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Google prevails in Perfect 10 thumbnail case

Our society is still coming to grips with all the ramifications of the World Wide Web. On the one hand, the right to display an image via a web site clearly belongs to the copyright holder. On the other hand, search engines that display tiny versions of copyrighted images (so that readers can choose which images they wish to examine more closely) are part of what makes the World Wide Web useful.

In the past, the courts have held that a search engine that displays thumbnails is making a “fair use” of copyrighted images. Until now, the case that addressed this question most directly was Kelly v. Arriba Soft, decided in 2002 — a case in which ASMP filed amicus curiae briefs and provided substantial support to photographer Les Kelly. In that ruling, the court made much of the fact that there was no commercial use for thumbnails except as a convenient way of referring to the real images. Thus, displaying thumbnails on a web site did not reduce the economic value of the images. No harm, no foul, said the court.

New technology has changed all that. Nowadays, there are companies that market small images for cell phone screens. Thus, what was fair use five years ago might not be fair use today. In 2005 a California firm, Perfect 10 Inc., brought this very question before the court.

Background. Perfect 10 publishes pictures of nude models on its web site and charges a fee to view them. (A positive commentary on the company is available in Wikipedia.) Much to Perfect 10's annoyance, the pictures are often pirated on other web sites. Google’s search engine visits the pirate sites and indexes their content, including the images. Then, as part of its normal operation, the search engine displays thumbnails of the stolen images, along with links to the sites where the original may be viewed. The Perfect 10 site itself is guarded by passwords, so Google has never indexed Perfect 10 images directly.

However, beginning in 2001, Perfect 10 sent notices to Google asking it to stop linking to sites that pirated its images and to remove their thumbnails. It was not satisfied with Google's cooperation. So, late in 2004, Perfect 10 sued Google for direct copyright infringement (via the thumbnails) and for secondary infringement (failing to remove links). Knowing that it would be some years before the trial was held, it also asked the judge for a preliminary injunction to make Google stop infringing immediately.

It is not easy to get a preliminary injunction. You have to demonstrate that you are suffering harm and that you are likely to win your case when it comes to trial.

At the hearing on the preliminary injunction, Google raised two defenses: First, that the thumbnails were a fair use under the Copyright Act. Second, that it had acted properly under the provisions of the Digital Millennium Copyright Act; whenever it could confirm that copyrights were being infringed, it did remove the offending links. However, in many cases it could not identify the infringer or verify that infringement was taking place.

Initial ruling. To decide whether Perfect 10 was likely to win, the judge had to determine whether Google’s defenses were valid.

The whole point of copyright is to encourage creators by giving them a way to make money from their works. The point of fair use is to allow society to benefit as well by permitting unpaid use of the copyrighted works by teachers, researchers and creators who build on earlier works. To balance these competing goals, the courts look at various factors, such as whether the new work really builds something new out of the old work — whether it is “transformative” — and whether it deprives the original creator of any revenues.

Citing the Kelly decision, the judge found that thumbnails in a search engine were transformative. But, said the judge, the existence of the cell phone market could deprive Perfect 10 of its legitimate revenues. Moreover, through its AdSense program, Google could also earn money from infringing web sites. Therefore, the judge granted the injunction against Google on the charge of direct infringement.

Perfect 10 also had made claims for secondary infringement: contributory infringement (enabling others to violate a copyright) and vicarious infringement (benefiting from the violations that others commit). Here, Google’s defense was that it had followed the rules of the DMCA. But the judge did not address that issue. Instead, he ruled that there was no contributory infringement; copyright violators had existed before Google came along and would continue if Google were shut down. And, although there was some vicarious infringement (pirates who were part of Google’s AdSense program paid money to Google when a link was clicked), there was not much Google could do about it. So the judge denied Perfect 10’s motions on these claims.

Both sides then appealed, and the injunction was stayed while the appeals court considered the matter.

ASMP role. Because the case had the potential to strengthen the rights of copyright owners, ASMP filed an amicus curiae brief in support of Perfect 10’s appeal. Joining in the brief were other industry associations: the British Association of Picture Libraries and Agencies (BAPLA), Graphic Artists Guild (GAG), Picture Archive Council of America (PACA), Professional Photographers of America (PPA), Stock Artists Alliance (SAA), American Society of Picture Professionals (ASPP), and National Press Photographers Association (NPPA).

These groups pointed out that Google's display of full-size images — albeit indirectly, via an HTML frame and a link — infringes on the public display right that is defined in the Copyright Act. The Act states that public display means "to transmit or otherwise communicate a … display of the work to … the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times."

The trial court had seen no violation of the display right. It said that the image files neither resided on nor passed through Google's servers, and that a link, though its effect was to cause the image to appear, was nevertheless not quite the same thing as the image file. The judge found that Google's system was therefore within the bounds of law.

ASMP and its fellow friends of the court supported Perfect 10's appeal. They pointed out that, although the Copyright Act was written before the Internet was invented, Congress had been aware of vast technological changes that were coming and had clearly spelled out its intent. Precedent-setting cases (such as New York Times v. Tasini) had reinforced this by establishing that the user's perception, not the technical inner workings of a system, were what counted. Therefore, said the associations, the trial court had erred.

Appeals court says no. On review, the Ninth Circuit found two mistakes in the trial court’s logic.

The case was then sent back to the lower court for further fact-finding.

Now what? Perfect 10 is about to file a petition for rehearing by the Ninth Circuit, and ASMP is filing an amicus brief in support of the petition. The brief will be joined in by other trade associations but, as of this writing, the list has not yet been completed.

However, if the Circuit Court's ruling remains in place, Perfect 10 has significant hurdles to overcome at trial. To overcome the decision on fair use, Perfect 10 will have to prove that there are significant numbers of users who would buy its images for their cell phones but don’t because they use Google thumbnails instead. To win on the issue of secondary infringement, Perfect 10 will have to prove either that Google has the capability to identify infringing sites on its own or that Google is ignoring Perfect 10’s DMCA notices that identify infringers.

ASMP will continue to participate in this case and keep you informed as developments occur.