The Daniel Patrick Moynihan Courthouse in New York. (AP Photo/Mark Lennihan)
Yesterday marked the conclusion of a major copyright suit raising serious questions about the way media companies do business online. The case was voluntarily dismissed following a settlement earlier this week with Time Inc. and with consent from the last remaining defendants, Oath (formerly Yahoo!) and Heavy.com.
In 2016, Justin Goldman snapped a photo of Tom Brady and Celtics general manager Danny Ainge on the streets of East Hampton, New York. Goldman uploaded the photo to his Snapchat story, where it then went viral, raising speculation that Brady was helping the Celtics recruit basketball player Kevin Durant. Users copied the photo from Snapchat and reposted it to Reddit and other platforms, and eventually to Twitter. Media outlets then embedded the tweets with the image into articles they wrote focused on Brady’s role in sealing the deal to get Durant.
Goldman filed a copyright suit against the outlets that used his photo, which in addition to Time Inc., Oath and Heavy.com included Breitbart, Vox Media, Gannett Company, Herald Media, Boston Globe Media Partners and New England Sports Network. The suit claimed the sites infringed on his copyright, violating his exclusive right to display his photo. The media defendants, relying on a landmark California case, argued there was no infringement since the image wasn’t hosted on any of their sites; it was hosted on Twitter.
But in a surprising decision issued in February 2018, a federal district court judge in the Southern District of New York rejected that argument.
“Having carefully considered the embedding issue,” Judge Katherine Forrest concluded, “that when defendants caused the embedded Tweets to appear on their websites, their actions violated plaintiff’s exclusive display right; the fact that the image was hosted on a server owned and operated by an unrelated third party (Twitter) does not shield from this result.”
The case turns on the distinction between hosting and embedding an image. To embed an image, a media outlet adds an “embed code” that directs a user’s browser to a third-party server where the image is hosted to retrieve that image. The embedded image then hyperlinks to that third-party website. Most social media sites like Facebook, Twitter and YouTube provide code that media outlets can copy to enable embedding on their own webpages.
In a seminal California case, Perfect 10, Inc. v. Amazon.com, the Ninth Circuit adopted what’s become known as the “Server Test.” Under that rule, liability for infringement is based on where the image is hosted. If it’s stored on a third-party server and accessed by “in-line linking,” which works like embedding, then there’s no infringement.
It’s a rule that media companies had viewed as settled law for over a decade, expecting the judge to apply the same test here. But Judge Forrest rejected that approach. When a user visits a website with an embedded tweet, she noted, the user sees a mix of text and photos that’s seamlessly integrated, even if the underlying images are hosted elsewhere. “The plain language of the Copyright Act, the legislative history undergirding its enactment and subsequent Supreme Court jurisprudence,” she wrote, “provide no basis for a rule that allows the physical location or possession of an image to determine who may or may not have ‘displayed’ a work within the meaning of the Copyright Act.”
The media defendants sought an immediate appeal to the ruling, warning that it would “cause a tremendous chilling effect on the core functionality of the web.” Judge Forrest granted consent for that appeal given it’s a “high-impact copyright case” where opinions might differ. But the Second Circuit declined to take on the case, finding an interlocutory appeal “unwarranted.”
So last summer, the case returned to the district court, where it was soon headed for trial. As discovery proceeded into this spring, several of the defendants opted to settle, with the latest defendant, Time Inc., agreeing to a settlement earlier this week. With just two media defendants remaining, Goldman’s counsel wrote in a May 9 letter to the judge that the “cons” of continuing the case outweighed the “pros” and that it was “no longer worth litigating.” Yesterday, with consent from the last two defendants, Oath and Heavy.com, the suit finally came to an end and was voluntarily dismissed.
That means there’ll be no appeal in this case and the legal uncertainty it created will continue—but not for too long. A number of cases are now pending in the district court that present the same “embed” legal issue. In the interim, media sites are forewarned that embedding remains a risky proposition.
