"Server Test" Is Reaffirmed (For Now) in Hunley v. Instagram, LLC

On July 17, 2023, in Hunley v. Instagram, LLC, No. 22-15293, the Ninth Circuit reaffirmed the "server test," which protects websites from copyright liability for embedding images that are hosted on another website's server. The server test has been the law in the Ninth Circuit since 2007, but in recent years it has come under attack in lower courts in other jurisdictions. While the Hunley decision confirms this binding precedent in the Ninth Circuit for now, online publishers should be aware that the server test may soon be reconsidered again in an en banc rehearing or possibly by the Supreme Court.

Background

Embedding (called "in-line linking" or "framing" in earlier cases) allows a website to incorporate images and other content into its site while the content remains stored on the server of a third-party host website. Slip op. at 5 & n.1. The embedding website contains HTML code that directs the user's browser to pull the content from the host website and display it within the embedding website. Id. at 5–6. Throughout that process, the embedding website does not actually store the underlying content, which remains stored on the host website's server. Id. at 8. The host website can control whether or not embedding is allowed. Id. at 9. The host website can also replace or delete the content, which will be reflected on any websites that embed that content. Id. (For example, picture a YouTube video embedded within a video player on various news and entertainment websites. If YouTube takes down the video and substitutes it with a gray screen indicating its removal, that gray screen will simultaneously appear on every site embedding it.) Numerous social media platforms, such as Instagram, have features that allow users to embed posts on other sites.

In 2007, in Perfect 10, Inc. v. Amazon.com, Inc., the Ninth Circuit decided that embedding does not constitute a "display" within the meaning of the Copyright Act. 508 F.3d 1146, 1160–61 (9th Cir. 2007). Rather, only the host website is displaying the image and is potentially liable for direct infringement. Id. This rule, known as the server test, was widely applied for years and allowed websites to incorporate others' content without the cost of licensing the work or facing a potential lawsuit for direct infringement.

A decade later, the tide appeared to be turning against the server test. Several district courts outside the Ninth Circuit rejected the server test and held that embedding websites were liable for direct infringement. See Leader's Inst., LLC v. Jackson, 2017 WL 5629514, at *11 (N.D. Tex. Nov. 22, 2017); Goldman v. Breitbart News Network, LLC, 302 F. Supp. 3d 585, 596 (S.D.N.Y. 2018); Nicklen v. Sinclair Broad. Grp., Inc., 551 F. Supp. 3d 188, 195 (S.D.N.Y. 2021); McGucken v. Newsweek LLC, 2022 WL 836786, at *6 (S.D.N.Y. Mar. 21, 2022).

The split in authority created uncertainty about the lawfulness of embedding content. Websites raised additional defenses—such as fair use or a license to embed based on the terms of service of the social media platform—but courts often rejected these defenses on early dispositive motions, requiring discovery or even trial. See Nicklen, 551 F. Supp. 3d at 198–99; McGucken, 2022 WL 836786, at *8–9. Facing the risk of adverse rulings and the cost of a lawsuit, websites often avoided embedding content unless they were sure they had permission from the author of the work or a strong fair-use argument.

Hunley v. Instagram, LLC

In Hunley, two photographers claimed that two news websites infringed their copyrights by embedding their Instagram posts. Slip op. at 9–13. Rather than suing the news websites for direct infringement of their images, the photographers instead brought a class action against Instagram for secondary infringement. Id. at 13. Instagram's secondary liability would depend on the existence of direct infringement by the news websites, so the case squarely presented the issue of liability for the websites' embedding. The district court dismissed the complaint under Perfect 10, and the photographers appealed. Id. at 14–15.

The Ninth Circuit reaffirmed the server test and its corollary that embedding does not display an image under the Copyright Act. Id. at 15–19. Adhering to Perfect 10's statutory analysis, the court held that "[f]or a display to be actionable, it must display a copy," and a copy displayed by a website or other computer must be "stored on that computer." Id. at 17–18 (emphases added) (quoting Perfect 10, 508 F.3d at 1160). Because an embedding website does not store a copy of the work, it "does not have a copy of the images for purposes of the Copyright Act" and thus cannot be directly liable for displaying a copy. Id. at 19 (quoting Perfect 10, 508 F.3d at 1160).

The photographers raised several arguments against application of the server test, and the Ninth Circuit rejected each. First, the photographers argued that the server test should be limited to the specific factual context of Perfect 10, i.e., "search engines or other automated, algorithmic indexing platforms." Id. But the court held that "Perfect 10 did not restrict the application of the Server Test to a specific type of website." Id. at 20.

The photographers also cited the lower court decisions in other circuits that rejected the server test. But the Ninth Circuit noted that "no circuit has disapproved of Perfect 10," and, in fact, two circuits cited the server test either neutrally or "with approval." Id. at 21–23 (citing Soc'y of Holy Transfiguration Monastery, Inc. v. Gregory, 689 F.3d 29, 55 (1st Cir. 2012); Flava Works, Inc. v. Gunter, 689 F.3d 754, 761 (7th Cir. 2012)).

Next, the photographers argued that the server test is inconsistent with the Copyright Act. But the Ninth Circuit stated that it "will not consider these arguments in any detail because they are foreclosed by Perfect 10." Id. at 24. The court explained that it was "not free to overrule Perfect 10 outside of an en banc proceeding unless there has been a change in the statute or an intervening Supreme Court decision." Id.

The photographers claimed that the Supreme Court's decision in American Broadcasting Cos. v. Aereo, Inc., 573 U.S. 431 (2014), was such an intervening decision. Aereo concerned whether a company's device that employed numerous small antennae, with each antenna receiving and transmitting television broadcasts to an individual subscriber, was "publicly performing" the broadcasts under the Copyright Act. In holding that it was, the Supreme Court emphasized high-level practicalities over "under the hood" technicalities, refusing to allow a technological "difference, invisible to subscriber and broadcaster alike," to "transform a system that is for all practical purposes" an infringer into a noninfringer. Aereo, 573 U.S. at 444.

The Ninth Circuit rejected the claim that Aereo was irreconcilable with Perfect 10. First, Aereo did not speak to the same issues as Perfect 10, as the former addressed public performance and the latter concerned public display—two distinct rights held by copyright owners under § 106 of the Copyright Act. The difference is important because a display requires a copy of the work, but a performance does not require a copy. Slip op. at 27–28; compare 17 U.S.C. § 101 (definition of "display": "to show a copy"), with id. (definition of "perform": "to recite, render, play, dance, or act"). Thus, according to the Ninth Circuit, Aereo's interpretation of performance does not affect Perfect 10's holding that embedding does not display a copy. Slip op. at 28. Second, as to the Supreme Court's emphasis on practicalities and perception, the Ninth Circuit was "reluctant to read too much into this passage," which concerned the specific context of similarities between Aereo and traditional cable companies. Id. at 30–31.

Finally, the photographers and their amici raised numerous policy arguments against the server test. But the Ninth Circuit panel stated that they "are not the policymakers." Id. at 33. The court repeatedly stated that if the photographers disagreed with Perfect 10, they would have to seek rehearing en banc, review by the Supreme Court, or a legislative amendment. Id. at 25, 33.

Having adhered to Perfect 10, the Ninth Circuit proceeded to affirm the dismissal of the complaint under the server test. Since the embedding websites did not display a copy of the images, there was no direct infringement and, consequently, no secondary infringement by Instagram. Id. at 34.

Takeaways

For now, Hunley confirms that the server test remains the law in the Ninth Circuit. But the Ninth Circuit may soon revisit the issue in an en banc proceeding. Indeed, the photographers have already indicated their intent to petition for a rehearing en banc. See Appellants' Unopposed Motion for Extension of Time to File Petition for Rehearing En Banc, Hunley v. Instagram, LLC, No. 22-15293 (9th Cir. July 20, 2023), ECF No. 57-2.

In addition, while Hunley confirms that the server test applies to online displays of images, it is less clear that it applies to online streaming of videos or audio. As the Ninth Circuit explained, the server test protects websites that embed images because they do not display a "copy" of the image, and a display requires a copy—but the performance of an audiovisual work does not require a copy. Slip op. at 27–28. Thus, plaintiffs may attempt to limit the server test to displays of images and hold websites liable for embedded videos.

On the other hand, Hunley has language that may extend to embedded videos. The Ninth Circuit noted that the server test is consistent with the "volitional conduct" requirement ("the Copyright Act's version of proximate cause"), which would hold that an embedding website that merely provides "access" to infringing content does not directly infringe, but the host website that actually copies and displays the content does. Id. at 28–29. The Ninth Circuit's "volitional conduct requirement draws a distinction between direct and secondary infringement that would likely foreclose direct liability for third-party embedders." Id. at 29–30. This reasoning would extend to both displays of images and performances of audiovisual works. Indeed, the Seventh Circuit used similar reasoning and cited Perfect 10 when it vacated a preliminary injunction against a website that embedded videos. See Flava Works, 689 F.3d at 761 ("By listing plays and giving the name and address of the theaters where they are being performed, the New Yorker is not performing them. It is not 'transmitting or communicating' them. . . . To call the provision of contact information transmission or communication and thus make [the embedder] a direct infringer would blur the distinction between direct and contributory infringement . . . .").

Of course, Hunley is only binding in the Ninth Circuit, which is little comfort to nationwide online services that may face lawsuits throughout the country for embedding. For all these reasons, websites that rely on embedding should continue to proceed with caution, and should consider securing a license and carefully assess the strength of other defenses like fair use before embedding others' content.