Advanced Copyright Issues on the Internet - Fenwick & West LLP

was no greater than necessary to achieve the objective of providing effective image searchcapabilities. 311 Finally, the court found that the fourth factor, the effect of the use upon thepotential market for and value of the copyrighted work, weighed slightly in Perfect 10’s favorbecause of the court’s finding that Google’s use of thumbnails likely would harm the potentialmarket 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 thethumbnails. 312On 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 someimportant preliminary rulings concerning the burden of proof with respect to the fair usedoctrine. The district court had ruled that, because Perfect 10 had the burden of showing alikelihood of success on the merits, it also had the burden of demonstrating a likelihood ofovercoming Google’s fair use defense. The Ninth Circuit held the district court’s ruling on thispoint to be erroneous. Citing cases from the Supreme Court and the Federal Circuit holding thatthe burdens at the preliminary injunction stage track the burdens at trial, the Ninth Circuit ruledthat, once Perfect 10 had shown a likelihood of success on the merits, the burden shifted toGoogle to show a likelihood that its affirmative defenses – including that of fair use – wouldsucceed. 313The Ninth Circuit’s analysis of the fair use factors is significant in its recognition of theneed, when judging the transformative nature of the use, to balance the public benefit from theuse against the potential harm to the rights holder from superseding commercial uses, as well asin its requirement of a showing that alleged potential superseding commercial uses are both realand 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 highlytransformative because its search engine transformed each image into a pointer directing a user311312313Id. at 850.Id. at 850-51.Perfect 10 v. Amazon.com, Inc., 508 F.3d 1146, 1158 (9 th Cir. 2007). This holding was the opposite of one theNinth Circuit had reached in an earlier issued opinion in the appeal, which the instant opinion replaced. In theearlier opinion, the Ninth Circuit had concluded that, because a plaintiff has the burden of showing a likelihoodof success on the merits in order to obtain a preliminary injunction, the plaintiff should also have the burden ofdemonstrating a likelihood of overcoming the defendant’s fair use defense. However, because the defendant inan infringement action has the burden of proving fair use, the Ninth Circuit had ruled in its earlier opinion thatthe defendant is responsible for introducing evidence of fair use in the first instance in responding to a motionfor preliminary relief, whereupon the burden would then shift to the plaintiff to demonstrate that it willovercome the fair use defense. Perfect 10 v. Amazon.com, Inc., 487 F.3d 701, 714 (9 th Cir. 2007) (supersededby 508 F.3d 1146 (9 th 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 willovercome defenses raised by the non-moving party. This burden is correctly placed on the party seeking todemonstrate entitlement to the extraordinary remedy of a preliminary injunction at an early stage of thelitigation, before the defendant has had the opportunity to undertake extensive discovery or develop itsdefenses.” 487 F.3d at 714. The Ninth Circuit apparently concluded that this earlier holding was inconsistentwith established precedent that the burdens at the preliminary injunction stage track the burdens at trial, leadingthe court to issue a revised opinion.- 81 -