travels over the Internet before it is shown on users’ computers. Second, it precludes search
engines from being held directly liable for in-line linking and/or framing infringing content
stored on third party web sites, but allows copyright owners still to seek to impose contributory
or vicarious liability on web sites for including such content. Third, web site operators can
readily understand the server test and courts can apply it relatively easily. Fourth, in the instant
case, it imposes direct liability on the web sites that took Perfect 10’s full size images and posted
them on the Internet for all to see. Finally, the server test promotes the balance of copyright law
to encourage the creation of works by protecting them while at the same time encouraging the
dissemination of information. The server test would avoid imposing direct liability for merely
indexing the web so that users can more readily find the information they seek, while imposing
direct liability for the hosting and serving of infringing content.^573
Applying the server test, the district court ruled that for purposes of direct infringement,
Google’s use of frames and in-line links did not constitute a “display” of the full size images
stored on and served by infringing third party web sites, but Google did “display” the thumbnails
of Perfect 10’s copyrighted images because it created, stored, and served those thumbnails on its
own servers.^574
On appeal, the Ninth Circuit agreed with the district court that the “server” test should be
used to determine which entity displays an image on the web, concluding that the test was
consistent with the statutory language of the copyright statute. Under that test, Perfect 10 had
made a prima facie case that Google’s communication of its stored thumbnail images directly
infringed Perfect 10’s display rights. However, Google had not publicly displayed a copy of the
full size infringing images when it framed in-line linked images that appeared on a user’s
computer screen.^575 The Ninth Circuit found that Google’s activities with respect to the full size
images did not meet the statutory definition of public display “because Google transmits or
communicates only an address which directs a user’s browser to the location where a copy of the
full-size image is displayed. Google does not communicate a display of the work itself.”^576 The
court also ruled that, because Google’s cache merely stored the text of web pages, and not the
images themselves, Google was not infringing the display right by virtue of its cache.^577
Fair Use. The district court evaluated Google’s assertion of the fair use defense to the
display of the thumbnails. With respect to the first fair use factor, the purpose and character of
the use, the court found that Google’s display of the thumbnails was a commercial use, since
Google derived significant commercial benefit from Google Image Search in the form of
increased user traffic and, in turn, increased advertising revenue. The court distinguished the
Ninth Circuit’s decision in the Kelly v. Arriba Soft case by noting that, unlike Arriba Soft,
Google derived direct commercial benefit from the display of thumbnails through its “AdSense”
(^573) Id. at 843-44.
(^574) Id. at 844.
(^575) Perfect 10 v. Amazon.com, Inc., 508 F.3d 1146, 1159-60 (9th Cir. 2007).
(^576) Id. at 1161 n.7.
(^577) Id. at 1162.