Perfect 10 Still Standing as Defense to Embedding, Highlighting Differences in Circuit Court View of Copyright Infringement
While other courts chip away at the Server Test, and find that embedding another’s image for display on one’s website may equate to copyright infringement, courts within the Ninth Circuit continue to follow Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146 (9th Cir. 2007) in finding that “an alleged infringer ‘display[s]’ an image in violation of a copyright holder’s rights only if a ‘copy’ of the image is ‘embodied’ (i.e., stored in a computer’s server or hard disk, or other storage device).”
In Hunley v. Instagram, LLC (N.D. Cal, Case No. 21-cv-03778 CRB), plaintiffs were again rebuffed in their efforts to allege that Instagram was secondarily liable for copyright infringement committed by users who accessed Instagram’s embedding mechanism, with the Court suggesting that “Hunley present these arguments to the Ninth Circuit.”
The Hunley case was commenced by plaintiffs who alleged that Instagram was secondarily liable for a third party’s copyright infringement as Instagram’s embedding tool enabled third-party websites to display copyrighted photos or videos posted to an Instagram account. On September 17, 2021, the U.S. District Court for the Northern District of California (J. Breyer) granted Instagram’s motion to dismiss, explaining that “Hunley’s legal theory failed because, under binding Ninth Circuit precedent, Hunley had shown ‘no direct infringement by a third party.’” The Court found that “where an alleged infringer ‘[does] not store the photographic images, [he] does not have a copy of the images for the purposes of the Copyright Act.’” The Court found that since there was no underlying direct infringement, Instagram could not be held secondarily liable. The Court invited Hunley to appeal to the Ninth Circuit.
Instead of appealing, Hunley filed an amended complaint on October 18, 2021, and included additional text consisting “of arguments that Perfect 10 was wrongly decided.” Instagram again moved to dismiss. On February 1, 2022, the Court granted Instagram’s motion to dismiss, finding that the “revised factual allegations” in the amended complaint “only confirm that, under Perfect 10, the claims fail as a matter of law.” The Court noted that “Hunley allege[d] that Instagram’s embedding technology ‘directs the browser to the Instagram server to retrieve the photo or video’s location on the Instagram server,’” and that while Hunley could be right that viewers “do not know or care that the photo or video is located on the Instagram server,” the Ninth Circuit cares.
The Court concluded that the deficiencies in Hunley’s first two complaints could not be cured, as “it is undisputed that the third-party infringers do not store the photos on their own servers as required by Perfect 10.” And then, the Court again invited Hunley to present its arguments to the Ninth Circuit.
Harmony on the Horizon?
The Hunley court further acknowledged that some courts outside of the Ninth Circuit disagreed with Perfect 10, including courts in the Southern District of New York and in the Northern District of Texas.
The Northern District of California decision stands in conflict with recent decisions that followed the 2018 Southern District of New York decision in Goldman v. Breitbart, wherein the court declined to adopt the Server Test and found that embedding content could be considered a violation of the copyright owner’s display right. Judges sitting in New York courts have continued the trend started in Goldman and recently have been finding for copyright owners when embedding is at issue.
We will continue to watch these developments, and the impact of the uncertainty experienced by website operators who do not have a clear decision on embedding, until such time as there is harmony among the courts or the Supreme Court delivers a definitive decision.