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.
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.
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."
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."
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.
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."
