect 10 case, the court's use of the server test backed by a possible claim of contributory infringement made considerable sense. Google's search engine is entirely automated. It cannot distinguish between authorized and unauthorized images, and the code to do so is still a long way off. Google's image search does not "look" at images that match the user's description of what she seeks, but instead searches textual tags that accompany the images. A search engine that examined the actual pixel code that comprises an image, compared that code to other pixel codes, and then somehow determined whether a copy was licensed, would not only require heroic acts of programming but would also require that all copyright licensing agreements be made public and Internet-searchable.

Nonetheless, in cases like Billy's, the server test poses a potentially serious threat to copyright owners. Billy would not be liable for direct infringement because his server does not contain a copy of the protected work, and he would not be liable for contributory infringement because there is no direct copyright infringer to whose infringement Billy contributes--so long as he takes care only to frame other websites' authorized copies. Indeed, "framing" is a misnomer here: As noted above, Billy can seamlessly embed the protected images in his own site without any frames or lines to indicate to the viewer on whose server the image resides, so that the viewer will typically never know the difference.

In Billy's case, the server test appears misplaced, and perhaps the Ninth Circuit would not apply it there. For one thing, courts routinely confine the reasoning of one case to its specific context. For another, the Ninth Circuit did not expressly adopt the server test. Instead, it merely noted twice that this was the test that the district judge applied (although the Ninth Circuit's analysis closely paralleled the district judge's analysis on the issue).

Thumbnails: How Can an Exact Copy of an Entire Work Be Fair Use?

Applying the server test, the district court in Perfect 10 preliminarily enjoined Google's display of thumbnails. The thumbnails, after all, reside on Google's own servers.

Citing one of its own earlier decisions, the Ninth Circuit agreed with the district judge that Google's thumbnails did indeed constitute a prima facie case of copyright infringement, but nonetheless ruled in favor of Google on the ground that a full trial will likely show them to be "fair use." As Julie Hilden explained in her column last week, the Copyright Act excuses what would otherwise count as infringement where the copying constitutes "fair use," as determined using a four-factor test for guidance. The statutory factors are: (1) the purpose and character of the use; (2) the nature of the copyrighted work; (3) the amount and substantiality of the work copied; and (4) the potential impact of the use on the market.

Interestingly, in the Perfect 10 case, only the first factor clearly pointed in favor of a fair use finding. As for the other factors: (2) the copyrighted images were original rather than derivative, and thus entitled to robust protection; (3) each thumbnail appropriated the entirety of the work it copied; and (4) the market impact was potentially quite large, as it would direct Google users to infringing sites rather than the Perfect 10 website itself.

Nonetheless, the Ninth Circuit ruled for Google because it found that copying and reducing a copyrighted image, then displaying it alongside numerous other images as a search result, amounted to a "transformative use." That conclusion is difficult to dispute. People do not view thumbnails instead of viewing full images; rather, they use thumbnails to locate the full images they want to view.

That fact also explains why the Ninth Circuit was not impressed by the potential economic impact of Google's thumbnails: The thumbnails do not themselves compete with Perfect 10's full images. Whatever impact they have is through the infringing copies to which the thumbnails link. Yet those copies do not reside on Google's servers, as discussed above, and so any economic impact would fall within the category of contributory infringement, and as to that issue, the Ninth Circuit remanded for further proceedings in the district court.

What About Phone Porn?

Perfect 10 also argued against a finding of fair use on the ground that Google thumbnails compete with Perfect 10's own sale of reduced-size images for mobile phones. A user with a browser-equipped phone can download free infringing thumbnails to his mobile phone from Google and thereby avoid having to purchase the same image from Perfect 10.

The Ninth Circuit rejected this claim on two principal grounds. First, it found that there was no evidence that mobile phone users actually had used Google thumbnails in this infringing way. Second, the court suggested that whatever incidental infringing use occurred in the mobile phone market was outweighed by the transformative nature of thumbnails as part of a search engine.

That conclusion could eventually be destabilized by further evidence in additional proceedings in the district court. Perhaps future testimony will reveal that some substantial number of people are so obsessed with viewing pornography as frequently as possible that they do, in fact, use the tiny screens on their mobile phones to do so in the hours, minutes, or seconds that they do not have ready access to a regular computer screen or hard-copy magazine.

The truth is that we don't know what the market for mobile phone porn looks like. Even in this case, there has been no formal trial yet, only a motion for a preliminary injunction. Thus, all of the Ninth Circuit's determinations are subject to revision in light of further evidence.

More generally, one hopes that the Ninth Circuit and other courts will avoid broad pronouncements in this area of rapidly-changing technology. Even when federal judges get the technology basically right, they reveal a certain level of discomfort in resolving issues that their children and grandchildren typically understand far better than they do.

For instance, the substantive portion of the Ninth Circuit opinion in Perfect 10 begins with the following almost-comical statement of the blindingly obvious: "Google's computers, along with millions of others, are connected to networks known collectively as the 'Internet.'" It's difficult to imagine a copyright opinion concerning alleged infringement in a print medium including the following analogous sentence: "Condé Nast's presses arrange ink on millions of pages of paper that are then distributed in bundles called a 'magazine.'"

Given the difficult terrain, the Ninth Circuit deserves credit for a basically sound decision. If it erred, it did so by under-protecting, rather than over-protecting, copyrighted material. In doing so, the Ninth Circuit ensured that in this instance at least, intellectual property law would not serve as a brake on technological innovation.