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Authored By: Forrest Hyde
Executive Editor, American Journal of Trial Advocacy
Recently, a circuit split has been building up between the United States Courts of Appeal for the Second and Ninth Circuits, the two leading copyright appeals courts. The disagreement centers around what constitutes a “display” for purposes of copyright infringement under the Copyright Act of 1976 (“the Act”) where copyrighted images are shown (or “embedded”) on third-party websites without the copyright owner’s permission. A split on this issue, discussed in more detail below, could create a “rash of new litigation, and prompt newsrooms and media companies to re-examine their embed policies,” and would also raise a question “central to governing copyright on the internet.” But first, a quick mention of the Act’s provisions and the controversial test in issue.
The Act provides for many different rights exclusive to the copyright’s owner. One of these rights gives the copyright owner the exclusive right to “display” their work publicly, provided that the work in question is, inter alia, a “pictorial [or] graphic” work. Under the Act, “display” means “to show a copy of it, either directly or by means of a film, slide, television image, or any other device or process or, in the case of a motion picture or other audiovisual work, to show individual images inconsequentially.” The Act further defines that to display a work “publicly” means to “transmit . . . a performance or display of the work . . . to the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times.”
Years ago, the Ninth Circuit established the controversial “Server Test,” which says that “where the image remains on third-party’s server and is not fixed in the memory of the infringer’s computer . . . embedding is not display.” The Ninth Circuit has faithfully adhered to this test in cases where embedded copyrighted expression has been used without the copyright owner’s permission, despite disagreement from other courts. However, as recently as July 2021, the United States District Court for the Southern District of New York expressly denied applying the Ninth Circuit’s “Server Test,” leading to polar opposite results in a similar copyright claim. Both cases are discussed below, with a quick mention of the outlook from here afterwards.
The Ninth Circuit’s Adoption of the “Server Test” – Perfect 10, Inc. v. Amazon.com, Inc.
Perfect 10, operators of an internet site that sells copyrighted images of nude models, filed suit against Google and Amazon.com (collectively “Google”) for copyright infringement in the Summer of 2005. For four years leading up to their lawsuit, Perfect 10 had notified Google that thumbnail images and in-line linking to the full-size images infringed their copyrights. Perfect 10 sought to enjoin Google from “copying, reproducing, distributing, publicly displaying,” Perfect 10’s photographs. Perfect 10 claimed that Google’s search engine directly infringed their exclusive display and distribution rights under the Act.
The District Court relied on the “Server Test” when considering whether Perfect 10 made a prima facie showing of infringement. In order to understand this “test,” the court explained some of the inner-workings of Google’s search engine process. Basically, the court explained that Google’s “Image Search” software mainly provides search results as a webpage of small “thumbnail” images, all of which are stored on Google’s servers and are “lower-resolution versions of full-sized images [that are] stored on third-party computers.” When an internet user does a Google Image Search and clicks on the thumbnail, that user’s web browser interprets Hypertext Markup Language (“HTML”) instructions to access a third-party’s webpage, and the user’s browser then connects to the website publisher’s computer (or server). In short, a third party stores the full-size images on its servers and Google stores only the thumbnails and facilitates the HTML instructions to direct internet users’ browser to access that third-party’s website. The court then laid-out the “Server Test” as follows: “a computer owner that stores an image as electronic information and serves that electronic information directly to the user (‘i.e., physically sending ones and zeroes over the [I]nternet to the user’s browser,’) is displaying the electronic information in violation of a copyright holder’s exclusive display right.”
In order to present a prima facie case of direct copyright infringement, Perfect 10 had to prove “ownership of the allegedly infringed material,” and also that “the alleged infringers violate[d] at least one exclusive right granted to copyright holders” under the Act.  As to the first element, Perfect 10’s ownership of the images at issue was not disputed. The court proceeded to a quick “plain language” analysis to the question of infringement where “a computer displays a copyrighted work.” In short, the court held that an image “stored in [a] computer is [a] ‘copy’ of the work for purposes of copyright law,” and that a computer owner—in this case, Google—“shows such a copy ‘by means of a . . . device or process’” when the owner communicates the stored image “electronically to another person’s computer.”
At no point did Google have Perfect 10’s permission to display its copyrighted images, and because it was undisputed “that Google’s computers store[d] thumbnail versions of Perfect 10’s copyrighted images and communicate[d] copies of those thumbnails to Google’s users,” the court held that Perfect 10 had made a prima facie case of infringement of their exclusive right to publicly display their copyrighted images. Regarding the full-size images, the court held that because Google only “provides HTML instructions that direct a user’s browser to a website publisher’s computer that stores the full-size” images, Google’s process there was “not equivalent to showing a copy.”
The Southern District of New York’s Recent Express Denial of the “Server Test” – Nicklen v. Sinclair Broadcast Corp., Inc.
Paul Nicklen, a nature photographer and copyright owner of a video of an emaciated polar bear wandering the Canadian arctic, posted his video to his Instagram and Facebook (collectively, “Facebook”) accounts in December 2017 with a caption noting that the video was “exclusively managed by Caters News” and that those who wanted to “license or use” it should “contact Caters News.” Later that month, Sinclair Broadcast Group (“Sinclair”), which owns hundreds of local television stations, published an article and included Nicklen’s video by using Facebook’s “application programming interface (‘API’) embed tool.” Sinclair thus “embedded” Nicklen’s video “by including in its website an HTML code provided by [Facebook] that directed web browsers to retrieve the [v]ideo from the [Facebook] server for viewing on Sinclair’s website,” meaning that Nicklen’s video would appear as part of Sinclair’s article regardless of whether the reader took any action to “retrieve” Nicklen’s video or go to his Facebook account. At no point did Sinclair obtain a license or Nicklen’s permission before embedding the video, even though the caption of Nicklen’s original post provided licensing information; in fact, Sinclair ignored Nicklen’s takedown notice.
Nicklen sued Sinclair, alleging that Sinclair infringed his exclusive display right, inter alia, by embedding his video on their websites using the Facebook API tool. Nicklen’s ownership of a valid copyright in the video was undisputed, so the court focused its attention on “whether embedding a video ‘displays’ the video within the meaning of [the Act].” After quoting the very same definition of “display” from the Act that the Perfect 10 court referred to, the court here read the plain meaning of the Act differently to provide that “a defendant violates an author’s exclusive right to display an audiovisual work publicly when the defendant without authorization causes a copy of the work, or individual images of the work, to be seen.” The court dug deeper, noting that the “final form” of the display right “encompasses ‘not only the initial rendition or showing, but also any further act by which that rendition or showing is transmitted or communicated to the public.’” Further, and inevitably building-up to its denial of the technicalities of the “Server Test,” the court noted that the display right is “technology-neutral” and is not concerned “with how a work is shown, but that a work is shown.”
The court concluded that the Act’s “text and history establish that embedding a video on a website ‘displays’ that video, because to embed a video is to show the video or individual images of the video nonsequentially by means of a device or process.” With regards to the HTML code—which caused the video to appear in Sinclair’s web page, even though the video was stored on Facebook’s server—the court went the opposite way from the Ninth Circuit’s “Server Test” and noted that such code “is simply an information ‘retrieval system’ that permit the [v]ideo or an individual image of the [v]ideo to be seen,” meaning that Sinclair’s “act of embedding” fell within the display right. Thus, the court held that Nicklen plausibly alleged that Sinclair violated his exclusive right to display his video by embedding it in their online article without his permission.
The Nicklen decision was not the first time that the Southern District of New York had rejected the Ninth Circuit’s “Server Test,” in which “infringement of the public display right in a photographic image depends, in part, on where the image is hosted.” As internet users, there is really no difference in our experience regarding the location at which embedded content is stored; however, the infringement question hinges on that purely technical aspect regardless of the practical end result for us. If courts in the Second Circuit continue to push-back against the Ninth Circuit’s “Server Test,” then certain web publishers will soon start to realize that this is not settled law throughout the country and that they may face liability in certain circumstances where they display outside content on their websites without the copyright owner’s permission.
 Kyle Jahner, Embed Copyright Cases Could Multiply as Server Test Faces Siege, Bloomberg Law (Aug. 17, 2021, 4:02 AM), https://news.bloomberglaw.com/ip-law/embed-copyright-cases-could-multiply-as-server-test-faces-siege.
 Id. (“The server test’s validity hinges on the interpretations of key words in the Copyright Act like “display” and “copy.”); Nicklen v. Sinclair Broadcast Group, Inc., No. 20-CV-10300 (JSR), 2021 WL 3239510, at *4 (S.D.N.Y. July 30, 2021) (disputing the Ninth Circuit’s “server test” and noting the Copyright Act’s definition of “display”).
 See Jahner, supra note 1.
 17 U.S.C. § 106.
 Id. at § 106(5) (providing that the copyright owner has exclusive rights “in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly”).
 Id. at § 101.
 Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146, 1159 (9th Cir. 2007).
 Robert Nussbaum, Southern District of New York Rejects Ninth Circuit’s Copyright Analysis Regarding Embedded Images, JDSUPRA (Oct. 6, 2021), https://www.jdsupra.com/legalnews/southern-district-of-new-york-rejects-1509014/.
 Bell v. Wilmott Storage Services, LLC, 12 F.4th 1065, 1073 (9th Cir. 2021).
 Nicklen, 2021 WL 3239510, at *4 (“The server rule is contrary to the text and legislative history of the Copyright Act.”).
 508 F.3d 1146 (9th Cir. 2007).
 Perfect 10, Inc., 508 F.3d at 1157.
 Id. at 1159.
 Perfect 10, Inc., 508 F.3d at 1155.
 Id. at 1155-56.
 Id. at 1156.
 Id. at 1159 (citation omitted) (citing 17 U.S.C. § 106(5)) (emphasis added).
 Perfect 10, Inc., 508 F.3d at 1159 (citing A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1013 (9th Cir. 2001)).
 Perfect 10, Inc., 508 F.3d at 1159.
 Id. at 1160.
 Id. (citing MAI Sys. Corp. v. Peak Computer, Inc., 991 F.2d 511, 517-18 (9th Cir. 1993))
 Perfect 10, Inc., 508 F.3d at 1160 (quoting the 17 U.S.C. § 101 definition of “display”).
 Id. at 1160.
 Id. at 1161.
 No. 20-CV-10300 (JSR), 2021 WL 3239510, at *1 (S.D.N.Y. July 30, 2021).
 Nicklen, 2021 WL 3239510, at *1.
 Id. at *1.
 Id. at *2.
 Id. at *3.
 Id. (referring to the 17 U.S.C. § 101 definition of “display”) (emphasis added).
 Nicklen, 2021 WL 3239510, at *3 (quoting H.R. Rep. No. 94-1476, at 63 (1976)) (emphasis added).
 Id. (emphasis in original).
 Id. (emphasis added).
 Id. at *5.
 See Goldman v. Breitbart News Network, LLC, 302 F. Supp. 585, 596 (S.D.N.Y. 2018) (“[T]he Court here does not apply the Server Test. It is neither appropriate to the specific facts of this case, nor, this Court believes, adequately grounded in the text of the Copyright Act.”) (emphasis in original).
 Jeffrey D. Neuburger, Another NY Court Repudiates Ninth Circuit “Server Test” in Case over Embedded Video, The National Law Review, (Aug. 11, 2021), https://www.natlawreview.com/article/another-ny-court-repudiates-ninth-circuit-server-test-case-over-embedded-video.
 Andrew Gray IV et al., Like Embedded Content, Server Test on Display – A Conversation with Andrew Gray, JDSUPRA (Aug. 27, 2021), https://www.jdsupra.com/legalnews/like-embedded-content-server-test-on-3296146/.
 See Neuburger, supra note 45.