Google’s Image Search Set Back

Search giant Google Inc. lost a court fight Tuesday in a copyright case that highlights the challenge of building a business on the frontier of technology and the law.

U.S. District Judge A. Howard Matz in Los Angeles ruled that Google was likely to lose at least part of a copyright infringement case filed by a publisher of adult magazines and websites. Perfect 10 Inc. alleged that Google users could find for free its pictures of nude women, for which it normally charges. The search engine links to such images posted improperly on other websites.

Matz said he planned to grant Perfect 10 a preliminary injunction and asked the two companies to negotiate an agreement by March 8. That could include requiring Google to block Perfect 10 images from its searches.

If upheld, the judge’s preliminary ruling could throw a kink into the way Mountain View, Calif.-based Google collects and displays photographs in the image portion of its search engine. Lawyers not involved with the case said it would have little effect on Google’s overall business, which generated $6.1 billion in revenue last year.

“This is a real setback for Google,” said copyright lawyer Laurence Pulgram, “but it’s not a business model threat or anything close to it.”

Nonetheless, the case demonstrates how technological change is outpacing the law.

Google in particular has tiptoed the line separating the “fair use” of copyrighted material and copyright infringement. The Internet giant has sometimes upset copyright holders, most recently getting sued by book publishers for making digital copies of books.

Matz’s ruling “narrows the concept of fair use for search engines, but it also points out how variable that doctrine is and how little certainty a company has in relying on it,” Pulgram said. “Google did what everyone thought was legal.”

Google appeared poised to win a key part of the lawsuit, which argued that the company was liable for the infringement of every website it linked to that contained copyrighted images. Matz said Google differed from file-sharing networks that encourage copyright infringement and called it unlikely that Perfect 10 would win its broader claim. He said he would deny its request for a preliminary injunction over that claim.

Had Matz ruled differently on that point, “a huge part of the World Wide Web would be suddenly vulnerable to legal attack,” said Fred von Lohmann, an attorney for the Electronic Frontier Foundation.

Google lawyer Michael Kwun said the company was “disappointed with portions of the ruling” but said any preliminary injunction would affect only searches related to Perfect 10.

Matz upheld previous rulings that displaying small copies of photographs is not a direct copyright infringement.

In an earlier case, the courts found that search engines could display full images as a “fair use” because these digital images didn’t replace the market for the photographer’s pictures.

In the Google case, a key issue was whether images displayed in search results would substitute for an existing market.

Several months after it sued Google, Beverly Hills-based Perfect 10 struck a deal with Fonestarz Media in Britain to sell small, low-quality photographs -- similar to ones found on Google -- for display on cellphones. The images that had been considered a “fair use” became a replacement for the product Perfect 10 was selling.

“There’s no reason for anyone to purchase those images from us when they can get them from Google for free,” Perfect 10 lawyer Daniel Cooper said.