The Server Rule Has to Go

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

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