On July 30, 2021, a New York District Court refused to dismiss copyright infringement claims relating to an online article that included a video that was “embedded” (i.e., shown via a link to a video hosted on another site). The case involved a video hosted on a social media platform that made embedding available as a function of the platform. The court ruled that the photographer-actor plausibly argued that defendants’ “embed” may constitute copyright infringement and violate his right to view the copyrighted video, rejecting defendants’ argument that the embed it is not a “view” when the image in question remains on a third-party server (Nicklen v Sinclair Broadcast Group, Inc., #20-10300 (SDNY July 30, 2021)). Notably, this is the second New York court to refuse to adopt the Ninth Circuit “server test” first adopted in 2007 Perfect 10 decision, according to which the violation of the right to public display of a photographic image depends, in part, on the place where the image has been hosted. Since this is the latest New York court to find server testing unsuitable for an online infringement case outside of the search engine context (although other worthy defenses may exist), website publishers have received another stark reminder to re-examine online hookup practices.

According to the Ninth Circuit’s “server test,” only a server that actually stores photographs and “delivers that electronic information directly to you (that is, by physically sending ones and zeros over the Internet to your browser”) could violate the rights of the copyright holder.” Under this reasoning, since the image in question remains on a third-party server and a copy is not fixed in the infringer’s computer memory, such embedding (which are simply HTML instructions that provide the address of the image to the user’s browser) is not a display under the Copyright Act.

As we wrote earlier, another New York District Court ruled in 2018 that a number of online news publishers and media websites that embedded certain tweets (containing unauthorized uploads of the plaintiff’s copyrighted photo) on their websites infringed on the plaintiff’s exclusive viewing right, despite the fact that the image in question was hosted on a server by an unrelated third party. When the case settled in 2019, it left many unresolved issues with respect to linking third-party content online, especially since there has never been a final ruling on the merits (or a chance for the Second Circuit to intervene). Several years later, we also now have another New York court refusing to adopt the server test, at least based on the facts of the dispute.

To briefly summarize the facts in nickel, the plaintiff captured footage of an endangered polar bear in the Canadian Arctic and posted it on social media to raise awareness about climate change. The defendants, Sinclair Broadcasting Group, Inc. and its affiliates (collectively “Sinclair”), incorporated the video into online articles about public reaction to the video without first obtaining a license. After the plaintiff filed copyright infringement complaints, Sinclair moved to dismiss, arguing that, under the “server test,” embedding a video does not “display” the video under the Copyright Act, and that the The inclusion of the video itself in an article about the viral nature of the plaintiff’s video was fair use. The court denied the motion on both grounds, ruling that embedding a video “displays” the video under the Copyright Act.

In rejecting the defendant’s argument that the server test applied, the Nickel the court said the server test “is contrary to the text and legislative history of the Copyright Act”. As interpreted by the court, the Copyright Act defines “display” as “displaying a copy of” a work, 17 USC § 101, not “making and then displaying a copy of the copyrighted work.” Refusing to adopt the server test in this case, the court said that the Ninth Circuit approach, “under which no viewing is possible unless the alleged infringer has also stored a copy of the work on the infringer’s computer, makes the right to display merely a subset of the right to reproduce.

Eventually, the court ruled that Perfect 10The server test of , which applied to a search engine’s image search function and displaying full-sized images hosted on third-party servers to a user, simply wasn’t applicable to the embedding practices at the heart of this case. Also, the Nickel the court held that a broad reading of the server test was not appropriate in this case because the Ninth Circuit adopted it in a different context, i.e., in that case, the display involved a search engine image search function which only showed full online images at just one click of a user, unlike the Nickel case where the embedded video was displayed in online articles regardless of the user’s preferences.

Concerning the fair use issue, the court acknowledged that “the use of a copyrighted photograph in a news article can rightfully be viewed as transformative where the photograph itself is the subject of the story,” but held that the remaining fair use factors could not be resolved in this first phase of the dispute. While most of the attention is on the issue of “testing the server,” should the discovery continue, Sinclair appears to have a strong fair use defense (if he wishes to continue suing).

Given the important online copyright issue at stake, this case is definitely one to watch. In 2018 when the Goldmann court also dismissed the server test, we commented that: “This decision could be something of a wake-up call for web publishers who were under the impression that server testing was an established law across the country or that they enjoyed a almost free reign for linking online to user posts and displaying external content on one’s own websites without fear of liability…”. With two New York District Courts now registered on this issue, some freewheeling practices and due diligence procedures for online links may need to be reviewed (at least in this jurisdiction), and publishers may also consider additional options as to how such linked content may be displayed to users.