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Unauthorized internet reseller of plaintiff’s products is not guilty of trademark infringement, and does not cause actionable initial interest confusion, by using plaintiff’s trademarks in meta tags of website at which plaintiff’s and its competitors’ products are sold, and in...

Perfect 10 v. Google, Inc.

Case No. CV 04-9484 AHM (SHx) (C.D. Cal., February 2006) aff'd. in part, reversed in part, remanded, 487 F.3d 701 (9th Cir., May 16, 2007).

On a motion for a preliminary injunction, the Court holds plaintiff likely to succeed on copyright infringement claims arising out of defendant Google's display of "thumbnail" images of plaintiff's copyrighted photographs in response to users' searches for images matching their description.  The Court held that it is likely to find that such a display is not a fair use of plaintiff's works, given, inter alia, its commercial nature, and the fact that such use likely interferes with a market for plaintiff's photographs.

The Court further holds that plaintiff is not likely to prevail on copyright infringement claims arising out of Google's use of "in-line links" that incorporate into Google's own web pages the web pages of third parties that themselves contain infringing copies of plaintiff's copyrighted photographs.  These "in-line links" allow users who are interested in a thumbnail image presented in Google's search results to view the actual image on the web page on which Google found it.  The Court held that it is not likely to find that Google directly infringed plaintiff's copyrights by such conduct, because, adopting the "server test," it is the third parties who created the websites that contain the infringing images, and not Google, that are displaying and/or distributing them in violation of plaintiff's copyright.

The Court further held that it was not likely to find Google guilty of contributory or vicarious copyright infringement as a result of such third party displays, notwithstanding any advertising Google may deliver to the web pages that contain such images, or revenue Google may derive therefrom.  Google is not guilty of vicarious infringement because it does not possess the requisite ability to control the content of such third party sites, or compel the third parties that operate them to remove infringing content found thereon.  Google's ability to remove such websites from search engine results does not constitute such control.  Nor, the Court stated, was it likely to hold that Google encourages or assists such infringement sufficiently to be guilty of contributory infringement.  The Court held that the record before it was insufficient to establish that the third parties displaying plaintiff's content were motivated by the revenue they might derive from the display of Google ads or that such revenue contributed to their posting of the infringing images in question.

Plaintiff Perfect 10 holds the copyright is a number of photographs of nude women.  Perfect 10 derives revenue from such images by publishing them in a magazine and displaying them on a subscription website.  Perfect 10 also derives revenue by allowing a third party to sell "thumbnails" of such images for download to cell phones.  A "thumbnail" is a lower resolution version of a full size image.

Defendant Google operates one of the world's foremost search engines.  Among Google's search offerings is the ability to search for images.  Google catalogues images it finds on the Web by the text that surrounds the image on the web page on which it is found.  When a user conducts an image search, Google uses this text to present a user with a series of thumbnail images its search engine deems responsive to a user's request.  These thumbnail images are created by Google from the original image Google located on the Web.  Google stores these thumbnails on its own servers. 

Each of the thumbnail images presented by Google to the user contains an "in-line link" to the web page on which Google's search engine located the image in question.  If the user clicks on the thumbnail, the "in-line link" pulls into a Google branded web page the third party webpage containing the image in question.  At the top of this web page is a frame containing information provided by Google, including Google's trademark and the thumbnail image of interest to the user.  At the bottom of this webpage is a second frame, which contains the third party web page on which the full image was found by Google's search engine.  The user's browser indicates that the resulting two frame web page is found on Google's website, and not that of the third party.  In reality, however, the information found on the lower frame is supplied by servers operated by the third party, and not Google.

Google derives a significant portion of its revenue from various advertising programs.  Its AdWords program allows Google to sell to third parties advertisements that appear on its own website.  Its AdSense program allows it to sell to third parties advertisements that appear on websites operated by others.  These third party website operators agree to permit Google to display ads on their websites that Google believes will be of interest to those who view them.  The revenues derived from the display of these advertisements are split between Google and the operator of the website on which the ads appear.  According to Google, a web page who's images appear in its image search results is ineligible for participation in the AdSense program.  Plaintiff, however, submitted evidence that showed that a number of the third party web pages that contained infringing images also contained Google AdSense ads, raising an issue of fact as to Google's enforcement of this policy.

Various third parties operate websites which contain infringing copies of plaintiff's photographs. 

Plaintiff commenced this suit, charging Google with infringing the copyrights it holds in various photographs both as a result of Google's display of thumbnails thereof in its search results and as a result of its use of "in-line links" to third party websites which themselves displayed images that infringed plaintiff's copyrights.  Google's thumbnail images were created from the infringing images found on these third party websites.

Plaintiff moved for a preliminary injunction.

The Court found that "Perfect 10 is likely to succeed in proving that Google directly infringes by creating and displaying thumbnail copies of its photographs."  As stated above, Google creates "thumbnails" of images it locates on the web which it stores on its own servers.  These images, reduced in size and resolution from the original, are delivered to the user in response to his search for various images.  Such "thumbnails" include images derived from plaintiff's copyrighted works.  The Court held that, by displaying such thumbnails in response to a user's search, Google was likely to have directly infringed plaintiff's copyrights in such works.

The Court further held that this was not likely to constitute a fair use of plaintiff's works.  The Court recognized that there was a transformative component to defendant's use - while plaintiff provided its images for entertainment, defendant provided its images to enable users to better use the web, and find images located thereon.

This use, however, was outweighed by the commercial nature of Google's use, and the competition it offered to plaintiff's marketing of its photographs.  The Court held Google's use was commercial because, via its AdSense program, it derived revenues each time a user clicked on the thumbnail, and caused the third party website which contained both it, and a Google ad, to appear.  Moreover, it held that Google's use was likely to be found to be consumptive, because it likely competed with plaintiff's program of licensing its own thumbnails for download to cell phones.  As a result, the Court held that it was likely to reject Google's fair use defense, and find that Google had directly infringed plaintiff's copyrights by its display of thumbnail images.

The Court held that Perfect 10 was unlikely to prevail on its claim that Google directly infringed its copyrights by in-line linking to the web pages of third parties which themselves contained infringing images.  To be guilty of direct copyright infringement, the defendant must violate one of the exclusive rights granted to the copyright holder in its copyrighted work.  Here, plaintiff claimed that Google's in-line links resulted in both its display and public distribution of its copyrighted works in violation of plaintiff's exclusive rights therein.

The Court held it was not likely to agree with this contention, and accordingly, that Perfect 10 was not likely to prevail on this direct infringement claim.

Adopting the "server test," the Court held it was the third parties who created the web pages on which the infringing images were found, and not Google, that were displaying and distributing plaintiff's works.  Said the Court:

The Court concludes that in determining whether Google's lower frames are a "display" of infringing material, the most appropriate test is also the most straightforward: the website on which content is stored and by which it is served directly to a user, not the website that in-line links to it, is the website that "displays" the content.

The Court adopted this test over the 'incorporation theory' espoused by Perfect 10 for a number of reasons, including the fact that it "is based on what happens at the technological-level as users browse the web," is "readily understand[able]," and leaves those who are the initial direct infringers - and the parties who misappropriated plaintiff's content in the first place - responsible for the infringement at issue.

As Google's in-line linking did not result either in its display or distribution of Perfect 10's images, the Court held it was not likely to find such conduct directly infringed plaintiff's copyright.

Nor, held the Court, was it likely to find that Google was guilty of contributory or vicarious copyright infringement as a result of its involvement in the display of these infringing materials by third parties.  To be guilty of contributory infringement, a defendant must be shown both to have knowledge of the infringing activity of third parties, and to have "induced, caused or materially contributed to that activity."  Perfect 10 argued that Google did indeed contribute to this activity by providing both a revenue stream via its AdSense program, and an audience via its image search.

The Court held that it was not likely to find such allegations sufficient to sustain a claim of contributory infringement.  Significantly, held the Court, there was no evidence on the record before it:

that AdSense materially contributes to direct infringement occurring on third-party websites.  Although AdSense may provide some level of additional revenue to these websites, Perfect 10 had not presented any evidence establishing what that revenue is, much less that it is material (either in its own right or relative to those websites' total income).  There is no evidence that these sites rely on Google AdSense for their continued existence or that they were created with the purpose of profiting from the display of AdSense advertisements.

The Court similarly held that Perfect 10 was not likely to prevail on its claim that Google was vicariously liable for the infringing activities of such third parties.  To be liable for vicarious infringement, a defendant must both obtain a direct financial benefit from the infringing activity and decline to exercise its right and ability to supervise or control it.

The Court held Google lacked sufficient ability to supervise or control the content of the third party websites at issue to be liable for vicarious copyright infringement.  Its ability to remove such a website from its search results was simply insufficient to meet this burden.  Said the Court:

Google does not exercise control over the environment in which it operates - i.e., the web.  Google's ability to remove a link from its search index does not render the linked-to site inaccessible.  The site remains accessible both directly and indirectly (i.e., via other search engines, as well as via the mesh of websites that link to it).  If the phrase "right and ability to control" means having substantial input into or authority over the decision to serve or continue serving infringing content, Google lacks such right or ability.

*          *          *

In addition, Google's right and ability to remove infringing websites from its index would make it more difficult for such websites to be found on the web, but those sites would continue to exist anyway.  Google cannot shut down infringing websites or prevent them from continuing to provide infringing content to the world.

The Court accordingly held that Perfect 10 was not likely to prevail on its claim of vicarious copyright infringement.

Based on the foregoing, the Court found Perfect 10 entitled to injunctive relief with respect to Google's display of thumbnail images of plaintiff's copyrighted works, and directed the parties to jointly propose the language of such an injunction.

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