potential market for and value of the copyrighted work, weighed slightly in Perfect 10’s favor
because of the court’s finding that Google’s use of thumbnails likely would harm the potential
market for the downloading of Perfect 10’s reduced-size images onto cell phones. On balance,
then, the court found that the fair use doctrine likely would not cover Google’s use of the
thumbnails.^585
On appeal, the Ninth Circuit reached the opposite conclusion under the fair use doctrine.
Before beginning its specific analysis of the four fair use factors, the Ninth Circuit made some
important preliminary rulings concerning the burden of proof with respect to the fair use
doctrine. The district court had ruled that, because Perfect 10 had the burden of showing a
likelihood of success on the merits, it also had the burden of demonstrating a likelihood of
overcoming Google’s fair use defense. The Ninth Circuit held the district court’s ruling on this
point to be erroneous. Citing cases from the Supreme Court and the Federal Circuit holding that
the burdens at the preliminary injunction stage track the burdens at trial, the Ninth Circuit ruled
that, once Perfect 10 had shown a likelihood of success on the merits, the burden shifted to
Google to show a likelihood that its affirmative defenses – including that of fair use – would
succeed.^586
The Ninth Circuit’s analysis of the fair use factors is significant in its recognition of the
need, when judging the transformative nature of the use, to balance the public benefit from the
use against the potential harm to the rights holder from superseding commercial uses, as well as
in its requirement of a showing that alleged potential superseding commercial uses are both real
and significant in their impact. Specifically, with respect to the first factor, the Ninth Circuit,
citing the Kelly v. Arriba Soft case, noted that Google’s use of the thumbnails was highly
transformative because its search engine transformed each image into a pointer directing a user
(^585) Id. at 850-51.
(^586) Perfect 10 v. Amazon.com, Inc., 508 F.3d 1146, 1158 (9th Cir. 2007). This holding was the opposite of one the
Ninth Circuit had reached in an earlier issued opinion in the appeal, which the instant opinion replaced. In the
earlier opinion, the Ninth Circuit had concluded that, because a plaintiff has the burden of showing a likelihood
of success on the merits in order to obtain a preliminary injunction, the plaintiff should also have the burden of
demonstrating a likelihood of overcoming the defendant’s fair use defense. However, because the defendant in
an infringement action has the burden of proving fair use, the Ninth Circuit had ruled in its earlier opinion that
the defendant is responsible for introducing evidence of fair use in the first instance in responding to a motion
for preliminary relief, whereupon the burden would then shift to the plaintiff to demonstrate that it will
overcome the fair use defense. Perfect 10 v. Amazon.com, Inc., 487 F.3d 701, 714 (9th Cir. 2007) (superseded
by 508 F.3d 1146 (9th Cir. 2007)). The court further elaborated its rationale in the earlier opinion as follows:
“In order to demonstrate its likely success on the merits, the moving party must necessarily demonstrate it will
overcome defenses raised by the non-moving party. This burden is correctly placed on the party seeking to
demonstrate entitlement to the extraordinary remedy of a preliminary injunction at an early stage of the
litigation, before the defendant has had the opportunity to undertake extensive discovery or develop its
defenses.” 487 F.3d at 714. The Ninth Circuit apparently concluded that this earlier holding was inconsistent
with established precedent that the burdens at the preliminary injunction stage track the burdens at trial, leading
the court to issue a revised opinion.