V.  Kelly v. Arriba Soft Corp.

In Kelly v. Arriba Soft Corp.,71 the Ninth Circuit applied the four-factor fair use test to analyze whether a search engine's use of thumbnail images is a violation of a copyright holder's rights.  In Kelly, professional photographer Leslie Kelly (“Kelly”) brought an action against Internet visual image search engine ditto.com, formerly known as Arriba Soft (“Arriba”), for copyright infringement.72  Kelly filed suit after he discovered that thirty-five of his copyrighted photographs were located in the search engine's database without his authorization.73  These photographs were placed on his websites and other websites with which he had a licensing agreement.74  Arriba acquired its database of images through the operation of a computer program that “crawls” websites in search of images.75  The captured images, including Kelly's photographs, were reproduced on Arriba's server.76  The program utilized these reproductions to create smaller, lower resolution thumbnail images.77  Once the thumbnail images were produced, the program removed the full-sized images from the server.78  These thumbnails, when accessed by someone on the Internet, could then be reproduced onto a computer's hard drive or a disk.79  However, a user could not expand the size of the thumbnail without losing its clarity.80

The Arriba program allowed the user to enlarge the thumbnail image by double-clicking it.81  Between January 1999 and June 1999, double-clicking the thumbnails would link the user to the “Images Attributes” page.82  This page included a description of the size of the image, a link to the originating website, the Arriba banner, and Arriba advertising.83  It also used a technique called in-line linking to display the original image:84

[i]n-line linking allows one to import a graphic from a source website and incorporate it in one's own website, creating the appearance that the in-lined graphic is a seamless part of the second web page.  The in-line link instructs the user's browser to retrieve the linked-to image from the source website and display it on the user's screen, but does so without leaving the linking document. 85

Therefore, in-line linking enabled the linking party to incorporate the linked image into its own content.86  Consequently, even though the image in Arriba's “Image Attributes” page was from the originating website and was not duplicated onto Arriba's server, it was unlikely that a user would know that the image was from another website.87  Since a user would never have to visit the images' originating website, Arriba's services were likely to create confusion for users and could negatively impact the originating website's business.  

Between July 1999 and August 2000, two links known as “Source” and “Details” were inserted on Arriba's results page containing the thumbnails.88  The “Details” link generated a screen resembling the “Images Attributes” page, but with a thumbnail rather than the full-sized image.89  When a user clicked on the “Source” link or the thumbnail from the results page, the site generated two new windows on the top of the Arriba page.90  The window in the front included only the full-sized image and the window behind it displayed a smaller version of the image's originating website.91  A portion of Arriba's website was noticeable underneath both of these windows.92

The district court rejected Kelly's argument that these practices constituted copyright infringement and awarded summary judgment for Arriba.93  In rendering its decision, the district court held that the use of both the thumbnail images and the full-sized images constituted fair use.94  In response to the district court's decision, Kelly filed a motion for partial summary judgment contending that Arriba infringed on his display, distribution, and reproduction rights through its use of the thumbnail images.95  Arriba, in turn, filed a cross-motion for summary judgment.96

With regard to liability for direct infringement resulting from in-line linking, the Court of Appeals for the Ninth Circuit found that Arriba had directly infringed on Kelly's right to display his images.97  Over one year later, the court withdrew the section of the Kelly opinion involving direct infringement on procedural grounds.98  It held that the district court should not have reached the issue of whether Arriba's framing of full-sized images constituted direct infringement when neither of the parties filed a motion for summary judgment on this specific claim.99

In rendering its decision, the Ninth Circuit balanced the four fair use factors to determine whether the use of thumbnail images violated Kelly's reproduction rights.100  Focusing specifically on the first and fourth factorsthe purpose and character of the use and the effect of the use upon the potential market for, or value of, the copyrighted work101 -the court affirmed the district court's holding that Arriba's use of the thumbnail images constituted fair use.102