Yet another photo embedding case, but this time Instagram wins based on the court's application of the "server test." 

The plaintiffs own the copyright in photos that they voluntarily posted on Instagram. They sued Instagram in the Northern District of California, alleging that Instagram is secondarily liable for copyright infringement that occurs when third parties use Instagram's embedding tool to display their photos on websites off the Instagram platform.

The plaintiffs didn't sue Instagram for direct copyright infringement, presumably because they realized that the license that they (like all Instagram users) granted to Instagram, via Instagram's Terms of Service ("TOS"), would doom any attempt. While the scope of that license may not be free from doubt in certain respects - including as to whether it is broad enough to permit Instagram to sublicense rights to third parties employing the embedding tool (see this post) - it would be mighty hard to argue that it isn't broad enough to cover displaying photos that the plaintiffs voluntarily shared on Instagram itself. 

To prevail with its secondary liability claim, the plaintiffs were required to prove, at the outset, that third parties directly infringed upon at least one of their exclusive rights. It was undisputed that users of Instagram’s embedding tool do not make a copy and store the embedded photos on their own or third party servers; instead, those photos remain stored on Instagram's servers. Thus, the legal question was whether those users infringed upon the plaintiffs' exclusive display rights when they employed the embedding tool.

The court's answer:  a hard no. The court reminded the parties that it is bound by Perfect 10 v. Amazon, where Ninth Circuit parsed the statutory definitions of “display,” “copy,” and “fixed” to conclude that a website publisher does not violate a copyright owner’s exclusive display right in an image unless the image is stored on the publisher's server. (See my colleague Craig Whitney's post for more background on the "server test.") Under this binding precedent, since the users of Instagram's embedding tool do not store the image on any server, but merely use HTML code to link to images stored on Instagram's severs, the district court concluded that those users are not liable for infringement. And if they are not liable for direct infringement, Instagram cannot be liable either on a secondary liability theory.

The court rejected the plaintiffs' attempt to distinguish Perfect 10 as a case that involved a "search engine" and reflected a "highly fact-driven . . . policy judgment.” In the district court's view, Perfect 10 relied on an interpretation of the statutory language, and not policy considerations, to determine when a computer displays a copyrighted work under § 106(5). The court also declined to follow out-of-circuit district court decisions, including Nicklen v. Sinclair Broadcasting Group, Inc. (the subject of this post), that had questioned or rejected the server test.

The court also didn't buy that the Supreme Court's decision in American Broadcasting Cos. v. Aereo, Inc. was in conflict with Perfect 10. In Aereo, the Court interpreted a different provision of the Copyright Act - the public performance right under § 106(4) - and not the display right under § 106(5) which was at issue in Perfect 10. The district court also observed that "years after Aereo, the Ninth Circuit continues to apply Perfect 10's server test, including in an opinion published just this month."

The district court ended the opinion by stating that if the plaintiffs disagree with the server test, they are "free to present that argument to the Ninth Circuit and the Supreme Court." It is only a matter of time before these plaintiffs, or someone else, asks the Supreme Court to weigh in on the east coast/west coast split emerging on the viability of the server test.

Hunley v. Instagram, LLC, Case No. 21-cv-03778-CRB (N.D. Cal. Sept. 17, 2021)