Case(s): Perfect 10, Inc. v., Inc., 508 F.3d 1146 (9th Cir. 2007)

Plaintiff Perfect 10, Inc., a subscription website for images of nude models, alleged that Google, Inc. and, Inc. (the “defendants”) infringed its copyrights. Perfect 10 alleged that Google infringed because its search engine results for image searches included Perfect 10’s images. The image search results were shown as reduced-sized, lower resolution “thumbnail” versions of the original images. Another aspect of Perfect 10’s claim related to a business agreement Google had with that permitted Google’s search engine to send search results, including Perfect 10’s images, to customers.

Google raised the affirmative defense that its use was a fair use, but the district court rejected this defense, finding that the first, second and fourth fair use factors weighed slightly in Perfect 10’s favor, and that the third factor was neutral. The district court granted the preliminary injunction, finding harm to the derivative market for Perfect 10’s reduced-size images.

The defendants appealed the district court’s grant of a preliminary injunction enjoining Google from creating and publicly displaying thumbnail versions of Perfect 10’s images.

Ninth Circuit Appeal

The Ninth Circuit concluded that the use of thumbnail versions of plaintiff’s images was a fair use and held that Google was likely to succeed in proving its fair use defense, thus vacating the preliminary injunction regarding Google’s use of the thumbnail images. The court deemed the use “highly transformative” because a search engine transformed an image into a pointer directing a user to a source of information and provided a social benefit by incorporating an original work into an electronic reference tool. The court held that market harm could not be presumed, given the highly transformative nature of the use, and that the potential harm to plaintiff’s market was hypothetical.

The court reviewed the fair use factors as follows …

The first fair use factor requires a court to consider “the purpose and character of the use.” A “transformative work” is one that alters the original work “with new expression, meaning, or message.” Here, Google’s use of thumbnails is highly transformative. Google’s search engine provides social benefit by incorporating an original work into a new work that serves as an electronic reference tool, thereby providing an entirely new use for the original work. Even though the entire original work is taken, it serves an entirely different function than the original, and therefore the use is transformative. The significantly transformative nature of Google’s search engine, particularly in light of its public benefit, heavily outweighs Google’s superseding and commercial uses of the thumbnails with regards to Google’s AdSense.

The second fair use factor is “the nature of the copyrighted work.” Perfect 10’s images are “creative in nature” and thus, “closer to the core of intended copyright protection than are more fact-based works.” However, because the photos appeared on the Internet before Google used thumbnail versions in its search engine results, this factor weighs only slightly in favor of Perfect 10.

The third fair use factor asks whether the amount and substantiality of the portion used in relation to the copyrighted work as a whole are reasonable in relation to the purpose of the copying. Here, this factor is neutral and does not weigh in favor of either party because Google’s use of the entire photographic image was reasonable in light of the purpose of a search engine and since using less than the entire image would be less helpful to a computer user.

The fourth fair use factor is “the effect of the use upon the potential market for or value of the copyrighted work.” Google’s use of thumbnails did not hurt Perfect 10’s market for full-size images. The presumption of market harm does not arise when a work is transformative because “market substitution is at least less certain, and market harm may not be so readily inferred.” Google’s thumbnail images were highly transformative, and there was no evidence of market harm to Perfect 10’s full-size images. Any potential harm to Perfect 10’s market remains hypothetical, and, therefore, this factor favors neither party.