Pinterest: Is It A Facebook Or A Grokster?

Pinterest

Copyright clouds are gathering around Pinterest. And that could make the dreamy image site an unlikely successor to other innovators — from Grokster to the Beastie Boys — who walked a fine legal line between sharing and theft.

In recent months, Pinterest’s soaring popularity has led media outlets to dub it the “next Facebook.” The site, which already has millions of users, has also won a 2011 start-up of the year award and significant venture capital. (To see who is using Pinterest, see this excellent account by my colleague Laura Owen).

Unfortunately for Pinterest, all the hype has also brought attention from another quarter: angry copyright owners. On sites like iStock, photographers are complaining that their pretty pictures are being used without permission in users’ collages. And to judge by Pinterest’s voicemail, the photographers are not the only ones upset. When I called the number listed for copyright complaints, a recording said the mailbox was full.

Pinterest said by email that it doesn’t disclose how many copyright complaints it receives. The company added that it actively responds to notices sent by email, and that it’s “building more tools to make it easier for rights holders to file a report.”

In the bigger picture, the copyright questions echo disputes from an earlier era that pit legal rules against new forms of culture. These include a long-running lawsuit over a short flute sample in the Beastie Boys hit ‘Pass the Mic’ (the Beasties won) and a 2005 Supreme Court decision that shut down music-sharing site Grokster.

For Pinterest, the legal issues are not cut and dry. On one hand, its notification scheme should grant it a “safe harbor” under copyright law. It is this law that protects sites like Facebook or YouTube (NSDQ: GOOG) from being sued when a user uploads copyrighted material.

But on the other hand, Pinterest’s business is based almost entirely on using images without permission — something that could lead it to lose its safe harbor protection in the same way that Grokster did.

This does not mean, of course, that someone will sue. A spokesperson for Getty Images, which licenses a wide variety of pictures, informed me that the company is “aware of the issue and [is] discussing it with Pinterest.”

Copyright holders may also fear a public relations fallout that would come with a lawsuit. For content owners, it’s one thing to label hip-hop artists and music fans as “thieves.” But it’s quite another when the content involves food and dress pictures — even the most hardened copyright visigoth would pause at denouncing a 16-year-old who borrows pictures to make a collage of her future wedding.

As for Pinterest, the copyright issues present not just a legal problem but a business one as well. Even if the company can implement a YouTube-like takedown system, users will balk if their pretty image boards become spotted with copyright removal notices. Collages are not much fun with pieces ripped out.

The ultimate solution is likely to be a licensing scheme in which image owners will let Pinterest users post pictures in return for sponsored pics or a royalty payment. The good news is that cash is already rolling in at Pinterest. LL Social reported on Tuesday that the company is quietly collecting commission fees by skimming the affiliate links that give third parties a cut of online sales. Spreading some of that money around will make Pinterest popular with copyright owners in no time.

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