Copyright Holders Are Going After Instagram: To Embed Or Not To Embed
It's been a while since I last posted a substantive article, so here I go. Today, I want to talk about embedding. Nowadays, you'd frequently come across newspaper articles or blogposts that embed Instagram posts of third parties for reporting or illustrative purposes. For those of you who are not familiar with what embedding is, it is a process involving a HTLM link that allows a third party to display someone else's copyrighted content on the third party's webpage. To a viewer, the displayed work is seamlessly integrated to the webpage, thereby obviating the need for the viewer to jump to the original webpage. Copyright holders, time after time, found the practice of embedding disruptive because it effectively diminishes their ability to license their works and collect licensing fees to which they are rightfully entitled. It is in this context that a group of creators has recently filed a class action complaint with the Northern District of California to legally air their grievances. See Complaint, Alexis Huntley et al. v. Instagram, LLC, 3:21-cv-03778 (N.D. Cal. May 19, 2021).
Before I dive into the summary of the complaint, it should be noted that this lawsuit did not arose in a vacuum. Over the last two years, judges in New York dealt with copyright infringement claims of photographers against newspapers. (See my previous post to learn more about the cases.) The judges addressed the copyright infringement issue with embedding largely in the fair use framework. They all ended up rejecting the defendants' novel theory that Instagram's Terms of Use operates to grant third parties a valid sublicense to embed. See McGucken v. Newsweek, LLC, 464 F. Supp. 3d 594, 603 (S.D.N.Y. 2020) (finding that "none of [Instagram's various terms and policies] expressly [or impliedly] grants a sublicense to those who embed publicly posted content"). On the heels of this ongoing fight comes this class action that can not only drastically alter the practice of embedding but also vastly reshape the ecosystem of the digital world. I know this might sound too overblown, but social media platforms as we know them have continued to grow at an exponential pace thanks to mountainous volumes of photos and videos supplied and spread by their users.
Let's now talk about the complaint itself. The plaintiffs (of the proposed class) claim that embedding infringes upon the exclusive display rights expressly granted under the Copyright Act. The Act, in relevant parts, provides that "the owner of copyright under this [Act] has the exclusive rights to display the copyrighted work publicly." (emphasis mine) See 17 U.S.C. § 106. The plaintiffs argue that, pre-McGucken, Instagram left its users with an unwarranted impression that its embed feature legally permits third parties to embed copyrighted works, just "like eating for free at a buffet table of photos." See Complaint at 2. Furthermore, it had never corrected such mistaken impression by affirmatively indicating otherwise until the McGucken ruling was announced. Instagram stepped in June 2020, in response to McGucken, clearing communicating that its platform policies "require third parties to have the necessary rights from applicable right holders" by means of licensing. The plaintiffs emphasize that this newly adopted policy patently contradicts its prior history of monetizing copyrighted contents. In light of this history, the complaint contends that Instagram had the "constructive knowledge" that copyright infringement occasioned by embedding was widely common and acted "in reckless disregard" despite the knowledge by not enforcing measures to robustly protect copyright. Id. at 17. In addition, copyright holders point out that they are not provided with any tool to "control or track third party embeds", which effectively impede their ability to go after instances of infringement on their own, leaving them utterly powerless in the face of embedding-type infringement. Id at 3. In sum, the complaint points out that Instagram has wrongfully retained all the pecuniary benefits flowing from embedding (in betrayal of its promise back in 2013 that the platform "respect[] copyright and [would] not going to monetize users' photos to third parties") while wholly denying its liability in popularizing the practice. Id. at 8.
This class action, once certified, will bring to the fore the tension that's been brewing for years. Instagram and other social media platforms are generating revenues based on huge volumes of traffic they receive by virtue of users' uploading and sharing their photos and videos. That is now their very core business model. On the other hand, copyright owners are deprived of the traffics that they could have enjoyed in the absence of embedding, in addition to certain licensing fees. There's another way to conceive the detriment to copyright owners. If embedding becomes a widespread practice without no attached liability, this would effectively destroy licensing markets for respective copyright owners. Why would third parties approach them to obtain a license if embedding can do the exact same job? Interestingly, the class action was filed in California, which is part of the Ninth Circuit. The Ninth Circuit adopts a server test to address the copyright infringement issue in embedding (though several judges within in the Ninth Circuit recently declined to apply the test), in contrast to New York courts that expressly rejected it. See Goldman v. Breitbart News Network, LLC, 302 F. Supp. 3d 585, 590 (S.D.N.Y. 2018). Under the server test, embedding is largely not violative of copyright law because the test requires that an embed be copied onto an infringer's server. That condition almost never happens with respect to embedding. Might this case deal a death blow to the Ninth Circuit's server rule? The plaintiffs are requesting compensatory damages permitted by law. Most importantly, however, they are firmly demanding that Instagram develop a tracking tool available for copyright owners in the near future so that they can exercise control over their works. After all, this isn't all about pennies and cents for copyright holders who have sweated to create their works.
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