stored or displayed full-sized copies of the Perfect 10 images on Yandex’s U.S. servers.
Accordingly, the court granted Yandex summary judgment on direct infringement with respect to
hosting or display of Perfect 10 images through servers outside the U.S.^639
The court then turned to storage of thumbnail versions of Perfect 10 images on
Yandex.com servers in the U.S. during the nine-month period from June 2012 to March 2013.
Yandex did not dispute that its use of the thumbnails in the U.S. constituted a prima facie
violation of Perfect 10’s display and distribution rights, but argued that its thumbnail copies were
a fair use. The court agreed. With respect to the first fair use factor, citing the Amazon and
Kelly v. Arriba cases, the court found that use of a thumbnail image as a pointer to a source of
information is highly transformative, and noted that Yandex’s in-linking to a full-size image,
which caused it to be transmitted from the third party web site hosting it, did not constitute direct
infringement on the part of Yandex.^640
The court noted that the second fair use factor slightly favored the plaintiff Perfect 10, as
in Amazon. With respect to the third factor, the amount and substantiality of the use, the court
rejected Perfect 10’s argument that the third factor should favor it because Yandex allegedly
used 40,000 Perfect 10 thumbnails. The court noted that the substantiality analysis must be
made on a copyright-by-copyright basis, and the number of allegedly infringed images is
therefore not relevant. As in Amazon and Kelly, the court concluded that the third factor favored
neither party because Yandex’s transformative use required use of the entire image, although in
reduced size. With respect to the fourth factor, the court rejected Perfect 10’s argument that
Yandex’s search engines caused it market harm because they led to billions of unauthorized
views and downloads of its images from web sites to which Yandex linked Perfect 10
thumbnails. The court found that Perfect 10 had not substantiated the argument by competent
evidence. Perfect 10’s evidence consisted of screen shots from third party web sites showing
that links on those sites leading to Perfect 10 images had been viewed approximately 3.8 million
times, but Perfect 10 failed to provide evidence that any of those views were the result of
Yandex.com users clicking on thumbnails stored on Yandex.com servers in the U.S. during the
nine-month period. The court also rejected Perfect 10’s argument that its market for reduced-
size images for cell phone use had dried up since 2007 and Yandex had begun providing a
thumbnail search service since 2007; ergo, Perfect 10 had been harmed by Yandex. The court
noted that this simple correlation, without more, did not constitute sufficient evidence that
Yandex’s use of 40,000 thumbnail images during the nine-month period affected Perfect 10’s
market for reduced-size images. The court therefore concluded that the fourth factor favored
neither party. Balancing the four factors, the court ruled that Yandex.com’s thumbnails stored
on its servers in the U.S. for the nine-month period were fair use.^641
Finally, the court ruled that Yandex could have potential contributory and vicarious
liability only with respect to direct infringements taking place in the U.S., which eliminated
contributory or vicarious liability for links connecting to full-size images hosted outside the U.S.
(^639) Id. at 1153-54.
(^640) Id. at 1154-55.
(^641) Id. at 1156-57.