On Wednesday the US Court of Appeals for the Ninth Circuit
overturned a preliminary injunction that was imposed against Google
in March. But it left some significant questions open, and
sent them back to the lower court to be ruled on. That court must
decide whether or not Google was given sufficiently specific notice
of infringing images and whether or not it should have taken them
down.
Background to the dispute
Perfect 10 is a subscription internet service whose business is
selling access to pictures of nude models. It sued Google, alleging
that the search giant's Image Search service infringed its
copyright in those pictures.
Perfect 10 puts its pictures in a locked, subscription-only part
of its website, and Google's search engine does not index those
pictures. However, some people make unauthorised copies of its
images and publish them online.
When someone conducts an image search, Google displays a
thumbnail, or miniaturised version, of an image that appears on a
third party website. Clicking that image will open a page on
Google's site that displays the thumbnail again and, beneath that,
it 'frames' the third party website.
Google does not store the images that fill this lower part of
the window; its own page simply provides HTML instructions that
direct a user's browser to access and display a third-party
website.
The process by which the web page directs a user’s browser to
incorporate content from different computers into a single window
is referred to as “in-line linking.” The term “framing” refers to
the process by which information from one computer appears to frame
and annotate the in-line linked content from another computer.
The Google page also offers a link to the third party site.
Perfect 10 sued Google because some of its thumbnails were based
on full-size images at sites that were infringing Perfect 10's
copyright.
Perfect 10 claimed that the creation and display of the
thumbnails themselves constituted copyright infringement, and that
Google was vicariously responsible for the violations of copyright
committed by the host of the full-size images on another site.
Google sought to rely on a ruling from 2003 in a case brought by
photographer Leslie Kelly against Arriba
Soft, another image search engine. In that case, the Ninth
Circuit Court of Appeals said thumbnails were fair use. But Perfect
10 argued that Google's use was more commercial than Arriba
Soft's.
It pointed out that Google made money from its practices. While
ads are not displayed in the results of an image search, some of
the sites that displayed copies of Perfect 10's images were said to
be using Google's AdSense facility, a service that invites a
website operator to display Google-served ads on its site and share
ad revenues with Google.
Perfect 10 also argued that Google’s thumbnails were of
sufficient quality to be used for download onto mobile phones – in
competition with Perfect 10's nascent mobile phone download
business.
The thumbnail and links judgment
Perfect 10 said that Google had violated two of its rights as a
copyright holder: display rights and distribution rights.
"There is no dispute that Google’s computers store thumbnail
versions of Perfect 10’s copyrighted images and communicate copies
of those thumbnails to Google’s users," said Judge Sandra Ikuta in
her ruling. "Therefore, Perfect 10 has made a prima facie case that
Google’s communication of its stored thumbnail images directly
infringes Perfect 10’s display right."
Perfect 10 argued that Google infringed its copyrights not just
in its thumbnails but also in its framing of the full-size images
which do infringe copyright.
"Google does not, however, display a copy of full-size
infringing photographic images for purposes of the Copyright Act
when Google frames in-line linked images that appear on a user’s
computer screen," said the ruling. "Because Google’s computers do
not store the photographic images, Google does not have a copy of
the images for purposes of the Copyright Act.
Perfect 10 also argued that making images available violates its
distribution right. It relied on rulings in two previous cases on
'making available': a decision on Napster's file-sharing service;
and a case in which Donna Hotaling and others sued the Church of
Jesus Christ of Latter-Day Saints over the unauthorised
distribution to libraries of copies of their genealogical
research.
The Hotaling case said that the owner of a collection of works
who makes them available to the public may be deemed to have
distributed copies of the work. Similarly, the Napster case said
that a record company's distribution right was infringed by Napster
users when they made their music collections available to
others.
But Ikuta believed that Perfect 10 was wrong to rely on these
cases.
"This 'deemed distribution' rule does not apply to Google," said
Ikuta. "Unlike the participants in the Napster system or the
library in Hotaling, Google does not own a collection of Perfect
10’s full-size images and does not communicate these images to the
computers of people using Google’s search engine. Though Google
indexes these images, it does not have a collection of stored
full-size images it makes available to the public," she said.
She continued: "Google therefore cannot be deemed to distribute
copies of these images under the reasoning of Napster or Hotaling.
Accordingly, the district court correctly concluded that Perfect 10
does not have a likelihood of success in proving that Google
violates Perfect 10’s distribution rights with respect to full-size
images."
Fair use
The Appeals Court said that in order to qualify for the
injunction which the District Court awarded it, Perfect 10 would
have to first prove that there were violations – which it did in
the case of thumbnails – and then that it would be likely to defeat
Google's likely arguments that use of the images was 'fair use'
under copyright legislation.
The Court said that Google did claim fair use, and that whether
or not use was fair depended on four factors: the purpose and
character of the use, including whether such use is of a commercial
nature or is for non-profit educational purposes; the nature of the
copyrighted work; the amount and substantiality of the portion used
in relation to the copyrighted work as a whole; and the effect of
the use upon the potential market for or value of the copyrighted
work.
In relation to the purpose and character of use, infringement
does not occur under US copyright law when the use is
transformative, when material is used for a purpose entirely
different to the original. Parody is, for example, a transformative
use of material.
"Google’s use of thumbnails is highly transformative," said
Ikuta. "Although an image may have been created originally to serve
an entertainment, aesthetic, or informative function, a search
engine transforms the image into a pointer directing a user to a
source of information."
"A search engine provides social benefit by incorporating an
original work into a new work, namely, an electronic reference
tool. Indeed, a search engine may be more transformative than a
parody because a search engine provides an entirely new use for the
original work, while a parody typically has the same entertainment
purpose as the original work."
Perfect 10 said that it used miniaturised versions of the photos
for download on to mobile phones, and that therefore the thumbnail
images were in competition with a commercial service it runs. Ikuta
said that this was a negligible concern. "The district court did
not find that any downloads for mobile phone use had taken place,"
she said.
"Accordingly, we disagree with the district court’s conclusion
that because Google’s use of the thumbnails could supersede Perfect
10’s cell phone download use and because the use was more
commercial than Arriba’s, this fair use factor weighed 'slightly'
in favor of Perfect 10. Instead, we conclude that the
transformative nature of Google’s use is more significant than any
incidental superseding use or the minor commercial aspects of
Google’s search engine and website. Therefore, the district court
erred in determining this factor weighed in favor of Perfect
10."
The Court decided to overturn the preliminary injunction against
Google. It said that in order to receive an injunction before the
full arguments on either side were heard, Perfect 10 needed to show
conclusively that it would defeat Google's fair use arguments,
something the Court said it did not do.
"Perfect 10 has the burden of proving that it would defeat
Google’s affirmative fair use defense," said the ruling. "In this
case, Google has put Perfect 10’s thumbnail images (along with
millions of other thumbnail images) to a use fundamentally
different than the use intended by Perfect 10. In doing so, Google
has provided a significant benefit to the public."
"Weighing this significant transformative use against the
unproven use of Google’s thumbnails for cell phone downloads, and
considering the other fair use factors, all in light of the purpose
of copyright, we conclude that Google’s use of Perfect 10’s
thumbnails is a fair use. We conclude that Perfect 10 is unlikely
to be able to overcome Google’s fair use defense and, accordingly,
we vacate the preliminary injunction regarding Google’s use of
thumbnail images."
Google assists infringement
The rulings did not all go Google's way, however. The original
trial court had said that Google could not be said to be a
contributor to infringing conduct because it did not promote,
advertise or encourage visitors to the websites that did infringe,
and nor did it earn significant sums from the links to them.
The Court of Appeal disagreed with that assessment and said that
there was every chance that Google does help others to infringe
copyright.
"[The District Court's] analysis is erroneous. There is no
dispute that Google substantially assists websites to distribute
their infringing copies to a worldwide market and assists a
worldwide audience of users to access infringing materials," said
the ruling. "We cannot discount the effect of such a service on
copyright owners, even though Google’s assistance is available to
all websites, not just infringing ones.
"Google could be held contributorily liable if it had knowledge
that infringing Perfect 10 images were available using its search
engine, could take simple measures to prevent further damage to
Perfect 10’s copyrighted works, and failed to take such steps," it
said.
Notice of infringement
The issue of Google's knowledge of the infringements was vital.
Though it formed a part of both hearings, it remains unresolved and
the Court of Appeal has asked the District Court to look at it
again.
A crucial issue in copyright disputes is how a company deals
with an infringement once it has been notified of it. In this case
there was some dispute about whether or not Perfect 10's
notifications were specific enough for Google to be expected to act
on them.
"The district court did not resolve the factual disputes over
the adequacy of Perfect 10’s notices to Google and Google’s
responses to these notices," said the Court. "Moreover, there are
factual disputes over whether there are reasonable and feasible
means for Google to refrain from providing access to infringing
images. Therefore, we must remand this claim to the district court
for further consideration whether Perfect 10 would likely succeed
in establishing that Google was contributorily liable for in-line
linking to full-size infringing images under the test enunciated
today."
Judge Ikuta said that Google could not be held liable for
vicarious infringement because it had no power over the third party
infringing websites and could not tell them to stop hosting Perfect
10's images.
Safe harbor
Another vital question will be sent back to the original trial
court. Google claimed 'safe harbor' under the Digital Millennium
Copyright Act (DMCA), a provision designed for service
providers.
It claimed a limited liability under section 512 of the DMCA.
That section offers limited liability "for infringement of
copyright by reason of the provider referring or linking users to
an online location containing infringing material or infringing
activity, by using information location tools, including a
directory, index, reference, pointer, or hypertext link" if the
service provider meets certain criteria.
Here, too, the District Court was found not to have addressed
the issue, which will be returned to that Court for judgment.
"Perfect 10 claims that it sent qualifying notices to Google and
Google did not act expeditiously to remove the infringing
material," said Ikura. "Google claims that Perfect 10’s notices did
not comply with the notice provisions of section 512 and were not
adequate to inform Google of the location of the infringing images
on the Internet or identify the underlying copyrighted work.
"Google also claims that it responded to all notices it received by
investigating the webpages identified by Perfect 10 and suppressing
links to any webpages that Google confirmed were infringing.
"Because the district court determined that Perfect 10 was
unlikely to succeed on its contributory and vicarious liability
claims, it did not reach Google’s arguments under section 512. In
revisiting the question of Perfect 10’s likelihood of success on
its contributory infringement claims, the district court should
also consider whether Perfect 10 would likely succeed in showing
that Google was not entitled to the limitations on injunctive
relief provided by title II of the DMCA."
