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Spotlight

As part of our Spotlight series, we connect with Andrew J. Gray IV, a partner in Morgan Lewis’s IP-Technology group, to discuss the recent focus on embedded copyright cases based on a court’s unwillingness to apply the server test. Andrew gives us his thoughts on recent developments and what companies may want to think about when embedding social media content (or other content) into its own.

Can you explain the server test and why it’s relevant to many companies’ online presence?

A little background first: Paul Nicklen captured footage of a starving polar bear and posted the video to his Instagram and Facebook accounts. Dozens of news outlets and online publishers “embedded” the video in online articles without first obtaining a license. Nicklen then sued some of these publishers for copyright infringement. These publishers moved to dismiss Mr. Nicklen’s complaint, arguing that embedding a video does not “display” the video within the meaning of the Copyright Act because the video remained on Instagram/Facebook’s servers and that the video’s inclusion in an article about the video’s popularity was fair use. On July 30, 2021, Judge Jed Rakoff of the US District Court for the Southern District of New York denied the publisher’s motion to dismiss on the basis that “embedding” the copyrighted video may infringe Mr. Nicklen’s display right in the video. Judge Rakoff rejected the publisher’s argument that embedding a video is not a “display” when the copyrighted content remains on a third party’s server.

In reaching this ruling, Judge Rakoff split from the US Court of Appeals for the Ninth Circuit’s 2007 decision in Perfect 10 v. Amazon, which holds that a website can only infringe a copyright in an image by displaying the copyrighted image if it also stores a copy of that image on its server. Judge Rakoff’s decision says that the server test is “contrary to the text and legislative history of the Copyright Act,” which “defines ‘to display’ as ‘to show a copy of’ a work, not ‘to make and then show a copy of the copyrighted work’” because under the test, “a photographer who promotes his work on Instagram or a filmmaker who posts her short film on YouTube surrenders control over how, when, and by whom their work is subsequently shown – reducing the display right, effectively, to the limited right of first publication that the [Copyright Act] rejects.”

What are some key takeaways or trends relating to recent tests of the server test?

The biggest takeaway is that we need to see what the US Court of Appeals for the Second Circuit does on appeal. If the Second Circuit affirms Judge Rakoff, we will have an interesting circuit split ready for the US Supreme Court’s review. In the meantime, publishers need to understand that the server test may not, in fact, be established law in the United States. The legality of embedding is uncertain. As a result, publishers may have to revisit their policies regarding embedding videos and images from social media sites. In many cases, it might make sense for publishers to ask the content author for permission to embed their work, and to use a different photo if the author declines to allow that. Otherwise, while an obvious work-around is simply to use “deep-linking” by providing a link to the underlying social media post, this option does not allow publishers to display the content itself in their article. Thus, this may very well lead to technical and business innovations in the publishing and/or social media industries regarding how to display, limit, and/or license social media content for use by others. And, of course, the fair use defense remains.

Looking ahead, do you have any particular expectations regarding the server test and how copyright law will be interpreted and applied with respect to embedded content?

While it would be disruptive – at least in the near term – I suspect that the server test will not survive. As a practical matter, there is really no difference to the reader’s experience (or the copyright holder’s compensation) regarding the location at which embedded content is stored. That copyright infringement depends on a purely technical aspect of the location of the content’s storage while ignoring that the practical end result is the same regardless of where the content is stored seems to ignore the copyright holder’s display rights. In this regard, as a legal matter, one could argue that the server test focuses on only one of the copyright holder’s rights - copying, ignoring the copyright holder’s display rights.

What are some key questions companies should be asking themselves about how they embed (or facilitate the embedding of) videos, images, and other copyrightable content?

Putting aside fair use questions, I think that publishers should think long and hard about whether their proposed use of social media (or other) content will disrupt or circumvent the copyright holder’s mechanism for receiving compensation for his or her work. If the answer is yes, publishers should probably get a license or rethink their proposed use in such a way that the copyright holder still gets paid for his or her work. Beyond that, publishers should, of course, review the terms and conditions of the sites from which they seek to embed content.

Are you noticing any trends in how companies are providing or managing embedded content (and the associated risks and potential liabilities)?

Perhaps “trends” is not the correct word here, but some platforms seem to be trying to extricate themselves from these fights by making clarifying statements in their terms of service to the effect that while certain sublicensing is permitted, these platforms do not grant such rights for embedded content and that publishers need to obtain any rights needed from applicable rights holders. Thus, these platforms want to make it clear that before you embed someone’s Instagram post, you may need to get a license from the person who made the post.

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We express great gratitude to Andrew for sharing his thoughts and insights regarding the server test and embedded content and look forward to following the developments as social media, web content, and embedded technology become part of our everyday lives and work.

Andrew serves as the leader of the firm’s semiconductor practice and a member of the firm’s fintech and technology industry team. Andrew concentrates his practice on intellectual property litigation and prosecution and on strategic IP counseling. Andrew advises established companies and startups on AI, machine learning, Blockchain, cryptocurrency, computer, and internet law issues, financing and transactional matters that involve technology firms, and the sale and licensing of technology. He represents clients in patent, trademark, copyright, and trade secret cases before state and federal trial and appellate courts throughout the United States, before the US Patent and Trademark Office’s Patent Trial and Appeal Board, and before the US International Trade Commission.