Perfect 10 v. Amazon: Copyright | Outside IP Counsel

The Ninth Circuit tied the online display right to hosting with its server test and held Google's image-search thumbnails a transformative fair use.

Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146 (9th Cir. 2007), is the decision that wrote the technical architecture of the web into the exclusive rights of the Copyright Act. Reviewing a preliminary injunction against Google Image Search, the Ninth Circuit adopted the “server test”: a website operator “displays” an image within the meaning of 17 U.S.C. § 106(5) only when it transmits a copy stored on its own servers, so in-line linking and framing of images hosted elsewhere do not directly infringe the display right. In the same opinion, the court held that Google’s reduced-size search thumbnails, which Google concededly did store and serve, were likely a highly transformative fair use. Judge Sandra Ikuta’s opinion, which amended and superseded an initial May 2007 opinion reported at 487 F.3d 701, remains the foundational statement of how the display right operates online, and nearly two decades later it still divides the courts.

The case matters for a second reason that is easy to overlook: it confirmed that even wholesale, commercial copying of entire creative works can be fair when it powers a genuinely new information tool. That reasoning became a doctrinal building block for Authors Guild v. Google and, more recently, for arguments over search, indexing, and machine-learning uses of copyrighted images.

At a glance

Case: Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146 (9th Cir. 2007), amending and superseding 487 F.3d 701 (9th Cir. 2007)
Decided: May 16, 2007; amended opinion issued December 2007. Opinion by Judge Sandra S. Ikuta for a unanimous panel (Judges Hall, Hawkins, and Ikuta), on appeal from the Central District of California, 416 F. Supp. 2d 828 (C.D. Cal. 2006). Affirmed in part, reversed in part, and remanded.
Holding: A website displays an image under § 106(5) only if it stores and transmits the image from its own servers; Google’s in-line linking to full-size images was not direct infringement, and its stored thumbnails were likely a transformative fair use.
Status: Final. The server test was reaffirmed by the Ninth Circuit in Hunley v. Instagram, LLC (2023), but it has been rejected by several Southern District of New York decisions, a split that remains unresolved as of July 2026.

Adult magazines, image search, and a preliminary injunction

Perfect 10 published copyrighted photographs of nude models in a magazine and behind a password-protected subscription website, and it licensed reduced-size versions of its images to Fonestarz Media for cell-phone download. Third-party websites republished Perfect 10’s images without authorization, and Google’s crawler indexed those pages. A query on Google Image Search therefore returned two things: small “thumbnail” copies of the infringing images, which Google created, stored on its own servers, and transmitted to users, and, on click-through, a framed view of the full-size image delivered by in-line linking. The HTML on Google’s results page merely gives the user’s browser the address of the third-party server; the browser fetches the full-size image directly from that server, framed by Google’s page. Amazon.com entered the picture because its A9 search service routed queries to Google and in-line linked to Google’s results.

Perfect 10 began sending Google notices in 2001, sued Google in November 2004 and Amazon in June 2005, and sought preliminary injunctions against both. The district court enjoined Google’s creation and display of thumbnails but declined to enjoin the in-line linking to full-size images, adopting what it called the server test. Both sides appealed. The Ninth Circuit endorsed the server-test framework but reversed on fair use, vacating the thumbnail injunction.

The server test: display means transmitting a stored copy

Section 106(5) gives the copyright owner the exclusive right “to display the copyrighted work publicly,” and § 101 defines “display” as showing “a copy” of the work. Building on § 101’s definition of “copies” and on MAI Systems Corp. v. Peak Computer, Inc., 991 F.2d 511 (9th Cir. 1993), the court held that “a person displays a photographic image by using a computer to fill a computer screen with a copy of the photographic image fixed in the computer’s memory.” Google’s thumbnails met that description, so Perfect 10 made a prima facie case of direct infringement as to them. The full-size images did not: “Because Google’s computers do not store the photographic images, Google does not have a copy of the images for purposes of the Copyright Act.” In-line linking supplies only HTML instructions, and “[p]roviding these HTML instructions is not equivalent to showing a copy.” The court acknowledged that framing may cause users to believe they are viewing a single Google page, but copyright, unlike trademark, does not police consumer confusion. Facilitating access to infringing images, the panel stressed, raises contributory liability questions rather than direct ones.

The distribution claim failed on parallel reasoning. Under § 106(3), distribution requires actual dissemination of copies, and it is the third-party publisher’s server, not Google’s, that transmits the full-size image. The court refused to extend the “deemed distribution” rule of Hotaling v. Church of Jesus Christ of Latter-Day Saints and A&M Records, Inc. v. Napster, Inc. because Google does not own or make available a collection of stored full-size images.

Thumbnails as transformative fair use

Having found a prima facie display violation as to the thumbnails, the court turned to Google’s fair use defense under 17 U.S.C. § 107, following Kelly v. Arriba Soft Corp., 336 F.3d 811 (9th Cir. 2003), which had blessed search-engine thumbnails, and Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994).

The first factor did the decisive work. Even though Google copied entire images and profited from AdSense, the court found the use “highly transformative”: a search engine transforms an image made for entertainment or aesthetics into “a pointer directing a user to a source of information,” and it “provides social benefit by incorporating an original work into a new work, namely, an electronic reference tool.” In a much-quoted passage, the court observed that “a search engine may be more transformative than a parody because a search engine provides an entirely new use for the original work.” The district court had weighed the factor slightly for Perfect 10 because thumbnails could supersede its cell-phone licensing and because AdSense tied Google’s revenue to infringing sites. The Ninth Circuit disagreed: no mobile downloads had actually been shown, the AdSense revenue attributable to infringing sites was not quantified, and the search engine’s transformative character and public benefit outweighed those incidental commercial and superseding uses. The factor weighed heavily for Google.

The remaining factors added little resistance. Perfect 10’s photos were creative but previously published, so factor two favored it only slightly; copying the entire image was reasonable because partial copies would cripple recognition in a visual search tool; and harm to the cell-phone market “remains hypothetical,” so market effect favored neither party. Weighing the factors in light of copyright’s purposes, the court held Google likely to prevail on fair use and vacated the thumbnail injunction.

Secondary liability and the remand

The server test does not immunize search engines; it reroutes the analysis into secondary liability. Applying Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (2005), the panel held that Google could be contributorily liable if it had actual knowledge that specific infringing Perfect 10 images were available through its search engine, could take simple measures to prevent further damage, and failed to do so. Because the district court had not made those findings, the contributory claim was remanded. Vicarious liability failed: Google had no contractual or practical ability to stop third-party websites from infringing, so it lacked the required right and ability to supervise the direct infringers. The court also held that users’ automatic browser cache copies were fair use, and it left Google’s DMCA § 512(d) safe-harbor defense for remand. The case ultimately ended without Perfect 10 ever obtaining its injunction.

Open questions

The server test’s textual foundation remains contested. Several Southern District of New York decisions, beginning with Goldman v. Breitbart News Network, LLC, 302 F. Supp. 3d 585 (S.D.N.Y. 2018), and continuing in Nicklen v. Sinclair Broadcast Group and McGucken v. Newsweek, have rejected the test as inconsistent with the Copyright Act’s transmit clause, reasoning that a work can be shown “by means of any device or process” regardless of where the copy sits. The Ninth Circuit reaffirmed the test in Hunley v. Instagram, LLC, 73 F.4th 1060 (9th Cir. 2023), but the panel there applied circuit precedent rather than freshly defending it, and commentators on both sides expect the issue eventually to reach en banc review or the Supreme Court. It also remains unsettled how the test applies to entities that passively host user-posted images, a question the Perfect 10 panel expressly reserved, and how the fair use analysis for indexing tools translates to generative AI systems that do more with images than point users toward them.

Implications for creators and businesses

Where an image is hosted decides who directly infringes, at least in the Ninth Circuit. Embedding or framing an image served from someone else’s server is not a direct display under Perfect 10 and Hunley, but the same conduct can support a direct claim in the Southern District of New York. Forum analysis should precede any embedding-based claim or defense.
The server test is not a safe harbor for platforms. Contributory liability follows from actual knowledge of specific infringements plus a failure to take simple preventive measures, so notice handling and takedown hygiene remain essential even for services that host nothing.
Transformative purpose can carry commercial, whole-work copying. Search and indexing tools that convert expressive works into information about those works start factor one with a strong tailwind, but the holding presupposes that the tool points users to sources rather than substituting for the work itself.
Document actual market harm, not theoretical harm. Perfect 10’s cell-phone licensing theory failed because no lost downloads were proven. Rights holders should build an evidentiary record of real substitution before seeking injunctions.

Frequently asked questions

What is the server test from Perfect 10 v. Amazon? The server test holds that a website operator directly infringes the public display right only if it stores a copy of the image on its own servers and transmits that copy to users. Providing HTML instructions that point a user’s browser to an image hosted on a third-party server, as in-line linking and framing do, is not a display of the work by the linking site, though it may raise contributory liability questions.

Why were Google’s thumbnails fair use even though Google is a commercial company? The Ninth Circuit held that Google’s use was highly transformative because a search engine converts an image created for entertainment or aesthetic purposes into a pointer that directs users to information. The court said a search engine may be even more transformative than a parody because it puts the work to an entirely new use, and that this significant public benefit outweighed Google’s incidental commercial and superseding uses, especially since harm to Perfect 10’s cell-phone download market remained hypothetical.

Is the server test still good law? In the Ninth Circuit, yes. Hunley v. Instagram, LLC reaffirmed the server test in 2023 for embedded social media posts. But several Southern District of New York decisions, beginning with Goldman v. Breitbart in 2018, have rejected it as inconsistent with the Copyright Act’s text, so as of July 2026 the rule for embedding and in-line linking still differs by forum.