Instagram and the Server Test Win 9th Circuit Challenge

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Earlier this week, the Ninth Circuit Court of Appeals ruled to uphold the dismissal of a class action lawsuit that was filed against Instagram over the company’s enabling of embedded images.

The case was filed in May 2021 by two photographers, who alleged that their images were used without permission on various news sites through the use of Instagram embeds. 

They argued that, since the use of their photos on those news sites was an infringement, that Instagram was liable for secondary copyright infringement. 

However, the lower court disagreed and dismissed the case. According to the judge, an embed of a photo does not equal displaying a copy of the underlying image. As such, the embeds were not infringements, meaning that there is no secondary copyright infringement for Instagram to be liable for.

The photographers appealed the case and the 9th Circuit has upheld that decision, saying that an embed of an image is tantamount to linking to it, not producing a new copy or publicly displaying the work. 

The reasons for both decisions is what is known as the “server test”. In May 2007, the same appeals court ruled in the case Perfect 10 v. Amazon that Google was not liable for the infringement of hotlinked images in its Google Image Search tool. The reasoning was that the images were not hosted on Google’s servers and, instead, were hosted on the sites of the actual infringers.

However, the server test has been called into question in recent years and the Ninth Circuit seemed to acknowledge that, noting in their ruling that the plaintiffs had raised “serious and well argued” concerns but noted that the only way it could overturn the previous decision would be to hear the case en banc.

As Alison Frankel at Reuters noted, this is all-but an invitation to make that appeal, a rare move by any appeals court. 

As such, it’s likely that this case will continue. However, it’s still worth taking a moment and seeing where this particular ruling leaves us on the issue of embedding.

The Server, Tested

The Perfect 10 case created what is known as the “server test”. It basically says that, when looking at who is responsible for a particular infringement, the courts need to look at where the infringing material is hosted.

This had significant impacts on the embedding of content, such as social media posts. Under the server test, if an image embedded from Instagram turned out to be infringing, the site that did the embedding would not be held liable since, in essence, they simply linked to the original post. Instead, only the original uploader (and Instagram if they failed to remove the image after notice) could be held liable.

The server test represented, and represents, a rare “bright line” rule in copyright, where there was a clear separation between who is and is not liable.

However, since the original ruling, the server test has been under attack.

The first major volley was in June 2014 when the Supreme Court ruled against the TV streaming service Aereo. Aereo was a TV streaming service that captured over-the-air transmitted television and streamed it to viewers using a system through which each customer had their own antenna. 

Aereo had argued that this was legal, as it was not a public performance of the broadcasters’ works. Since each customer had their own antenna, they argued it was a private performance.

The Supreme Court, however, disagreed. It said that the technological distinctions weren’t relevant and that its retransmission of broadcast signals was infringing.

The case didn’t speak to the server test directly. However, the server test is built upon a very similar “technological distinction” and the ruling was a clear signal from the Supreme Court that it was losing interest in such distinctions that led to identical outcomes.

The Aereo case was cited in February 2018 when a New York district court, which is in the Second Circuit, ruled that embedding a tweet could be a copyright infringement

That case involved a photographer suing various news agencies for embedding Tweets of a photo he took that was uploaded to Twitter without his permission. In the decision, the court wrote, “Technical distinctions invisible to the user should not be the lynchpin on which copyright liability lies.”

In July 2021, a different New York judge ruled similarly, rejecting the server test outright. 

While not yet a circuit split, the decisions represent a fracture in how courts are looking at the server test, and the Ninth Circuit’s own ruling isn’t exactly brimming with confidence for it either.

The Latest Ruling

The latest ruling makes it clear that the server test is still alive, but it is unclear if it’s alive anywhere other than the Ninth Circuit. 

In its ruling, the court set aside the Aereo ruling, saying that it involved a different provision of the Copyright Act. As such, the panel ruled that the Aereo decision didn’t alter the validity of the server test.

However, as noted by Frankel, the court appeared to be open to arguments relating to how the test may or may not contravene the Copyright Act’s overarching goal, which is to provide incentives and protections for copyright holders.

But, the panel refused to rule on that saying, “Even if we thought, in retrospect, that Perfect 10 created some inconsistencies with other provisions of the Copyright Act, we are not free to overrule Perfect 10 outside of an en banc proceeding.”

This has led those supporting the photographers to express optimism that the court would grant such a review and, at the very least, seriously entertain arguments that the server test is flawed.

Such a ruling would likely lead either to the final death knell for the server test or the further entrenchment of it in the Ninth Circuit, setting the stage for a possible Supreme Court challenge.

As it is, the ruling doesn’t really change much. The server test was considered valid in the Ninth Circuit before this ruling, and remains as such now. The court didn’t overturn it, but hinted that it was constrained by earlier decisions and may be willing to hear the case en banc.

In short, we’re very much in the same place we were before this ruling. The Ninth Circuit is holding the server test and other circuits, in particular the Second Circuit, seem to be dismissing it.

There is still a very good chance that this issue will need intervention by the Supreme Court.

Still, it’s safe to say that the fate of the server test doesn’t seem as precarious as it did a few years ago, even if it’s clear that the story is far from over.

Bottom Line

In the end, this decision is important, if somewhat predictable. The Ninth Circuit created the server test, and all the serious challenges have come from outside it. It was unlikely that they were going to simply ignore it, either at the district or appeals court level.

That said, setting the stage for an en banc hearing was not something that many expected and would represent the highest level challenge of the test to date.

But while that does give optimism for those opposed to the server test, the ruling also indicated that the court isn’t going to apply the Aereo decision to the server test, which is the exact grounds that others have used to successfully challenge it.

Simply put, the ruling means that the server test isn’t dead, especially in the Ninth Circuit. However, the threats against it still remain and a new challenge for it may have been added in the form of a possible en banc hearing.

So while this is an important chapter in this story, it’s not the end in either direction. This is an issue that is only going to get more and more important over the next few years, so expect to hear more about this issue in the not-too-distant future. 

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