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An Internet-Age Copyright Ruling

By Stephen Filler, Esq.

Web businesses that use images or display third party content should pay attention to an important decision reached last month by a federal appeals court in California.

In Kelly v. Arriba Soft Corporation, the Court of Appeals for the Ninth Circuit covering California ruled that an image search engine website that copied and displayed thumbnail images in response to a user's query was not a copyright infringement but rather a (non-infringing) "fair use" allowed under copyright law.

Also, and more significantly, the Court ruled that the Web site's use of inline linking and frames to display content residing on a third party's server was a copyright infringement.

The case involved plaintiff Leslie Kelly, a professional photographer who displays images on his Web site and on authorized third party sites. Defendant Arriba, now known as Ditto.com, operates an Internet image search engine that permits users to enter a search query and then returns and permits users to view images matching the query.

Arriba builds its database by using a Web crawler that searches the Web for images, and then downloads full-sized copies of the images to its computers. Arriba then generates smaller, lower resolution images -- known as "thumbnails" -- for display, and deletes the originals.

When a user enters a search term into the query box, Arriba's servers display thumbnails responsive to the search. If the user clicks on a thumbnail or a view "source" link, the user sees a full-sized version of the same image that would be displayed in the user's browser, and appearing to be part of the Arriba site.

Arriba used various methods to display these full-sized images. Sometimes, users who clicked on a thumbnail would see an "Images Attributes" page containing the Arriba banner, advertising and text describing the size of the image, all of which resided on Arriba's servers.

The user would also see the full-sized original image, but this image did not reside on Arriba's servers; rather, it was delivered from the image's original location by an "inline link" that caused the image to be displayed as part of the Arriba site in the user's browser.

At other times, if the user clicked on the thumbnail, or on a view "source" link, the full-sized image and the originating page would be similarly displayed, from a link to the originating server, and framed within the Arriba site.

Arriba's crawler copied Kelly's images into Arriba's database and made them returnable by search on the Arriba site. Kelly then sued for copyright infringement.

The Court found that Arriba had copied images and displayed thumbnails without Kelly's permission. However, this was not considered a copyright infringement because Arriba's use of the thumbnails in this context was considered a "fair use."

Even though it was clear that Arriba's purpose in displaying the images was commercial (e.g., it sold advertising on its site), Arriba's use of the images was "transformative." Kelly's images were artistic works used to illustrate and esthetically portray the American West.

In contrast, Arriba's search engine used the thumbnails not to be illustrative of esthetic purposes, but as part of a tool to index and improve access to images on the Internet. Thus, Arriba's use of the thumbnail images did not "merely supersede" the original images, but "instead add[ed] something new, with a further purpose or different character, altering the first with new expression, meaning or message."

Also, the thumbnails were of such low resolution that it was unlikely that a user would enlarge and use them, or that their use would harm the market or value of Kelly's images. Users were directed to Kelly's site to see full-resolution images.

The Court reached the contrary conclusion in its ruling, however, with regard to the full-sized images that were displayed as part of Arriba's site through inline links and framing.

Although most people understand that copyright protects against unlawful copying, the Copyright Act also protects against unlawful distribution and public display. These full-size images were not copied onto Arriba's servers and, thus, Kelly's right of reproduction was not violated.

Nonetheless, the Court held that Arriba infringed Kelly's copyright by publicly displaying the full-size images to appear as part of Arriba's site through an inline link or frame. The Court found the Copyright Act's broad right of public display was violated when Arriba actively caused Kelly's images to be displayed on the user's screen.

The Court also held that Arriba's display of the full-sized images in this manner was not a fair use. Unlike the thumbnail images that were necessary to index and provide access to images, the full size display did not enhance the search engine function. Instead, display of the full-sized images served the illustrative and artistic purpose of the original images.

By displaying the full-sized images as part of the Arriba site, Arriba harmed Kelly's ability to license images, because users would no longer have reason to go to Kelly's site to view the full-sized images.

In some respects this decision represents a coming of age for Internet jurisprudence. The Court handled the technical concepts of crawlers and linking in an intelligent and matter-of-fact way. It also recognized the unique value of Internet search engines; by giving users indexing and access capability they provide value very different than the underlying content.

Internet businesses that use third party content in ways very different from the originally intended use may find this decision justifies their actions.

The Court also recognized that it may be improper for an online business to display third party content residing on a third party server through inline links or frames. Anyone engaged in such activity should carefully analyze this decision and determine whether such actions might be considered a copyright infringement.

Although the Court's decision appears limited to situations where content residing on a third party server is made to appear as part of a different website, some fear that the decision is dangerously broad and may provide grounds to challenge all Internet links.

On behalf of the defendant search engine, the Electronic Frontier Foundation has asked the Ninth Circuit to reconsider its ruling.

Stay tuned.

* Stephen Filler (sfiller@nylawline.com) has been the principal of Law Offices of Stephen Filler since 1993. His practice focuses on information and technology industries, such as copyright, trademark, intellectual property, electronic commerce, Internet law, and general business law.

He is co-chairman of the Entertainment, Media, Intellectual Property and Sports Law Section of New York County Lawyers Association and co-chairman of the Law and Business Special Interest Group of New York New Media Association.