The Ninth Circuit has issued its long-awaited opinion in Google v. Perfect 10. Read the decision here. My initial take is that it's a mixed bag. On one hand, it's great for fair use, and recognizes the profound public benefit of search technology. On the other hand, it imposes an ill-considered and difficult-to-apply rule for secondary liability.
So let's start with the good news. The Court reversed the District Court's determination that Google's use of thumbnails as part of its image search function was likely to infringe Perfect 10 copyrights. The District Court's holding had distinguished Kelly v. Arriba Soft Corp. (which held that using thumbnails for search was fair use) based on the fact that Perfect 10 also sells reduced-size images, and Google's thumbnails might affect the market for those reduced-size images. The Ninth Circuit rejected that conclusion and instead held that Google was likely to prevail on a fair use defense based largely on the "highly transformative" nature of its use. The Court held the fact that Google's thumbnails "could supersede Perfect 10's cell phone downloads" could not overcome the public benefit inherent in Google's transformative use.
In other words, the Court recognized that search engine technology provides an astondingly valuable public benefit, which should not be jeopardized just because it might be used in a way that could affect somebody's sales. Bravo.
But now the bad news: secondary liability. The secondary liability issues arise from the fact that Google, through its search results, directs users to sites that contain pirated Perfect 10 images. So the question is should Google be held liable for that? The District Court held Perfect 10 was unlikely to show that Google could be held liabile on this ground becuase Google did nothing to encourage users to visit infrigning sites, or provide any significant revenue to them.
The Ninth Circuit rejected that reasoning, and announced there "is no dispute that Google substantiually assists websites to distribute their infringing copies to a worlwide market and assists a worldwide audience of users to to access infringining materials." Accordingly, it held Google could be liable for contributory infringement if Perfect 10 can show Google (i) "had knowledge that infringing . . . images were available using its search engine," (ii) "could take simple measures to prevent further damage to Perfect 10's copyrighted works," and (iii) "failed to take such steps."
In other words, it held that Google could be held liable for providing search results that lead a user to a site with infringing content, so long as Google knew infringing content was available and could have done something "simple" to stop it.
This strikes me as a terrible rule. It doesn't give search engine operators any clear guidance, and raises more questions than it answers. Knowledge of what? Each specific infringing image available? The fact there are infringing images out there, which of course there are -- by the millions, if not billions? And what does "simple measure" tell us? Simple in concept? Practice? Effective but expensive? Never mind the speed at which technology changes and makes what was once difficult or impossible simple or at least feasible.
The Ninth Circuit made a big mistake here. A search engine is at its core a tool for conveying factual information about what exists on the Web. It tells you that a website that may contain the content you're searching for can be found at a particular http address. Some sites contain pirated and infringing content. Does that mean folks that run search engines should be run the risk of millions in libaility for telling you the simple, true fact they exist and contain the content they, in fact, contain? If the folks who publish the Yellow Pages know that an escort service traffics in prostitution, should they be held liable for telling you the phone number or address? Ditto as to Google Maps.
Piracy is a huge problem on the web. But its the pirates that should be held responsible, not the people who give directions.