Canada: Finders Keepers — Search Engines Benefit From Broad Interpretation Of User Rights

Copyright 2008, Blake, Cassels & Graydon LLP

Originally published in Blakes Bulletin on Information Technology, May 2008

With such great resources of knowledge available through networked computers, powerful search engines have come to be an essential part of our daily lives.

Search engines are the gateways to a wide variety of content — written, graphical, photographic, artistic, video, and musical. Search engines may retrieve data out of its intended context, or provide links to illegal copies or to Web sites that are misleading, fraudulent or infected by malware. And so it is not surprising that litigants are increasingly testing the limits of search engines' freedom to index and display proprietary content. A recent United States appellate decision shows the great significance such cases can have for the development of intellectual property law, and perhaps points the way to a similar result in Canada.

Perfect 10, Inc., a purveyor of pictures of nudes, sued Google because Google's search results returned thumbnail versions of images and, more particularly, of unauthorized copies of Perfect 10 images which were found on the Internet. Perfect 10 argued that Google was liable for direct copyright infringement, because mouse-clicking on a Google thumbnail displayed the full-scale, unlawfully copied version of the Perfect 10 image in a Google frame. On this question, the court ruled that, because Google only "framed" content which was provided from a link to someone else's server, and did not make a copy on any of Google's own servers, Google was not liable for direct infringement. Google itself would have had to actually make a copy in order to be liable for direct infringement of copyright.

Secondly, Perfect 10 alleged that Google should be liable for "contributory infringement" under copyright because it contributed to the display of infringing content by other, unauthorized copiers. In spite of the allegation, it seems from the court record that Google had in fact been fairly scrupulous about following up on Perfect 10's requests to remove unauthorized material from its search results, and that Perfect 10 had not been assiduous in making such requests. On the contributory infringement issue, however, the Court of Appeal sent the matter back for trial for want of evidence and, in doing so, articulated for the lower court a strict test under United States law for a finding of contributory infringement; that is, that it needed to be determined whether or not Google had "actual knowledge that specific infringing materials [are] available using its system", and whether Google nonetheless "continued to provide access to infringing works".

Perhaps still more interesting was Perfect 10's claim of direct infringement on the basis that Google made, stored and transmitted thumbnail copies of the images. There was evidence before the court of a commercial market for such images. Perfect 10 could sell them for mobile device purposes and Google had a commercial interest in making available search results, since they enhanced its advertisement sales revenues.

Despite Perfect 10's commercial opportunities for thumbnails, the court ruled, consistent with its earlier decision in Kelly v. Arriba Soft, where there was no commercial value for the thumbnails, that Google's return of thumbnail search results was "fair use" under United States copyright law because it was "highly transformative and of great value". This is a very broad reading of the fair use doctrine. In effect, it is to say that a search engine is entitled to copy an entire work and display it in search results. The court justified its result on the basis of public policy and the important role that search engines and the Internet play in modern society.

The issues before the United States court could be litigated in other jurisdictions. Canada's equivalent to fair use, the right of "fair dealing", was recently radically re-examined by the Supreme Court of Canada in CCH v. Law Society of Upper Canada. The views of the court set out in CCH might very well allow a result similar to Perfect 10 to be reached in Canada.

In the CCH case, the court recategorized the "fair dealing exception" from a defence to infringement to "a user's right". The court set out a number of factors to consider when determining whether the bounds of "fair dealing" had been exceeded. The court held that "the Copyright Act does not define what will be 'fair'. Whether something is fair is a question of fact and depends upon the facts of each case." The court then went on to list a number of factors which are to be considered determining whether or not a dealing with the work is fair, including: the purpose of the dealing; the character of the dealing; the amount of the dealing; alternatives to the dealing; the nature of the work; and the effect of the dealing on the work. It was the view of the court that, in some circumstances, it might be fair dealing to copy the entirety of the work. For example, there might be no other way to criticise or review certain types of work, such as photographs [other than to reproduce them entire]. But generally, for fair dealing, including for "research and private study", the amount taken is indicative of whether a dealing is fair, but not determinative.

Google's creation of thumbnail copies seems clearly to aid research and private study. In CCH, the court clearly stated that the fair dealing exception is open to those who can show that their dealings with the copyrighted work are for the purpose of research or private study. "Research" must be given a large and liberal interpretation in order to ensure that users' rights are not unduly constrained.

Therefore, a Canadian court may be inclined to take an expansive view of fair dealing and the rights of users to arrive at the same conclusion as in the Perfect 10 decision. The result could be reached either on the basis that a search engine's purpose was to aid research, and that therefore the research purpose shelter its activities, or that the engine's work itself amounts to research, that is, finding and retrieving indications of meaning through a vastly distributed, networked information architecture. Whether a search engine's dealing is fair could ultimately depend on the purposes of the individual using its facilities.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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