THE SERVER RULE MIGHT FAIL TO EMBED IN THE US COURTS

 

In a Motion to Dismiss the Second Amended Complaint in the case of Nicklen v. Sinclair Broadcast Group, Justice Jed S. Rakoff, Senior U.S.D.J. at the Southern District of New York, on July 30^th, 2021, denied the applicability of the ‘Server Rule’ concluding that embedding a video ‘displays’ the video under the Copyright Act, 1976 (hereinafter referred to as the ‘Act’).[1]  The Plaintiff, Nicklen claims infringement against Defendant on the ground that the Defendant did not obtain a valid license to embed a video captured by the Plaintiff on its various online websites.[2]  The Defendant then moved to dismiss the Second Amended Complaint. The Court was now under the responsibility to answer questions regarding what constitutes as ‘Display’ under the Act, the Server Rule adopted in the States in 2007 and the Doctrine of Fair Use.

Background

The Plaintiff, Paul Nicklen is a famous Canadian nature Photographer and founder of SeaLegacy, a nature conservation non-profit organisation. While on an expedition in the Baffin Island, Nicklen captured a starving polar bear wandering for food in a video (hereinafter also referred to as the ‘Work’). He holds valid Copyright with registration. To sensitize people to this soul crushing reality, he then on December 5^th, 2017, uploaded the Work to his social media accounts like Facebook and Instagram with a caption requesting people to take steps to mitigate the harms of climate change. He ended the caption with details about licensing the Work from Carter News. The video became very popular among social media users.

The Defendant, Sinclair Group, a large Maryland based media group with hundreds of television stations, on December 11^th, 2017, posted an article titled “Starving polar bear goes viral in heartbreaking video” on its various websites highlighting the post by Nicklen, his interview with National Geographic, and the popularity of the video. It embedded the Work in the said articles using the Application Programming Interface (API) of Facebook and Instagram. Sinclair provided an HTML code which made it possible for the viewers to retrieve and view the Work from Facebook and Instagram’s server on the Sinclair websites itself, even when the users had no such social media accounts or were simply not logged in. It did not obtain a valid license from Carter News as provided by Nicklen. Nicklen sent a takedown notice to Sinclair which was of no avail, hence he filed the First Amended Complaint alleging infringement of his rights under §106 of the Act.[3] He later filed the Second Amended Complaint outlining every single Sinclair affiliate and their URL. The Defendant then moved to dismiss this Complaint.

A Perspective from The Court

To answer the question of whether any unauthorised use of a copyrighted work amounts to infringement or not, there needs to be a valid Copyright in the place. The Court was of no doubt that the Work was the original creation of Paul Nicklen. And as an author, he had various rights under §106. In the present case, Nicklen had alleged infringement of his right to ‘display’ the Work publicly.

According to the Act, the meaning of display is crafted very broadly. It implies ‘to show a copy of the work either directly or by the means of any device or process’. The lawmakers, being hopeful and accepting to the futuristic technological developments, enlarged the scope of the term ‘device or process’ by including in it any device or process already present and the ones that would be developed in the future. This comes as a relief in issues where the behind-the-screen technology is too complex for a layman to understand, which helps shift the attention from ‘how’ a work is shown to ‘that’ a work is shown. The right to display includes not only the right to display a work for the very first time but also any act which permits the same to be shown thereafter.

The Defendant embedded (it can be defined as ‘to include something as a part of the whole text’ as done in the posts of Sinclair) the Work on its website in a manner that the HTML code acted as a medium of retrieval of the Work from the servers of Instagram and Facebook. Their defence focused on insisting the Court to adopt the ‘Server Rule’ established in the case of Perfect 10, Inc. v. Amazon.com Inc. decided by the 9^th Circuit in 2007.[4]  Under the said Rule, a person is said to embed a work and is guilty of infringement only when they store a copy of the said work on their server. In most cases, because the video is not fixed in the memory of the infringer’s computer, the Server Rule doesn’t consider embedding to amount to display. This Rule clearly distinguishes between just plain ‘displaying’ and ‘storing and then displaying’, where only the latter would amount to infringement.[5]

While deciding the present Complaint, the Court refused to adopt the Server Rule in the fear that accepting this would make the right to display a mere subset of the right of reproduction and this right will lose its independent value. The judge followed a literal approach of the text of the Act and opined that the term display is said to merely mean ‘to show a copy of the work’ and in no way points towards ‘to make a copy and then show’. The methods and modes of exploitation and infringements have taken many shapes and forms which are exhausting for even the judiciary to comprehend, let alone the common person whose work gets misused. Any author of any work is disheartened at the very sight of their work getting misused (and misuse doesn’t always have to mean with ‘any negative intent’, it also includes ‘use of the work in a manner that the author did not consent to’). The proponents of the Personality Theory are sure to support the ruling against the use of Server Rule in all cases related to embedding. The ‘how’ a work is embedded is of little significance in the eyes of the author as they are more focused on protecting the emotional bond with their creation.

Judge Rakoff also pointed out that, embracing the technology neutral scope of the right to display, also included displaying to the public through the ‘online’ medium. Any alleged infringer cannot escape their liability because a work had been first displayed by the author on any online medium. This comes in response to the claim of the Defendant that any author who wants more control over his or her work can simply make efforts of not uploading the same on any social media. The HTML code made available on the Sinclair websites would stop functioning if Nicklen decided to remove the Work from his Instagram account. But the need for an author to withdraw a copyrighted work from public should be a personal choice and not a result of systematic failures to stop unauthorised use of it.

Sinclair also claimed that the inclusion of the video in an article informing the public of the video’s popularity is protected as Fair Use under §107. The burden to prove Fair Use rests heavily on the party that claims it. In the pleadings provided by the Defendant, the Court attempted to analyse the four-factor test to reach a conclusion for the purpose of dismissing any claims regarding infringement.[6]  But the test turned out to be inconclusive as there was not much information present in the pleadings and the question of Fair Use is generally answered during the summary judgment process. From another point, once this question of Fair Use is decided by the Court in the Second Amended Complaint hearings, it will provide a reasonable understanding of what constitutes as ‘substantial amount’ in terms of embedding on the internet.

Based on the above discussions, the Court denied the Motion to Dismiss suggesting for the time being that embedding a video without proper authorisation amounts to violation of the Display Right of the author.

Impact on Present Day Internet Activities

Justice Rakoff is not the first American Judge to question the authority of the Server Rule. Earlier in 2018, Justice Kathrine Forrest, a former Judge in the same Court as Justice Rakoff also did not fully trust the applicability of this Rule on all sorts of embedding issues.[7]  If the facts-oriented approach attains popularity among courts, then social media as we know it will come under a lot of scrutiny. The question on this Rule might not stand the test of credibility as courts in general are considering the language of the Act literally and increasingly coming to the opinion that this Rule is contrary to the text, language and most importantly, the objective of the Act.

Questioning this Rule will put all social media platforms including news reporting platforms to look at their policies to avoid such kind of confrontation in the future. Defence of Fair Use maybe able to protect some platforms but majority of other embedding would only be protected if they have obtained a valid license.[8]  But obtaining a license is not a practice which is diligently followed in the media industry. Take for example, in the present case too, Nicklen had provided all necessary details regarding license for his Work but there were only a few handful organisations that obtained a valid license from Carter News. If the Server Rule is unaccepted frequently in the future, then not obtaining a valid license even though all details were available to the embedder, may also amount to Bad Faith leading to a stricter Criminal Liability on the infringer. Conversely, active social media participants are deeply concerned by the Court’s questioning of the 2007 Rule, they are of the view that it would impact the internet life as we know it.

I believe there should be uniformity in the way this Rule is conceived in the U.S. Courts and outside. While the Intellectual Property Rights are territorial in nature and influence of fallacy in one jurisdiction might not have a huge impact on others except for the high persuasive value, the internet on the other hand, practices no territorial boundaries. The present-day internet practices are transborder and more and more people are shifting to the virtual world to carry out their businesses, creative or not. They are choosing to showcase their work through these platforms and the imbalance of economic and moral rights across borders will ultimately lead towards an invisible trade barrier. And I conclude, that when the world’s attention shifts to a particular business model, the laws must also get stringent in that medium!

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[1] 20-CV-10300(JSR).

[2] Christina Tabacco, SDNY Court Splits with Ninth Circuit on Copyright Act Interpretation,LAW STREET MEDIA (August 2, 2021), https://lawstreetmedia.com/tech/sdny-court-splits-with-ninth-circuit-on-copyright-act-interpretation/.

[3] 17 U.S.C. §106 1976.

[4] 508 F.3d 1146.

[5] Sandra A Crawshaw-Sparks, David A Munkittrick and Anisha Shenai-Khatkhate, Federal Judge Finds Copyright Issues “Embedded” in Social Media Re-Posts,NATIONAL LAW REVIEW (August 13, 2021), https://www.natlawreview.com/article/federal-judge-finds-copyright-issues-embedded-social-media-re-posts.

[6]Tal Dickstein and Ava Badiee, Nicklen v. Sinclair,LEXOLOGY (July 30, 2021) https://www.lexology.com/library/detail.aspx?g=3ffaa6fb-aa3a-46e8-b132-5eeac3842559.

[7] Alison Frankel, N.Y. judge says embedded tweets may violate copyrights. But don’t panic!, REUTERS (February 17, 2018, 5:37 AM),  https://www.reuters.com/article/legal-us-otc-panic/n-y-judge-says-embedded-tweets-may-violate-copyrights-but-dont-panic-idUSKCN1G02L8.

[8] Kyle Jahner, Embed Copyright Cases Could Multiply as Server Test Faces Siege, BLOOMBERY LAW (August 17, 2021, 2:32 PM), https://news.bloomberglaw.com/ip-law/embed-copyright-cases-could-multiply-as-server-test-faces-siege.