Perfect 10 v. Amazon Opinion Amendment–Ninth Circuit Does 180 on Fair Use Burden for Preliminary Injunction

December 4, 2007 · by · in Copyright, Derivative Liability

By Eric Goldman

In the Perfect 10 v. Amazon case, the Ninth Circuit has reversed itself on who has the burden of establishing fair use in the context of a preliminary injunction motion. See the revised opinion. In the original Ninth Circuit Perfect 10 v. Amazon ruling, the court put the burden on the plaintiff to disprove fair use as part of its PI obligations. Now, in an amended opinion, the Ninth Circuit has put the burden on the defendant to establish fair use to defeat the PI. This is a pretty big reversal of a key holding from the initial opinion (at the time, I said that aspect of the ruling was “significant and could have widespread effects on copyright cases, both online and off”). Interestingly, it doesn’t change the results in this case–the original injunction issued by the district court is still dissolved–but fair use will be a hotly contested issue in many future PI cases, and the Ninth Circuit just made plaintiffs’ jobs easier.

The original text from the May 2007 opinion:

Because Perfect 10 has the burden of showing a likelihood of success on the merits, the district court held that Perfect 10 also had the burden of demonstrating a likelihood of overcoming Google’s fair use defense under 17 U.S.C. § 107. Perfect 10, 416 F. Supp. 2d at 836-37. We have not previously ruled on this issue, see Napster, 239 F.3d at 1014 n.3 (cataloguing conflicting authority), and we now agree with the district court’s ruling. 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. Our conclusion that a party seeking a preliminary injunction in the copyright context bears the burden of showing its likely success in overcoming a fair use defense is consistent with decisions of the Federal Circuit purporting to apply Ninth Circuit law. See Atari Games Corp. v. Nintendo of Am. Inc., 975 F.2d 832, 837 (Fed. Cir. 1992) (“[F]ollowing Ninth Circuit caselaw [for review of a district court’s grant of preliminary injunction], this court must determine whether Nintendo has shown a likelihood of success on its prima facie case of copyright infringement and a likelihood that it will overcome Atari’s copyright misuse defense.”); see also H.H. Robertson, Co. v. United Steel Deck, Inc., 820 F.2d 384, 387-89 (Fed. Cir. 1987) (requiring a patent holder seeking preliminary injunctive relief to overcome the defense that the patent is invalid even though the patent is presumed valid at trial), overruled on other grounds by Markman v. Westview Instruments, Inc., 52 F.3d 967, 977-79 (Fed. Cir. 1995).

However, entitlement for preliminary relief “is determined in the context of the presumptions and burdens that would inhere at trial on the merits.” H.H. Robertson, 820 F.2d at 388. Because the defendant in an infringement action has the burden of proving fair use, see Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 590 (1994), the defendant is responsible for introducing evidence of fair use in responding to a motion for preliminary relief. See Dr. Seuss Enters., L.P. v. Penguin Books USA, Inc., 109 F.3d 1394, 1403 (9th Cir.

1997). The plaintiff must then show it is likely to succeed in its challenge to the alleged infringer’s evidence.

The amended language:

Because Perfect 10 has the burden of showing a likelihood of success on the merits, the district court held that Perfect 10 also had the burden of demonstrating a likelihood of overcoming Google’s fair use defense under 17 U.S.C. § 107. Perfect 10, 416 F. Supp. 2d at 836-37. This ruling was erroneous. At trial, the defendant in an infringement action bears the burden of proving fair use. See Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 590 (1994). Because “the burdens at the preliminary injunction stage track the burdens at trial,” once the moving party has carried its burden of showing a likelihood of success on the merits, the burden shifts to the nonmoving party to show a likelihood that its affirmative defense will succeed. Gonzales v. O Centro Espirita Beneficente Uniao do Vegetal, 546 U.S. 418, 429 (2006); see also Abbott Labs. v. Andrx Pharms., Inc., 473 F.3d 1196, 1201 (Fed. Cir. 2007) (to defeat a motion for preliminary injunctive relief in a patent infringement case, the non-moving party must establish a likelihood of success in proving its defenses of invalidity or unenforceability); PHG Techs., LLC v. St. John Cos., 469 F.3d 1361, 1365 (Fed. Cir. 2006). Accordingly, once Perfect 10 has shown a likelihood of success on the merits, the burden shifts to Google to show a likelihood that its affirmative defenses will succeed.

In any case, this self-reversal reminds me a little of the Ninth Circuit’s struggles with Kelly v. Arriba Soft, also a search engine framing/linking case. In that case, 18 months after the initial ruling, the Ninth Circuit issued an amended opinion where it retracted about 1/2 of its original opinion that had resolved an issue that neither party had asked the Ninth Circuit to adjudicate. For now, it looks like the Ninth Circuit judges are having a tough time getting everything right in these complex Cyberlaw cases.

UPDATE: I’ve noticed some of the coverage (apparently distracted by this confusing LA Times article) seems to think that the amended opinion is a new win for Google. No–that occurred in May. Instead, this is a small amendment of a technical but important legal point.