District Court Rules in Perfect 10 v. Google

February 17, 2006. The U.S. District Court (CDCal) issued its order [48 pages in PDF] titled "Order Granting in Part and Denying in Part Perfect 10's Motion for Preliminary Injunction Against Google" in Perfect 10 v. Google, a copyright infringement case.

Google's Image Search function involves the creation and display of reduced size (thumbnail) images, created from full sized images copied from other web sites, which may be protected by copyright, without first obtaining authorization. Google also displays these thumbnail images on a search results page, and on a two frame web pages, with the thumbnail in the top frame, and the web page containing the full size image in the bottom frame. The content of the lower frame is created by third parties, and stored on servers of third parties. Some of these third party web sites themselves display infringing full size pictures.

The present order pertains to Perfect 10's (P10) motion for preliminary injunction for copyright infringement, and Google's defense of fair use. The District Court wrote that the issue is "does a search engine infringe copyrighted images when it displays them on a ``image search´´ function in the form of ``thumbnails´´ but not infringe when, through in-line linking, it displays copyrighted images served by another website?"

The District Court granted P10's motion for a preliminary injunction of the display by Google of thumbnail copies of P10's copyrighted images. The District Court denied P10's motion as to framing of, and in-line linking to full size infringing copies elsewhere. The District Court also denied injunctive relief based upon P10's theories that Google's framing of, and linking to, infringing web sites constitutes vicarious and contributory infringement claims.

What follows is a summary of this 48 pages order. However, it is long and detailed, and interested readers should read the entire order.

Related Cases. This case may affect more that just P10 and other web based businesses that sell access to pictures of women. This case may be cited and relied on as precedent in other copyright infringement cases against search web sites.

Moreover, this case reaches a different result from the other 9th Circuit opinion on search and images, Kelly v. Arriba Soft. On February 6, 2002, the U.S. Court of Appeals (9thCir) issued its original opinion [25 pages in PDF] in Kelly v. Arriba Soft. Arriba Soft filed a petition for review. The Court of Appeals denied the petition, but issued its revised opinion [16 pages in PDF] on July 7, 2003. This revised opinion is also reported at 336 F.3d 811. See also, stories titled "9th Circuit Reverses in Kelly v. Arriba" in TLJ Daily E-Mail Alert No. 363, February 7, 2002; and "Petition for Rehearing Filed in Kelly v. Arriba Soft" in TLJ Daily E-Mail Alert No. 381, March 5, 2002.

The opinion is Kelly v. Arriba Soft is fundamental to Google's defense in the book publishers' and the Authors Guild's cases.

On October 19, 2005, five book publishing companies filed a complaint [35 pages in PDF] in U.S. District Court (SDNY) against Google alleging that its GPL infringes copyrights. The plaintiffs are McGraw Hill, Pearson Education, Penguin, Simon & Schuster, and John Wiley & Sons. All are members of the Association of American Publishers (AAP).

See also, story titled "Major Book Publishers Sue Google for Digitizing Copyrighted Books" in TLJ Daily E-Mail Alert No. 1,237, October 20, 2005. This case is McGraw Hill Companies, Inc., Pearson Education, Inc., Penguin Group (USA) Inc., Simon & Schuster, Inc. and John Wiley & Sons, Inc. v. Google Inc., U.S. District Court for the Southern District of New York, D.C. No. 05-CV-8881.

On September 20, 2005, the Author's Guild and others filed a similar complaint in the same District Court against Google alleging copyright infringement in connection with the same GPL. The plaintiffs in that action seek class action status. See, stories titled "Author's Guild Sues Google for Copyright Infringement" in TLJ Daily E-Mail Alert No. 1,218, September 21, 2005, and "University Publishers Accuse Google of Systematic Infringement of Copyright on a Massive Scale" in TLJ Daily E-Mail Alert No. 1,142, May 25, 2005.

See also, story titled "Google, Publishers and Authors Debate Google's Print for Libraries Program" in TLJ Daily E-Mail Alert No. 1,239, October 25, 2005.

The present case involves pictures. The Authors Guild and book publishers' case involve scanning of books. Hence, the underlying facts differ. Nevertheless, one set of facts that is common to all cases is the extent to which Google is operating its search functions for commercial purposes. Google has developed sophisticated advertising programs to generate revenue. These caused the District Court in the present case to find Google's activities to be more commercial than those of Arriba Soft. And this was one reason that this Court reached a different result in its fair use analysis.

Perfect 10 and Google. Perfect 10 publishes a print magazine, and operates a web site, that display pictures of naked women. The women are young, and their images appeal to a prurient interest. P10 has registered copyrights with the U.S. Copyright Office. P10's business model includes generating revenues from magazine sales, web site subscriptions, and licensing. The web subscription is $25.50 per month. This is $306 at an annual rate. (TLJ is a comparative bargain at $250.)

P10 has licensed reduced size copies of its pictures, for compensation, to a third party for display on cell phones. P10 has not licensed Google or Amazon.

Google operates a web site that provides web search functions, including a service titled "Image Search". Google states in its web site that "Google's Image Search is the most comprehensive on the Web, with billions of images indexed and available for viewing. ... Enter a query in the image search box, then click on the "Search" button. On the results page, just click the thumbnail to see a larger version of the image, as well as the web page on which the image is located."

Google adds that "The images identified by the Google Image Search service may be protected by copyrights. Although you can locate and access the images through our service, we cannot grant you any rights to use them for any purpose other than viewing them on the web. Accordingly, if you would like to use any images you have found through our service, we advise you to contact the site owner to obtain the requisite permissions."

Google also states that "The results you see with this feature may contain mature content." That is, Google Image Search also operates as a pornography search engine.

The District Court's order states that "Google stores content scanned by its web crawler in Google's ``cache.´´" It identifies the subject of images by the text surrounding the images.

The order relates that Google creates and stores in a cache thumbnail sized images, that can then be produced in a search results web page in response to a user's query. Google generates results pages that display thumbnail images, arranged in a grid, and hyperlinked to a page that will provide more information. If the user clicks on an image from the grid, he then is provided a framed web page. The top frame contains the thumbnail, and is content that resides on Google servers. The larger bottom frame contains material hosted by the third party. It contains the full size image that Google used to create the thumbnail image.

Some of these third party web sites contain full sized copies of P10's copyrighted images.

Google's business model includes generating revenues through paid advertising displays on search results pages.

Pleadings. P10 filed a complaint in U.S. District Court (CDCal) against Google alleging copyright infringement and trademark infringement. P10 filed a second complaint against Amazon.com, and its subsidiary, A9.com. The two suits were consolidated.

More specifically, P10 plead direct copyright infringement, vicarious copyright infringement, contributory copyright infringement, circumvention of copyright protection systems under the DMCA, direct trademark infringement, contributory trademark infringement, vicarious trademark infringement, trademark dilution under federal law, unfair competition, wrongful use of a registered mark, trademark dilution under state law, and violation of rights of publicity.

P10 filed a motion for preliminary injunction on its copyright claims, seeking to enjoin Google and Amazon from displaying thumbnail copies of its copyrighted pictures, and to further enjoin the defendants from hyperlinking to the web sites of third parties that display infringing full size copies of P10's pictures.

Google did not dispute that the P10 pictures are copyrightable subject matter. Nor did it dispute P10's ownership. Google did argue that its copyright is protected by the doctrine of fair use, which is codified at 17 U.S.C. § 107.

District Court's Ruling on Direct Copyright Infringement and Fair Use. The District Court provided an overview of the legal standards for issuance of a preliminary injunction. It also reviewed the elements of a claim for copyright infringement. Also, since Google raised the defense of fair use, the District Court discussed standards applicable to this defense. The Court stated that fair use is an affirmative defense, but that on P10's motion for preliminary injunction, P10 "carries the burden of overcoming Google's fair use defense".

However, before applying fair use analysis, the District Court first examined whether and where there was a violation of any of the six exclusive rights of copyright enumerated in 17 U.S.C. § 106. The District Court had little difficulty finding direct infringement by Google in the creation and use of thumbnail images. It found that Google did "display" infringing copies. (The District Court did not decide whether Google did "distribute" infringing copies. See, footnote 11.)

However, after a lengthy discussion and analysis of the technology, the District Court concluded that "for the purposes of direct copyright infringement, Google's use of frames and in-line links does not constitute a ``display´´ of the full-size images stored on and served by infringing third-party websites. Thus, P10's claim of direct infringement with respect to these actions will likely fail." Moreover, the District Court concluded that Google's use of frames and in-line links to infringing websites is not a "distribution".

The District Court then applied fair use analysis to the question of direct infringement via display of infringing thumbnail images.

The fair use doctrine is codified at 17 U.S.C. § 107. The relevant language of the fair use exception provides: "In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include -- (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work." The Court applied this test, prong by prong.

First, as to the "purpose and character of the use", the Court found that this prong weighs slightly in favor of P10. In so doing, the Court distinguished Kelly v. Arriba Soft, which also involved the fair use exception to copyright infringement in the context of online digital images and search engines. The Court of Appeals held that Arriba Soft's use of small thumbnail copies of Kelly's copyrighted photographs in its search engine results constituted fair use. And, the Court of Appeals found that the "purpose and character" prong worked in Arriba Soft's favor.

In the P10 case, the Court considered both the commercial versus non-commercial aspect of the use, and transformative versus consumptive aspect of the use. The District Court found that Google's use is commercial, since its image search generates advertising revenues. However, it found that Google's use was more commercial than was Arriba Soft's. Also, while the Court of Appeals found that Arriba Soft's images were transformative, the District Court found that Google's use was consumptive. That is, P10 licenses thumbnail images, for payment, for display on cell phones. The District Court noted that cell phone customers could instead use the thumbnails generated and displayed by Google, thus replacing P10's licensed service.

Second, as to the "nature of the copyrighted work", the District Court found that because the works are published photographs, this prong weighs only slightly in P10's favor. The Court of Appeals reached the same conclusion in Kelly v. Arriba Soft.

Third, as to the "amount and substantiality of the portion used in relation to the copyrighted work as a whole", the District found that this prong weighs in favor of neither party. The Court of Appeals also reached the conclusion that this test is neutral in Kelly v. Arriba Soft.

Fourth, as to the "effect of the use upon the potential market for or value of the copyrighted work", the District Court found that because there is a cell phone image download market for small pictures of naked women, Google is harming the potential market for P10's works, and hence, this factor weighs in P10's favor. The District Court concluded that Google is not likely to affect the market for full sized pictures.

Then, the District Court concluded that since three of the four fair use tests weigh in P10's favor, and the fourth is neutral, Google's fair use defense fails.

Vicarious or Contributory Infringement. The District Court noted that there was no evidence in the record on direct infringement by individual users. There was, however, evidence in the record of direct infringement by third party web sites. The District Court rejected P10's request for a preliminary injunction based upon either the theories of vicarious or contributory infringement claims.

This case is Perfect 10 v. Google, Inc., et al., U.S. District Court for the Central District of California, D.C. No. CV 04-9484 AHM (SHx), Judge Howard Matz presiding.