updated 2/21/2006 8:44:47 PM ET 2006-02-22T01:44:47

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.

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