“Fair Use” on the Internet: Copyright’s Reproduction and Public Display Rights

Order Code RS21206
Updated January 16, 2004
CRS Report for Congress
Received through the CRS Web
“Fair Use” on the Internet: Copyright’s
Reproduction and Public Display Rights
Robin Jeweler
Legislative Attorney
American Law Division
Summary
This report summarizes Kelly v. Arriba Soft Corporation, a case construing the
scope of the Copyright Act’s public display, reproduction and fair use rights on the
Internet.
The Ninth Circuit Court of Appeals considered whether “thumbnail”
depictions — small, low resolution images — of copyrighted content constituted an
infringement of the copyright holder’s reproduction and display rights. It held that the
thumbnail reproductions displayed by an Internet visual search engine constituted a non-
infringing “fair use” of the copyrighted content.
Kelly v. Arriba Soft Corp1 is a significant Internet copyright case arising from the
Ninth Circuit Court of Appeals. There, the court addressed the interface between the
public’s fair use rights and two of a copyright holder’s exclusive rights — those of
reproduction and public display.
Factual and Procedural Background. In Kelly, the defendant Arriba operated
a “visual search engine” that allowed users to search for and retrieve images from the
Internet. To provide this functionality, Arriba developed a computer program that would
“crawl” the Internet searching for images to index. It would then download full-sized
copies of those images onto Arriba’s server and generate lower resolution thumbnails.
Once the thumbnails were created, the program deleted the full-sized originals from the
server.
Arriba altered its display format several times. In response to a search query, the
search engine produced a “Results” page, which listed of a number of reduced,
“thumbnail” images. When a user would double-click these images, a full sized version
of the image would appear. From January 1999 to June 1999, the full-sized images were
produced by “inline linking,” a process that retrieved the full sized-image from the
original website and displayed it on the Arriba web page. From July 1999 until sometime
after August 2000, the results page contained thumbnails accompanied by a “Source” link
1 336 F.3d 811 (9th Cir. 2003)
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and a “Details” link. The “Details” link produced a separate screen containing the
thumbnail image and a link to the originating site. Clicking the “Source” link would
produce two new windows on top of the Arriba page. The window in the forefront
contained the full-sized image, imported directly from the originating website.
Underneath that was another window displaying the originating web page. This technique
is known as framing, where an image from a second website is viewed within a frame that
is pulled into the primary site’s web page. Currently, when a user clicks on the thumbnail,
the user is sent to the originating site via an “out line” link (a link that directs the user
from the linking-site to the linked-to site).2
Arriba’s crawler copied 35 of Kelly’s copyrighted photographs into the Arriba
database.
Kelly sued Arriba for copyright infringement, complaining of Arriba’s
thumbnails, as well as its in-line and framing links. The district court ruled that Arriba’s
use of both the thumbnails and the full sized images was a fair use.3 Kelly appealed to the
Ninth Circuit Court of Appeals.
The Ninth Circuit’s Decision. On appeal, the Ninth Circuit affirmed the district
court’s finding that the reproduction of images to create the thumbnails and their display
by Arriba’s search engine was a fair use. But it reversed the lower court holding that
Arriba’s in-line display of the larger image was a fair use as well.4
Thumbnails. An owner of a copyright has the exclusive right to reproduce copies of
the work.5 To establish a claim of copyright infringement by reproduction, the plaintiff
must show ownership of the copyright and copying by the defendant. There was “no
dispute that Kelly owned the copyright to the images and that Arriba copied those images.
Therefore,” the court ruled, “Kelly established a prima facie case of copyright
infringement.”6
However, a claim of copyright infringement is subject to certain statutory exceptions,
including the fair use exception.7
This exception “permits courts to avoid rigid
application of the copyright statute when, on occasion, it would stifle the very creativity
which that statute is designed to foster.”8
To determine whether Arriba’s use of Kelly’s images was a fair use, the court
weighed four factors: (1) the purpose and character of the use, including whether such use
2 Arriba Soft subsequently changed its name to “Ditto.com”.
3 Kelly v. Arriba Soft Corp., 77 F. Supp. 2d 1116 (C.D. Cal. 1999)
4 In an earlier decision subsequently withdrawn by the Ninth Circuit Court of Appeals, it held
that the in-line display of the larger image of Kelly’s work was not a fair use and was therefore
infringing. See Kelly v. Arriba Soft Corp, 280 F.3d 934 (9th Cir. 2002). In its revised opinion,
the court determined that the issue of in-line linking had not been adequately raised by the parties
and should not have been decided by the district court.
5 See 17 U.S.C. §106
6 Kelly, 336 F.3d at 817.
7 17 U.S.C. §107
8 Dr. Seuss Enters., L.P. v. Penguin Books USA, Inc., 109 F.3d 1394, 1399 (9th Cir. 1997).

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is of a commercial nature or is for nonprofit educational purposes;9 (2) the nature of the
copyrighted work; (3) the amount and substantiality of the portion used in relation to the
copyrighted work as a whole; and (4) the effect of the use upon the potential market for
or value of the copyrighted work.10
Applying the first factor to this case, the court noted that the “more transformative
the new work, the less important the other factors, including commercialism, become”11
and held that the thumbnails were transformative because they were “much smaller,
lower-resolution images that served an entirely different function than Kelly’s original
images.”12 Furthermore, it would be unlikely “that anyone would use Arriba’s thumbnails
for illustrative or aesthetic purposes because enlarging them sacrifices their clarity,” the
court found.13 Thus, the first fair use factor weighed in favor of Arriba.
The court held that the second factor, the nature of the copyrighted work, weighed
slightly in favor of Kelly because the photographs were creative in nature.14 The third
factor, the amount and substantiality of the portion used, was deemed not to weigh in
either party’s favor, even though Arriba copied the entire image.15
Finally, the court held that the fourth factor, the effect of the use on the potential
market for or value of the copyrighted work, weighed in favor of Arriba. The fourth
factor required the court to consider “not only the extent of market harm caused by the
particular actions of the alleged infringer, but also whether unrestricted and widespread
conduct of the sort engaged in by the defendant ... would result in a substantially adverse
impact on the potential market for the original.”16 The court found that Arriba’s creation
9 The Supreme Court has held that “the central purpose of this investigation is to see ... whether
the new work merely supersede[s] the objects of the original creation, or instead adds something
new, with a further purpose or different character, altering the first with new expression,
meaning, or message; it asks, in other words, whether and to what extent the new work is
transformative.” Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 579 (1994).
10 17 U.S.C. § 107
11 Kelly, 330 F.3d at 818 n. 14, citing Campbell, 510 U.S. at 579.
12 Kelly, 330 F.3d at 818. While Kelly’s images were artistic works used for illustrative purposes
and to portray scenes from the American West in an aesthetic manner, Arriba’s use of Kelly’s
images in the thumbnails was unrelated to any aesthetic purpose. Arriba’s search engine
functions as a tool to help index and improve access to images on the Internet and their related
websites.
13 Id. at 819.
14 See id. at 820.
15 See id. While wholesale copying does not preclude fair use per se, copying an entire work
militates against a finding of fair use. However, the extent of permissible copying varies with
the purpose and character of the use. “If the secondary user only copies as much as is necessary
for his or her intended use, then this factor will not weigh against him or her.” Id.at 821.
Applying this principle, the court found that if Arriba only copied part of the image, it would be
more difficult to identify it, thereby reducing the usefulness of the visual search engine.
Therefore, the court concluded, it was reasonable to copy the entire image.
16 Id. at 821, citing Campbell, 510 U.S. at 590. See also, 3 M. Nimmer & D. Nimmer, NIMMER
(continued...)

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and use of the thumbnails would not harm the market for or value of Kelly’s images.17
Accordingly, on balance, the court found that the display of the thumbnails was a fair use.
16 (...continued)
ON COPYRIGHT § 13.05[A][4], at 13-102.61 (1993).
17 Kelly, 330 F.3d at id. The court emphasized that “Arriba’s use of Kelly’s images would not
harm Kelly’s ability to sell or license his full-sized images. Arriba does not sell or license its
thumbnails to other parties. Anyone who downloaded the thumbnails would not be successful
selling the full-sized images because of the low-resolution of the thumbnails. There would be no
way to view, create, or sell a clear, full-sized image without going to Kelly’s websites.” Id. at
821-822.