Perfect 10, a publisher of adult images, owned copyrights in photographs of its models and licensed certain small images for cell phone downloads through a partner (Fonestarz). Numerous third-party websites posted Perfect 10's images without authorization. Google's web crawler indexed those pages and, through Google Image Search, stored reduced-size copies (thumbnails) of images on Google's servers. Search results displayed grids of these thumbnails; when a user clicked a thumbnail, Google's result page used inline linking and framing so the user's browser retrieved and displayed the full-size image directly from the third-party site, not from Google's servers. Amazon subsidiary A9.com offered an image search service that relied on Google's search technology and similarly displayed thumbnails and linked to full-size images hosted by third parties. Perfect 10 sent notices identifying infringing URLs and sued Google and Amazon for copyright infringement, seeking a preliminary injunction. The district court granted a preliminary injunction against Google's display of thumbnails (finding no fair use) but denied relief as to inline linking and framing of full-size images; it denied or limited relief as to Amazon. All parties appealed, resulting in the Ninth Circuit's consolidated opinion.
1) Does a search engine directly infringe the display or distribution rights by inline linking or framing full-size images that reside on third-party servers? 2) Does a search engine's copying and display of thumbnail images constitute direct infringement, and if so, is it protected by fair use? 3) Can the search engine or related service be secondarily liable (contributory or vicarious) for facilitating user access to infringing images hosted by others?
Direct infringement of the display right under 17 U.S.C. § 106(5) requires that the defendant show a copy of the work, and a "copy" is a material object in which the work is fixed, 17 U.S.C. § 101. Under the Ninth Circuit's "server test," a service provider directly displays a work only if it stores and serves a copy of the work from its own server. Inline linking or framing content stored on another's server is not direct display infringement and does not distribute the work under § 106(3) because the defendant does not fix or disseminate a copy. Copying and displaying thumbnail images stored on the defendant's servers can implicate the reproduction and display rights, but such use may be fair use under § 107. Fair use requires analysis of four factors: (1) purpose and character of the use (including whether the use is transformative and commercial), (2) nature of the copyrighted work, (3) amount and substantiality used, and (4) market effect. Secondary liability: Contributory infringement arises where a defendant, with knowledge of the infringing activity, materially contributes to or induces the infringement (MGM v. Grokster; A&M Records v. Napster). Vicarious infringement requires a direct financial benefit from infringement and the right and ability to supervise or control the infringing conduct.
1) Inline linking and framing of full-size images that reside on third-party servers do not constitute direct infringement of the display or distribution rights under the server test. 2) Google's creation and display of thumbnail images stored on its servers implicates the reproduction and display rights but is likely fair use. 3) Perfect 10 did not show a likelihood of success on vicarious infringement because Google and Amazon lacked the right and ability to control the infringing activities of third-party websites. 4) Contributory infringement remains possible: providing links that facilitate access to known infringing images can materially contribute to infringement; the court remanded for further proceedings on contributory liability consistent with its standards.
Direct infringement and the server test: The court examined the statutory text defining a "display" as showing a copy of a work and a "copy" as a material object in which a work is fixed. Because full-size images appeared on users' screens by being transmitted from the third-party host's server to the user's browser, and not from Google's or Amazon's servers, neither Google nor Amazon possessed or served the fixed copies of those full-size images. Inline linking and framing merely directed the user's browser to retrieve content from another source; thus, the search engines did not directly infringe the display or distribution rights with respect to full-size images. This analysis also meant there was no direct distribution, as no copies were transferred by Google or Amazon. Thumbnails and fair use: By contrast, Google stored and served reduced-size thumbnail versions of images on its own servers, implicating reproduction and display rights. Applying § 107, the court found Google's use highly transformative: the thumbnails served a new and different function—improving access to and organization of information—rather than supplanting the original expressive purpose. Although Google's use was commercial, transformative character weighed strongly in favor of fair use, consistent with Kelly v. Arriba Soft. The works were creative, which modestly weighed against fair use. Google used entire images, but that was reasonable and necessary for image search functionality and therefore did not weigh heavily against fair use. On market effect, Perfect 10 argued Google's thumbnails harmed its cell-phone thumbnail licensing market (via Fonestarz). The court found the evidence of market substitution weak and attenuated; the thumbnails' role as search tools did not reasonably supplant a market for licensed downloads, and any harm from full-size images stemmed from third-party infringement, not Google's thumbnails. Balancing the factors, the court concluded Google's thumbnail use was likely fair use. Secondary liability: For contributory infringement, the court restated that liability attaches where a defendant, with knowledge of specific infringement, materially contributes to it. A search engine can materially contribute by providing links that facilitate user access to infringing images if it knows of the infringing activity and fails to take reasonable steps to limit such access. The record suggested Google and Amazon received notices identifying infringing URLs. The district court's analysis did not fully apply the proper standard, so the Ninth Circuit remanded for reconsideration of contributory liability in light of the knowledge and material contribution framework. For vicarious infringement, Perfect 10 failed to show that Google or Amazon had the right and ability to control the infringing conduct of third-party websites that hosted images; the ability to remove links from search results is not the same as controlling the infringing activity itself. Nor was there sufficient evidence of a direct financial benefit tied to specific infringements to establish vicarious liability at the preliminary injunction stage. Procedurally, because this was an appeal from preliminary injunction rulings, the Ninth Circuit focused on likelihood of success on the merits and applied its holdings to both Google and Amazon's A9 service, which relied on Google's image search results.
Perfect 10 v. Amazon.com is a cornerstone of internet copyright law. It established the server test for direct display liability, a rule widely applied to determine whether embedding or inline linking constitutes direct infringement. It confirmed that search-engine thumbnails can be protected by fair use due to their transformative, informational function, extending and reinforcing Kelly v. Arriba Soft. The decision also delineates the boundary between direct and secondary liability for online intermediaries: while mere linking does not make a service a direct infringer, knowledge-plus-material-contribution can give rise to contributory liability. For law students, the case is indispensable for understanding platform liability, fair use in functional technologies, and the doctrinal architecture that governs how the web works.
Perfect 10 v. Amazon.com reconciles copyright doctrine with the technical realities of the web. By adopting the server test, it shields routine web architecture—embedding and linking—from direct display liability while recognizing that copying to create and serve thumbnails triggers fair use analysis that favors search functionality. At the same time, the court preserved the possibility of secondary liability where a service meaningfully facilitates access to known infringements.