• by Wendy Davis , Staff Writer @wendyndavis, April 6, 2007

In a closely watched case, Google and Agence-France Presse have entered into a licensing agreement to settle a lawsuit brought by AFP. The settlement allows Google to link to AFP stories and display some of the wire service's content. The financial terms weren't disclosed.

AFP sued in March 2005 in federal court in Washington, D.C., claiming that Google violated AFP's copyright by displaying headlines, blurbs and other material on Google News. In its original lawsuit, AFP asked for an injunction and $17.5 million in damages.

The settlement marks at least the second time Google and a large news company have come to terms. Last August, Google and the Associated Press also entered into a licensing agreement.

But neither settlement creates a legal precedent, so it's still not clear whether Google and other Web companies violate U.S. copyright law by publishing other news companies' photos, headlines and the like.

Meantime, Google faces copyright challenges on several fronts. In addition to Viacom's suit against YouTube, Google continues to fight a case brought by Perfect 10, an adult entertainment company. Perfect 10 sued the search giant in 2004 for allegedly displaying thumbnails of images owned by Perfect 10 and providing users with links to sites accused of illegally copying Perfect 10's photos. Google lost in the trial court, but is currently appealing to the 9th Circuit.