Perfect 10 v.

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District Court Opinion: Perfect 10 v. Google, Inc., 416 F. Supp. 2d 828 (C.D. Cal. 2006)

Adult entertainment publisher Perfect 10 sued Google over its Image Search service, arguing that Google violated copyright law by indexing and linking to Perfect 10 photos posted on unauthorized websites, and making and delivering thumbnail images of those photos in its search results. Perfect 10 sought a preliminary injunction to prevent Google from linking to or making thumbnails of its copyrighted photos. Id. at 831.

The district court enjoined the use of thumbnails, concluding that Google's creation and display of these thumbnails from infringing websites did not fall within fair use. Id. at 851. It distinguished Kelly v. Arriba Soft Corp., 336 F.3d 811 (9th Cir. 2003), pointing to Perfect 10's claim that there was a market for thumbnail-sized images. 416 F. Supp. 2d at 850-51. The court also rejected the notion that in-line linking of images directly infringes a copyright owner's public display right, and reasoned that merely visiting a website that includes infringing material does not make you an infringer. Id. at 852 n.17. The court found that Google did not display or distribute the full images through in-line framing and that Perfect 10 was unlikely to show that Google was secondarily liable. Id. at 844, 858-59.

Original Opinion on Appeal: 487 F.3d 701, 2007 WL 1428632 (9th Cir. 2007)

The court stated that because Perfect 10 had the burden of proving likelihood of success on the merits in a preliminary injunction motion, it also had the burden of overcoming Google's fair use defense as part of showing likelihood of success. Id. at 714. In the amended opinion, the court reversed this language, stating that "[b]ecause 'the burdens at the preliminary injunction stage track the burdens at trial,' once the moving party has carried its burden of showing a likelihood of success on the merits, the burden shifts to the nonmoving party to show a likelihood that its affirmative defense will succeed." 508 F.3d 1146, 1158.

Amended Opinion on Appeal: 508 F.3d 1146 (9th Cir. 2007)

The Ninth Circuit held that framing in-line linked, full-size images of copyrighted photographs was not a "display" nor "distribution" of Perfect 10's works. Id. at 1161-62. The court reasoned that the search engine transmitted only an address that directed a user's browser to a site where a copy of the full-size image was displayed and did not communicate a display of the work itself.

The court also held that Google was not directly infringing by displaying the thumbnail images. Id. at 1165. The court extensively analyzed the fair use factors, and emphasized that the search engine provided a social benefit by incorporating an original work into a new work, namely, an electronic reference tool, and to the extent that operator's use was commercial and could supersede owner's sale of images, such use was not significant. Perfect 10 claimed the thumbnails on Google's search engine directly interfered with its secondary market for small cell phone version images because consumers who found such thumbnails on Google would not bother to buy similar-sized cell phone versions from Perfect 10. Id. at 1168. The court found this potential harm to be too hypothetical and Google's use to be fair.

On the issue of contributory infringement with full-size in-linked images, the court found that Google did not induce infringement and that the search engine was capable of substantial noninfringing uses. Id. at 1170. However, citing to the Napster test, the court found Google could still be contributorily liable under common law principles. Id. at 1171 (citing A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1013 (9th Cir. 2001)). It found that Google aided third-party websites in distributing their infringing copies of photographs to a worldwide market and assisted a worldwide audience of users to access infringing materials. Id. at 1172. The court remanded to the district court for factual determinations of whether Google had actual knowledge of specific infringing materials and whether there were reasonable and feasible means for the search engine to refrain from providing access to infringing images. Id. at 1172-73.

As for vicarious infringement, the court found that Perfect 10 failed to show likelihood of success on its claim because the search engine could not terminate third-party websites or block their ability to host and serve infringing full-size images on the Internet; the search engine lacked the practical ability to police the infringing activities of third-party websites. Id. at 1174. This was true even though the search engine has a right to terminate in its advertising contracts. The court stated, "Google's right to terminate an AdSense partnership does not give Google the right to stop direct infringement by third-party websites. An infringing third-party website can continue to reproduce, display, and distribute its infringing copies of Perfect 10 images after its participation in the AdSense program has ended." Id. at 1173.

The court also remanded for a determination of whether Google qualified for DMCA 512 protection from the secondary liability claims. Id. at 1175.