First published in Intellectual Property Magazine

Since 2007, when the Ninth Circuit adopted the ‘server test’ in Perfect 10, Inc v, Inc,1 companies and individuals sued for copyright infringement have relied on its holding that whether a website publisher is directly liable for copyright infringement turns on whether the image is hosted on the publisher’s own server or is embedded or linked from a third-party server.

Earlier this year, two photographers filed a copyright infringement suit against Instagram challenging the server test.2Instagram’s motion to dismiss the suit – and potentially, protect its and other media companies’ business models – hinges on the viability of the server test as a defence to such claims.

In Perfect 10, the plaintiff, a subscription website for images of nude models, alleged that Google and Amazon infringed its copyrights because (1) Google’s search engine results included reduced-sized, lower resolution “thumbnail” versions of its original images, and (2) Google’s business agreement with Amazon permitted Google’s search engine to send search results, including the plaintiff’s original images, to Amazon’s customers.

The Ninth Circuit found that (1) the thumbnails were infringing based on the fact that they were stored on Google’s server, and (2) the full-size original images, which were stored on third-party servers and accessed by in-line linking (which works like embedding) were not infringements.

Fourteen years later, the server test is the subject of renewed scrutiny. Moreover, the Hunley litigation could lead the Ninth Circuit itself to revisit the Perfect 10 decision in light of developments in how images are used and disseminated online.

In Hunley, the photographers’ complaint attacks the server test, alleging that “Instagram misled the public to believe that anyone was free to get on Instagram and embed copyrighted works from any Instagram account, like eating for free at a buffet table of photos, by virtue of simply using the Instagram embedding tool.”3

Stated differently, the plaintiffs promulgate that Instagram and its parent company, Facebook, profit from the embedding process which constitutes secondary and contributory copyright infringement.

In response, Instagram’s motion to dismiss argues that the plaintiffs’ secondary liability claims are barred “...Under the server test, then, the third-party websites cannot be direct infringers. (And Instagram, of course, cannot be a direct infringer because, as Plaintiffs concede, Instagram has a license to display the photographs).”4

Two weeks after Instagram filed its motion, the US District Court for the Southern District of New York (SDNY) refused to adopt the server test in Nicklen.5 In that case, a conservationist posted a video he took of an emaciated polar bear on Instagram, asking his followers to consider climate change. Nicklen’s video was widely shared on social media and Sinclair, like many other news outlets, covered the viral content. In its online article, Sinclair “embedded” the plaintiff’s video through HTML code provided by Instagram.

Nicklen sued for copyright infringement and Sinclair moved to dismiss, “arguing that embedding a video does not ‘display’ the video within the meaning of the Copyright Act” and seeking protection under the server test. The court denied Sinclair’s motion, holding that “[t]he server rule is contrary to the text and legislative history of the Copyright Act”. 6 This decision is not the first SDNY holding to question the server test.7

As the SDNY has held, “Perfect 10 is [not] part of an ’unbroken line of authority” and “[o]utside of the Ninth Circuit... the Server Test has not been widely adopted.” Goldman v Breitbart News Network, LLC, 302 F. Supp. 3d 585, 591 (SDNY 2018). For example, in Flava Works, Inc v Gunter, the Seventh Circuit did not directly opine on the viability of the server test.8 The lower court did, however, hold that, “[t]o the extent that Perfect 10 can be read to stand for the proposition that inline linking can never cause a display of images or videos that would give rise to a claim of direct copyright infringement, we respectfully disagree.”9

Many media companies and social platforms rely on the easily understandable bright-line server test for robust protection against copyright claims by content creators related to embedded content. These challenges to the test, however, should give these companies and platforms pause regarding the availability and use of embedding functionality.