Back in November 2004, Perfect 10 lobbed a complaint at Google, asserting that the search engine should be liable for indexing infringing images that others had posted. Yesterday, the California Central District issued an order (local copy) that's a mixed bag, but gets a lot right in its description of how copyright works on the web.

The court grants in part and denies in part Perfect 10's motion: it finds Google's inclusion of thumbnails of P10 images infringes, but the inclusion of links to infringing sites or the inline framing of infringing sites do not. First the good: The court holds that linking to infringing sites does not subject Google to liability, even if Google makes money from some of those sites via AdSense. Users visiting infringing sites via Google are not direct infringers, the court says.

It also holds that showing third-party pages inline, as Google image search does via frames when a user clicks a thumbnail, does not count as an infringing "public display" by Google. These results make sense. The infringement, if any, takes place on third-party sites and the search engine should not be held liable for their activities. Most warming to my heart, the court found it entirely unnecessary to reach the question of DMCA safe harbors, for there was no liability against which Google needed harboring.

The court is less solid on its analysis of Google's thumbnailing, there finding that the result should diverge from the factually similar Kelly v. Arriba Soft because Google's AdSense made the search more "commercial" and because P10 had licensed some thumbnails to Fonestarz (after filing suit, natch), to show effect on the market. The court left it to Google and P10 to compromise on an injunctive order. Google plans to appeal.