Perfect 10 V. Amazon
In Perfect 10, Inc. v. Amazon.com, Inc., the Ninth Circuit again considered whether an image search engine's use of thumbnail was a fair use. Although the facts were somewhat closer than in the Arriba Soft case, the court nonetheless found the accused infringer's use fair because it was "highly transformative." The court explained:
We conclude that the significantly transformative nature of Google's search engine, particularly in light of its public benefit, outweighs Google's superseding and commercial uses of the thumbnails in this case. … We are also mindful of the Supreme Court's direction that "the more transformative the new work, the less will be the significance of other factors, like commercialism, that may weigh against a finding of fair use."
In addition, the court specifically addressed the copyright status of linking, in the first US appellate decision to do so:
Google does not…display a copy of full-size infringing photographic images for purposes of the Copyright Act when Google frames in-line linked images that appear on a user's computer screen. Because Google's computers do not store the photographic images, Google does not have a copy of the images for purposes of the Copyright Act. In other words, Google does not have any "material objects…in which a work is fixed…and from which the work can be perceived, reproduced, or otherwise communicated" and thus cannot communicate a copy. Instead of communicating a copy of the image, Google provides HTML instructions that direct a user's browser to a website publisher's computer that stores the full-size photographic image. Providing these HTML instructions is not equivalent to showing a copy. First, the HTML instructions are lines of text, not a photographic image. Second, HTML instructions do not themselves cause infringing images to appear on the user's computer screen. The HTML merely gives the address of the image to the user's browser. The browser then interacts with the computer that stores the infringing image. It is this interaction that causes an infringing image to appear on the user's computer screen. Google may facilitate the user's access to infringing images. However, such assistance raised only contributory liability issues and does not constitute direct infringement of the copyright owner's display rights. …While in-line linking and framing may cause some computer users to believe they are viewing a single Google webpage, the Copyright Act, unlike the Trademark Act, does not protect a copyright holder against acts that cause consumer confusion.
Read more about this topic: Copyright Aspects Of Hyperlinking And Framing, History of Copyright Litigation in Field, United States