News.com reports that Nude photo site wins injunction against Google. This could have a rippling affect on image search as we know it today.
Perfect 10, an adult photo site, has proven to the court that Google's image search thumbnail copies are a violation of U.S. copyright law. This past Friday, U.S. District Judge A. Howard Matz, ruled that Google has violated the law "by creating and displaying thumbnail copies of its photographs."
Google plans to appeal the case, but the main reason documented as to why Google lost the case is two fold. First, Google monetizes image search with AdSense of those sites that have pirated the images of Perfect 10. Second, Google has image mobile search, which enables users to save a downsized version of the image to the phone, that image is "similar to what Perfect 10 offers as a subscription service through U.K.-based Fonestarz" and could hurt Perfect 10's revenue and earnings.
Gary Price has posted the full text of Google/Perfect 10 decision, 48 pages, at ResourceShelf as a PDF.
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Get Google in Trouble Over Copyright Law.