German court: Google Image thumbnails infringe on copyright

By John Timmer

As much as people complain about the challenges of balancing copyrights and fair use in the US, overseas courts have been happy to provide examples that remind us that some aspects of US copyright law are actually fairly liberal. The latest such reminder comes courtesy of a case in Germany that revisits an issue that appears settled in the US: the right of image search services to create thumbnails from copyrighted works to display with the search results. The German courts have now determined that this is not OK in Germany, where Google has just lost two copyright suits over image thumbnails.

This is not the first tussle of this sort that Google has been involved with. The company had initially lost a copyright case based on its creation of thumbnails from porn site Perfect 10, but ultimately prevailed on appeal in that case. Although the appeal did not clarify all the legal issues, it did determine that the creation of thumbnails fell within the exceptions granted by US copyright law for transformative use.

The search giant hasn't always had good luck in European courts, however. Last year, Google lost a legal tussle with a Belgian newspaper trade group, and was left in the awkward position of seeing the excerpts it uses for Google News content be declared a violation of copyright. Negotiations have gotten the Belgian papers' content back in Google searches, but the case is still very active; Google is appealing, while the newspapers are looking to extract a healthy fine.

The latest case to be decided combines aspects of both of these others: image thumbnails and European courts. In this case, the venue was Germany, where Google was being sued for creating thumbnails from the copyrighted materials of a photographer and a comic artist. According to Bloomberg News, Google lost both of these cases, with courts declaring that shrinking images down to thumbnail size doesn't create a new work, and thus displaying the thumbnails is a violation of copyright.

Google was, not surprisingly, unamused. A Google spokesperson told paidContent, "Today's decision is very bad for Internet users in Germany, it is a major step backwards for German e-business in general, and it is bad for the thousands of websites who receive valuable traffic through Image Search and similar services."

Although copyright holders can easily let search engine indexing bots know what files to avoid, the ruling apparently leaves them with no legal need to do so. Instead, the burden lies on the search engines, which apparently need to determine what images they discover are subject to copyright. Given the impossibility of doing so in an automated fashion, the ruling is likely to see Google radically alter its image search offerings in Germany.

Google is unlikely to be the only one with this problem, too, as those who initiate these lawsuits rarely stop at one search engine. Perfect 10 later went after Microsoft despite having part of its case against Google thrown out. Meanwhile, the Belgian newspapers, fresh off their Google victory, went after the EU itself. It seems likely that it will be a matter of time before other image search services get served in Germany.

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America May Get Broadband for Free, But Porn Will Cost You

Stacey Higginbotham

Last Friday afternoon, the FCC issued a report putting to rest worries about interference from a free wireless broadband service using the AWS-3 spectrum, paving the way for an auction sometime next year. However, opponents of the auction, including T-Mobile, aren’t going to give up without a fight.

The original proposal for the spectrum, put forth two years ago by a Kleiner-backed company called M2Z Networks, had asked the FCC for use of the spectrum in the 2155-2175 MHz band to create a wireless broadband service. M2Z offered the FCC 5 percent of its revenue in exchange for the spectrum. It also pledged 25 percent of its network for free broadband service at lower speeds. The company would charge more for faster speeds and would build out 90 percent of its network in 10 years at a cost of $2 - $3 billion.

In June the FCC issued its own rulemaking proposal, which hewed closely to the M2Z proposal. The FCC proposal would also restrict material that could be deemed obscene and “harmful” to children between ages 5 and 17 (i.e., porn) on the resulting wireless broadband network. Update: An FCC spokesman says that aspect of the proposal will likely get tweaked during the rulemaking process to allow adults to opt-out of such filters.

T-Mobile had argued against the potential auction and use of the spectrum on the grounds that it would interfere with services deployed on the neighboring AWS-1 spectrum, which T-Mobile leased for $4 billion. But it appears that FCC Chairman Kevin Martin, isn’t buying into the argument now that T-Mobile’s filters have proven to be ineffective at keeping out content from the nearby spectrum. “You shouldn’t have equipment that reads spectrum you don’t own,” Martin told Dow Jones.

Damn! Who is this reasonable, carrier-smacking FCC chair? It’s nice to see a potential wireless broadband competitor making it out into the world, but the content limitations should give everyone pause. A whole mess of litigation will stand between this network and real use, as any government-created wireless broadband network should probably be free of censorship.

Meanwhile, a mess of litigation might still stand between an AWS-3 auction and the creation of a network, as T-Mobile seems inclined to release the lawyers if the FCC goes forth with its proposal. The company issued a statement from Kathleen Ham, VP of federal regulatory affairs, via email, but didn’t answer my question about suing to protect its interests directly. The statement read:

While we are glad the FCC engineers finally put their observations on the record, we have serious concerns that their analysis is flawed and relies on factors that were not the subject of the testing, while ignoring other important data in the record. In light of this, we are concerned that the result was predetermined unfairly. We and the multiple parties concerned about interference will strongly urge the FCC to provide for sufficient time for comment on their report before any FCC action on these rules.

I may have to eat my words about the unliklihood of wireless broadband competition, but I’ll wait until the networks are up and devices are out before admitting defeat.

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Bush signs controversial anti-piracy law

WASHINGTON (Reuters) - President George W. Bush signed into law on Monday a controversial bill that would stiffen penalties for movie and music piracy at the federal level.

The law creates an intellectual property czar who will report directly to the president on how to better protect copyrights both domestically and internationally. The Justice Department had argued that the creation of this position would undermine its authority.

The law also toughens criminal laws against piracy and counterfeiting, although critics have argued that the measure goes too far and risks punishing people who have not infringed.

The Recording Industry Association of America and Motion Picture Association of America backed the bill, as did the U.S. Chamber of Commerce.

"By becoming law, the PRO-IP Act sends the message to IP criminals everywhere that the U.S. will go the extra mile to protect American innovation," said Tom Donohue, president and CEO of the U.S. Chamber of Commerce.

Counterfeiting and piracy costs the United States nearly $250 billion annually, according to the U.S. Chamber of Commerce.

Rick Cotton, general counsel for NBC Universal, said the bill would give movie and music makers more tools to fight what he called a "tidal wave" of counterfeiting and piracy of everything from medical devices to automobile parts to media by organized crime.

"That is at the core of what this discussion is about," he said. "It is not about teenagers."

Cotton said he did not expect an IP czar to be named before Bush's term ended in January.

Richard Esguerra, spokesman for the Electronic Frontier Foundation, said he was relieved to see lawmakers had stripped out a measure to have the Justice Department file civil lawsuits against pirates, which would have made the attorneys "pro bono personal lawyers for the content industry."

But the advocacy group Public Knowledge had argued that the law went too far, especially given that fair use of copyrighted material was already shrinking.

Public Knowledge particularly opposed a measure that allowed for the forfeiture of devices used in piracy.

"Let's suppose that there's one computer in the house, and one person uses it for downloads and one for homework. The whole computer goes," said Public Knowledge spokesman Art Brodsky.

Brodsky argued that, at best, the bill was unnecessary because the recording and movie industry had the right to take accused infringers to court.

"There's already lots and lots of penalties for copyright violations," he said. "They've got all the tools they need."

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