On May 19, two California photographers filed a class action suit alleging that Instagram is liable for inducement of copyright infringement, contributory copyright infringement, and vicarious copyright infringement due to the platform’s implementation and promotion of its “embed” function. The complaint begins: “This case is about Instagram’s scheme to generate substantial revenue for its parent, Facebook, Inc., by encouraging, inducing, and facilitating third parties to commit widespread copyright infringement.” Assuming this case proceeds, it could be a doozy, but first a little background.
The Server Rule and Terms of Service
Simply put, when an Instagram user uploads an image to a public account, a third party can cause that image to be displayed on its own web pages by means of copying HTML code that “points” to the image on Instagram’s server without copying the image onto the third party’s server. This act of “pointing” to a file on a host server is referred to as embedding or in-line linking or sometimes just linking.
Since 2007, and until quite recently, the practice of embedding, without making a copy on a different server, was held not to infringe copyright, thereby establishing the judge-made “server rule” in the case Perfect 10 v. Amazon. But more recent jurisprudence, particularly in instances when third-party users are commercial enterprises, courts have recognized that although embedding does not implicate the reproduction right, it still implicates the display right, which is simply common sense to most of us.
If a news organization causes a photograph to be shown on its web page along with a story it publishes, this is unquestionably a “public display” of the work. And the benefit derived by the news organization’s use of the image is a paradigmatic example of a use that requires a license. And that is a digest version of what a New York district court held in 2018 in Goldman v. Breitbart et al, after which several news organizations settled with photographer Justin Goldman for unlicensed display of one of his photographs by means of embedding from Goldman’s Twitter feed.
Thus, after Goldman, the server rule was held (and I think correctly) not to relieve the end-user third party from its obligation to license a work because the use still implicates the exclusive right of public display. At least in the SDNY. Then, in a related case (Sinclair v. Ziff-Davis), photographer Stephanie Sinclair complained that Mashable had caused her unlicensed image to be displayed, via Instagram’s embed API, for one of its articles.
But there, a New York district court articulated nothing about the server rule (or copyright per se) because the judge stated that she had no choice other than to affirm that any user who uploads an image to a public Instagram account grants that platform a very broad license to sub-license works to third parties. As discussed in my post about this ruling, under its TOS, Instagram can even charge fees to third parties for these sub-licenses, but so far, the platforms have not been quite so brazen.
Partly in response to Sinclair, a spokesperson for parent company Facebook stated to Ars Technica, “While our terms allow us to grant a sub-license, we do not grant one for our embeds API.” Ars also reports in the same article (albeit under the banner of whining about “web culture”) that another judge weighing a similar case in the same district (McGucken v. Newsweek) had not been so quick to dismiss the complaint on the TOS-based precedent articulated in Sinclair.
Holding Instagram Liable
None of those cases, of course, implicates the source platforms where the copyright owners originally upload their images. And that brings us to the class action Hunley et al v. Instagram, which alleges that the Facebook-owned platform has intentionally caused chronic third-party infringements of primarily photographic and videographic works. To meet the standards under the allegations filed, plaintiffs will have to demonstrate, to put it in simple terms, that Instagram’s managers knowingly fostered third-party infringements and did so for its own material gain.
But before this case enters that discovery phase, I imagine Instagram will file a motion to dismiss based on both the server rule and the TOS contract to which the plaintiff class has agreed by using Instagram in the first place. In the first matter, it may prove unfortunate for the plaintiffs that this complaint was filed in the Ninth Circuit, where the server rule is precedent, while it is only in the Second Circuit where district courts have articulated that the rule should not extend to infringing the display right. If the California district court defers to the server rule, it may find that the third parties did not infringe and, therefore, no basis for secondary forms of infringement exists. Alternatively, in a potential win for rightsholders overall, courts in the Ninth Circuit will agree with the display right limit, and at least the server rule will cease to be a free pass for parties to infringe visual works.
On the TOS question, the plaintiff class could, at least initially, run into the same problem as Sinclair because the language granting Instagram the right to sub-license is quite clear. Just because a Facebook PR person stated that third parties need to obtain licenses, that does not amend the contract with users (TOS) giving Instagram the authority to grant sub-licenses. The plaintiff class will seek to prove that Instagram is playing games—that although it is not exercising its contractual authority to sub-license, it has instead engaged in conduct to induce third parties to intentionally and chronically infringe works, and it has done so for its own material gain. From the complaint:
Embedding was originally marketed as a new tool to share one’s own photos or videos from one’s Instagram account to ‘your own website or blog.’ But Instagram had other plans that it was less public about, including the embedding of copyrighted works onto third party websites and blogs that were hosted outside of Instagram’s platform. That month [July 2013], Instagram rolled out a ‘pilot program’ with Bleacher Report, Mashable.com. CNN.com, HuffPost.com, and People.com to test drive the new ‘embedding’ tool.
To secretly enhance Instagram’s embedding tool’s functionality and generation of revenue, in 2016 or earlier, Instagram started putting tracking code technology that attached to users’ photos and videos uploaded to Instagram as a means to measure, handle, monitor, track and monetize the most valuable copyrighted works, i.e. the works that generated the most traffic.
Certainly, these allegations (and others in the complaint) are consistent with the manner in which platforms exploit the traffic or data generated by third-party infringements, while claiming to have no involvement in the infringements themselves. As such, especially if the plaintiff class can overcome the server rule hurdle in the Ninth Circuit, this case could prove to be a game-changer for online copyright enforcement. On the other hand, a class action against a giant like Facebook could last a decade or more, at which point the proverbial game may look very different.