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Two Judges in S.D.N.Y. Hash Out Whether Instagram’s Terms and Policies Grant a Sublicense to Embed Others’ Photographs

By Jeff Hermes

In this article, I review three recent decisions from the U.S. District Court for the Southern District of New York analyzing the rights that photo sharing website Instagram obtains from its users and grants to other users with respect to the embedding of photos posted to the site. The decisions, which were all issued within ten weeks of one another, represent a remarkable back-and-forth over an issue important to how news organizations use photos posted to social media.

Three Decisions, Two Judges, One Court

On April 13, 2020, Judge Kimba Wood issued an order granting a motion to dismiss in Sinclair v. Ziff Davis, LLC, No. 18-cv-790 (S.D.N.Y. Apr. 13, 2020) ("Sinclair I"). Sinclair involves a copyright claim against website Mashable and its parent corporation over its embedding of a photo taken by plaintiff Stephanie Sinclair into an article about female photographers. Sinclair had posted the photo to Instagram; Mashable used Instagram's embedding function to display the photo after Sinclair rejected Mashable's offer to purchase a license.

Judge Wood ruled that, despite Sinclair's rejection, under Instagram's site terms and policies "Plaintiff granted Instagram the right to sublicense the Photograph, and Instagram validly exercised that right by granting Mashable a sublicense to display the Photograph." Sinclair I, slip op. at 4. In doing so, Judge Wood rejected several arguments raised Sinclair, specifically that: (1) Mashable's failed to attempt to obtain a license from Sinclair directly precluded a sublicense; (2) Instagram's terms and policies are complex and thus not subject to judicial notice; (3) the sublicense failed because Mashable was not an intended beneficiary; (4) a sublicense cannot arise from the interoperation of Instagram's various terms and policies; (5) Instagram's terms and policies are "circular," "incomprehensible," and "contradictory"; (6) Instagram violated the terms of its license from Sinclair by granting a sublicense; and (7) it was unfair for Instagram to condition use of its "public mode" on granting Instagram the right to sublicense. Id. at 5-7.

On June 1, 2020, Judge Katherine Failla of the same court denied a motion to dismiss on virtually the same issue in McGucken v. Newsweek LLC, No. 19-cv-09617 (S.D.N.Y. June 1, 2020). McGucken involves a copyright claim against Newsweek for its embedding of plaintiff Elliot McGucken's Instagram photo of a temporary lake created by rare rainfall in Death Valley into a news article about the phenomenon. Judge Failla found that, at the pleading stage, it was not clear Instagram had granted a sublicense to Newsweek.

Notably, Judge Failla reached a result contrary to Sinclair I while stating her agreement with Judge Wood's analysis in the earlier decision. Judge Failla stated that found Judge Wood's interpretation of Instagram's policies to be "well-reasoned"; however, she read Sinclair I as establishing no more than that Instagram's terms and policies give Instagram the right to sublicense its users' work through use of its embedding API. See McGucken, slip op. at 9.

This left open the possibility that, while Instagram was entitled to grant Newsweek a sublicense to McGucken's photo, it had not in fact done so. And Judge Failla found that this was the case: "Although Instagram's various terms and policies clearly foresee the possibility of entities such as Defendant using web embeds to share other users' content ..., none of them expressly grants a sublicense to those who embed publicly posted content." Id. at 9-10. Thus, she held, she could not determine that an explicit sublicense existed at the pleading stage. Id. She similarly found that no implicit license could be found on the face of the pleadings. Id. at 10.

Judge Failla arguably misread Sinclair I, which did indeed find that a sublicense was granted through operation of Instagram's terms without additional evidence. She might have been confused by the fact that Sinclair's arguments in the earlier case appear to have gone to the grant of rights to Instagram rather than Instagram's grant of rights to Mashable, but Judge Wood could not have reached the result she did in Sinclair I without finding that both a license and a sublicense existed.

But if Judge Failla committed an error in this respect, it would turn out not to be a meaningful one. On June 4, 2020, a spokesperson for Facebook (which owns Instagram) wrote an e-mail to news site Ars Technica essentially confirming Judge Failla's interpretation of the Instagram terms, stating, "While our terms allow us to grant a sub-license, we do not grant one for our embeds API[.] ... Our platform policies require third parties to have the necessary rights from applicable rights holders. This includes ensuring they have a license to share this content, if a license is required by law." Timothy B. Lee, Instagram just threw users of its embedding API under the bus, Ars Technica (Jun. 4, 2020).

Then, on June 24, 2020, Judge Wood granted a motion for reconsideration of her earlier decision. Sinclair v. Ziff Davis, LLC, No. 18-cv-790 (S.D.N.Y. June 24, 2020) ("Sinclair II"). The basis for her reconsideration was district precedent holding that a license must be explicit and that the terms of a governing contract must be clear in order to support dismissing a complaint on that basis at the pleading stage. Sinclair II, slip op. at 2-3, citing Ward v. Nat'l Geographic Soc., 208 F. Supp. 2d 429 (S.D.N.Y. 2002) and Agence Fr. Presse v. Morel, 769 F. Supp. 2d 295 (S.D.N.Y. 2011). On that basis, Judge Wood agreed with Judge Failla in holding that while Instagram's terms and policies established that Instagram had a right to grant sublicenses to embed photos, they were unclear as to whether Mashable had an automatic sublicense to use Sinclair's photo. Sinclair II, slip op. at 3.

Exploring Instagram's Policies

Notwithstanding the fact that Judges Failla and Wood appear to have harmonized their analyses of Instagram's terms and policies, the question remains: Are they right? As related by Judge Failla, Instagram's Terms of Use at the time said in relevant part:

"[W]hen you share, post, or upload content that is covered by intellectual property rights ..., you hereby grant to [Instagram] a non-exclusive, royalty-free, transferable, sub-licensable, worldwide license to host, use, distribute, modify, run, copy, publicly perform or display, translate, and create derivative works of your content (consistent with your privacy and application settings)."

McGucken, slip op. at 4. The court also pointed to relevant language in the site's Privacy Policy,

Instagram's Privacy Policy, which "applies to all visitors, users, and others who access the Service," provides that "other Users may search for, see, use, or share any of your User Content that you make publicly available through [Instagram], consistent with the terms and conditions of this Privacy Policy and our Terms of Use." ... In addition, "[s]ubject to your profile and privacy settings, any User Content that you make public is searchable by other Users and subject to use under our Instagram API." ... The Privacy Policy notes that once a user has "shared User Content or made it public, that User Content may be re-shared by others."

id. at 4-5, and its Platform Policy governing the use of the Instagram API,

Instagram's Platform Policy governs the use of the API. ... The Platform Policy states that the Platform is provided "to help broadcasters and publishers discover content, get digital rights to media, and share media using web embeds." ... However, the Platform Policy instructs users to "[c]omply with any requirements or restrictions imposed o[n] usage of Instagram photos and videos ... by their respective owners," and also prohibits users from "provid[ing] or promot[ing] content that violates any rights of any person, including but not limited to intellectual property rights." ... The Platform Policy provides that the Platform is licensed to users, but "User Content is owned by users and not by Instagram."

id. at 5.

In Sinclair II, Judge Wood focused on the language of the Platform Policy in finding a lack of clarity, stating,

The Platform Policy's statement that the API is intended to "help broadcasters and publishers discover content, get digital rights to media, and share media using web embeds" could be interpreted to grant API users the right to use the API to embed the public content of other Instagram users. But, that is not the only interpretation to which that term is susceptible.

Sinclair II, slip op. at 3.

But there is other language that bears on this issue. Without conducting an extended exegesis of the particular policies at issue, it is also notable that the Privacy Policy uses the permissive "may" rather than the potential "might" when it says "other Users may ... share any of your User Content that you make publicly available through [Instagram]" and that once a user has "shared User Content or made it public, that User Content may be re-shared by others." McGucken, slip op. at 4-5 (emphasis added). Of course, the Privacy Policy is in these instances addressed to the poster of content, not the embedder, and it is conceivable that "may" was somewhat sloppily used as a synonym for "might" in order to alert the poster about a potential use rather than to advise the poster of the existence of a sublicense.

Also relevant is the Platform Policy's statement that would-be embedders must "[c]omply with any requirements or restrictions imposed o[n] usage of Instagram photos and videos ... by their respective owners." McGucken, slip op. at 5. This seems to indicate that the burden is on content owners to impose those restrictions, with the default being permission to embed. But that interpretation suggests that the "may" in the Privacy Policy should be read to mean "might," because then the Privacy Policy serves as a call to action to let content owners know that they need to do something if they don't want embedding to occur. Conversely, if "may" means "are allowed to," then the Privacy Policy is communicating to content owners that they don't have a choice as to whether others embed their content, which is arguably inconsistent with the API Platform Policy suggesting that owners can impose whatever restrictions they choose.

Under the circumstances, it is not surprising that Judges Failla and Wood decided to kick the can down the road on the existence of an explicit license. That leaves open the possibility, however, that there was an implied sublicense from Instagram to embedders. The embed function is made available without restriction and is, as the Platform Policy says, intended to allow users to share content. Moreover, users are not told to seek permission in advance but that they must comply with any restrictions that the owners of the content – not Instagram – may impose. Until June 2020, Instagram did not give users any sign that their widespread embedding of content was anything other than part of how the site was supposed to function. The overall message had been that Instagram intended and indeed wanted people to embed content from the site unless specifically told not to.

The existence of an implied sublicense was not given thorough consideration in either Sinclair or McGucken. Judge Wood did not discuss the issue at all in either Sinclair I or II. Meanwhile, Judge Failla's brief discussion cited only to cases discussing implied licenses from the owner of content rather than implied sublicenses. McGucken, slip op. at 10, citing SHL Imaging, Inc. v. Artisan House, Inc., 117 F. Supp. 2d 301 (S.D.N.Y. 2000) and SmithKline Beecham Consumer Healthcare, L.P. v. Watson Pharmaceuticals, Inc., 211 F.3d 21 (2nd Cir. 2000). These earlier implied license cases turned on the knowledge and intent of an author in creating a work, see SHL Imaging at 317 ("An implied license can only exist where an author creates a copyrighted work with knowledge and intent that the work would be used by another for a specific purpose[.]"), when the author's state of mind is irrelevant after explicitly granting another party the ability to sublicense at will.

But the existence of an implied sublicense is circumstance-dependent, and so leaving that issue to summary judgment would also not be unusual. Moreover, now that Facebook has directly stated that it is not granting a blanket sublicense, it would likely be impossible to find an implied sublicense moving forward. That does not necessarily mean that Newsweek and Mashable could not succeed on that argument with respect to their past conduct, given the signals that Instagram had previously been sending, but it could put them in the position of needing to remove embedded content from their sites if their other arguments fail.

Are News Organizations Now Repeat Infringers?

Facebook's recent public statements may be irrelevant to the determination of Sinclair and McGucken if the court ultimately finds that an explicit license exists on the face of Instagram's policies (though of course Facebook could change those policies to match its public statements). But these statements also raise the possibility of another attack that could be directed towards news organizations who routinely embed content: namely, the invocation of repeat infringer policies under the Digital Millennium Copyright Act.

In order to enjoy DMCA immunity from copyright infringement lawsuits based on the conduct of their users, platforms like Instagram must adopt and "reasonably implement" a policy for terminating users who repeatedly infringe others' copyrights. 17 U.S.C. § 512(i)(1)(A). Facebook's statement this month that it does not grant an automatic sublicense potentially places any news outlet that uses unauthorized embeds from Instagram in the position of being a repeat infringer. This would allow content owners to complain to Facebook and potentially result in the news outlet being kicked off of Instagram.

Whether Facebook/Instagram accepts those complaints would depend in part on whether it applies a Ninth Circuit or Second Circuit copyright analysis. If it were threatened with a contributory or vicarious infringement lawsuit based upon users' embedding, Facebook as a California-based company would likely argue that the suit should be governed by Ninth Circuit law. This would allow Facebook to argue that its users' conduct was not infringing under the so-called "server test," which is based on the idea that embedders are not copying or displaying content but only linking to where that content appears on a third party's servers. See Perfect 10, Inc. v. Amazon.com, Inc., 487 F.3d 701, 715-18 (9th Cir. 2007) (applying server test in display right case). Thus, the argument would run, there should be no liability to flow back to Facebook.

But the server test has not yet been accepted in the Second Circuit. To the contrary, it was explicitly rejected by Judge Katherine Forrest of the Southern District of New York in Goldman v. Breitbart News Network, LLC, 302 F. Supp. 3d 585 (S.D.N.Y. 2018). With that split between the jurisdictions, it is hard to imagine a platform putting its DMCA protection at risk by disregarding New York rulings like the ones discussed in this article when implementing a repeat infringer policy.

Facebook arguably left open a potential jurisdiction-by-jurisdiction approach in its public statement when it said, "Our platform policies require third parties to have the necessary rights from applicable rights holders. This includes ensuring they have a license to share this content, if a license is required by law" (emphasis added). Facebook is not saying one way or another whether a license is required, and it is possible a license could be required in some cases (or places) and not others. That, however, would put Facebook in the unenviable position of needing to do a choice-of-law analysis to evaluate claims of infringement unless it applies the most restrictive alternative across the board.

Conclusion

These decisions are likely to be frustrating for media outlets seeking a way to use photos they are unable (or unwilling) to license directly. A fair use argument remains a possibility, although in McGucken Judge Failla rejected Newsweek's fair use argument at the motion to dismiss stage based on the traditional four-factor analysis. Slip op. at 10-22.

Meanwhile, both of these cases are overshadowed by the result in Goldman. Indeed, both Sinclair and McGucken may be viewed as cases that follow from Goldman, calling into question the next most powerful defense besides applying the server test. The argument that a news outlet has an automatic sublicense depends on the policies of a specific website and is thus not quite as clean as the server test argument (which applies to all embedding regardless of whether material is sourced from Instagram, Twitter, or some other platform). However, it is still a fairly straightforward defense that is not as dependent on balancing tests or factual variations as arguing fair use, and could support a general practice of embedding so long as a news organization watches for changes in platform terms of service. Should both the server test and license test ultimately fail, negotiating licenses with photographers might well be more appealing than risking the vagaries of a fair use case.

 
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