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Small Business Digest


Using Materials Created By Others Made Easier; Restraints, Monitoring Required

In creating promotional materials, websites and newsletters, many companies are unsure of what they can or cannot use in terms of material from others.

On the Internet as well as in direct mail programs, this area has become particularly fuzzy in recent years.

In general, “Fair-Use” is limited to 50 words or less and no image reproduction without permission.

In all cases, sources for the quotes or usage must accompany the material.

However, on the Internet, a wild frontier in terms of rules and usage, there has been wholesale copying of material, often without attribution.

Unfortunately, the “Fair-Use” doctrine has just been further widened by a decision allowing Google to display thumbnail pictures that have been copyrighted by a publishing house as part of its search results.

Companies without the luxury of in-house council have been perplexed by the usage rules and often suffer for it by either being forced to reprint or retract material when challenged.

On the Internet, if the Court of Appeals ruling holds, putting up thumbnail pictures of products and photos in the context of other material will now be much easier and free from attack by copyright holders.

Perfect 10, a publisher of sexually explicit magazines and Web sites, sued Google in 2004 for allegedly violating its copyrights, and the case quickly attracted wide attention not just for its adult subject matter but also for its possible impact on Internet copyright law. The issue of copyrighted material on the Web has assumed greater priority as videos, music and other proprietary material has flooded onto the Internet.

Earlier, Google lost a copyright lawsuit brought by Belgian newspapers to remove their headlines and links from the Google News service. Google also decided to eliminate any mention of the newspapers from its search results but restored them this month with the publications' consent. Subsequently, the two parties reached agreement and content from the Belgian publications are once again being offered on Google.

In the closely watched Perfect 10 case, a three-judge panel of the U.S. Court of Appeals for the 9th Circuit in San Francisco reversed the decision of a lower-court judge, who had blocked Google from showing the small images. The appeals court ruled that the thumbnails fell within a "fair use" exception in copyright law because they play a role in the search process and thus have a function different from that of the original photos.

"We conclude that the significantly transformative nature of Google's search engine, particularly in light of its public benefit, outweighs Google's superseding and commercial uses of the thumbnails in this case," Judge Sandra S. Ikuta wrote for the panel.

"We think this is a tremendous decision for the principle of fair use," said Art Brodsky, a spokesman for the Public Knowledge advocacy group. "It gives search engines and other useful services the ability to take advantage of computer technology in the search for and use of information."

The ruling was not a complete victory for Google, because the judges directed the lower court to reconsider a separate finding in the company's favor. The judge had ruled that Google was not liable for allowing Internet users to link from its search results to other Web sites that display photographs without copyright permission.

The appeals court opinion said, "There is no dispute that Google substantially assists Web sites to distribute their infringing copies to a worldwide market and assists a worldwide audience of users to access infringing material." The appeals court instructed the district judge to evaluate whether Google knew that unauthorized copies of Perfect 10's photos were being made available and failed to take steps to prevent it.

The judge was also told to make a similar assessment about, which was also sued by Perfect 10, alleging that its search engine links to thousands of copyrighted images.
Google had no immediate comment on the ruling.

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