Perfect 10 Inc. versus Google Inc. - Case Study Example

The World Wide Web The World Wide Web de s its exactly, a world all on its own. The digital media that is the internet brought a revolution to our culture and society. Access to the internet empowers any individual in ways that would have just been a dream decades ago. It has equipped people with the ability to transform the convergence of information. It has allowed for the advent of a plethora of innovations. The conveniences that it offers instigate the simultaneous conquering of the possibilities that accompanies it. Consequently, something this vast comes along with predicaments and being that it is dynamic, rules and regulations will also have to be dynamic. The demarcation between what is right and what is not, what is moral and what is not, and more importantly, what is legal and what is illegal has been blurred by the context of the gape that the internet has created. There was suddenly a need to revise and re-examine the bounds of legality pertaining to the use of the internet. A new breed of crime has opened and flourished which has no other goal than to be destructive for personal amusement. Cybercrimes had evolved from just a novelty a few years ago to a full blown problem today. Even the delineation of the governing body for which such cases should be investigated and decided upon has become a dilemma. Along with all that it entails commensurate a number of debates for which multiple interests lies. The proliferation of open source systems and other community based sharing websites open up doors to the subdued effects of the internet. Not only is everything at the tip of your fingertips, it is also free for use to anyone who would like to access it. Quoting Milo Hoffman from the suspense film Antitrust, “Human knowledge belongs to the world” (Philippe). And this is something that the world wide web has shown us. The ‘internet natives’ as we have been aptly called which includes all of the younger generations and those who have grown up accustomed to computers are testament to this phenomenon. From operating systems, to software applications, to the mre ambiguous music, film and other content sharing, this mass of seeders and other uploaders populate the world of the internet and there’s little to no stopping them from their respective activities. Intellectual Property Rights Intellectual Property (IP) is deemed as the most taken for granted type of property. Many had been victims of violations against IP. It is often accompanied with high costs but its use is marginalized comparative to cost. The most common problem arises from the fact that limitations are not concretized due to the difficulty it poses in tangible definition. In effect, those who have availed of intellectual property and their competitors are in the dark on the actual extent of what the provision sets. Its value depends on aspects that include manpower, facilities, production, etc. The time frame for it is concurrently limited. The proper maximization of intellectual property must be kept in mind to avoid wastage of this appropriation. Guidelines for its enforcement is set and implemented by the Department of Justice alongside the Federal Trade Commission. Among the rules set on the Guidelines include that, first, similar antitrust rules may be employed to other property agreements in terms of analysis. Next, intellectual property is not synonymous with market power but serves as protection of the product and or technology. Contrary to a misconception, intellectual property creates competition because it sets off with other features of production (U.S. Department of Justice and the Federal Trade Commission, p.4-5). The report deems the internet as a means to scrutinize the market for royalty-free licensing. Inherently, the Consortium of the World Wide Web mediates all members to it to limit ‘licensing hold up’ to enact market growth. This comes with an assertion that this confines competition in the market, this happens if the owner of the IP keeps hold of the license. Apprehensions still include that even first-movers may not have the capacity for reasearch and the chance for development (U.S. Department of Justice and the Federal Trade Commission, p.47-48). It is quite obvious that upon austere reflection, zero is an unreasonable price to pay or get paid. But the internet has flourished mainly on the basis of this principle. The constant reinvention and invention, not only of professionals but almost anyone who has access to it, being online becomes tantamount to being in the loop. Perfect 10 vs. Google Perfect 10, a web-based magazine with subscription-based payments filed a lawsuit against Google, Inc. for copyright infringement due to thumbnail versions of pictures from their website generated by the Google website. The issue is mainly regarding intellectual property rights which Perfect 10 maintains has been violated because of the said act. The internet adult magazine company has filed two separate cases against Google, Inc. and Amazon.com, Inc. and its subsidiary A9.com, Inc. The battle is between the right to intellectual property and the freedom to display content in the internet. “In a nutshell, is: does a search engine infringe copyrighted images when it displays them on an "image search" function in the form of "thumbnails" but not infringe when, through inline linking, it displays copyrighted images served by another website?” (Perfect 10 v. Google, Inc., p.1). Filed against the United States District Court for the Central District of California and presided by Judge A. Howard Matz, the plaintiff hopes to impede the search engine from showing thumbnail duplications of images from Perfect 10 website. The court finds that the act “likely do directly infringe P10s copyrights” but “is not likely to succeed on its vicarious and contributory liability theories” (Perfect 10 v. Google, Inc., p.2). In 2007 the U.S. Court of Appeals for the Ninth Circuit returned the case to the District Court for review. Under a panel consisting of three judges, the court unanimously decided that Perfect 10 cannot compete with Google’s defense of fair use and they trashed the preliminary injunction on the issue of the thumbnail use (Lane, par.3). This issue has generated interest among content creators and intellectual property practitioners. It became a tug and pull among two principles wherein ideas collide. Google was supported by the United States Internet Service Provider Association and Electronic Frontier Foundation in its fight to defend its cause. On the other hand, Perfect 10 had on its back the Motion Picture Association of America, the Graphic Artists Guild and the American Society of Picture Professionals among others (Lane, par. 4). Suffice to say that both parties had their own merits in each entity’s fight for justice. The time that it had dragged in court and the decisions that were meted challenges a number of aspects regarding which prevails, intellectual property or web-based autonomy? Fair Use A fair use is described as any copying of a material with copyright within a partial and ‘transformative’ purpose. These purposes may include criticizing or comment upon the material. Fair use basically guarantees that this can be done void of permission from the holder of the copyrighted material. When used upon the stated definition, then it cannot be considered as illegal infringement. Fair use is generally categorized between criticism and commentary or parody. The raison dêtre is that this is beneficial to the public as a review informs the people and may pave towards the enhancement of the material. A parody is frequently defined as a work that mocks another work, oftentimes popular, through comic imitation. It is detrimental therefore for a judge to comprehend that a parody would have to involve likeliness to the original work (Stanford University). Fair use was the primary defense of Google, Inc. in the lawsuit filed against them. The District Court did not recognize this and ordered injunction in their use of the photographs. The Ninth Circuit on the other hand viewed that fair use was maintained by Google since they only displayed thumbnails which means they did not distort or transform the image in any way. Moreover, the search engine did not copy any of the pictures and stored it in a database. As a matter of the nature of the site, it may only be saved for a short period of time before it is again deleted from the system. The Circuit recognized this as a clear indication of fair use which led to their decision to return the case back to the lower district court. This issue has baffled and confounded specialists on the subject. It has become a battle of semantics and of policies and laws for which there are no clear-cut defined statements thereof. When analyzing the situation and the definition given beforehand, one cannot clearly and unrelentingly state that the usage of Google is considered for use for neither is it a commentary nor a parody. At the same time, one cannot easily conclude that there had been an intellectual property infringement in the placing of thumbnails by Google which is in fact a search engine through the use of the program of A9 under the Amazon banner. This is first and foremost where the debate finds its deadlock. Google = Search There is no doubt that Google is the number 1 search engine in the world. It has 65% share of the total share market and it just keeps growing. The company has seen its fair share of competition trying to bring it down. None more so than its most persistent rival, Steve Ballmer and the rest of Microsoft. In a recent move, Ballmer contacted Rupert Murdoch and aims to convince him to remove his news contents from Google. In simple terms, when one searches Google all that are from within the news corporation’s database would not be found. The logic lies in that users would then switch to Bing, Microsoft’s search engine. News Corp. is not completely happy with the current arrangement where Google accumulated $22 billion in sales with $5 billion of it in profit the previous year. The search engine creates ‘snippets’ of news articles and places ads with it. They maintain this arrangement is fair use as the ‘snippets’ direct the readers to the original article. Same as it is, News Corp. is still not profiting from all these. (Lyons, par. 4-5). ‘Googling’ has already become a verb. The term ‘Google yourself’ wherein anyone can go to the site type in their name and see how many hits it finds has become another popularity contest, and quite frankly, a conceited gesture. Nonetheless, whenever anyone needs to find anything, Google is the first search engine that comes to find. A pickup line I have recently heard goes, “You’re like Google, I have found everything I am looking for.” The search giant has become a household word and anyone is able to use it with its basic interface. The company has already branched out into a number of ventures including Gmail which offers a large memory comparative to its free usage. Analysts contend that it wouldn’t be long before Google will finally meet its match. The $200 billion Corporation which earns five times more than Yahoo is sure to shake things up to maintain its lead. About 60% of its revenue and 80% of its profit come from advertisements that include Adsense and Adwords as approximated. Revenue ultimately comes from its dominance of the search engine field. It has marked its way as the top competitor in the Web-searching arena but the battle is ongoing. As with any other business, especially one that is founded on the internet, competition is always just around the corner and anyone can be the underdog one day then the top dog the next (Freedman, p.39). Perfect 10’s Knack for Lawsuits It goes without saying that there are those that perceive that there lies an internal motive in Perfect 10’s lawsuit against Google. The prospect of financial gain from a multi-billion dollar company seems so tempting indeed. This has not been the first time that Perfect 10 has filed a case against another company. Its owner, Norman Zadeh has gained some recognition for his campaign for Playboy to fend off scans of their images obtainable through other websites. The plan was not to sue the Web developers, which would have been futile anyway, and go after the age verification services (AVS) of credit cards. They filed a ‘copyright, trademark and unfair competition case’ against AVS companies, among which includes Cybernet’s Adult Check. These companies charge a certain amount and reverts a segment to the websites. Zadeh claims that AVS should know that the sites are chockfull of copyright infringed material. The preliminary injunction was won by the plaintiff but was settled and dwindles into oblivion after settlement (Pizzi, par.2-5). After the seemingly fruitful endeavor, Perfect 10 then went after credit card companies within the same premise. Unlike the previous case, this one had varying resisting motions in the litigation. Soon after which, the case also seemed to have been settled. The third time, Perfect 10 eyed Visa and Mastercard which did not push through. The case is too far-fetched in its claim of copyright infringement to continue. In effect, they were even mandated by the court to return a large sum of money to repay the legal fees which the two companies had to pay for (Pizzi, par. 7-8). Perfect 10 then had on its midst a competent and viable lawsuit they can pursue. The company claims that Google has caused punitive damages to their company. The complaint contains that the site “receives approximately 100,000 unique visitors per month” along with another unnamed Web site (Pizzi, par. 10). Possibly their most lucrative attempt, the company had seen the potential for monetary compensation. What they had was a battle between David and Goliath in a crucial fight over intellectual property rights and fair use. The case which Perfect 10 has filed is with its proper value regardless of the dubious track record the company has in terms of legal cases. Perhaps they were able to acquire really good ambulance-chasing lawyers, nonetheless, they were able to keep Google on their feet with the District Court’s preliminary summary. The Consequences The court’s granting of preliminary injunction (Zimerman, p.1) holds that: 1. Google’s framing of full-sized Perfect 10 images did not violate Perfect 10’s display right; 2. The display of thumbnail copies for search purposes did represent direct copyright infringement and was not protected as fair use 3. Google was not liable for contributory infringement because the search capacity does not “materially contribute” to the underlying infringements; and 4. Google was not vicariously liable because it exercised no control over infringing activity. The reversal of the decision made by the District Court citing Kelly v. Arriba where Perfect 10, moreover, sells images that had been reduced in size the court holds that Google will succeed in its defense of fair use. In the same area, Perfect 10’s downloadable images for mobile phones surpass it due to the benefit the public gathers in its transformative use. The primary logic is that the technology of search engines provides for an overwhelming importance for the benefit of the people. This is put first before somebody’s profit. The problem now lies in secondary liability wherein users through engines such as Google connects them to pirated copies such as those owned by Perfect 10. The District Court upholds that there is no way for Perfect 10 to make Google accountable for this as there is no concrete evidence that shows they encourage the proliferation and visiting of sites that infringe copyrighted materials nor do they provide considerable revenue for such act (Falzone, par.3-5). The Good and the Bad The decision in favor of Google upholds the value of free and open information. It fosters the availability of information to the people. On a personal view, this is good because it equips internet users with the ability to look into content of other websites before visiting them. Conceivably it would have been ideal if it was another type of website that sued for copyright infringement. Though Perfect 10 fought a good fight it is still the public’s general benefit that comes first according to court decision. The issue of the owner’s right is then subordinated for what could be regarded as a common good. This creates then the dilemma of the right of the owner in such they lose their protection. As previously stated, IP is the most frequently disregarded property right. The order in favor of Google in some way validates this fact. Had it been decided the other way, the recognition would have been an obstinate move for copyright and IP owners. This would have meant that search engines cannot place snippets or thumbnails as liberally as they do right now. In another perspective this could actually be ruinous to their business because such search engines provide a linkage between possible clients and their sites. The research done on the subject showed the many aspects of the case. It proves the polarity of the issue wherein some favor Google while the others favor Perfect 10. This is not only limited to fee-based websites as it also includes other copyrighted materials such as movies, music, photographs, etc. If the court ruled in favor of the plaintiff then search engines would have been prohibited to show content of all copyrighted materials including pirated ones which would have made it more difficult for users retrieve. There would have been a whole new dynamic in the world of internet, particularly its users. Bibliography Antitrust. Dir. Peter Howitt. Perf. Ryan Philippe. 2001. Falzone, Anthony. The Two Faces Of Perfect 10 v. Google. 16 May 2007. Freedman, David H. "Searching for the Best Engine." Newsweek (2007): 38-44. Lane, Frederick. 17 May 2007. NewsFactor. 15 february 2010 . Lyons, Daniel. 28 November 2009. Newsweek. 15 February 2010 . Perfect 10 v. Google, Inc. No. CV 04-9484 AHM (SHx). United States District Courtt for the Central District of California. 17 February 2006. Pizzi, Peter J. "Perfect 10 v. Google." New York Law Journal 4 January 2005. Stanford University. SU Lair. 2007. 15 February 2010 . U.S. Department of Justice and the Federal Trade Commission. "Antitrust Enforcements and Intellectual Property Right: Promoting Innovation and Competition." 2007. Zimmerman, Mitchell. "Perfect 10 v. Google Analysis of the Preliminary Injunction Decision." Copyright Group – IP Lunch Educational. Mountain View: Fenwick & West LLP, 2006. Read More