Perfect 10, a publisher of sexually explicit magazines and Web sites, sued Google in 2004 for allegedly violating its copyrights, and the case quickly attracted wide attention not just for its adult subject matter but also for its possible impact on Internet copyright law. The issue of copyrighted material on the Web has assumed greater priority as videos, music and other proprietary material has flooded onto the Internet.

Three months ago, Google lost a copyright lawsuit brought by Belgian newspapers to remove their headlines and links from the Google News service. Google also decided to eliminate any mention of the newspapers from its search results but restored them this month with the publications' consent.

In the closely watched Perfect 10 case, a three-judge panel of the U.S. Court of Appeals for the 9th Circuit in San Francisco reversed the decision of a lower-court judge, who had blocked Google from showing the small images. The appeals court ruled that the thumbnails fell within a "fair use" exception in copyright law because they play a role in the search process and thus have a function different from that of the original photos.

"We conclude that the significantly transformative nature of Google's search engine, particularly in light of its public benefit, outweighs Google's superseding and commercial uses of the thumbnails in this case," Judge Sandra S. Ikuta wrote for the panel.

Perfect 10's case won support from the motion picture and recording industries, which have often complained that their copyrights are violated by Internet companies. Some groups advocating greater openness on the Web have lined up behind Google.

"We think this is a tremendous decision for the principle of fair use," said Art Brodsky, a spokesman for the Public Knowledge advocacy group. "It gives search engines and other useful services the ability to take advantage of computer technology in the search for and use of information."

Yesterday's ruling was not a complete victory for Google, because the judges directed the lower court to reconsider a separate finding in the company's favor. The judge had decided that Google was not liable for allowing Internet users to link from its search results to other Web sites that display photographs without copyright permission.

The appeals court opinion said, "There is no dispute that Google substantially assists Web sites to distribute their infringing copies to a worldwide market and assists a worldwide audience of users to access infringing material." The appeals court instructed the district judge to evaluate whether Google knew that unauthorized copies of Perfect 10's photos were being made available and failed to take steps to prevent it.

The judge was also told to make a similar assessment about Amazon.com, which was also sued by Perfect 10, alleging that its search engine links to thousands of copyrighted images.

Google had no immediate comment on the ruling.

Background ...

Google Infringes on Copyrights of Porn Magazine

AP, 2/22/06 - A federal court judge has concluded that an image search service run by Google Inc. infringes on the copyrights of adult entertainment company Perfect 10 Inc. by displaying small versions of its images in search results.

But U.S. District Court Judge Howard Matz said that based on evidence submitted at a preliminary injunction hearing, Google could not be held responsible when viewers click on the images and are directed to third-party sites that contain full-size images stolen from Perfect 10's Web site.

Matz ordered both sides to craft a narrow preliminary injunction that would respect Perfect 10's copyrights but not curtail Google's broader right to catalog and display online images.

The order was issued Friday and made public Tuesday. A trial in the case has not been scheduled. Mountain View-based Google said it would appeal any injunction ordered by the court.

Daniel Cooper, Perfect 10's general counsel, called the ruling a victory regarding the search portion of the case and said his company would prevail on the rest of the matter at trial.

"Once we get the evidence we are fighting hard to get, we're hopeful we will ultimately prevail on that aspect of the case as well," Cooper said.

Perfect 10, based in Beverly Hills, publishes a magazine and a Web site that sells access to thousands of photos of nude women.

The company sued Google in 2004 and Amazon.com Inc., which runs the A9 search engine, last year. The cases were consolidated. The court said it will issue a separate order in regard to Amazon, which licenses much of Google's technology.

"While we're disappointed with portions of the ruling, we are pleased with Judge Matz's favorable ruling on linking and other aspects of Google image search," Google spokesman Michael Kwun said.

"We anticipate that any preliminary injunction will have no effect on the vast majority of image searches and will affect only searches related to Perfect 10."

At issue is Google's search engine technology that displays thumbnail images in response to a search request.

When a user clicks on a thumbnail, the page splits into two frames. The top of the page displays a narrow band that includes the thumbnail image and a warning that the thumbnail "may be scaled down and subject to copyright." The band is hosted on computers owned by Google.

The lower part of the page is hosted by the third-party Web site that displays the full-size image.

Perfect 10 alleges that the display of the thumbnail is a direct violation of its copyright, and that the display of the larger image, even though it is hosted by a third-party Web site, constitutes a secondary copyright infringement on the part of Google.

Judge Matz ruled that Perfect 10 had submitted enough evidence to conclude that it would succeed in a trial on its claim of direct copyright infringement.

But he said Perfect 10 had not provided enough evidence to convince him that the company would likely prevail on the issue of secondary infringement at trial.

Background ...

Magazine Sues Google for Copying and Distributing Porn

Agence France-Presse, 8/25/05 - The publisher of a US men's magazine has sued Google, alleging that the Internet search giant is infringing on copyright by displaying thousands of pictures of nude women.

Perfect 10 magazine said in a statement that it was seeking a preliminary injunction against Google "to enjoin Google from copying, displaying and distributing Perfect 10 copyrighted images."

The magazine said it had already filed a complaint against Google in November 2004 claiming the Web giant "is displaying hundreds of thousands of adult images, from the most tame to the most exceedingly explicit, to draw massive traffic to its website, which it is converting into hundreds of millions of dollars of advertising revenue."

Much of Google's revenues come from so-called keyword searches that link advertisers to users by their search criteria.

Perfect 10 claims that "under the guise of being a 'search engine,' Google is displaying, free of charge, thousands of copies of the best images from Perfect 10, Playboy, nude scenes from major movies, nude images of supermodels, as well as extremely explicit images of all kinds."

Norm Zada, the founder of Perfect 10 magazine, claimed that most of the traffic to search engines is sex-related, and added: "Google's extraordinary gain in market cap from nothing a few years ago to close to 80 billion dollars is more due to their massive misappropriation of intellectual property than anything else."

Mr Zada said the outcome of the Perfect 10 suit has implications for other media, which he said lose revenues to Google through these practices.

"If all an infringer needs to avoid liability is to provide some sort of a 'search function,' that will be the end of intellectual property in this country," Zada said.

AFP has also sued Google for copyright infringement, claiming the search engine was displaying its news and photos without permission.

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