Finally, the court held that the fourth factor, the effect of the use upon the potential
market for or value of the copyrighted work, weighed in favor of Arriba. The court found that
Arriba’s use of the thumbnail images would not harm the market for Kelly’s use of his images or
the value of his images. By displaying the thumbnails, the search engine would guide users to
Kelly’s web site rather than away from it. Nor would Arriba’s use of the images harm Kelly’s
ability to sell or license the full-sized images. Anyone downloading the thumbnails would not be
successful selling full sized-images from them because of the low resolution of the thumbnails,
and there would be no way to view, create, or sell clear, full-sized images without going to
Kelly’s web sites. Accordingly, on balance, the court found fair use.^549
The court reversed, however, the district court’s ruling that Arriba’s use of the full-sized
images through inline linking or framing was a fair use and remanded for further proceedings.
The Ninth Circuit’s ruling on this issue was contrary to a result the Ninth Circuit had reached in
an earlier opinion in the case issued in 2002,^550 which it withdrew when issuing its 2003 opinion.
In the 2002 ruling, the Ninth Circuit had held, in a highly controversial ruling, that Arriba’s
inline linking to and framing of the full-sized images violated the plaintiff’s public display
rights.^551 Interestingly, the court ruled that Kelly’s reproduction rights had not been infringed:
“This use of Kelly’s images does not entail copying them but, rather, importing them directly
from Kelly’s web site. Therefore, it cannot be copyright infringement based on the reproduction
of copyrighted works .... Instead, this use of Kelly’s images infringes upon Kelly’s exclusive
right to ‘display the copyrighted work publicly.’”^552 Apparently the court’s observation that the
offering of the full-sized images through linking “does not entail copying” was meant to refer to
direct copying by Arriba, because a copy of the images is certainly made in the user’s computer
RAM, as well as on the screen, when the user clicks on the thumbnail to display the full sized
image.
With respect to infringement of the display right, the court ruled in its 2002 opinion that
the mere act of linking to the images constituted infringement. First, the court ruled that there
was an unauthorized “display”: “By inline linking and framing Kelly’s images, Arriba is
showing Kelly’s original works without his permission.”^553 Second, the court held that such
“showing” was a “public” one: “A display is public even if there is no proof that any of the
potential recipients was operating his receiving apparatus at the time of the transmission. By
making Kelly’s images available on its web site, Arriba is allowing public access to those
images. The ability to view those images is unrestricted to anyone with a computer and internet
access.”^554 The court thus concluded that Arriba had directly infringed Kelly’s public display
rights: “By allowing the public to view Kelly’s copyrighted works while visiting Arriba’s web
(^549) Id. at 821-22.
(^550) Kelly v. Arriba Soft Corp., 280 F.3d 934 (9th Cir. 2002).
(^551) Kelly had never argued, either in the proceedings below or on appeal, that his public display rights had been
infringed. The Ninth Circuit raised this issue on its own.
(^552) Id. at 944.
(^553) Id. at 945.
(^554) Id.