Kelly v. Arriba Soft Corp.

Majority - T.G. Nelson

Yes, as to the thumbnails; No, as to the full-sized images. The court holds that creating and using thumbnails in a search engine is a protected fair use, but displaying the full-sized images through inline linking is a copyright infringement. Regarding the thumbnails, the court found their creation and use to be a fair use after analyzing the four statutory factors. The first factor, 'purpose and character of the use,' weighed heavily in Arriba's favor because the use was highly transformative. Arriba used the images for an entirely different purpose—as a tool for indexing and accessing information on the internet—rather than for the original's aesthetic purpose. This new function created a public benefit. The fourth factor, 'effect on the market,' also favored Arriba because the low-resolution thumbnails did not serve as a market substitute for Kelly's high-quality originals and would likely guide users to Kelly's website, potentially increasing his market. The second factor, 'nature of the work,' slightly favored Kelly as the works were creative, but the third factor, 'amount used,' was neutral because copying the entire image was necessary for the thumbnail's transformative indexing function. Regarding the full-sized images, the court found that Arriba's inline linking and framing violated Kelly's exclusive right to publicly display his work under 17 U.S.C. § 106(5). By making the images available to any visitor on its own website, Arriba was actively engaging in a public display, not merely acting as a passive conduit. This display was not a fair use. The purpose was not transformative, as it served the same aesthetic function as Kelly's original display. This non-transformative use directly harmed Kelly's potential markets by obviating the need for users to visit his website to view the full-sized images, thereby reducing his web traffic and licensing opportunities. All four fair use factors weighed in favor of Kelly regarding the full-sized display.