Search giant Google 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 Court Judge A. Howard Matz 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 alleged that Web surfers could find its copyrighted pictures of nude women for free by performing Google searches.
Matz ordered Google and Perfect 10 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 Google collects and displays photographs in the images portion of its search engine. Lawyers not involved with the case said it would have little impact 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 fallen afoul of copyright holders.
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,’’ said Pulgram. ‘‘Google did what everyone thought was legal.’’
Google appeared poised to win a key part of the lawsuit, which argued that Google 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.
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, not other images.
Judge Matz upheld previous rulings that simply displaying small copies of photographs is not a direct copyright infringement because the ‘‘thumbnail images’’ are no substitute for the full-size images. But in this case, two factors weighed in Perfect 10’s favor.
The key issue was whether or not the images displayed in search results would substitute for an existing market.
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.
But, several months after it sued Google, Perfect 10 struck a deal with a United Kingdom company, Fonestarz Media, to sell small, low-quality photographs — similar to Google thumbnails — for display on cell phones.
The thumbnails that had been ruled a ‘‘fair use’’ in previous cases suddenly became a replacement for the product Perfect 10 was selling.