Ninth Circuit Opinion in Perfect 10 v. Google and Amazon

By Eric Goldman

Perfect 10, Inc. v. Amazon.com, Inc., CV-05-04753-AHM (9th Cir. May 16, 2007)

In yet another lengthy and highly technical opinion from the Ninth Circuit (fast becoming their specialty), the Ninth Circuit has addressed the crucial case of Perfect 10 v. Google and Amazon. The opinion summarizes its complex results:

We conclude that Perfect 10 is unlikely to succeed in overcoming Google’s fair use defense, and therefore we reverse the district court’s determination that Google’s thumbnail versions of Perfect 10′s images likely constituted a direct infringement. The district court also erred in its secondary liability analysis because it failed to consider whether Google and Amazon.com knew of infringing activities yet failed to take reasonable and feasible steps to refrain from providing access to infringing images. Therefore we must also reverse the district court’s holding that Perfect 10 was unlikely to succeed on the merits of its secondary liability claims. Due to this error, the district court did not consider whether Google and Amazon.com are entitled to the limitations on liability set forth in title II of the DMCA. The question whether Google and Amazon.com are secondarily liable, and whether they can limit that liability pursuant to title II of the DMCA, raise fact intensive inquiries, potentially requiring further fact finding, and thus can best be resolved by the district court on remand. We therefore remand this matter to the district court for further proceedings consistent with this decision.

A few initial observations:

1) As the previous paragraph indicates, the ruling is a mixed bag. It overturns the most pernicious part of the district court opinion holding that Google was directly infringing for displaying thumbnails in its image search. On the other hand, it opens up the possibility of new secondary liability by the search engines. However, on balance, this opinion is much better for the search engines than the lower court opinion, so it’s a mild win for them.

2) The opinion is highly technical and rather fact-specific, in many cases turning on the burden of proof/production in a preliminary injunction motion and whether sufficient factual evidence was introduced at this stage in the litigation. As a result, I don’t think the opinion will have a lot of immediate impact as precedent because it can be read as limited to very specific facts. This also makes it a lousy teaching case (a little disappointing, because I was hoping we could replace the hard-to-teach district court ruling with a cleaner Ninth Circuit opinion–no such luck!).

Despite the omnibus and technical nature of this opinion, there were some interesting rulings that need further exploration. For example, I believe the court’s holding that a plaintiff seeking a PI has the burden to disprove fair use is significant and could have widespread effects on copyright cases, both online and off. I’m sure there are some other similarly important nuggets we’ll discover after a closer read.

UPDATE:

* John O. has added some more thoughts.

* Jason Schultz explains why he thinks this case is “good news for innovators and Internet users.”