Perfect 10, Inc. v. Amazon.com, Inc.
487 F.3d 701, 82 U.S.P.Q. 2d (BNA) 1609 (2007)
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Rule of Law:
An owner of a computer system that provides links to infringing content on third-party websites does not directly infringe a copyright owner's display or distribution rights. A search engine's creation and display of thumbnail images is a transformative fair use and does not constitute direct copyright infringement.
Facts:
- Perfect 10, Inc. operates a subscription-based website featuring its copyrighted photographs of nude models.
- Perfect 10 also licenses Fonestarz Media Limited to sell and distribute reduced-size versions of its copyrighted images for use on cell phones.
- Third-party websites republished Perfect 10's copyrighted images without authorization.
- Google's Image Search is an automated software program that indexes images on the internet, including the unauthorized images from third-party websites.
- In response to user queries, Google's search engine displays small, low-resolution 'thumbnail' versions of these images, which Google creates and stores on its own servers.
- When a user clicks on a thumbnail, Google provides HTML instructions that direct the user's browser to the third-party website where the full-size infringing image is stored.
- This process, known as 'in-line linking' and 'framing,' makes the infringing third-party image appear on the user's screen within a Google-branded webpage.
- Google's AdSense program places advertising on some of these third-party websites containing infringing images, and Google shares the resulting revenue with the website owners.
Procedural Posture:
- Perfect 10 sued Google, Inc. in the U.S. District Court for the Central District of California for copyright infringement.
- Perfect 10 also sued Amazon.com in a similar action, and the two cases were consolidated.
- Perfect 10 moved for a preliminary injunction to stop Google and Amazon from infringing its copyrights and linking to infringing websites.
- The district court granted the injunction in part against Google, prohibiting it from displaying thumbnail versions of Perfect 10's images.
- The district court denied the injunction in part against Google, refusing to prohibit it from linking to full-size infringing images.
- The district court denied the motion for a preliminary injunction against Amazon.com.
- Both Perfect 10 and Google appealed the district court's decision to the U.S. Court of Appeals for the Ninth Circuit.
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Issue:
Does a search engine operator directly infringe a copyright owner's exclusive right to display its images when it creates and displays thumbnail versions of the images as search results and provides in-line links to websites hosting infringing full-size versions of the images?
Opinions:
Majority - Ikuta
No, a search engine operator does not directly infringe a copyright owner's display rights under these circumstances. For direct infringement of the display right, an entity must store and transmit a copy of the work itself. Under the 'server test' adopted by this court, Google does not directly infringe Perfect 10's display or distribution rights for the full-size images because Google does not store those images; it only provides HTML instructions that link to the third-party servers where the images are stored. While Google does store and display copies of the thumbnail images, this is a protected fair use. The court reasoned that Google's use of thumbnails is highly transformative, as it uses the images not for their original aesthetic purpose but as pointers in an electronic reference tool, providing a significant public benefit. This transformative purpose outweighs the commercial nature of Google's operation and any potential, but unproven, harm to Perfect 10's market for cell phone images. Therefore, Google's use of thumbnails is a fair use, and its linking to full-size images is not direct infringement.
Analysis:
This decision established the influential 'server test,' which clarifies that direct copyright infringement for displaying an image online occurs only when the defendant hosts and transmits the image from its own servers. By immunizing search engines from direct infringement liability for in-line linking and framing, the court provided critical legal protection that allowed search engines to function and develop as they do today. Furthermore, the ruling solidified the fair use defense for search engine thumbnails, building on Kelly v. Arriba Soft, by emphasizing the 'transformative' nature of using images as a reference tool rather than for their original expressive purpose. This has had a profound impact on internet law, shaping the boundaries between direct and secondary liability online.
