• by Wendy Davis , Staff Writer @wendyndavis, May 17, 2007

A federal appeals court this week boosted Google's image search, vacating a trial court's injunction banning the search giant from displaying thumbnails of pictures owned by adult entertainment company Perfect 10.

The 9th Circuit found that the display of the thumbnails is probably a permissible fair use of the material, even if the images themselves are pirated. "We conclude that Perfect 10 is unlikely to be able to overcome Google's fair use defense and, accordingly, we vacate the preliminary injunction," the judges wrote.

In a footnote, the court added that the fact that Google is indexing and displaying results from sites that have themselves violated Perfect 10's copyright shouldn't change the outcome. "Google's inclusion of thumbnail images derived from infringing websites in its Internet-wide search engine activities does not preclude Google from raising a fair use defense," the court stated.

The case isn't over yet, however. Google still faces trial for copyright infringement and the opinion left open the possibility that Google still will be held liable.

Perfect 10 initially sued Google in late 2004, alleging that Google violated copyright laws by providing users with links to sites that illegally copied Perfect 10's photos. Later, Perfect 10 also made similar allegations against Amazon.

Legal pundits are still parsing the 9th Circuit's 48-page ruling, but preliminary reaction holds it's a victory for Google. "On balance, this opinion is much better for the search engines than the lower court opinion, so it's a mild win for them," writes Santa Clara University School of Law's Eric Goldman on his blog.

Jason Schultz of the Electronic Frontier Foundation, which weighed in with a friend of the court brief on Google's behalf, also deemed the case a victory. "While it leaves some questions open, the bottom line is that the Court upheld important policies of fair use and freedom online and resisted Perfect 10's plea to put copyright owners completely in charge of how and when search engines and other online intermediaries can provide their users with links to images."