Perfect 10, an adult-oriented website featuring images of nude women, recently won a preliminary victory in its efforts to stop Google from displaying thumbnails of its photographs as part of Google’s Image Search results. In its lawsuit, Perfect 10 alleged that Google’s Image Search directly infringed its copyrighted images by displaying images from Perfect 10’s official website as thumbnails and also contributorily and vicariously infringed its copyrighted images through in-line linking thumbnails of pirated Perfect 10 images to third party websites.

On February 17, 2006, U.S. District Judge A. Howard Matz for the Central District of California ruled that portions of Google’s Image Search feature likely violate U.S. copyright law. He granted Perfect 10’s request for a preliminary injunction and set a March 8, 2006 deadline for the lawyers from both sides to propose wording that would balance the rights of copyright holders with the value of helping people find information.

In granting the injunction, Judge Matz’s 48 page ruling emphasized that the “enormous public benefit” provided by Google’s image search did not trump copyright law. The court rejected Google’s defense that displaying thumbnails of the copyrighted images was “fair use.” Instead, the court found that Google likely directly infringed Perfect 10’s copyrights. Google made commercial use of the images by displaying ads along with search results. In addition, Google received AdSense advertising revenue from third party sites that displayed pirated Perfect 10 images despite a stated policy that prohibited AdSense ads on sites containing infringing material.

Judge Matz also stressed that Google’s Mobile Image Search, which permits handheld devices to save scaled-down images for future reference, undermined Perfect 10’s ability to license its images for sale to mobile phone users. The court found that these images were essentially the same size and quality as those Perfect 10 offered as a subscription service and would likely harm the market for Perfect 10’s subscription-based image sales.

The ruling included some goods news for Google. The court found that Perfect 10 was unlikely to succeed on it contributory and vicarious copyright infringement claims. The court rejected Perfect 10’s argument that the “framing” feature of the Google’s Image Search, which displays a thumbnail of the image above a rendering of the original page, constituted copyright infringement. Thus, the court held that Google was not responsible if users clicked on thumbnails that directed them to pirated, full-sized photographs displayed on third party websites. The ruling also upheld Google’s broader right to catalogue online images.

Reacting to the ruling, Google released a statement that it planed to appeal the injunction and predicted that the decision would have no effect on the “vast majority” of its image searches because only searches related to Perfect 10 would be affected.

The case has received widespread attention, in part, because the ruling appears to contradict an earlier Ninth Circuit decision, Kelly v. Arriba Soft Corp., 336 F.3d 811 (9th Cir. 2003). In that case, the Ninth Circuit decided the issue in favor of an image search engine over a photographer who claimed that the creation of thumbnails infringed his copyrighted images. Judge Matz, however, distinguished the Ariba Soft case from the suit brought by Perfect 10 based on Google’s receipt of advertising revenue from its activities.

The decision has also focused attention on Google’s legal battles over its Library Print Project, an effort to make libraries’ entire collections available for online searching. The ruling may strengthen arguments by authors and publishers that Book Search diminishes the market for their copyrighted material, thus overcoming Google’s fair use defense. The outcome of these lawsuits is still pending.