Inline linking is a method of embedding content hosted on a third-party server and integrating it into a website. The embedded link retrieves the content and displays it on the website, operating much like a window into the other location. Many believed that inline linking did not infringe the copyright of the content hosted at the other location, but that assumption may have changed. The European Union’s directive on copyright law includes a provision that requires content aggregators to negotiate license fees for display of content through an embedded link, directly targeting inline linking with what has been colloquially referred to as a “link tax.” In the United States, two recent cases have declined to follow a previously-created test for determining copyright infringement of content displayed on a website. The test, dubbed the “server test,” effectively held that inline linking is not copyright infringement so long as the displayed content remained hosted by its originating third-party location because no physical “copy” of the content was created by the alleged infringer. New cases test that assumption by questioning whether the hosted location of the content matters when determining whether it has been “displayed” on a website within the meaning of the Copyright Act.

Inline linking is a method of displaying content from third-party sources on the webpage browsed by the user. The technique is commonly used to integrate content from multiple sources onto a single webpage for coherent display. Inline linking operates through easily-obtainable code that creates a window into the third-party source location and instructs the user’s browser on how to arrange the third-party content on the webpage and, importantly, the content’s source. Webpage content must be hosted by a server connected to the internet—either the website’s own servers or a third-party server linked to the website.  If the website’s server is used, a copy of the content exists on the website servers, but if a third-party server is designed as the source of content through a link to the third-party’s webpage, no copy of the content is necessary on the websites servers. Many webpages contain content hosted by multiple servers using inline linking. Content aggregators and service providers are the most prevalent users of inline linking presenting content from many different sources on a single webpage. For example, Google Image Search operates by pulling images from other locations via inline linking. Content linked from third-party servers appears visually identical to any another content on the webpage, but instead of hosting the content, the website contains a hyperlink to the third-party source.

Many entities using inline linking believed they were protected from copyright liability by the “server test” used in a 2007 Ninth Circuit case. In Perfect 10, Inc. v. Amazon.com, Inc, Perfect 10 had sued both Amazon and Google for infringing the copyright of photographs by displaying them on their websites. 508 F.3d 1146, 1154 (2007). The Ninth Circuit found that Google’s use of online linking to display the copyrighted photographs did not constitute copyright infringement, because Google had not created a “copy” of the displayed photographs per the language of the Copyright Act. Id. at 1160-61. Because Google had not created a “copy,” the Court reasoned that Google had not stored the photograph and therefore did not infringe. Id. As to inline linking, the Court reasoned that Google did not display a copy because its HTML code merely directed a user’s browser to the third-party host location of the photograph. Id. at 1161. In the Court’s characterization, Google provided the means for the user’s browser to interact directly with the third-party host location. Id. “Google transmits or communicates only an address which directs a user’s browser to the location where a copy of the full-size image is displayed. Google does not communicate a display of the work itself.” Id. at Fn. 7.

After Perfect 10, only a handful of cases dealt with inline linking, but the reaction to the “server test” was mixed. The Seventh Circuit adopted the test for contributory liability and the right to display a work. Flava Works, Inc. v. Gunter, 689 F.3d 754 (7th Cir. 2012). A number of federal district courts cited disagreement with the notion that actual copying was necessary to find display of a work on a website infringement, but did not have the opportunity to rule on it as a central issue until The Leader’s Institute, LLC v. Jackson, ten years later. See, e.g., Flava Works, Inc. v. Gunter, 2011 WL 3876910 at *4 (N.D.Ill. 2011); The Leader’s Institute v. Jackson, 2017 WL 5629514 at *10 (N.D.Tex. 2017). In The Leader’s Institute, the Northern District of Texas found that inline linking to a copyrighted website infringed the right of display. 2017 WL 5629514 at *10. The Court distinguished Perfect 10 on both factual and legal grounds. Id. at *11. On factual grounds, the Court cited the difference between the “server test” as applied to a search engine (Google) that merely presents query results and the “server test” as applied to an infringer using inline linking to display content as if it were its own, saying that the latter was copyright infringement even if the former was not. Id. The Court also rejected Perfect 10’s central argument, saying that requiring actual possession of a copy as a prerequisite for violating the right of display is not in line with the Copyright Act. Id.

More recently, two cases in the last two years, including one within the Ninth Circuit, have rejected the “server test,” casting uncertainty on its relevance going forward. Goldman v. Breitbart News Network, 302 F.Supp.3d 585 (S.D.N.Y. 2018); Free Speech Systems, LLC v. Menzel, 390 F.Supp.3d 1162 (N.D. Cal. 2019). In Goldman, the plaintiff sued news media websites for inline linking to a twitter photograph that he had taken and posted to Snapchat. Goldman, 302 F.Supp.3d at 586. In denying the defendant’s motion for summary judgment, the court wrote that the “server test” should not be applied to the right to display a copyrighted work, and to do so is inconsistent with the Copyright Act. Id. at 593. The court noted that a crucial aspect of non-infringement in Perfect 10 was user involvement in the display of the copyrighted works, whereby the user, in clicking on thumbnails and thus engaging with the third-party websites, shifted responsibility for display of a full-size image to the user. Id. at 596. The opinion found there was a difference between displaying content in a seamless integration into a blog or like website, and with the user having clicked on an inline hyperlink in a search engine to display the content full-size. Id.

Menzel, a case before the Northern District of California in June 2019, acknowledged Perfect 10’s precedential authority in the Ninth Circuit, but narrowed the ruling by stating that it has not been used outside of the search engine context, and thus declined to apply it. Free Speech Systems v. Menzel, 390 F.Supp.3d 1162, 1172 (N.D.Cal. 2019). In Menzel, a photographer alleged that Free Speech Systems (FSS) used inline linking to display his photographs without attribution or consent, and FSS sued for declaratory judgment. Id. at 1166-68. In an order denying FSS’s motion to dismiss the photographer’s infringement claim, the court was skeptical of the applicability of the “server test” to the posting of copyrighted material on a non-search-engine website. Id. at 1172.

These U.S. cases that allow inline linking to be actionable infringement of copyright appear to be in agreement with a controversial provision of the European Union’s Directive on Copyright in the Single Digital Market (“Directive”). See Directive 2019/790, art. 15, 2019 O.J. (L 130) 118. The Directive was enacted in 2019, and member states have until 2021 to enact local laws that effect the Directive’s provisions. Article 15 of the Directive would require service providers to negotiate licenses with publishers of press publications before engaging in inline linking of their content. Id.

Previously, as in the U.S., service providers and content aggregators engaged in inline linking to press publications to allow embedded article previews did so without incurring liability for copyright infringement. With the passage of Article 15, these entities would be required to negotiate license fees with publishers to incorporate as little as a few short sentences from a published news story hosted on the publisher’s website. See id. Article 15 does not target simple hyperlinks, titles, or short phrases, but is designed to give press publishers more control over how their publications are displayed and distributed. News publishers have difficulty recouping the costs of generating news stories, because news is shared freely. The use of inline linking deals a blow to the publishers, because it displays their news content on an aggregator’s website without sharing web traffic with the publishers, taking away advertising or paid content revenue. Note that Article 15 only applies to press publications, defined in the Directive as “journalistic publications, published in any media . . . for instance, daily newspapers, . . . magazines . . . and news websites.” Id. at 104. France has enacted Article 15 into its local laws, and in response, Google recently announced that it would no longer be displaying embedded article previews for search results. Laura Kayaki, Google Refuses to Pay Publishers in France, Politico (Sept. 25, 2019, 8:16 PM) https://www.politico.eu/article/licensing-agreements-with-press-publishers-france-google/.

Goldman and Menzel illustrate a shift towards interpreting copyright law to provide protection for content creators in an internet of accelerated growth where content is increasingly connected. See Goldman, 302 F.Supp.3d at 593; Menzel, 390 F.Supp.3d at 1172. Although the reasoning of the Directive is different from U.S. case law, the effect of protecting creators is the same. The rejection of the “server test” as applicable to the display right indicates an increasing emphasis on the perspective of the user in determining whether inline linking is actionable infringement, rather than raw mechanics of coded instructions. Content aggregators and service providers should be mindful of how the user of their online services is viewing any content hosted by a third-party server, and remain aware of developments in the EU as member states implement Article 15 into their local laws.