Last week, Judge Forrest of the U.S. District Court for the Southern District of New York in Goldman v. Breitbart News, LLC – one of a pair of cases pending in Manhattan federal court concerning the practice of “embedding” copyrighted content – issued a ruling in favor of the plaintiff, photographer Justin Goldman, holding that embedding (or framing) does not immunize content users from copyright infringement claims. The court declined to adopt the Ninth Circuit’s “server test” as set forth in Amazon v. Perfect 10, holding that the location of the allegedly infringed work does not determine whether a defendant has “publicly displayed’ that work in violation of the copyright owner’s exclusive rights. Put another way, “the fact that the image was hosted on a server owned and operated by an unrelated third party . . . does not shield” defendants from a finding that a plaintiff’s display right had been violated.
The court chiefly relied on the language of the Copyright Act, including § 101’s definition of “display,” which includes showing a copy of a work by any “device or process,” and transmitting or communicating a display by means of any “device or process.” The court explained that the Copyright Act does not require a user to possess, or to store at their own physical location, a copy of the work in order to display it within the meaning of the statute. The court further looked to legislative history and the 2014 decision in Aereo to note the application of the Copyright Act to new technologies.
Consequently, the district court found that the defendant websites engaged in processes that resulted in transmission and “display” of the photograph at issue even though the photograph was stored on Twitter’s servers, particularly in light of the essentially seamless presentation of the photograph on their websites from the perspective of a website visitor. Moreover, the court expressed skepticism that Perfect 10 correctly interpreted the Copyright Act’s display right, but that, even so, there were key factual and technological differences that distinguished it from the Breitbart case. Specifically, in Perfect 10, the defendant, Google, operated a search engine that indexed web content for easy reference and facilitation of access, and users made active choices to click on images before they were displayed, whereas in Breitbart, users simply opened up a webpage that displayed an image regardless of whether the user specifically looked for it or clicked on it. Moreover, the court found that very few cases followed the “server test,” and so was unconvinced that there was an “unbroken” line of cases supporting the position set forth in Perfect 10.
Goldman’s companion case against Advanced Publications, Inc., is still pending, with Judge Carter staying discovery and requesting immediate notification of a decision in the Breitbart case as of January 19, 2018. It remains to be seen whether Judge Carter will be influenced by Judge Forrest’s decision, and whether any appeals will be forthcoming. These cases still should be closely watched, but the stakeholders should be aware of the potential impact of yesterday’s decision.
Judge Forrest’s decision may be seen as a victory for some content owners, creators, and licensors who believe that the technological machinations behind how content is posted should not serve as a workaround to proper licensing. Presumably the case closes a perceived loophole against IP licensing, and its scope potentially applies to more than just photographs – e.g., videos and music tracks (assuming the decision is extended to the public performance right). On the other hand, given the widespread use of embedding and framing in the current digital media world, users of copyright-protected content may have to revisit how they create, source, and procure that content, as well as how they train and instruct employees and staff – at least until further guidance comes from the Second Circuit or, possibly, the U.S. Supreme Court. To be sure, the Breitbart court did not believe that the resultant impact of its decision on the Internet at large would have as “dire consequences” as predicted by the defendants and their amici, and noted that strong defenses to liability separate from the “server test” still exist, including proper ownership, licensing/authorization, fair use, the DMCA safe harbor, and innocent infringement. Nonetheless, these defenses only come into play once a claim or action is asserted, so preparation and prevention are still the key to digital content-based risk management.