During the case, ownership of Arriba Soft changed to Sorceron, the operator of the Internet search engine Ditto.com.

In addition to the display, a postage stamp size thumbnail image the user could also link to the full picture in a new web browser window.

2d 1116, granted summary judgment for search engine operator based on finding of fair use and owner appealed.

[3] In 2002, the Ninth Circuit United States Court of Appeals in San Francisco, California affirmed the District Court's holding that thumbnails were prima facie infringing Kelly's copyright, but that the fair use doctrine permitted the use of the thumbnails in the image index.

However, the Circuit Court overturned a portion of the lower court summary judgment ruling in favor of the defendant, holding that fair use did not permit the inline linking or framing processes that displayed Kelly's images in the context of Arriba's web site.

On denial of rehearing and withdrawing and superseding its prior opinion, 280 F.3d 934, the Court of Appeals, T. G. Nelson, Circuit Judge, held that operator's use of owner's images as "thumbnails" in its search engine was fair use.

[4] Kelly has posted online that after failure to reach a settlement, default judgment in his favor was obtained on the remaining issues on March 18, 2004.

With no one left to defend the case, Kelly managed to get a judgement against Arriba Soft Inc., an entity that no longer existed in any form.