Background
Perfect 10 was an adult entertainment company that sold subscriptions to its website featuring photographs of models. Perfect 10 sued Google and Amazon, alleging that Google’s image search feature infringed its copyrights by: (1) displaying thumbnail-sized versions of Perfect 10’s images in search results; and (2) providing inline links to full-size versions of Perfect 10’s images stored on third-party websites that had themselves obtained the images without authorization.
The district court granted a preliminary injunction against Google on both grounds, finding that neither thumbnails nor inline linking qualified as fair use and that both could constitute direct infringement. Google and Amazon appealed. The case raised fundamental questions about how copyright law applies to search engine indexing, caching, and linking — issues with enormous implications for the internet economy.
The Court’s Holding
The Ninth Circuit reversed in part and affirmed in part. On thumbnails: the court held that Google’s display of thumbnail images in search results was likely fair use under all four statutory factors. The thumbnails were highly transformative — they served a fundamentally different purpose (locating images on the internet) than the original images (artistic and commercial display); they were low-resolution copies that did not substitute for the originals; and Google’s search service provided substantial public benefit. The commercial nature of Google’s service was outweighed by the transformative purpose.
On inline linking and the “server test”: the court held that a website that inline-links to an image stored on a third-party server does not itself “display” that image for purposes of the Copyright Act’s display right. The court reasoned that the infringing copy must be stored on the defendant’s own server to constitute direct display infringement — merely providing a link that causes a user’s browser to retrieve the image from another server is not a display by the linker. This became known as the “server test” for display right infringement.
Key Takeaways
- Search engine thumbnail images are transformative and likely qualify as fair use — they serve a different functional purpose from the original work and enable a socially valuable search function, outweighing their commercial character.
- Under the “server test,” direct copyright infringement of the display right requires that the infringing copy be stored on the defendant’s own server — inline linking to images stored on third-party servers does not constitute direct display infringement by the linking party.
- Contributory and vicarious infringement theories remain available against linking parties even where direct infringement is absent — if the linker knows of infringement and materially contributes to it, secondary liability may attach.
- The server test has been criticized and questioned in subsequent cases but remains Ninth Circuit law and has significantly shaped how online platforms approach copyright liability for linking and embedding content.
Why It Matters
Perfect 10 v. Amazon established foundational copyright law for the internet age. The fair use holding on thumbnails confirmed that search engine image indexing — one of the most basic and commercially valuable internet functions — is not copyright infringement, providing essential legal certainty for Google, Bing, and every other image search service. The thumbnail fair use doctrine has since been applied broadly to similar transformative uses of copyrighted images in indexing and search contexts.
The server test for inline linking has been more controversial. Critics argue it creates a formalistic loophole that allows websites to display copyrighted content while avoiding liability by ensuring the actual files are hosted elsewhere. The test has been questioned by district courts in other circuits and in the Second Circuit’s 2018 Goldman v. Brauer decision (which rejected the server test), creating a circuit split on one of the most important copyright questions for the modern web.