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Shownotes for The Singularity Law Podcast: Episode 5 for October 27, 2008

Our Panel for Today:

• Josh Kagan, author of The Josh Kagan Blog
• Prof. Michael Scott of The Singularity Law Blog

Search Engine Caches Covered by Implied Licenses: Parker v. Yahoo!, Inc.

• Parker v. Yahoo!, Inc. 2008 U.S. Dist. LEXIS 74512 (E.D. Pa. Sep. 26, 2008).
• Perfect 10 v. Google, Inc., et al., 416 F. Supp. 2d 828 (C.D. Cal. 2006).
• Perfect 10 v. Amazon.com, Inc., 487 F.32 701 (9th Cir 2007).
• Kelly v. Arriba Soft Corp., 336 F.3d 811 (9th Cir 2003).
• S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081 (9th Cir. 1989).
• MAI Systems Corp. v. Peak Computer, Inc., 991 F.2d 511 (9th Cir. 1993).
• Ticketmaster Corp. v. Tickets.com, U.S.P.Q.2d (BNA) 1344 (C.D. Cal 2000). This is an unpublished decision.
• Ticketmaster Corp. v. Microsoft Corp., Case No. 97-3055 DDP (C.D. Cal., filed Apr. 28, 1997).
• Josh Kagan: Is a Search Engine Cache a Copy? Revisiting Kelly v. Arriba Soft through Parker v. Yahoo!, Inc.
• Eric Goldman: Search Engine “Cache” Function Covered by Implied License–Parker v. Yahoo.
• Jeff Neuburger: Challenge to Search Engine Caching Dismissed on Most (But Not All) Grounds.

eBay Libel and the Danger of Libel Tourism

• Eric Krangel, writing for Silicon Valley Insider: eBay Business Sues Buyer For Leaving Bad Feedback.

Apple Drops the iPhone NDA for Released Applications

• Robert Palmer, writing for The Unofficial Apple Weblog: iPhone NDA dropped, developers rejoice.
• Josh Kagan’s Recommended Reading: The Future of the Internet–And How to Stop It by Jonathan Zittrain.

Practical Corner: The Dangers of Screening Employees via Social Networking Sites

• William-Arthur Haynes, writing for The San Jose Business Journal: Screening via social media sites may leave employers exposed.

Final Thoughts: Murder in Cyberspace!

• Mari Yamaguchi, writing for the Associated Press: Japanese Woman Jailed After “Killing” Virtual Husband.

This recording is an informational resource only. It is not designed to offer legal advice.

The job of a search engine is to organize information on the Web and present that information to users in a way that is meaningful and skimmable. Modern search engines like Google and Yahoo! work by scouring Web sites for information and then indexing the contents of each page in a database from which it can draw information to respond to queries. This process involves creating a cache, which is a copy of the text or other content of each Web page added to the index.

It’s certainly not a new story to hear about a copyright owner complaining about this cache. Perfect 10 litigated the hell out of this issue¹ two years ago when they demanded that a court enjoin Google from creating “thumbnail” (small low-resolution) images for its Google Image Search. Perfect 10 prevailed in their initial action but then lost on appeal when the 9th Circuit found that Google’s fair use defense trumped Perfect 10’s infringement claim. This appellate decision followed the tradition of Kelly v. Arriba Soft,² an earlier case which established that the use of thumbnail images on a search engine is a fair use.

The Kelly decision gave us a doctrine that I support, even though I have to admit I’m not entirely comfortable with it. It’s not hard to see why the Ninth Circuit found that a cached thumbnail image is a fair use. The four-pronged fair use test in § 107 of the Copyright Act weighed heavily in favor of Arriba Soft, with the all-important fourth prong–the effect of the use upon the potential market for the original–solidly on the search engine’s side because, if anything, a low-quality thumbnail preview will guide consumers to the original copyrighted works.

Fair enough. This means that we need to consider whether a copy accomplishes the goals of the original, whatever those may be. Arriba Soft’s thumbnail copies didn’t, because they were low-resolution versions of Kelly’s epic photos. But what about Perfect 10’s images? Perfect 10 is a pornographic magazine. In fact, their business model includes selling small cell-phone-sized versions of their images that are similar to the thumbnail images cached by Google, Arriba Soft, and other search engines. Clearly the thumbnails can substitute for the originals of similar size. Luckily, this isn’t why Perfect 10 lost; Google prevailed largely because the Web sites supplying the source for its thumbnails were not even owned by Perfect 10. The Court found that those third-party sites might be infringing, but that was an issue that would need to be litigated independently of Google.³

But what if a copyright owner brought suit over something like those Perfect 10 thumbnail images without the messy third-parties involved? I don’t think that wouldn’t be a fair use under § 107. It would mean that search engines are making full copies that can completely fulfill the purpose of the source images. And when a search engine copies a Web page in its entirety and makes it available in something like the Google cache, that’s also not a fair use for the same reason. That means that search engines either needed (1) another defense or (2) a license.

This is the situation that presented in Parker v. Yahoo!, Inc.⁴ Parker claimed that Yahoo! infringed by copying text from his Web site into its cache, but the Court rejected his argument because, according to a well-known and well-accepted Internet convention, Parker could have prevented the indexing and caching of his page by using a robots.txt file. Parker even admitted that he was aware of this. The Court reasoned that, by not including a robots.txt file, Parker granted Yahoo! and other search engines an implied license for that use.

This is a great precedent for search engines. Decisions like Parker and others have gone a long way toward making me feel comfortable with Kelly. I’d still like to see the courts square off this concept in future cases. For example, one of the characteristics of the Web is that information is released it’s very hard to contain. One of the questions that survived Parker was whether the implied license is revocable. Saying “yes” to that might be like telling a newspaper that it can recall old editions of its paper at will. But judging by the trend we’re seeing in these search engine caching cases, I’m not terribly worried.

1. Perfect 10 v. Google, Inc., et al., 416 F. Supp. 2d 828 (C.D. Cal. 2006).
2. 336 F.3d 811 (9th Cir 2003).
3. Perfect 10, Inc. v. Amazon.com, Inc., 487 F.32 701 (9th Cir 2007).
4. 2008 U.S. Dist. LEXIS 74512 (E.D. Pa. Sep. 26, 2008).