5th Circuit: Sets Aside Server Test Copyright in Embedded Content Cases

• The 5th U.S. Circuit Court of Appeals recently rejected the long-standing "server test" for online copyright infringement claims involving embedded content.
• The court ruled that Particle Media, operator of NewsBreak, did not infringe copyright by linking to news articles, but found the server test to be on "weak statutory footing."
• Instead of focusing on whether content is 'stored and served,' the 5th Circuit adopted a standard centered on 'transmitting the work' for public display infringement.
• The court also clarified that URLs can constitute "copyright management information" under the DMCA if they clearly convey statutory characteristics.
• The case was remanded to the district court for further proceedings consistent with the 5th Circuit's new legal interpretations.

By shifting the legal standard from whether content is 'stored and served' to whether it is 'transmitted,' the court has redefined the parameters for what constitutes a public display of copyrighted material online.

The 5th U.S. Circuit Court of Appeals, based in New Orleans, has recently issued a significant ruling that departs from the long-standing "server test" used to evaluate online copyright infringement claims involving embedded content. In a decision handed down last Thursday, the appellate court determined that Particle Media, the company behind the news aggregation platform NewsBreak, did not violate the Copyright Act by linking to news articles from various publications.

This pivotal ruling emerged from an interlocutory appeal in a case where Emmerich Newspapers had sued Particle Media for alleged copyright infringement. Emmerich Newspapers, which owns and publishes several news outlets, contended that Particle Media's practice of linking to its content constituted infringement. The central question before the 5th Circuit was whether the server test provided the appropriate standard for assessing a display infringement claim under the Copyright Act.

While the court ultimately found that Particle Media's actions did not infringe, it critically assessed the legal foundation of the server test itself. The 5th Circuit concluded that this test, which has guided courts in similar disputes, rests on "weak statutory footing" and opted to establish a different framework for analyzing display infringement in its jurisdiction.

The server test, originally established by the 9th U.S. Circuit Court of Appeals in San Francisco through its 2007 ruling in *Perfect 10 Inc. v. Amazon.com*, posits that a computer owner does not display electronic information if their system does not store and serve that information to a user. This holds true even if the owner employs in-line linking or framing techniques to present the content.

According to the 5th Circuit's analysis, the server test primarily focuses on the statutory definition of "display," which inherently requires the showing of a fixed work. This approach is predicated on the assumption that a work is always fixed on a server. However, the 5th Circuit has now shifted this focus, emphasizing the definition of "displaying a work publicly," which it interprets as requiring the act of "transmitting the work."

Despite this fundamental shift in legal interpretation, the 5th Circuit acknowledged that its new standard, while rooted in different statutory language, is likely to yield outcomes similar to those produced by the server test in many scenarios. This suggests a nuanced change in the legal reasoning rather than a complete overhaul of practical results for many online content aggregators.

Beyond the server test, the 5th Circuit also addressed another crucial question raised by Emmerich Newspapers: whether Uniform Resource Locators (URLs) can qualify as "copyright management information" (CMI) under the Digital Millennium Copyright Act (DMCA). The DMCA provides safeguards for CMI, which includes information identifying the copyright owner or the work itself.

The appellate court clarified that the DMCA does not inherently prevent URLs from being considered CMI. However, it stipulated that for a URL to meet this definition, it must clearly convey the specific characteristics mandated by the statute, taking into account the functional purpose of URLs. This nuanced stance leaves open the possibility for URLs to be protected under the DMCA in certain circumstances, depending on the information they communicate.

Following its comprehensive opinion, the 5th Circuit remanded the case involving Particle Media and Emmerich Newspapers back to the district court. The lower court is now tasked with conducting further proceedings that align with the appellate court's newly articulated standards and interpretations regarding both display infringement and the nature of CMI.

The 5th Circuit's decision to set aside the server test for copyright infringement claims marks a significant development for online content aggregation liability, particularly within its jurisdiction. By shifting the legal standard from whether content is 'stored and served' to whether it is 'transmitted,' the court has redefined the parameters for what constitutes a public display of copyrighted material online.

This ruling, which found that NewsBreak's linking practices did not infringe, provides a new framework for digital publishers and platforms that embed or link to external content. While the court noted that the practical outcomes might often align with the previous server test, the underlying legal rationale has fundamentally changed. This requires a careful re-evaluation of current practices for any entity involved in online content aggregation or embedding within the 5th Circuit's purview, ensuring compliance with the updated 'transmitting the work' standard for display infringement.

Lawyers advising clients on online content aggregation or embedding within the 5th Circuit's jurisdiction must re-evaluate potential copyright infringement liability, as the court has rejected the 'server test' in favor of a 'transmitting the work' standard for display infringement. This creates a different legal landscape for digital publishers and content platforms in the region, requiring a review of current practices to ensure compliance.

Source: Original reporting via American Bar Association Journal