Advanced Copyright Issues on the Internet - Fenwick & West LLP

Based on its various rulings, the district court concluded that it would issue a preliminaryinjunction against Google prohibiting the display of thumbnails of Perfect 10’s images, andordered the parties to propose jointly the language of such an injunction. 346On appeal, the Ninth Circuit affirmed the district court’s ruling that Perfect 10 had notshown a likelihood of establishing Google’s right and ability to stop or limit the directlyinfringing conduct of third party web sites. The Ninth Circuit began its analysis by noting that,under Grokster, “a defendant exercises control over a direct infringer when he has both a legalright to stop or limit the directly infringing conduct, as well as the practical ability to do so.” 347With respect to the first part of this test, the court noted that, unlike in Fonovisa where the swapmeet operator had contracts with its vendors giving it the right to stop the vendors from sellingcounterfeit recordings on its premises, Perfect 10 had not shown that Google had contracts withthird party web sites that empowered Google to stop or limit them from reproducing, displayingand distributing infringing copies of Perfect 10’s images. Although Google had AdSenseagreements with various web sites, an infringing third party web site could continue toreproduce, display, and distribute its infringing copies after its participation in the AdSenseprogram was ended. 348 And unlike the Napster system, in which Napster’s control over itsclosed system that required user registration and enabled Napster to terminate its users’ accountsand block their access to the Napster system, Google could not terminate third party web sitesdistributing infringing photographs or block their ability to host and serve infringing full sizeimages on the Internet. 349The Ninth Circuit also affirmed the district court’s findings that Google lacked thepractical ability to policy the third party web sites’ infringing conduct. “Without imagerecognitiontechnology, Google lacks the practical ability to police the infringing activities ofthird-party websites.” 350 Google’s inability to police distinguished it from the defendants heldliable in the Napster and Fonovisa cases. Accordingly, Perfect 10 had failed to establish theright and ability to control prong of vicarious liability. 351 Having so concluded, the Ninth Circuitdetermined that it need not reach Perfect 10’s argument that Google received a direct financialbenefit. 352Based on its rulings, the Ninth Circuit reversed the district court’s determination thatGoogle’s thumbnail versions of Perfect 10’s images likely constituted a direct infringement. Italso reversed the district court’s conclusion that Perfect 10 was unlikely to succeed on the merits346347348349350351352Id. at 859.Perfect 10 v. Amazon.com, Inc., 508 F.3d 1146, 1173 (9 th Cir. 2007).Id.Id. at 1174.Id.Id. The Ninth Circuit also stated, without analysis, that it agreed with the district court’s conclusion thatAmazon.com did not have the right and ability to supervise the infringing activity of Google or third parties,and that the district court did not clearly err in concluding that Amazon.com lacked a direct financial interest insuch activities. Id. at 1176.Id. at 1175 n.15.- 88 -