Of Polar Bears and Copyrights: Southern District of New York Again Rejects the Server Test

Written by Leo M. Lichtman

A polar bear is currently at the center of an important copyright dispute in the Southern District of New York in a case that could hold major implications over the scope of a copyright holder’s exclusive display rights.  See Nicklen v. Sinclair Broad. Grp., 2021 WL 3239510 (S.D.N.Y. July 30, 2021).

The case was filed by Paul Nicklen, a nature photographer and filmmaker, who authored a video of an emaciated polar bear wandering the Canadian Arctic.  Nicklen posted the video on his Instagram and Facebook accounts, urging his followers to consider the “haunt[ing]” and “soul-crushing scene” and to take steps to mitigate the harms of climate change.  The video was then picked up by a media company, Sinclair Broadcast Group (“Sinclair”), which published an article titled “Starving polar bear goes viral in heartbreaking video” and, without permission, “embedded” the video into the body of the article.  Nicklen brought suit in the Southern District of New York for copyright infringement against Sinclair and its media affiliates, alleging that Sinclair infringed his copyright rights in the video, and that the article was reposted—and the video re-embedded—on television station websites operated by Sinclair and its affiliates.  The Sinclair defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), arguing that plaintiff failed to state a claim for copyright infringement.

The key issue in the case was whether “embedding” a video violates the copyright owner’s display right under section 106(5) of the Copyright Act of 1976, 17 U.S.C. §106(5).  To embed the video on its site, Sinclair included HTML code that would cause the readers’ web browser to interact with a third-party server storing the video (such as Instagram or Facebook, where Nicklen posted the video).  The embedded video “appeared” on Sinclair’s site, even though Sinclair’s servers did not host the video—that is, Sinclair did not store a copy of the video on its own servers. 

For much of the twenty-first century, actions such as Sinclair’s were thought not to be a “display,” under the “server test” (or “server rule”), a well-known doctrine enunciated by the Ninth Circuit in Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146 (9th Cir. 2007).  Under that doctrine, “the owner of a computer that does not store and serve the electronic information to a user is not displaying that information, even if such owner in-line links to or frames the electronic information.”  Id. at 1160.  In other words, “a computer owner does not display a copy of an image when it communicates only the HTML address of the copy.” Id. at 1161.  Rather, to display an image, the computer owner must “us[e] a computer to fill a computer screen with a copy of the photographic image fixed in the computer’s memory.”  Id. at 1160.  Thus, under the server test, a website that embeds a video does not infringe the copyright owner’s display right.

In a stark departure from the Ninth Circuit’s approach, Judge Rakoff in Nicklen stated in no uncertain terms that the server test was “contrary to the text and legislative history of the Copyright Act,” and held that Nicklen’s allegations that Sinclair embedded the video plausibly stated a violation of his display right.  This holding was based on several considerations.  First, the court noted that the server test effectively subsumes the copyright holder’s display right within the reproduction right: “The Ninth Circuit’s approach, under which no display is possible unless the alleged infringer has also stored a copy of the work on the infringer’s computer, makes the display right merely a subset of the reproduction right.”  Second, the court pointed out that while the server test distinguishes “between showing a copy possessed by the infringer and showing a copy possessed by someone else,” the Copyright Act makes no such distinction.  Third, the court distinguished Perfect 10 on the facts because the latter case involved a search engine and images that were displayed only if a user clicked a link, whereas the Nicklen case did not involve a search engine, and the “display” of the images in the video required no user intervention beyond a visit to Sinclair’s site.  Fourth, the court noted that the server test forces creators who post their works to social media to effectively surrender control over how their work is subsequently shown, thereby reducing the display right to what is in effect, a limited right of first publication, something that the drafters of the 1976 Copyright Act rejected when they fashioned the display right.

After determining that Nicklen had plausibly alleged a violation of his display right, Judge Rakoff then analyzed Sinclair’s fair use defense under section 107 of the Copyright Act, holding that the fact-sensitive inquiry could not be resolved at this early stage of the case, notwithstanding a finding that Sinclair’s use of the video—to report on the video itself rather than to comment on environmentalism as Nicklen did—was transformative.  Notably, the court observed that according to the allegations of the complaint, Sinclair might not have needed to use the entire video to make its point, such that the third fair use factor—the amount and substantiality of defendants use—might as a factual matter weigh against fair use.  The court also found that Nicklen had plead market harm under the fourth fair use factor. 

The holding comes only a few years after Goldman v. Breitbart News Network, LLC, 302 F.Supp.3d 585 (S.D.N.Y. 2018), another case in the Southern District of New York that criticized the Ninth Circuit’s server test, finding that it was “neither appropriate to the specific facts of this case, nor, this Court believes, adequately grounded in the text of the Copyright Act.”  Though the issue has yet to come before the Second Circuit, such holdings suggest a possible circuit split in the future as criticism of the server test, like our sea levels, continues to rise.

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