Kelly Appeal - Split Decision

            As you may recall, Leslie A. Kelly previously brought a lawsuit against Arriba Soft Corporation (which has since changed its name to "Ditto.com") for copyright infringement arising out of use of his photographs on the defendant's search engine on the Internet.

            In the April 2000 issue, I reported on the District Court's dismissal of the case on the basis of the fair use doctrine.

            On appeal, the United States Ninth Circuit Court of Appeals, in an opinion filed February 6, 2002, ruled in favor of both parties by splitting the case into two separate issues.

            The Court distinguished between two types of infringement. The first, of "thumbnail" (or small) pictures copied from other websites, including that of Kelly, was affirmed as a fair use.  The Court reasoned that the photographer was not harmed by such use, that it was a transformative use (i.e., serves a different purpose than the original) and thus a valid public purpose was served by enabling the public to search the web more easily. 

            The Court determined that these thumbnail images could not be enlarged without loss of clarity because of the low resolution of the images. Therefore the use did not pose a threat to the market for the photographer's work. In fact, it held the "search engine functions as a tool to help index and improve access to images on the Internet and their related websites."

            The second type of infringement occurred when one "clicks" on the thumbnail images.  This creates, in the Court's words, a "display of Kelly's images through the online linking and framing processes." This occurred because the clicking transports a full-size high-resolution image onto the screen directly from Kelly's website.

            The Court noted that this is an infringement of the copyright holder's right to "display" copyrighted material, as opposed to the more common infringement of the right to "reproduce," or copy, copyrighted material. This finding was necessary, said the Court, because the linking did not result in a copying of the image. Copying, on the other hand, did occur with the thumbnail images.

            The Court distinguished between the transformative nature of the thumbnail images, which provides users with the ability to find Kelly's images without harming his market (and in fact probably enhancing it, which I am sure Kelly would dispute), and the full-size images, which served no additional purpose and clearly harmed all of Kelly's markets.

            The Court remanded the case to the District Court with instructions to determine damages and whether an injunction is necessary.

            In view of the importance of the issues to all users of the Internet, and particularly to photographers and those who seek to find photographs, this will surely not be the last word. In fact, the defendant has already filed a petition for a Rehearing and a Rehearing En Banc (by the entire circuit court). Other appeals may follow.