Internet Library of Law
and Court Decisions

Copyright - Fair Use - Internet Library of Law and Court Decisions - Updated November 3, 2008

Court holds that minors entered into valid ‘click wrap’ agreement with defendant IParadigms LLC (“IParadigms”) by clicking an “I agree” icon which appeared directly below an online Usage Agreement, and indicated their assent to be bound thereby.  Plaintiffs were high school students that were directed by the schools they attended to submit class work to defendant IParadigm’s “Turnitin” website to check for plagiarism.  As part of this submission process, plaintiffs were obligated to assent to the site’s Usage Agreement.  Because the Usage Agreement contained a limitation of liability clause precluding liability to plaintiffs as a result of their use of the Turnitin site, the Court rejected plaintiffs’ copyright infringement claims, which arose out of defendant’s storage of plaintiffs’ class work in a database used to check student homework for plagiarism.

In reaching this result, the Court rejected plaintiffs’ claims that, as minors, they were not bound by the terms of the site’s Usage Agreement.  Because they had accepted the benefits of the agreement – the ability to submit their class work for grade to their respective schools was dependent upon their use of the site – they could not escape the contractual conditions upon which such benefits were rendered.

The Court further held that plaintiffs’ copyright infringement claims failed because defendant had made a permissible fair use of their works.  In reaching this result, the Court relied on the fact that Turnitin’s use of plaintiffs’ school work was highly transformative of the original works, in that it added plaintiffs’ school work to a non-publicly available database used only to check for plagiarism by students.  The Court also rested its holding of fair use on the fact that defendant’s use did not impact the market for plaintiffs’ works, as the copies Turnitin made thereof were not available to the public, but rather maintained in a non-public database.

The Court rejected the counterclaims advanced by defendant iParadigms, including a claim for indemnification as a result of the commencement of this action.  This claim was based on a separate “Usage Policy” found on the Turnitin site.  The Court held that plaintiffs were not bound by this policy, which was not linked or otherwise referenced in the Usage Agreement to which plaintiffs were in fact bound.  There was no evidence that plaintiffs were aware of this separate “usage policy,” which was contained in a link on each page of the Turnitin site.  As a result, and because the parties’ contract stated that it constituted the full agreement between the parties, the plaintiffs’ use of the site was held not to create a valid browse wrap agreement, and the claim for indemnification, predicated on the Usage Policy, was dismissed.

The remaining counterclaims advanced by iParadigms arose out of the use of the site by one of the plaintiffs to submit class work to an institution he did not attend.  These claims for trespass to chattels, and violations of both the Computer Fraud and Abuse Act and Virginia Computer Crimes Act, failed due to the absence of the requisite damage.

Court holds that defendant Funeral Depot Inc. ("Funeral Depot") may be infringing plaintiffs' copyright in advertising materials consisting, inter alia, of lithographs of caskets, by placing small thumbnail images of those copyrighted materials on defendant's website which are linked to allegedly infringing full size copies of those same materials that defendant arranged to have placed on the website of a third party.  While this third party website is owned by one of plaintiffs' authorized dealers, visitors to the web pages containing the challenged images view defendant Funeral Depot's contact information, as well as prices for these caskets set by defendant.  Because issues of fact existed as to whether the third party dealer had an implied license to use the advertising materials in this fashion, the Court could not determine if defendant was infringing plaintiff's copyright on the parties' respective summary judgment motions.  The Court did reject a number of defenses advanced by Funeral Depot to plaintiff's copyright infringement claims, including its fair use, copyright misuse and antitrust defenses.

Court holds that unauthorized internet reseller of plaintiff’s tanning products is not guilty of trademark infringement as a result of its use of plaintiff’s trademarks in the meta tags of a website at which such products are sold, and as search engine keywords triggering the display of a link to such a website.  In reaching this result, the Court rejected plaintiff’s claim that such use of its marks causes actionable ‘initial interest confusion’ by directing those searching for plaintiff’s site to that of the defendant.  To sustain such a claim, holds the court, defendant’s conduct must be deceptive.  Plaintiff failed to meet this burden because defendant’s site does indeed offer plaintiff’s products for sale, and thus, its use of plaintiff’s mark in the site’s meta tags is not deceptive, but rather accurately describes the contents of defendant’s site.  This was true, held the Court, notwithstanding the fact that S & L offered plaintiff’s competitors products for sale on its site as well.

The Court also dismissed trademark dilution claims arising out of defendant’s use of plaintiff’s marks.  The Court held that, under the circumstances, defendant’s use of plaintiff’s marks in the meta tags of its site, and as search engine key words, constituted a permissible nominative fair use of those marks.  To establish that a use of a trademark qualifies as a permissible nominative fair use, the defendant must ‘do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder.’  Notably, the Court reached this result because plaintiff failed to submit adequate evidence as to the impact this use of its marks had on the listing of defendant’s site in search results for plaintiff’s mark.  The Court left open the possibility that such a use of plaintiff’s mark may not qualify as a nominative fair use if in fact it caused defendant’s site to appear at or near the top of search engine results for plaintiff’s mark, and thereby suggested that plaintiff sponsored or endorsed defendant’s site. 

The Court denied so much of defendant’s motion for summary judgment which sought dismissal of copyright infringement claims arising out of its use of electronic renderings of plaintiff’s products to promote the sale of such products on its web site.  Issues of facts as to whether defendant copied such images from plaintiff’s web site, or created its own, precluded an award of summary judgment.  In allowing this claim to proceed to trial, the Court rejected defendant’s argument that its alleged use of plaintiff’s images was protected as a fair use.  Notwithstanding the fact that defendant’s use did not effect the potential market for plaintiff’s images – which plaintiff does not offer for sale – the Court rejected defendant’s fair use argument, pointing to the fact that its use was commercial, and copied plaintiff’s image, which was a creative work, in its entirety.

Finally, the Court rejected plaintiff’s claim for intentional interference with contractual relations, which arose out of prohibitions contained in contracts with plaintiff’s distributors precluding their resale of plaintiff’s products to Internet resellers such as defendant.  Defendant obtained plaintiff’s products from tanning salons, to whom the distributors were permitted to sell such products.  Because there was no evidence either that such tanning salons were acting as defendant’s agent in purchasing goods from plaintiff’s distributors, or that defendant directly purchased such goods from the distributors in breach of the prohibitions contained in their agreements, this claim failed.

Court holds that the use by defendant Camp Systems International ("Camp") of maintenance manuals prepared by plaintiff Gulfstream Aerospace Corporation ("Gulfstream") to advise owners of the need for maintenance of their Gulfstream aircraft is a permissible fair use of those manuals.  Court accordingly grants Camp's motion for summary judgment, and dismisses both copyright and trademark infringement claims advanced by Gulfstream arising out the placement by Camp of portions of those manuals on its computer system, which manuals Camp made available, and transmitted, to both the aircraft's owner and appropriate repair personnel.

The Ninth Circuit Court of Appeals holds that defendant's display on a visual search engine of lower resolution "thumbnails" of copyrighted images appearing elsewhere on the Internet, without the copyright owners' permission, is a protected fair use of those images under the Copyright Act. The court further holds that defendant's display of the full copyrighted image as part of its search engine results, either via inline linking or framing, infringes the copyright owner's right to publicly display the work. Such use of the full images as they appear on the copyright owner's site is not a protected fair use because it is done for the same purpose, to attract viewers, as the copyright owner's own use, and causes injury to the copyright owner by diverting users from his site.

In the decision that replaced its original decision of February 6, 2002, the 9th Circuit affirmed so much of the lower court's determination that held that Arriba Soft's production of thumb nails of plaintiff's copyrighted works to facilitate its display of image search results was a permitted fair use for the reasons stated in its original decision of February 6.  However, in the revised July 3, 2003, the 9th Circuit did not determine, as it had previously, that Arriba Soft's in-line linking to the full images of plaintiff's works constituted copyright infringement.  Instead, it reversed the lower court's determination on this score on procedural grounds, and remanded the issue to that court for further consideration.

Court holds that defendant's operation of a "visual search engine" which presents, without the owners' permission, "thumbnails" of copyrighted images that appear both without identifying copyright management information, and separated from the Internet web page in which the image was originally displayed, is a protected fair use under the Copyright Act which does not run afoul of the Digital Millennium Copyright Act ("DMCA").

The court's ruling that this represented a fair use was based predominantly on its determination that defendant's use was "transformative" of and "very different" from the original work. Said the court: "Plaintiff's photographs are artistic works used for illustrative purposes. Defendant's visual search engine is designed to catalog and improve access to images on the Internet. The character of the thumbnail index is not esthetic, but functional; its purpose is not to be artistic, but to be comprehensive."

Defendant's separation of the image from its copyright management information did not constitute a violation of Section 1202(b)(3) of the DMCA, because defendant did not have reasonable grounds to believe such separation would cause copyright infringement. The court reached this conclusion because defendant posted warnings on its site concerning the possibility of use restrictions, and referred the user to the originating web site, which could be visited via a provided link, to ascertain any applicable restrictions before copying. What made the images vulnerable to copying, according to the court, was their display by plaintiff on a web site.

Court enjoined Internet Entertainment Group ("IEG") from distributing on its adult-oriented subscription website a video tape depicting plaintiff and Pamela Anderson Lee engaging in sexual activity. Such dissemination would infringe plaintiff's and Ms. Lee's copyright in the video, as well as violate their rights of publicity and privacy. In so holding, the court rejected IEG's claim that, for $16,500, it had purchased a non-exclusive license to display the video. This claim was disproven by statements from both plaintiff and Ms. Lee that they had not conveyed such license, by evidence that plaintiff had rejected a $1 million dollar offer to grant such a license and finally, by evidence that the alleged source of this license admitted that he did not have (and therefore could not convey) a right to distribute the tape. The Court also held that IEG could not display small excerpts or stills from the video under the guise of the fair use doctrine.

On a motion for a preliminary injunction, the Court holds plaintiff likely to succeed on copyright infringement claims arising out of defendant Google's display of "thumbnail" images of plaintiff's copyrighted photographs in response to users' searches for images matching their description.  The Court held that it is likely to find that such a display is not a fair use of plaintiff's works, given, inter alia, its commercial nature, and the fact that such use likely interferes with a market for plaintiff's photographs.

The Court further holds that plaintiff is not likely to prevail on copyright infringement claims arising out of Google's use of "in-line links" that incorporate into Google's own web pages the web pages of third parties that themselves contain infringing copies of plaintiff's copyrighted photographs.  These "in-line links" allow users who are interested in a thumbnail image presented in Google's search results to view the actual image on the web page on which Google found it.  The Court held that it is not likely to find that Google directly infringed plaintiff's copyrights by such conduct, because, adopting the "server test," it is the third parties who created the websites that contain the infringing images, and not Google, that are displaying and/or distributing them in violation of plaintiff's copyright.

The Court further held that it was not likely to find Google guilty of contributory or vicarious copyright infringement as a result of such third party displays, notwithstanding any advertising Google may deliver to the web pages that contain such images, or revenue Google may derive therefrom.  Google is not guilty of vicarious infringement because it does not possess the requisite ability to control the content of such third party sites, or compel the third parties that operate them to remove infringing content found thereon.  Google's ability to remove such websites from search engine results does not constitute such control.  Nor, the Court stated, was it likely to hold that Google encourages or assists such infringement sufficiently to be guilty of contributory infringement.  The Court held that the record before it was insufficient to establish that the third parties displaying plaintiff's content were motivated by the revenue they might derive from the display of Google ads or that such revenue contributed to their posting of the infringing images in question.

The Ninth Circuit holds that Google’s creation and display in search results of lower resolution ‘thumbnail’ copies of infringing images found on third party websites for the purpose of aiding the public in locating such images is a fair use that does not infringe the rights of the holder of the copyright therein.  In reaching this result, the court relied largely on the transformative nature of the thumbnails Google created, which, by facilitating the public’s ability to search the web for images, serve a different purpose than the original images, which are designed to entertain.  The Ninth Circuit accordingly reversed so much of the decision of the District Court which had enjoined Google from displaying such thumbnails in its search results. 

The Ninth Circuit further held that framing infringing images found on third party web sites via “in-line linking” to such sites does not directly infringe the display or distribution rights of the holder of the copyrights in such images.  As part of the process by which it provides results to those who search for images, Google presents a ‘framed page,’ the bottom half of which comes directly from the third party web site on which the image is found, and contains that image.  For the purpose of direct infringement, the Ninth Circuit endorsed the “server test” applied by the District Court.  Under this test, a party infringes the display rights of a copyright holder in an image when it stores a copy of that image on its own server, and delivers it to a third party.  When a party merely provides a link to a third party website on which such infringing material can be found, it is that third party web site, and not the party providing the link, that directly infringes the display rights of the copyright holder by causing that infringing image to be displayed on a user’s computer screen.  Applying this test, Google did not directly infringe by providing “in-line links” to third party websites that themselves contained infringing images.

Reversing the District Court, the Ninth Circuit held, however, that Google is potentially liable on a theory of contributory infringement for infringing plaintiff’s copyrights as a result of its provision of such in-line links.  According to the Court, “Google could be held contributorily liable if it had knowledge that infringing Perfect 10 images were available using its search engine, could take simple measures to prevent further damage to Perfect 10’s copyrighted works, and failed to take such steps.”  Issues of fact as to the adequacy of notices sent by Perfect 10 alerting Google that it was in fact providing links to third party web sites that contained infringing images, of Google’s response thereto, and of Google’s ability to remove such infringing sites from its search results, mandated denial of plaintiff’s motion for summary judgment.  Also left for the District Court to resolve on remand was whether the Digital Millennium Copyright Act (“DMCA”) immunized Google from liability for such contributory infringement, an issue the District Court had not addressed because it had determined that Google was not likely to be found liable for contributory infringement.

Finally, the Ninth Circuit held that Perfect 10 was unlikely to prevail on vicarious infringement claims arising out of Google’s provision of in-line links to third party web sites that contained infringing images.  The Court held that Perfect 10 had not demonstrated that Google had the ability to control such third party websites, and compel them to remove infringing images found on their sites, a prerequisite to a finding of vicarious infringement.

The Ninth Circuit resolved the copyright infringement claims Perfect 10 asserted against Amazon.com in a similar fashion.  These claims arose out of the provision by Amazon.com to users of its site of Google search results, “framed” via in-line links. By this arrangement, the Amazon user received the same search result as the Google user.  Accordingly, the Court reached the same conclusions concerning Amazon’s conduct as it did concerning Google’s.  All claims save that which sought to hold Amazon.com liable on a theory of contributory infringement were held likely to fail.  The contributory infringement claim, arising out of Amazon’s provision of in-line links to third party sites that contained infringing images, was remanded for further consideration by the District Court.

Court holds that unauthorized commercial distribution of shareware posted on the Internet in violation of express restrictions prohibiting such distribution infringed plaintiffs' copyright in the software. Because such distribution did not amount to "fair use," the court held defendant liable for statutory damages in the amount of $20,000.

Court holds that a binding agreement can be formed by the use of a web site, without more, if the user has actual knowledge that the site's Terms and Conditions so provide.  As a result, the Court denied defendant Tickets.com's summary judgment motion, which sought dismissal of breach of contract claims arising out of Tickets.com's use of a search robot to obtain information about concerts from plaintiff Ticketmaster's web site.  The Court held that issues of fact as to defendant's knowledge of the site's Terms and Conditions at the time it used plaintiff's site precluded a determination as to the binding nature of such Terms.

The Court did grant so much of Tickets.com's summary judgment motion which sought dismissal of trespass to chattels claims Ticketmaster asserted as a result of such activity.   These claims failed because of the absence of evidence that "the use or utility" of Ticketmaster's computers were being adversely affected by Tickets.com's use of a search robot to gather information from plaintiff's site.

Finally, the Court dismissed several copyright infringement claims brought by Ticketmaster.  These included infringement claims arising out of the temporary copying into the RAM of defendant's computers of data from plaintiff's site, including materials in which plaintiff held a copyright.  These materials were copied as an intermediate step to obtaining, and displaying on Tickets.com's own site, factual information contained therein.  The Court held such copying was a protectable fair use given the only materials retained at the end of the process were the facts -- as to concert locations, dates and times -- contained therein, which facts were not protected by copyright.  Infringement claims arising out of deep linking to interior pages of plaintiff's website were dismissed because, by deep linking into plaintiff's site, Tickets.com was not showing or displaying plaintiff's copyrighted materials (which instead were being displayed by plaintiff itself).  Finally, infringement claims arising out of copying the URLs from such interior pages were dismissed because such URLs did not have sufficient originality to be copyrightable.

Court denies plaintiff's application to enjoin defendant from using spiders to copy factual information contained on plaintiff's web site. In so holding the court rejects plaintiff's claim that such spidering constitutes an improper trespass on plaintiff's computers, because the spidering neither harms plaintiff's computers, nor interferes with their use. The court also held that even though copies of plaintiff's materials were made during this spidering, this was likely to constitute a protected fair use akin to the copying permitted during the reverse engineering of a product.

Court held that defendant's My.MP3.com service infringes plaintiffs' copyrights in various sound recordings. Defendant claims in advertisements that this service permits users to store and listen to their CDs from any location at which they can access the Internet. To operate this service, defendant purchased a large number of CD's containing plaintiffs' sound recordings, converted them to MP3 files, and stored these MP3 files on its servers. A user wishing to access any of the songs contained in these files was first required either to demonstrate to defendant that it owned a CD containing the song in question (by inserting the CD into its computer), or to purchase the CD from a designated online vendor. Once the user satisfied this requirement, he was permitted for free to access the MP3 file resident on defendant's server, which MP3 file had been created from plaintiffs' CDs.

The court held that defendant's act of converting plaintiffs' CDs into MP3 files, and providing access to these files to users in the manner outlined above, infringed plaintiffs' copyrights in these sound recordings. In addition, the court rejected defendant's arguments that this was a fair use of plaintiffs' sound recordings because its activities "transform" the original recordings. Instead, the court held that in the case at bar, "unauthorized copies are being retransmitted in another medium" in violation of the copyright laws.

Court issues preliminary injunction, enjoining plaintiff Video Pipeline Inc. ("Video Pipeline") from continuing to display over the Internet 62 promotional "trailers" plaintiff made to promote the sale of videos of movies in which defendant's licensors hold copyrights.  (Defendant and it's licensors will be referred to herein collectively as "Defendant").  The trailers in question consist of excerpts from Defendant's movies, combined with a display of Defendant's trademarks and the title of the film.  Plaintiff did not add any commentary, music or voice overs to its trailers.  The trailers were made available to the public via the Internet websites of Vendors selling authorized copies of Defendant's films.  For this service, the Vendors paid plaintiff a fee based on the amount of time users spent viewing the trailers.

The court held that plaintiff's conduct infringed Defendant's copyright in the films, including Defendant's exclusive right to create derivative works of the copyrighted films, as well as its right to perform and publicly display the work under 17 U.S.C. Section 106.

The court further held that plaintiff's actions were not protected by either the 'first sale' or 'fair use' doctrines.  Plaintiff could not claim protection under the first sale doctrine because it only permits owners, and not their licensees, to advertise the sale of a copy of the copyrighted work that they own.  Moreover, the court held that the 'first sale' doctrine probably would not permit Vendors to display over the Internet promotional trailers they created to advertise the sale of copies of the films they owned.  Rather, such display was probably limited under 17 U.S.C. Section 109(c) to "the place where the copy [owned by the Vendor] is located."

The court held that plaintiff could not claim protection under the 'fair use' doctrine, because its use of Defendant's copyrighted materials was commercial and not transformative, represented a copying of the heart of the works in question, and was of a fictional, and not factual work.

The court accordingly issued the requested injunctive relief.  In so doing, the court rejected arguments that its order would allow Defendant to control the sale of home videos over the Internet to the detriment of the public and/or Vendors of legitimate copies of the works.  The court held that other means were available to the Vendors to market Defendant's films, including via written descriptions of the films.

Quick Hits

Affirming the decision of the court below, the Seventh Circuit finds defendant Cecilia Gonzalez (“Gonzalez”) guilty of copyright infringement because she downloaded and retained on her computer over 1370 copyrighted songs.  The Court rejected Gonzalez’ contention that she was engaging in a permissible fair use by downloaded the songs to sample and purchase if they appealed to her.  In finding defendant guilty of copyright infringement, the Court made no distinction between songs Gonzalez owned at the time of her download, subsequently purchased, or never owned.  Said the Seventh Circuit:

Although BMG Music sought damages for only the 30 songs that Gonzalez concedes she has never purchased, all 1000+ of her downloads violated the [copyright] statute.  All created copies of an entire work.  All undermined the means by which authors seek to profit. … With all of these means available to consumers who want to choose where to spend their money, downloading full copies of copyrights material without compensation to authors cannot be deemed ‘fair use.’

The Seventh Circuit accordingly affirmed the lower court’s award to BMG of statutory damages of $22,500 on its motion for summary judgment.  This represented the minimum statutory damage award permitted under the Copyright Act of $750 for each of 30 works Gonzalez was held to have infringed.  Importantly, this was the relief requested by BMG, and not the result of the trial court’s exercise of its discretion as to an appropriate damage award.  BMG elected to seek damages for only those songs Gonzalez downloaded which she admitted she did not own or purchase, either before or after downloading.

In reaching this result, the Seventh Circuit rejected defendant’s claim that the lower court erred in failing, under Section 504 of the Act, to reduce this statutory damage award because defendant did not believe her acts constituted infringement.  Such a defense is not available where the infringed works, such as those at bar, bear an appropriate copyright notice.  This was true notwithstanding the fact that the actual copies Gonzalez copied did not themselves contain such notice.

Download PDF of Court Decision

Use by competing yacht broker of internet "spider" to extract non-copyrightable facts concerning yachts for sale from competitor's website did not infringe website owner's copyright.  Court held that "momentary copying" of competitor's site during this "extraction" process was a permissible fair use under Section 107 of the Copyright Act.  Court further held that copying, modifying and reposting individual yacht listings and the pictures contained therein with the permission of either the yacht owner or his broker did not infringe any copyrights in such works, which were held by the yacht broker and not the competitor's web site on which the listings were posted.  Finally, web site's owners claim that competitor infringed its copyright by copying the site's "look and feel" failed because, according to the court, the similarities between the sites derived from unprotectable elements, including pictures, headings and descriptions of yacht listings.

Download PDF of Court Decision