Here are some of the highlights. Today's decision reversed the lower court's holding [PDF] that Google's thumbnails were not a fair use, following and bolstering an earlier image search engine precedent, Kelly v. Arriba Soft [PDF]. The court rightly took into account the important public benefit that search engines provide -- not simply the impact on the particular parties in this case -- and what would serve copyright's fundamental goal of promoting access to creative works. While Google's transformative use of the image provided a very real public benefit, Perfect 10's potential loss of thumbnail licensing revenue was highly speculative.
The Court also shot down Perfect 10's claim that Google was displaying the full-sized versions of infringing images from third-party websites by framing them or providing an HTML in-line link tag to end users. The Court correctly discerned the technology at issue, finding that when you frame a page or provide an in-line link, it's the site that you're pointing to that could be displaying the picture, not the search engine that coughs up the HTML.
Though the thumbnail issue has made the most headlines, Perfect 10 actually brought a grab bag of secondary liability claims as well, asking the court to hold Google liable for indexing third-party infringing sites. Perfect 10 predicated much of its argument on the fact that Google was on general notice that its index contained links to infringing content, and argued that Google could be held liable for failing to actively police its system or design it differently. A ruling in favor of Perfect 10 could have been a catastrophe to web hosting services, video sharing sites, and myriad other dual-use tools that link to or host third-party content.
Perfect 10's arguments aren't so different from the ones made by the entertainment industry -- but not accepted by the Supreme Court -- in Grokster, and thus it should be no surprise that that the MPAA and RIAA piled on, filing briefs in support of Perfect 10. Once again, this was a case of Hollywood and its allies trying to lockdown innovation.
Fortunately, the Court wasn't buying it. It rejected Perfect 10's theory and found that until Perfect 10 gave Google actual knowledge of specific infringements (e.g. specific URLs for infringing images), Google had no duty to act and could not be liable. It also held that Google could not "supervise or control" the third-party websites linked to from its search results, something most people (except apparently Perfect 10) probably already knew. The rule provides strong guidelines for future development and avoids the kind of uncertainty that could chill start-ups trying to get the next great innovation off the ground.
Finally, the court also rejected Perfect 10's attempts to turn web surfers into pervasive copyright violators. Specifically, Perfect 10 had claimed that Google users who looked at photos in their browsers were infringing the photos because their computers automatically "cached" a copy of the photo in memory. Thankfully, the ruling today affirmed that any such copying is a fair use and cannot be infringing.
All in all, good news for innovators and Internet users.
