Analyst Report: Pinterest reawakens Napster-style debate over copyright


Every once in a while, a new Web phenomenon bursts on the scene: a hugely popular new service that allows users to aggregate content and share with their social graph but at the same time raises all kinds of issues around copyright infringement. Not long ago, the new kid on the block was Tumblr, which went from a small blogging platform to a behemoth with more than 15 billion page views per month. Today the phenomenon is Pinterest, a site that allows users to easily “pin” or share Web pages and images that they like from around the Web. And it has raised all the same questions about the legality of what it allows and whether the site or its users bear the ultimate responsibility for the content that appears there. Unfortunately, this debate seems unlikely to be resolved anytime soon.

Just as Tumblr allows users to re-post or re-blog something they like on their own Tumblr blog, Pinterest makes it easy for users to “re-pin” content they see somewhere else on their own pages, one of the features that has helped content “go viral” in a hurry. And the growth that Pinterest has seen over the past year has been nothing short of eye-popping: According to a chart in Fortune magazine, while Tumblr took 30 months to reach 17 million registered users and Twitter took 22 months, Pinterest hit that level in just nine months this March. Major media players such as the Wall Street Journal are now using the service, which CEO Ben Silbermann and a friend started in 2008 (Silbermann’s wife came up with the name over dinner), and in February the site drove more traffic to websites than Twitter, Google+ and LinkedIn combined.

Sharing of copyrighted content raises legal red flags

Even as it was becoming a huge international hit, however, Pinterest was raising red flags for some when it came to how it handled the content that was being pinned on users’ sites: Kirsten Kowalski — a photographer who is also a lawyer — said that when she read the company’s terms of service she became alarmed and immediately removed all the content she had posted there, for fear of becoming embroiled in a copyright lawsuit. That’s because the Pinterest terms of service not only gave the site a “perpetual, worldwide” license to use any content pinned by users in any manner the company saw fit but also put the legal responsibility for any infringement solely on the user. As Kowalski said,

As Kowalski and some other observers have noted, Pinterest’s behavior isn’t really that different from plenty of other Web and Internet services that have gotten into hot water, including Napster, where individual users were ultimately sued for millions of dollars for downloading music through the file-sharing service. Although the site requires members to only upload content to which they own the rights, the vast majority of the material that gets pinned to the service probably comes from elsewhere, whether it’s photos on a shopping site or from a magazine or pictures that photographers have shared on their respective websites — and that is a serious risk from a legal perspective.

In recent weeks, Pinterest has taken a number of steps to try to get on the right side of copyright law: It released some code that site owners could use to prevent their photos or other content from being pinned to the site, and it made it easier for people to flag content on Pinterest as being a copyright violation. The service also changed its terms to remove the part about selling or licensing users’ content (something the company says it never planned to do anyway), made it more clear that users should be aware of who owns the rights to the content they are sharing, and said it would do everything it could under the Digital Millennium Copyright Act to remove illegal content as soon as possible.

The fair-use test is not an easy one to apply

Unfortunately for Pinterest, even those changes may not insulate the company (or its users) from copyright infringement allegations and potential lawsuits. YouTube takes a similar approach — requiring users to vouch that they own or have rights to the content and removing videos quickly if a content owner protests that they are infringing — but it has been the target of multiple lawsuits from movie studios and others, and so have users. Megaupload, the file-hosting and file-sharing service that was raided by the FBI and charged with multiple counts of infringement earlier this year, has argued that it also took all the steps required by the DMCA when it comes to hosting copyrighted content, and yet it faces criminal fraud and conspiracy charges.

The big issue for a content-hosting service of any kind, whether it’s YouTube or Pinterest or Tumblr, is that a certain amount of sharing is permissible under copyright law, thanks to the “fair use” exemption, which gives users and Web companies a get-out-of-jail-free pass if their behavior passes the fair-use test. For example, the courts have handed down several rulings involving images, including one that found Google not guilty of infringement for using thumbnail photos in its search results. But as more than one person has noted, most Pinterest users don’t post thumbnails: They post the entire thing.

That distinction is important, because the fair-use test is what lawyers call a multifactor test, meaning judges look at a series of factors and then weigh them all in order to reach a conclusion. In the case of fair use, there are four factors:

  • The “purpose and character of the use.” Typically the courts have found that fair use applies when the user who infringes the copyright is using the work in an artistic or “transformational” way.
  • The “nature of the copyrighted work.” If the original is a work created for sale, the courts have tended to be more harsh on copyright infringement, as opposed to when it was created for some other purpose.
  • The “amount and substantiality” of the portion used. This applies to whether a user who copies or distributes the original uses the entire work or merely a small part (such as a portion of a photo or an excerpt from a book).
  • The “effect of the use upon the potential market.” In other words, whether the copy is likely to convince some users who might otherwise have paid for the original not to bother.

The law continues to lag behind the reality of the Internet

The difficulty with all of those factors, of course, is that they can be interpreted in so many different ways. Does someone pinning a photo to her page help the original creator or harm the ultimate market for his work? Is a product photo pinned to a user’s page a portion of the overall work (i.e., a catalog of product shots), or is it the entire image? And if Pinterest made it more explicit that users were commenting on the photos and other content they were sharing — instead of just posting it verbatim without any comment — would that help in any subsequent legal case, because it might look more like commentary (and therefore a transformative use) rather than plain old copyright infringement?

No one really knows the answers to those questions, but they could become very important as the site grows. Services like Napster, YouTube and Tumblr have all dredged up these same kinds of issues in their time. Some have managed to remain in business, while others have had to shut down, in many cases because they couldn’t afford an expensive legal fight (video-sharing site Veoh is a good example). Pinterest is doing all it can to bolster its legal defenses with the changes to its terms of service and more tools to report infringement, but the bottom line is that the legal system is still trying to catch up to what the Internet makes possible. Until that is resolved, virtually every Internet-powered content-sharing service is at risk.

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