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Exploring the Latest in Intellectual Property Law
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It’s a Taking: Copyright Deposit Requirement Violates Fifth Amendment

by | Sep 7, 2023 |

Addressing the issue for the first time, the US Court of Appeals for the District of Columbia found that the Copyright Act of 1976’s requirement to deposit two copies of a work with the Library of Congress within three months of the work’s publication was unconstitutional under the Fifth Amendment’s Takings Clause. Valancourt Books, LLC v. Merrick B. Garland and Shira Perlmutter, Case No. 21-5203 (D.C. Cir. Aug. 29, 2023) (Srinivasan, Henderson, Edwards, JJ.)

Valancourt Books is a small business in Richmond, Virginia, which publishes rare and out-of-print fiction on an on-demand basis (i.e., in response to a specific customer request). Despite never having sought copyright registration for any of its works, Valancourt received a letter in 2018 from the US Copyright Office (CO) demanding a complete copy of 341 books published by Valancourt “for the use or disposition of the Library of Congress.” Failure to comply would subject Valancourt to fines of up to $250 per work plus the total retail price of the copies and an additional $2,500 for repeated failure to comply. Valancourt responded that it could not afford to submit copies of all the requested works, noting that some of the works contained material in the public domain and offering instead to sell copies of the works to the CO at cost. In response, the CO narrowed the list of requested copies to 240 works.

Valancourt sued seeking a declaration that the application of Section 407 of the Copyright Act is unconstitutional under the First and Fifth Amendments and an injunction against its enforcement. The CO offered Valancourt the option to electronically submit the deposits, but Valancourt declined. The parties both moved for summary judgment. After considering whether the CO’s offer to accept electronic copies had mooted the dispute, the district court concluded that the CO’s offer had merely narrowed the dispute to one of electronic deposit copies and granted summary judgment to CO on the constitutional claims. Valancourt appealed.

Valancourt challenged the district court’s grant of summary judgment on Valancourt’s First and Fifth Amendment claims and the district court’s conclusion that the dispute had been limited to one about electronic copies. The DC Circuit agreed, stating that the CO’s “offer did not moot Valancourt’s challenge to the demand for physical copies” because “[a] party’s voluntary cessation of challenged conduct does not moot the challenged [requirement] unless it is ‘absolutely clear’ that the challenged conduct will not recur after the litigation.” Accordingly, the Court considered only the demand for physical (rather than electronic) deposits.

With respect to Valancourt’s constitutional challenges, the DC Circuit concluded that Section 407’s requirement for physical deposit copies violated the Fifth Amendment’s Takings Clause as there was no benefit received by the copyright owner in response to the deposit: “A demand for personal property would not be a taking . . . if it involved a voluntary exchange for a governmental benefit.” In this case, however, no such benefit existed. Pursuant to the Copyright Act, copyright attaches automatically upon fixation of a [...]

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Rimini, Meeny, Miny, Moe: Ninth Circuit Affirms Most PI Violation Findings, Reverses Others

by | Sep 7, 2023 |

Addressing the boundaries of a permanent injunction awarded to a major software developer, the US Court of Appeals for the Ninth Circuit largely agreed that the defending developer was in contempt for violating the order but reversed on certain issues where the district court overextended the injunction. Oracle USA, Inc. v. Rimini St., Inc., Case No. 22-15188 (9th Cir. Aug. 24, 2023) (Bybee, Bumatay, JJ.; Bennett, Dist. J., sitting by designation).

Oracle creates enterprise software to carry out business functions. Oracle’s customers buy licenses to its products, which require updates and technical support. These necessary support services can be outsourced to third-party vendors, such as Rimini.

This case is the byproduct of a 13-year battle that Oracle initiated on the grounds that Rimini’s support services constituted copyright infringement. Rimini made generic versions of Oracle software on Rimini computers to develop updates and bug fixes (local hosting) and supported clients by using development environments created pursuant to a different client’s license (cross-use). After multiple appeals and remands, the case resulted in a permanent injunction prohibiting Rimini from reproducing or cross-using Oracle software unless pursuant to a customer license. Rimini revamped its support services and sought a declaratory judgment of noninfringement. After Oracle was permitted to conduct discovery into potential violations of the injunction, the district court held a bench trial on 10 possible violations. The district court found Rimini in contempt for five of the 10 alleged violations (issues 1–4 and 8). On two others (issues 7 and 9), the district court found no contempt but enjoined Rimini from continuing a specific copying practice. The district court sanctioned Rimini $630,000, calculated according to statutory damages available under the Copyright Act.

Rimini appealed each contempt finding, the injunction and the sanctions.

First, the Ninth Circuit addressed the five contempt findings, sorted into three groups:

  • Local hosting (issue 1)
  • Cross-use (issues 2–4)
  • Database copying (issue 8).

On issue 1, the Ninth Circuit affirmed. The lower court had found that Rimini received copyrighted files from its clients. Instead of following internal policies requiring them to quarantine or report these files, Rimini employees forwarded and saved them locally. Based on the plain language of the PI, this was a clear violation.

On issues 2–4, regarding cross-use, the Ninth Circuit also affirmed. Rimini used one client’s environment to modify and test updates that the client did not need and were intended for other clients. Since the injunction specifically prohibited cross-use, this was a violation. Rimini lodged multiple failed arguments, including that the injunction only prohibited cross-use in “generic” (non-client) environments, so its use of one client’s environment to support another client was allowed. The Court disagreed that the injunction was so specific.

On issue 8 (database copying), however, the Ninth Circuit reversed. The district court held Rimini in contempt for making copies of an Oracle database file on Rimini systems. When the client uploaded the file to Salesforce for Rimini to provide technical assistance, a copy was automatically created on Rimini’s system. Here, the [...]

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Almost Paradise? No Authorship for AI “Creativity Machine”

by | Aug 31, 2023 |

The US District Court for the District of Columbia agreed with the US Copyright Office’s denial of a copyright application that sought to register visual art generated by artificial intelligence (AI) because US copyright law only protects works of human creation. Thaler v. Perlmutter, Case No. CV 22-1564 (D.D.C. Aug. 18, 2023) (Howell, J.)

The Copyright Act of 1976 provides immediate copyright protection to any work of authorship fixed in any tangible medium of expression. Applicants may submit their works to the Copyright Office for registration, during which works are reviewed for eligibility for copyright protection. the Copyright Office then registers eligible works, affording the registration owner certain legal benefits and presumptions.

Stephen Thaler, the owner of an AI computer system called the “Creativity Machine,” claimed that his AI independently generated the below visual art entitled “A Recent Entrance to Paradise.”

Thaler sought to register the work with the Copyright Office. The copyright application described the art as “autonomously created by a computer algorithm running on a machine,” identified the Creativity Machine as the author and listed Thaler as the copyright claimant under the work-for-hire doctrine. The Copyright Office denied Thaler’s application because the work lacked human authorship, which is an essential element of a valid US copyright. Thaler twice requested reconsideration of the copyright application, and the Copyright Office twice refused to register the work because of the human authorship requirement. Thaler timely appealed the Copyright Office’s denial to the District Court for the District of Columbia, and both parties moved for summary judgment.

Under the authority of the Administrative Procedure Act, the district court reviewed the Copyright Office’s final agency action through the arbitrary and capricious standard of review (5 U.S.C. § 704). The district court first analyzed whether the AI computer system could own the copyright, then determined whether Thaler was a proper claimant under the work-for-hire doctrine. The district court held that the Copyright Office did not err in denying Thaler’s copyright registration application because US copyright law only protects works of human—not machine—creation. Although copyright law was designed to adapt with the times, the district court stated that there is an underlying and consistent understanding that human creativity is the driving force of copyrightability. While the tools humans use to create copyrightable works (fixed in tangible mediums) are ever evolving and range from pencils to computers, human authorship is a bedrock requirement to copyrightability such that the tools themselves cannot be listed as copyright authors. The district court further held that the plain text of the 1976 Copyright Act requires human authorship since it states that the originator of the copyrightable work must have the capacity for intellectual, creative or artistic labor—a standard that AI has yet to meet. Because AI computers cannot be copyright authors, the district court did not address the work-for-hire [...]

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Cover-Up Isn’t Covered Under VARA

by | Aug 31, 2023 |

The US Court of Appeals for the Second Circuit affirmed that the Visual Artists Rights Act of 1990 (VARA) does not prohibit covering an artist’s mural where there is no damage to the mural. Samuel Kerson v. Vermont Law School, Inc., Case No. 21-2904 (2d. Cir. Aug. 18, 2023) (Livingston, Cabranes, Kovner, JJ.)

In 1993, Samuel Kerson and Vermont Law School entered into a written agreement for Kerson to paint two murals on the walls of the law school’s community center. The completed murals were publicly viewable and depicted several distinct scenes spanning the history of US slavery, from the capture of Africans in their homelands through the abolitionist movement.

Because of complaints from community members regarding how the murals presented Black people, the law school considered options for the murals’ removal. The school decided to conceal the murals behind a barrier of fabric-cushioned acoustic panels. The panels were constructed such that they were suspended approximately two inches away from the murals’ surface and did not touch the murals.

Kerson filed suit seeking to enjoin the installation of the acoustic panels on the theory that they amounted to a violation of his rights under VARA. Under the relevant part of VARA, the author of a “work of visual art” “shall have the right”:

(A) to prevent any intentional distortion, mutilation, or other modification of that work which would be prejudicial to his or her honor or reputation, and any intentional distortion, mutilation, or modification of that work is a violation of that right, and

 

(B) to prevent any destruction of a work of recognized stature, and any intentional or grossly negligent destruction of that work is a violation of that right.

17 U.S.C. §§ 106A(a)(3)(A)-(B).

In the district court, Kerson argued that blocking the public from viewing his work of art would amount to the “destruction” or “intentional distortion, mutilation, or other modification” of the murals. The district court disagreed and granted summary judgment in favor of the law school. Kerson appealed.

Kerson argued that permanently concealing the murals with a solid barrier of acoustic panels modified and thus “destroy[ed]” his work. The Second Circuit agreed with the district court that covering a work of art did not amount to “destruction” under VARA. The Court explained that Kerson’s argument did not comport to the conventional understanding of the word “destruction” under the plain meaning of the statute. The acoustic panels were designed to not touch the murals, let alone destroy them.

The Second Circuit also rejected Kerson’s argument that covering a work of art amounts to “modification.” Under VARA, “modification” would entail a change to the work of art that alters some portion of it without radically transforming the whole. For example, an additional brush stroke, erasure of content or the reorganization of a movable component would be a modification of a work of art. Modifications do not include concealing the entire work behind a solid barrier.

The Second Circuit also rejected Kerson’s argument that concealing the murals was [...]

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Uncompleted Building Sold in Bankruptcy Doesn’t Infringe Architect’s Copyright

by | Aug 24, 2023 |

The US Court of Appeals for the Eighth Circuit affirmed a district court’s ruling that there was no actionable infringement where an uncompleted building sold under the authority of a bankruptcy court was later completed. Cornice & Rose International, LLC v. Four Keys, LLC et al., Case No. 22-1976 (8th Cir. Aug. 11, 2023) (Loken, Shepard, Kelly, JJ.) (per curiam). The Court explained that the architectural copyright claims were precluded by the bankruptcy court’s order approving the sale.

McQuillen Place Company retained Cornice & Rose, an architectural firm, to design a building. Cornice created technical drawings for the building and obtained copyrights for its drawings and for the building itself, the tangible embodiment of its design work. When the building was 90% complete, McQuillen halted construction and filed for bankruptcy. During liquidation proceedings, the trustee moved to sell the building to the lender, First Security Bank & Trust Company. Cornice objected to the sale on various grounds, including that its copyright protection in the building itself would be infringed by an order authorizing the sale. In response, First Security Bank suggested language to protect the parties, which the court incorporated into its order authorizing the sale of the uncompleted building, as follows:

Copyright: So long as the Purchaser, or its assignee, or its architect or agents do not use the Plans or Drawings or any work in which Cornice & Rose International, LLC (“C & R”) holds a valid copyright (the C & R Intellectual Property), the Purchaser, or its assignee, may use and occupy the Property, develop the Property, and complete the existing interior and exterior of the Property, free and clear of existing and future claims of C & R, whether for copyright infringement or otherwise. The Purchaser, or its assignee, or its architect or agents may not use the C &R Intellectual Property without first making arrangements satisfactory to C & R for the use of the C & R Intellectual Property. Nothing contained herein shall preclude future claims of copyright infringement resulting from the improper or unauthorized use of the C & R Intellectual Property by the Purchaser, or its assignee, or any third parties.

Cornice filed a motion to reconsider, arguing that under its contract with McQuillen, the license for the use of the building was conditioned on full, complete and timely payment. Because that had not occurred, there was no license for the construction of the building and, therefore, the building was an infringing copy of the architectural work. The following day the bankruptcy court denied the motion. Cornice filed an appeal, which the bankruptcy court dismissed under 1 U.S.C. §363(m) because the sale had been completed.

While the appeal was pending, the trustee sold the building, and First Security Bank assigned its interest to Four Keys, which hired various companies to finish the building. Cornice then sued First Security Bank, its president, Four Keys and others for copyright infringement by finishing the building as an infringing derivative work. Cornice sought a declaratory judgment [...]

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Change in Law Leading to Case Dismissal Doesn’t Preclude Attorneys’ Fees

by | Aug 24, 2023 |

Addressing the symmetrical fee-shifting provision of the Copyright Act and whether a prevailing defendant was entitled to fees even when the plaintiff moved to dismiss the case in response to a change in law, the US Court of Appeals for the Seventh Circuit reversed the district court’s denial of attorneys’ fees and remanded the case for reconsideration. Live Face on Web, LLC v. Cremation Society of Illinois, Inc., et al., Case No. 22-1641 (7th Cir. Aug. 11, 2023) (Scudder, Kirsch, Jackson-Akiwumi, JJ.)

The Cremation Society of Illinois and its co-defendants (collectively, CSI) licensed software from Live Face on Web. Live Face on Web then sued CSI for copyright infringement, seeking damages of more than 1,000 times the initial license fee. Five years later, while summary judgment was pending, Live Face on Web moved to dismiss the case, arguing that the Supreme Court’s 2021 decision in Google LLC v. Oracle America, Inc. “made the defendants’ fair-use defense insurmountable.” The district court granted the motion to dismiss, and CSI filed a motion to recover fees. The court denied the motion for fees, in part because “awarding fees would neither encourage nor discourage other defendants from maintaining valid defenses against copyright claims.” CSI appealed.

The Copyright Act allows prevailing parties to recover costs and fees. The Seventh Circuit examined the nonexclusive factors that guide this analysis:

  • The frivolousness of the lawsuit
  • The losing party’s motivation for bringing or defending the lawsuit
  • The objective unreasonableness of the losing party’s claims
  • The need to advance considerations of compensation and deterrence.

The Seventh Circuit noted that the last factor relates to the purpose of the fee-shifting provision: “[b]y encouraging parties to stand on their rights, the Act’s symmetrical fee-shifting provision advances its core purposes.” A successful copyright infringement litigant “encourages others to use the copyright system, fostering further innovation,” whereas a defendant “who successfully protects his rights to use things in the public domain necessarily gives others a license to do the same.” The Court stated that prevailing defendants in particular benefit from a strong presumption that they are entitled to recover attorneys’ fees: “Without an award of attorney’s fees, a defendant faces pressure to abandon his meritorious defenses and throw in the towel because the cost of vindicating his rights (his attorney’s fees) will exceed the private benefit he receives from succeeding (a nonexcludable right to continue doing what he was already doing).”

In this case, the district court reasoned that CSI’s success was due to the change in the law rather than meritorious defenses and, therefore, awarding fees to CSI would not advance or deter any conduct. The Seventh Circuit disagreed, stressing that Live Face on Web did not demonstrate that it would have prevailed but for the Supreme Court’s decision in Google. Moreover, the Court noted that CSI had raised multiple other defenses that were not impacted by Google. In any event, the Court reasoned, “[i]n litigation, both sides accept that as the case evolves, the law might, [...]

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Copyright Office Issues New Rule

by | Aug 17, 2023 |

Adopting its interim rule from December 2022, the US Copyright Office issued a final rule that governs district court referrals, proof of service forms, default proceedings and the appearance of law student representatives before the Copyright Claims Board (CCB).

District Court Referrals

CCB proceedings qualify as alternative dispute resolution processes under 28 U.S.C. § 651 for purposes of referral of eligible cases by US district courts upon consent of the parties. The CCB was created to resolve certain copyright claims more efficiently and at a lower cost than a district court. In furtherance of this objective, the CCB has the authority to adjust or suspend certain rules that would otherwise apply if doing so would be in the interest of efficiently resolving the dispute. The new rule excludes district court referrals from the limits on the number of proceedings a claim, attorney or law firm may file with the CCB and does not require a claimant to pay a filing fee for such a proceeding.

Proof of Service Forms

Claimants may file either the proof of service form provided on the CCB’s website or an alternative proof of service form that contains all of the information required by the CCB-provided form.

Evidence in Default Proceedings

Evidence presented by the parties in a default proceeding is not limited to materials exchanged during discovery, as a default proceeding may occur before discovery has begun.

Law Student Representatives

The final rule allows for law student representatives, provided that they qualify under the laws, court rules, or bar rules of the jurisdiction that allows, authorizes or permits them to practice law. The CCB’s regulations only govern law students who make a formal appearance in CCB proceedings, rather than those who provide legal assistance to parties in other capacities.



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A Textbook Example: Single Online Sale Does Not a Minimum Contact Make

by | Aug 10, 2023 |

The US Court of Appeals for the Eighth Circuit affirmed a district court’s grant of a motion to dismiss for lack of personal jurisdiction, finding that a single online sale did not establish minimum contacts to support personal jurisdiction. Kendall Hunt Publishing Company v. The Learning Tree Publishing Corporation, Case No. 22-1885 (8th Cir. July 24, 2023) (Smith, Wollman, Loken, JJ.)

Kendall Hunt Publishing filed a copyright infringement lawsuit against The Learning Tree Publishing in the District of Iowa. Before founding Learning Tree, Frank Forcier and John Coniglio worked remotely for Kendall Hunt from their homes in California. Both individuals traveled to Iowa for work, had regular contact with Iowa co-workers during their tenures and accessed files on an Iowa-based server. Nicholas Baiamonte teaches in California, where he wrote an online ethics textbook. Forcier negotiated with Baiamonte on behalf of Kendall Hunt from 2014 to 2016, and as a result, Baiamonte entered into contracts with Kendall Hunt to publish his textbook as Course Pack 4: Ethics. Baiamonte assigned publication rights to Kendall Hunt.

In 2019, Forcier and Coniglio incorporated Learning Tree in California to sell online textbooks to post-secondary students. Learning Tree targeted its advertising to California professors and educational institutions, as well as some limited sales to Colorado and Oklahoma. One of these textbooks was an ethics textbook that included some copyrighted portions of Baiamonte’s ethics textbook.

Kendall Hunt’s lawsuit alleged that a single purchase of the ethics textbook by an Iowa-based Kendall Hunt employee established the requisite minimum contacts with Iowa to support personal jurisdiction. Kendall Hunt also alleged that the prior contacts Forcier and Coniglio established with Iowa through their employment with Kendall Hunt should be attributed to Learning Tree. These contacts included Coniglio regularly traveling to Iowa from 1995 to 2006 and Forcier traveling to Iowa in 2005 and 2006. The district court rejected Kendall Hunt’s jurisdictional arguments and dismissed the complaint. Kendall Hunt appealed.

Reviewing de novo, the Eighth Circuit set out the factors to analyze Iowa’s long-arm statute, which is permissive up to the extent of due process. These factors include the nature and quality of Learning Tree’s contracts with Iowa, the quantity of the contacts, the relation of the cause of action to the contacts, the interest of the forum state and the convenience of the parties. They also include the additional factors for intentional torts: the intentionality of the acts; whether the contacts were uniquely or expressly aimed at the forum; and whether the contacts caused harm, or the defendant knew they were likely to cause harm, of which the majority occurred in the forum state.

The Eighth Circuit concluded that Learning Tree did not expressly aim at or target Iowa because it did not advertise in Iowa. The Court found that Kendall Hunt’s litigation-based purchase was the only sale, and the infringing conduct occurred in California. Based on this fact and the Court’s 2022 decision in Brothers & Sisters in Christ v. Zazzle, which was decided under similar facts, the Court [...]

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Off the Charts: Derivative Work Copyright Registers All Material in Derivative Work

by and | Jul 27, 2023 |

In a matter of first impression, the US Court of Appeals for the Ninth Circuit reversed the district court’s partial grant of summary judgment in favor of the defendants, vacated a jury verdict and an award of attorneys’ fees, and remanded an action alleging infringement of copyright in two charts depicting organizational change. The Court agreed with other circuits that by registering a derivative work, an author registers all the material included in the derivative work, including any unregistered original works. Enterprise Management Limited, Inc. v. Construx Software Builders Inc., Case No. 22-35345 (9th Cir. July 17, 2023) (Fletcher, Clifton, Ikuta, JJ.)

Mary Lippitt and her company Enterprise Management filed a lawsuit against Steve McConnell and his company Construx for copyright infringement. Lippitt has built a career around advising companies on organizational change. To this end, she created charts and materials, including one titled “Managing Complex Change,” to demonstrate how an organization can fail by missing key transitional elements. According to Lippitt, the “Managing Complex Change” chart was registered with the US Copyright Office in 1987 as part of a presentation called “Transition: Accomplishing Organization Change.” The Copyright Office subsequently destroyed the deposit copy of the registration as part of its routine practice. In 2000, an updated presentation with an updated version of the chart was registered with the Copyright Office. In 2003, the updated chart, “Aligning for Success,” was registered individually.

In 2016, McConnell used Lippitt’s chart in a YouTube video presentation. McConnell titled the chart “Lippitt/Knoster Change Model,” added supplementary information and made stylistic changes. When Lippitt found out that McConnell used her chart, she sent cease-and-desist letters. After McConnell refused to stop using the chart, Lippitt sued.

Following discovery, McConnell moved for summary judgment, which the district court granted in part and denied in part. The district court ruled that Lippitt failed to show that she had registered the “Managing Complex Change” chart because she did not present evidence that the chart was included in the “Transition: Accomplishing Organization Change” material registered in 1987. The district court also denied the motion for summary judgment with respect to Lippitt’s claim that McConnell infringed the “Aligning for Success” chart because there was a genuine issue of material fact as to whether McConnell had copied it. Based on these rulings, the district court issued a pretrial order precluding Lippitt from basing any argument on her alleged ownership of the copyright in the “Managing Complex Change” chart, including any argument that McConnell infringed the “Aligning for Success” chart by copying elements from the “Managing Complex Change” chart. At trial, the jury returned a verdict for McConnell. The district court subsequently granted McConnell’s motion for attorneys’ fees. Lippitt appealed.

The Ninth Circuit first addressed whether Lippitt raised a genuine issue of material fact that she registered the “Managing Complex Change” chart by including it in the “Transition: Accomplishing Organization Change” materials. The Ninth Circuit explained that the district court’s ruling was partially based on the fact that the copyright for Lippitt’s original [...]

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Serving a Perfect 10: No Protection for Embedding

by and | Jul 27, 2023 |

The US Court of Appeals for the Ninth Circuit found that a photo- and video-sharing social networking service could not be liable for secondary copyright infringement because embedding a photo does not “display a copy” of the underlying image. Hunley v. Instagram, LLC, Case No. 22-15293 (9th Cir. July 17, 2023) (Bybee, Bumatay, Bennett, JJ.)

Embedding is a method of displaying images on a website by directing a browser to retrieve an image from the host server. Instead of hosting an image file on a home server, a website merely pulls the image, along with any other content, from an external server and displays it.

Alexis Hunley and Matthew Brauer are photographers who brought a class action lawsuit against Instagram on behalf of copyright owners whose work was “caused to be displayed via Instagram’s embedding tool on a third party website without the copyright owner’s consent.” Hunley alleged that Buzzfeed News and Time embedded Hunley’s Instagram posts (copyrighted photos and videos) within news articles. Hunley also alleged that Instagram’s embedding tool violated her exclusive display right under the Copyright Act by enabling third-party websites to display copyrighted photos posted to Instagram.

Hunley’s argument was unsuccessful, and the district court granted Instagram’s motion to dismiss. The district court determined that the Ninth Circuit’s 2007 holding in Perfect 10 precluded relief to Hunley. The court explained that under the “server test” set forth in Perfect 10, embedding websites that do not store an image or video does not “communicate a copy” of the image or video and therefore does not violate the copyright owner’s exclusive display right. The court explained that because Buzzfeed News and Time do not store images and videos, they do not “fix” the copyrighted work in any “tangible medium of express” (a copy), and therefore when they embed the images and videos on a website, they are not displaying “copies” of the copyrighted work. Hunley appealed.

Hunley argued that Perfect 10 was inconsistent with the Copyright Act, but the Ninth Circuit declined to consider the argument in detail as the proper procedure was to seek a rehearing en banc. While the Court was sympathetic to policy arguments advanced by Hunley (as well as other amici), the Court stated it was not its place to create a policy solution. Hunley’s final major argument questioned the validity of Perfect 10 in light of the Supreme Court’s 2014 decision in American Broadcasting Co. v. Aereo, but this too was rejected. The Ninth Circuit failed to see sufficient similarities between the performance and display rights, holding them as two distinct rights with few parallels.

Applying the server test to the facts presented, the Ninth Circuit found that Instagram could not be found secondarily liable for displaying images on third-party sites. Since Buzzfeed News and Time embedded the images and no copy was stored, they could not be liable for direct infringement. Because there was no direct infringement, there could be no secondary infringement, and the Court found that the district court properly [...]

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