Tag: Hunley et al v. Instagram

The Server Rule Has to Go

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On September 17, a California District Court dismissed the complaint in Hunley et al v. Instagram, in which the plaintiff class accused the Facebook-owned social platform of “encouraging, inducing, and facilitating third parties to commit widespread copyright infringement” by means of the company’s promotion of its embedding tools. Through Instagram’s marketing the ability for third parties to display images by means of embedding (copying code that points to the image file on Instagram’s servers), Photographer Alexis Hunley et al argue that the platform induces other parties to infringe photographic and other works.

But in order to proceed with an allegation of secondary liability against Instagram, those third party users must be considered alleged direct infringers by the court; and according to Ninth Circuit precedent, parties who cause the display of works by means of embedding (aka “in-line linking”) do not infringe the display right (§106(5)) of the author.

The precedent, written in the case Perfect 10 v. Amazon (2007), is known as the “server rule” because it holds that if a person causes the display of a work by pointing to a location on a server he does not control (i.e. where he has not stored the copy of the work), then §106(5) is not implicated. In a few recent cases, courts in the Second Circuit have held the opposite view, finding, quite reasonably, that when a party causes a work to be displayed by any means, then the work has been, well, displayed. (See discussion in posts here and here.)

So, in Hunley, there was little doubt the district court would be bound by the controlling precedent, but if and when this circuit split is ever resolved, it is the Second Circuit’s reading of the law that common sense must favor. In fact, if the server rule question is ever presented to the Supreme Court, the district court’s five-page opinion in Hunley emphasizes the error in Perfect 10 when it describes that decision as having been based on the “plain language of the statute.” No, I don’t think it was.

Perfect 10 may be a plausible reading of the statute, but it is neither a plain reading nor a particularly sensible or fair one. §106(5) of the Copyright Act protects the author’s exclusive right to “display the copyrighted work publicly,” and any party who displays a work without license (exceptions notwithstanding) is an infringer. The plain-text definition of “display” in §101of the law is “to show a copy of it, either directly or by means of a film, slide, television image, or any other device or process …” [emphasis added]. And just to cover all bases, “copies” are defined thus:

“Copies” are material objects, other than phonorecords, in which a work is fixed by any method now known or later developed, and from which the work can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.

Nowhere in these statutory definitions—read independently or interdependently—does the text indicate that while using a “device or process” to cause a public display, the user of a work will only implicate the author’s exclusive right if he displays the copy which he caused to be made of the work. Reading the text as the Ninth Circuit does is a strained and creative interpretation, not a strict one. In fact, as Professors Jane Ginsburg and Luke Budiarjo argued in a 2019 paper, the server rule has been “converting the display right into an atrophied appendage of the reproduction right.”

If we were to apply the server test in any context other than the internet, it would not survive as a defense in court—not even in the Ninth Circuit. In 2007, perhaps the court in Perfect 10 was distracted by the technology and failed to recognize that “finding” a work online and making unlicensed use of it online is not legally distinguishable from doing the same thing in physical space. It should not matter that “in-line linking” happened to accomplish the purpose of display by technologically novel means. And while it is often true that statutory language can be out of step with a new paradigm, that does not seem to be the issue here.

If Perfect 10 were a textually defensible reading of the statute, then the server rule’s abuse on the display right and common sense would be a forgivable legal loophole in need of repair. Instead, it is simply bad law and should be overruled, either by the Ninth Circuit Court of Appeals itself, or by the Supreme Court, if and when that opportunity is ever presented.

Photo: by: AndreyPopov

New Class Action Accuses Instagram of Mass Copyright Infringement

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.