Perfect 10 magazine, which has been more celebrated for published court decisions than for magazines, has done it again. This time it’s responsible for a difficult-to-reconcile decision about thumbnails and framing. Thusly, in so doing, Perfect 10 has engineered a colossal stickup. But first, some background.
Occasionally, copyright law and the First Amendment clash. After all, an injunction against the publication of copyright-infringing material is an unqualified prior restraint on speech, something that the First Amendment ordinarily does not tolerate. Yet, injunctions against copyright-infringing publications are commonplace.
The area where the courts are forced to delicately balance copyright and free speech interests is called “fair use.” This was first summarized in the Legal Commentary May 2002 AVN Online (“Other People’s Stuff: Thumbnails and Linking—When is Infringement Permissible?” But much has transpired on the legal front since then, and the latest decision merits reporting the status of thumbnail and by framing infringement.
Perfect 10 Inc. has sparked varying opinions after taking on Supersex.com, Adult Check, CCBill, Visa International, and, now, behemoth Google—the most remarkable case to date.
As reported in 2002, the 9th Circuit Court of Appeals – the federal appellate court that covers California – rendered a noteworthy opinion in Kelly v. Arriba Soft Corp., 280 F.3d 934 (9th Cir. 2002).
Photographer Leslie Kelly found Arriba’s website, a search engine that displayed results as thumbnail pictures. Like other search engines, Arriba used a “crawler” that surfed the Web for pages associated with various words. Unlike other search engines, however, Arriba displayed entire images, not just URLs. The crawler then downloaded the image, made it a thumbnail, and then discarded the full-size image. So, for example, a search for “Boston” would produce thousands of thumbnails involving Boston, including presumably paid advertisements for Boston Magazine and for travel agents that can book a trip there. Clicking a thumbnail links you to the source photograph. Arriba unquestionably infringed on numerous copyrights, but claimed that it all was fair use.
Specifically, infringement occurred when (1) Arriba’s crawler first copied the picture, (2) when Arriba made a thumbnail from it, (3) when the site displayed the thumbnail in response to the search, and (4) when the site displayed the entire picture, which, at the time, was inside Arriba’s frame. The court found this was fair use, except the last one, which seemed to infringe by displaying a copyrighted full-sized image on Arriba’s site. The court later withdrew its decision, finding that it should not have reached the issue in the first place.
The court found that the entire process of creating and displaying the thumbnails was fair use, and it noted two important points. First, the sole purpose of the original copying of the entire photograph was for creating the thumbnails; the copy was discarded afterward. Secondly, the quality of the thumbnails was dramatically reduced from that of the originals. Noting that the fair use exception is designed for the benefit of the public, the court found a public benefit “by enhancing information gathering techniques on the Internet.” Also important was the court’s finding that the thumbnails did not harm the market for the photographer’s original images for reasons including poor quality. Thus, the infringement of creating and displaying the thumbnails was subject to the fair use exception.
The recent Perfect 10 case turns Arriba on its head. It addresses Google’s search engine that, after the search, displays the following:
“[When] a user clicks on a thumbnail returned as the result of a Google Image Search, his computer pulls up a page [comprising] two distinct frames: one hosted by Google and a second hosted by the underlying website that originally hosted the full-size image. The two frames are divided by a gray horizontal line a few pixels high. The upper frame is the Google frame. It contains the thumbnail, retrieved from Google’s cache, and information about the larger image, including the original resolution of the image and the specific URL associated with that image. The Google frame also states that the thumbnail ‘may be scaled down and subject to copyright’ and makes clear that the upper frame is not the original context in which the full-size image was found, stating, ‘Below is the image in its original context on the page: http://.’ The lower frame contains, or shows, the original Web page on which the original image was found. Google neither stores nor serves any of the content (either text or images) displayed in the lower frame; rather, the underlying third-party website stores and serves that content. However, because Google’s Web page composites the two frames, the URL displayed in the browser’s address bar displays ‘images.google.com.’”
The issue was whether the court should grant a preliminary injunction against this practice of “framing,” aka “in-line links” and/or the practice of displaying thumbnails. Remarkably, the court found that Perfect 10 likely would prevail with respect to the thumbnails but would not prevail with respect to the frames. To many, this result is totally counterintuitive.
As in Arriba, thumbnails should be fair use, right? Perfect 10 could never sell low-quality thumbnails for anything. New technology evidently has changed things:
“[Perfect 10] targets its copyrighted small- and full-size images at several markets: the print magazine market, the online adult website subscription market, and the cell phone image download market. Google’s use of thumbnails is not likely to affect the market for full-size images (whether in print or online)…The thumbnails would not be a substitute for the full-sized images because the thumbnails lose their clarity when enlarged…
“On the other hand, Google’s use of thumbnails likely does harm the potential market for the downloading of…images onto cell phones.”
This case is far from over—and it is not all about Perfect 10’s righteous interest in preventing Google from illegally using its images; this case is about money. Putting aside the fact that Perfect 10’s complaint includes a more difficult claim for punitive damages, it includes a claim for statutory damages under the Copyright Act, presumably up to $30,000 per infringement, and up to $150,000 each if the infringement is found to be willful. The complaint also alleges violations of a California statute allowing collection of statutory damages of $750 per each publication of a copyrighted photo without consent. Perfect 10’s model releases apparently assign the model’s right of publicity to Perfect 10.
The complaint lists more than 75 allegedly infringed copyrights and speaks of “thousands of distinct copies of unauthorized Perfect 10 Copyrighted Works.” So, 70-something violations at $750 each equal more than $50,000. The stakes for the copyright violations begin at around another $50,000, but if you calculate using the $30,000 figure, you are talking at least $2 million. If you use the $150,000 figure, it is more than $10 million—excluding attorneys’ fees!
The economics of this is fascinating. By garnering a preliminary injunction, Perfect 10 has engineered a spectacular coup against Google, which has well-known deep pockets. Perfect 10 is now in a position where it can force Google to settle for huge bucks, leaving on the record only a “probability of success” opinion by a district court, which would not be conclusive against Google in future cases. If it failed to settle, Google might be up against copyright infringement suits by countless other publishers, and no defense because of a doctrine called “issue preclusion.”
Certainly, this case raises the prospect that a company that has been relatively unsuccessful at paper, motion picture, and Internet publishing could find itself constantly shelling out $750 plus attorneys’ fees for infringement.
Cha-ching!
Clyde DeWitt is a Los Angeles attorney whose practice has been focused on adult entertainment since 1980. He can be reached through AVN Online’s offices or at [email protected]. Readers are considered a valuable source of court decisions, legal gossip, and information from around the country, all of which is received with interest. Books, pro and con, are encouraged to be submitted for review, but they will not be returned. This column does not constitute legal advice but, rather, serves to inform readers of legal news, developments in cases, and editorial comment about legal developments and trends. Readers who believe anything reported in this column might impact them should contact their personal attorneys.
