Plaintiff Perfect 10, Inc., a California corporation, creates copyrighted adult entertainment products, including photographs. Perfect 10 owns and operates the subscription-based internet website perfect10.com. Defendant Yandex N.V., a Dutch holding company headquartered in the Netherlands, owns a family of companies under the “Yandex” brand. It does not itself own or operate any internet search engines or websites that host user-generated content. It manages its investments, including its subsidiaries, defendants Yandex LLC and Yandex Inc.
Subsidiary Yandex LLC is a Russian technology company which operates yandex.ru, Russia’s most popular search engine. Subsidiary Yandex Inc., a Delaware corporation located in Palo Alto, provides software-development services to Yandex LLC. Yandex Inc. does not own or operate any search engines or websites that host user-generated content. It does, however, own servers in Nevada, which hosted the search index for Yandex LLC’s international version of its search engine (yandex.com) for nine months in 2012–2013.
The yandex.ru search engine is Russia’s most popular search engine and the fourth largest search engine worldwide. It functions as follows. A user can query either a web or image search. When a user types in a query, the search engine references a search index, which is a database of all the words or images known to the search engine and their locations. When a user searches for an image by typing in text, the search engine analyzes the text and then determines whether a given image in its search index fits the user query.
Yandex.ru’s image search index is compiled by “crawlers” that periodically canvas the world-wide internet for images. It does not copy and store full-sized copies of the images it finds but rather distills and stores smaller, lower-resolution thumbnail-sized copies. The storage occurs on its servers. It reproduces its thumbnail copies on search results pages so that the user can determine which, if any, thumbnails are hits. The user can then click through to the third-party website that hosts the full-sized image.
Yandex.ru also allows users to place ads and click on ads. Because yandex.ru is a Cyrillic-language search engine, it typically crawls Russian-language websites, which are normally hosted outside of the United States. The yandex.ru index has always been hosted on Russian servers. Yandex.ru does not save data regarding where a user goes next after leaving the search-results page.
Yandex.com is a search engine that provides English and other Latin-alphabet based search results. Like yandex.ru, it offers both an image search and a web search and generates its search results in the same manner. It does not store full-sized copies of its images on its server but rather thumbnail copies. Like yandex.ru, yandex.com does not save data regarding where a user goes after leaving the yandex.com search-results page.
But there are differences. Unlike yandex.ru, yandex.com crawls for internet content using Latin-alphabet based terms, has no advertising anywhere on its site, and was physically hosted in the United States for a period of nine months, between June 2012 and March 2013 (whereas yandex.ru has always been physically hosted on servers in Russia). Outside of that nine-month window, yandex.com was hosted in Russia like yandex.ru.
Yandex LLC hosts several popular Russian-language services that host user-generated content. Narod.ru is a Russian-language site-hosting service where users can build and host their own websites (like WordPress). Fotiki.ru is a Russian-language photo-hosting service and online community similar to Shutterfly. Ya.ur is a blog-hosting service. Moikrug.ru is a social network for professionals. All of these services are hosted entirely on servers located in Russia.
Yandex does not track the IP addresses associated with user uploads or downloads on any of these services and so it does not know where — geographically — uploads are coming from or downloads are going to. Yandex LLC also does not track “right-click” user activity data on any of its user-generated content services, so Yandex LLC does not know if users right-click on images and save them on their computers, and thus does not know if users in the United States download the images it hosts.
Perfect 10 has brought direct, contributory, and vicarious copyright infringement claims against Yandex N.V., Yandex, Inc., and Yandex LLC. Perfect 10’s direct copyright infringement claims are as follows: (1) narod.ru (sitehosting) and fotki.ru (photo-hosting) services hosted full-sized copies of user-uploaded infringing Perfect 10 images; (2) yandex.ru and yandex.com hosted infringing thumbnail-sized copies of Perfect 10 images and linked them to Yandex-created pages that display similar fullsized versions of the images often adjacent to Yandex ads.
Perfect 10’s contributory copyright infringement claims are as follows: (1) Yandex.ru linked to third-party sites that hosted full-sized infringing copies of Perfect 10’s images; (2) Yandex.com linked to third-party websites that hosted full-sized infringing copies of Perfect 10’s images; (3) Yandex LLC’s user-generated content sites allowed users to upload and download infringing copies of Perfect 10’s images. Perfect 10’s vicarious copyright infringement claims against Yandex N.V. are based on the allegations of direct and contributory infringement purportedly committed by Yandex LLC and Yandex Inc.
According to defendants, in a series of DMCA notices sent to Yandex Perfect 10 identified 63,756 URLs from Yandex search results pages linking to allegedly infringing Perfect 10 images hosted on third-party websites. Perfect 10 furthermore asserted 1,474 acts of direct infringement based on Narod, Fotki, Ya.ru and Moikrug.ru’s hosting of Perfect 10 images uploaded by third-parties.
During discovery in this action, both Perfect 10 and Yandex have used widely-available geo-location tools. These software tools obtain IP addresses (the numeral labels assigned to computing devices) which can be then used to determine, among other things, the country in which device is located. This is important because legal liability is tied to the location of servers and storage media used to capture the images.
Perfect 10 has used geo-location tools to determine the owners and hosts of various websites that display allegedly infringing Perfect 10 images. Yandex used geo-location tools to obtain IP addresses and corresponding geo-locations of all 63,756 allegedly infringing URLs which Perfect 10 alleged yandex.com and/or yandex.ru linked to in their search results. Of the 63,756 alleged infringements to which yandex.com and/or yandex.ru linked in search results, Yandex contends that 51,959 of them were hosted on servers located outside of the United States and 50,485 concerned content hosted by third-party websites. The remaining 1,474 of the 51,959 URLs located outside of the United States concern content uploaded by Yandex users to Narod.ru, Fotki.ru, Ya.ru and Moikrug.ru accounts hosted by Yandex LLC, all of which are located on servers in Russia.
Yandex served discovery requests asking Perfect 10 to produce all documents showing the location of the direct infringements on which the contributory and vicarious claims are based. Perfect 10 directed Yandex to documents that claimed to show infringement hosted in the United States. Perfect 10 did not, however, produce evidence of direct infringement in the United States relevant to the location of the 51,959 alleged infringements hosted on servers outside the United States. Furthermore, Perfect 10 did not provide evidence of direct infringement in the United States relevant to the 1,474 alleged infringements based on user-generated content hosted by Yandex.
It is a well-established principle that, as a general rule, the Copyright Act has no extraterritorial application. Yandex argues that the evidence is undisputed that these Yandex services are, and have always been, hosted on servers in Russia. Therefore, Yandex argues, these foreign-hosted images are extraterritorial and not actionable under the Act. This order agreed.
Perfect 10 does not contest that the servers for these Yandex services are located in Russia. Rather, Perfect 10 objects that Fotki and Narod.Ru (and presumably Yandex’s other, similar sites) commit “direct infringement by display”. According to Perfect 10, when its images are hosted on servers located in Russia, Yandex violates Perfect 10’s “exclusive display right” because users in the United States could download them.
Perfect 10 supplies declarations establishing that a United States user could download Perfect 10 images from a Yandex server in Russia, but no evidence of actual downloads in the United States. This theory of liability was rejected. In a more plausible variation of this argument, Perfect 10 points out that when Yandex’s servers were located in the United States for a nine-month period, a Yandex.com image search performed by a server in the United States could have linked to a Perfect 10 image hosted on a Yandex server in Russia.
Perfect 10 argues that Yandex should not escape direct copyright liability by international distribution of its hosting and searching servers. This theory failed for lack of proof. Perfect 10 did not demonstrate that Yandex in fact stored or displayed full-sized copies of the Perfect 10 images on Yandex’s United States servers. Perfect 10 only submited that “Yandex suggests it keeps duplicate copies of images on all of its servers . . . so full-size Perfect 10 images may very well have been stored on yandex.com’s U.S. servers”.
There was no any evidence of an effort by Yandex to intentionally circumvent copyright liability through clever placement of its servers or through manipulation of the corporate form. Yandex’s hosting of full-sized Perfect 10 images on servers in Russia does not constitute direct copyright infringement in the United States. Yandex concedes that during the nine-month period from June 2012 to March 2013 when Yandex.com servers were located in the United States, Yandex stored thumbnail versions of Perfect 10 images within the territorial reach of the Copyright Act.
Yandex does not dispute that Perfect 10 owned (and owns still) the copyrights in the images it asserts, nor the basic proposition that Yandex’s use of the thumbnails violated Perfect 10’s display and distribution rights in these images. Yandex’s thumbnail versions served a different function than Perfect 10’s use: “improving access to information on the Internet versus artistic expression.”
Perfect 10 objected that the yandex.com image search linked the thumbnail directly to a larger version of the image, without including parts of the surrounding third-party web page, concentrating its fire on a technique known as “in-line linking.” When a user of the yandex.com search service clicked on one of the thumbnails, the full-size source image appeared in the same browser window.
Significantly, although it appeared as an integrated page, the full-size image was actually transmitted from the third-party website directly to the user’s computer — no copy was ever stored on yandex.com’s servers. Put differently, the user would continue to see the Yandex logo near the top of the screen (which came from the United States-based server) and would see on the rest of the screen a full-size image of the nude model (which came from the third-party server).
Perfect 10 objected that when the yandex.com thumbnail images in-line linked to fullsize versions, the full-size images were displayed beside commercial advertising. These objections are not supported by competent evidence. The summary judgment record does not show that any of the yandex.com thumbnails (as opposed to thumbnails from Yandex services in Russia) were used in connection with advertising. The storage of full-size images and use of advertising on the yandex.ru website in Russia is irrelevant here.
Perfect 10 next contends that Yandex is responsible for “billions of unauthorized views and downloads of its images from websites to which Yandex links Perfect 10 thumbnails”. Put differently, Perfect 10 is arguing that Yandex causes it market harm because Yandex provides a search service that links to third-party infringers. This argument is not substantiated by competent evidence. Perfect 10’s putative support for this contention consists of screen shots from third-party websites showing that links on those websites leading to Perfect 10 images had been viewed approximately 3.8 million times as of December 2012 (which was within the nine-month period that yandex.com servers were located in the United States).
Perfect 10 does not, however, provide evidence that any of those views were the result of yandex.com users clicking on thumbnails stored on yandex.com servers in the United States during that nine-month period. The simple fact that the thumbnail links were stored in yandex.com’s index and accessible on the internet does not compel a finding that those links were actually viewed or used.
In sum, there is no evidence in the record that Yandex.com’s use of thumbnail versions of Perfect 10’s image during a nine-month period had any effect on the market for those same images. Upon due consideration, order held that Yandex.com’s thumbnails stored on its servers in the United States for a nine-month period were fair use. Yandex moved for summary judgment on approximately 50,000 yandex.com and yandex.ru links identified in Perfect 10’s DMCA notices. The links connect to full-size versions hosted on third-party websites.
Using the same geo-location tools used by Perfect 10, Yandex demonstrated that the third-parties hosting the 50,000 full-sized images was extraterritorial, and Perfect 10 did not provide any evidence to the contrary. Therefore, Yandex argues, the fullsize images cannot constitute direct infringement under the Copyright Act, and the Yandex.com links to them cannot contributorily infringe. This order agreed. To this extent, summary judgment was GRANTED.
Perfect 10 submitted declarations from a private investigator, a web developer, and a graphic designer. In each one, the declarant states they were asked by Perfect 10 to use various Yandex services to download Perfect 10 images to computers located within the United States. Each declarant confirmed that this is “possible” and then explains the process by which they each accomplished the task.
These declarations do not change any of the conclusions herein. Perfect 10’s own downloads (and downloads by its agents) conducted as part of its investigation do not constitute direct infringements. Nor do any of the declarations rise to the level of expert testimony showing that any particular quantity of such downloads have in fact occurred. This order agreed that it is possible for someone in the United States to download infringing copies of Perfect 10 images using Yandex’s search engine.
The summary judgment record does not establish, however, that any such downloading has actually occurred. This order disposed of Perfect 10’s direct infringement claims in their entirety. A portion of Perfect 10’s claims for contributory and vicarious liability remain in the case and shall proceed to trial.
Perfect 10 moved for summary judgment that each Yandex entity is ineligible for the DMCA safe harbor under Section 512(c) during the period when they had no registered DMCA agent. Yandex’s responses to this contention are meritless and frivolous. Summary judgment in favor of Perfect 10 on this issue is GRANTED.