Links & Law - Information about legal aspects of search engines, linking and framing

Hyperlink & Search Engine Law News  Decisions & Court Documents Worldwide Legal Resources (Hyperlink & Search Engine Law Articles) Linking Law Cases Search Engine Law Publications by Dr. Stephan Ott Technical    Background


Update 53: December 12, 2007

1. Spain: Complaints over mixing search results and ads

The Australian Competition and Consumer Commission (ACCC) accuses Google of inadequately distinguishing between its sponsored links and the normal "organic" search results (see Update 51). The case will be heard in the Federal Court June 23, 2008.

Same problem in Spain: The Federation of Consumers in Action (FACUA) filed complaints with several government ministries (the National Consumer Institute, the Spanish Office of Patents and Trademarks, the Ministry of Health and Consumer Affairs ministry of the region of Madrid) against Yahoo and Google claiming that the ads aren't adequately distinguishable from the search results. The group also criticizes the use of trademark protected terms as keywords. According to the group, one third of telecommunications companies, two thirds of travel agencies and 20 percent of the banking entities studied used the names of their competitors to advertise on Google.

  • November 19, 2007: Australia sets date for Google keyword case, ZDNet:
    "The Australian Federal Court has set a hearing date for the Australian Competition and Consumer Commission's allegations against Google of misleading and deceptive conduct."


2. Austrian study: Google is creating dangerous monopolies and has to be stopped!

According to an Austrian university study (187-pages PDF) Google is creating unacceptable monopolies that will allow it to control information flows and invade privacy.

Two of the conclusions of the study are:

  • "Google can use its almost universal knowledge of what is happening in the world to play the stock market without risk: in certain areas Google KNOWS what will happen, and does not have to rely on educated guesses as other players in stock market have to. This is endangering trading on markets: by game theory, trading is based on the fact that nobody has complete information (i.e. will win sometimes, but also loose sometimes). Any entity that never looses rattles the basic foundations of stock exchanges!"

  • "Google’s open aim is to “know everything there is to know on Earth”. It cannot be tolerated that a private company has that much power: it can extort, control, and dominate the world at will."

According to, a Google spokesman said in a statement: "These allegations are premised on numerous inaccuracies, conspiracy theories and fundamental misunderstandings about Google's products and services. They're completely without foundation and, frankly, a little strange.''


3. USA - Search Engines and the Global Online Freedom Act of 2007

The Global Online Freedom Act of 2007 was approved in a unanimous voice vote by the Foreign Affairs Committee. The bill seeks to "prohibit US internet companies from cooperating with repressive regimes that restrict information about human rights and democracy on the internet and use personally identifiable information to track down and punish democracy activists."

Under § 202 of The Global Online Freedom Act of 2006, businesses that provide search engine services would be prohibited from altering the operation of the search engine with respect to “protected filter terms” at the request of the governments of designated Internet-restricting countries like China, or in a manner that would
be likely to produce different search results for users accessing the service from within the designated countries.This requirement was removed from GOFA in June 2007.
Under § 203 of The Global Online Freedom Act of 2007, businesses providing search engine services would only be required to report to a newly-created Office of Global Internet Freedom the terms and requirements for filtering that are specified to them by the governments of designated countries.


SEC. 203. Transparency regarding search engine filtering (Global Online Freedom Act of 2007)

    Any United States business that creates, provides, or hosts an Internet search engine shall provide the Office of Global Internet Freedom, in a format and with a frequency to be specified by the Office, with all terms and parameters used to filter, limit, or otherwise affect the results provided by the search engine that are implemented--

      (1) at the request of, or by reason of any other direct or indirect communication by, any foreign official of an Internet-restricting country; or

      (2) to comply with a policy or practice of restrictions on Internet freedom in an Internet-restricting country.


SEC. 202. Integrity of search engines (Global Online Freedom Act of 2006)

    Any United States business that creates, provides, or hosts any Internet search engine may not alter the operation of such search engine with respect to protected filter terms either--

      (1) at the request of, or by reason of any other direct or indirect communication by, of a foreign official of an Internet-restricting country; or

      (2) in a manner intended or likely to produce different search engine results for users accessing the search engine from within an Internet-restricting country as compared to users elsewhere.


4. Search Engine Law Article: Green light for search engines to use thumbnail images?  

The times, in which search engines have only provided a search for text-based websites have long passed. Market leader Google e.g. provides a sophisticated mix of features, enabling its users to search for videos, blogs, products, scientific articles and pictures. Especially the last service has lead to several lawsuits in the USA and in Germany. Users will only embrace a visual search engine, if they get a good first impression of the pictures within the search results. As it is not possible to effectively describe a visual image with plain text to the benefit of a user, thumbnail images come into play. In a process called crawling search engines automatically index pictures. They download a copy of each image they find on the internet to its servers and convert it into a small low resolution version of the full file, the so called thumbnail. In response to a search engine user's textual query, the search engine then produces a display of relevant thumbnail images.

Some content owners call this behavior a violation of their copyright. Search engines should not be permitted to display their content without their explicit permission. If this view prevails and courts stop the use of thumbnails, visual search engines would loose all of their attractivity to users and would practically become useless. So when considering the legality of thumbnails keep in mind this question puts the whole business model of visual search engines at stake. 

This article outlines the key findings of courts in the USA and in Germany. From a legal point of view there is no doubt that in both countries two exclusive copyright holder's rights are concerned in the thumbnail scenario: The right of reproduction (Section 107 of the U.S. Copyright Act and § 16 of the German Copyright Act - Search engines make copies of the images they crawl) and the right to publicly display (Section 107 of the U.S. Copyright Act) / to make available a work (§ 19 a of the German Copyright Act - Search engines show the thumbnails to their users). So the main question is whether a search engine can rely on one of the exemptions to the copyright holder's exclusive rights. While there is a fair use defense in the U.S. law (and in other common law countries; Great Britain and Canada e.g. have a fair dealing exemption), most European countries have a catalog of "public interest" exemptions, that are to be interpreted narrowly. In Germany it is well established that the creation of thumbnails by search engines is not privileged by the exemptions laid down in § 44 a ff. of the German Copyright Act. Search engines in Germany can only rely on one last argument, an implied consent by the copyright holder to the creation of the thumbnails.

So the decisive questions are: Is the creation of a thumbnail fair use? And in non common law countries: Does a copyright holder, who publishes his work on the internet, impliedly consent to the creation, storage and display of thumbnails by search engines? We will discover that these questions are connected. Arguments used to justify fair use will also be of importance when discussing implied consent.


a. USA

Section 107 of the U.S. Copyright Act provides that fair use of a copyrighted work "for purposes such as criticism, comment, news reporting, ... or research" is not a violation of the Copyright Act. In order to determine what constitutes fair use in a particular case, a court has to consider four nonexclusive factors:


(1) the purpose and character of the use including whether it is commercial;

(2) the nature of the work;

(3) the amount and substantiality of the portion used relative to the work as whole;

(4) the effect of the use upon the potential market for or value of the work.

No single factor is determinative.


In two cases (Kelly v. Arriba Soft Corp., 280 F.3d 934 (9th Cir. 2002), full text also available at: and Perfect 10 v. Google, full text also available at: the Ninth Circuit held that seach engines' reproduction of images for use as thumbnails is fair use under the Copyright Act.


First factor: Thumbnails create a different purpose for the images. They are not used in an aesthetic manner. Instead they help index and improve access to images on the Internet and thus provide a new and transformative use of the images. The use does not stifle artistic creativity or in any way supplant the originals. Thumbnails are of poorer quality. They lack the resolution of regular-sized images. Any enlargement would result in a loss of clarity of the image. Due to the highly transformative use, the commercial nature of search engines doesn't warrant another result, no matter of the precise business model (ads on the result pages in the Arriba case, AdSense on the linked-to-sites in the Google case).


Second factor: Even if the images are creative in nature, the second factor only slightly weighs in favor of the copyright holder, because they have already been published on a web site. The court noted that published works are more likely to qualify as fair use because the first appearance of the artist's expression has already occurred.


Third factor:  Although search engines copy the entirety of each image, this is the amount necessary in order for its users to recognize the image and to achieve the objective of providing an effective image search. So this factor favors neither side.


Fourth factor: The use of thumbnail images does not harm the copyright holders ability to sell or license them. There will be no negative consequences for the market for full-size images. Much to the contrary: By showing the thumbnails on its result pages when users enter terms related to a copyright holder's image, a search engine would guide users to their website rather than away from it.

According to a California court (Perfect 10 v. Google, Inc., 416 F. Supp. 2d 828 (C.D.Cal. 2006), full text at: this factor weighs in favor of a copyright holder, if there is also a market for smaller sized images. In this case the plaintiff asserted that the reduced size images had commercial value, because he sells them for display on cell phones. The Ninth Circuit did not agree: “The district court did not make a finding that Google users have downloaded thumbnail images for cell phone use. This potential harm to Perfect 10’s market remains hypothetical.”


So to conclude, the use of thumbnails is regarded as fair use in the USA.



b. Germany

There have been two major decisions on thumbnails in Germany, one by the District Court of Hamburg (Case No. 308 O 449/03, full text available at: and the second by the District Court of Erfurt (Case No.: 3 O 1108/05, full text available at:


The District Court of Hamburg ruled against Google's German news service when it found that thumbnail images, that were displayed beside excerpts from various news stories, were protected under German copyright law and could not be reproduced without permission. The Court did know that thumbnails were regarded as fair use in the Kelly v. Arriba case and discussed the differences between the systems in the USA and in Germany. But without a fair use defense in Germany, the court found, that it could not consider several arguments that were relevant in the US cases, e.g. the purpose of the thumbnails or the great benefit of a visual search engine for the public. The court did not discuss the possibility of an implied consent by the copyright holder. In his opinion the defendant could have merely provided a textual link  stating "See image here". So the court issued a preliminary injunction against Google, ordering the search engine market leader to refrain from copying pictures or making available  thumbnails of the plaintiff’s works. Should Google not comply with the injunction, the court will impose a fine with a maximum of 250.000 Euros.


The District Court of Erfurt had to decide on the legality of Google’s picture search engine and reached another result, arguing that webmasters must brace themselves for other users to link to their works. Many arguments from the fair use discussion appear in the decision. The court stressed the fact that the thumbnails cannot be enhanced into high quality images and that the depiction of thumbnails is beneficial to the copyright holder, because visual search engines help users to locate them on the internet. Page owners had one easy way to prevent their pictures from appearing as thumbnails in search engine results, the court wrote. They can restrict access to the works on their site, e.g. by the use of a robots.txt file.


In my opinion the Erfurt court decision is more compelling, although the reasoning that a copyright owner sacrifices some intellectual property rights by making his work available on the internet, is troubling. The interests of users and copyright holders are clearly balanced by the exemptions granted by the German Copyright Act. It is against the law to introduce a fair use defense through the backdoor "implied consent". But implied consent can still be assumed under narrow prerequisites that also take into account the way the internet functions. The decisive factors should be the following:

  • The copyright owner has not made a clear statement against the use of his pictures as thumbnails, e.g. by the use of a robots.txt file (Please note the difference to a fair use defense: Even if the copyright owner dissents, it is still fair use!)

  • The use of the copyrighted work is also in the interest of the copyright owner.

  • The use is limited to what is absolutely necessary.

  • The copyright owner can not reasonably be asked for his explicit consent due to the high number of persons regarded.

Especially the last argument is of great importance. It is impossible for search engines to ask every webmaster for his consent. Google e.g. claims to crawl more than 8 billion web sites. So applying the test to thumbnails leads to the result that their use in visual search engines should be legally permissible in Germany as long as the copyright owner refrains from excluding search engines from his web site completely or explicitly tells them to exclude his works from the picture search results. Thumbnails in another context like in news search engines which use pictures to illustrate articles, would not be covered by the implied consent defense, because news search engines only use a few sources for their service and it is reasonable to negotiate licensing agreements. The thumbnails are also not absolutely necessary for a news search service, they are a mere attachment. 


c. Conclusion

While it is pretty much established in the USA that the creation of thumbnails is fair use, the situation is far more uncertain in Germany. Differing court opinions don't give visual search engines the clear guidance that they need to conduct their business. They depend on the very weak "implied consent" defense. This argument completely fails when an image has been put on a web site without the copyright holder's permission. Than there is no longer a basis for an implied consent. There already have been some authors (e.g. Nimmer, CRI 2006, 65, 69) that proposed a European fair use exemption that would avoid rigid application of copyright law when it would stifle the creativity it is designed to foster. Given that several features are provided by search engines with an overwhelming legal uncertainty (not only thumbnails, but the same can be said about caching for example), this might not be a bad idea. Our picture from "search engine law" is far from being complete. It's merely a thumbnail...


5. In short:

  • Person v. Google (see Update 45): Person filed an appeal in the Court of Appeals for the 9th Circuit in San Francisco, California on November 1, 2007. Court documents are available at Is keyword related Search Advertising and Non-Search Advertising interchangeable? The United States Disctrict Court for the Northern District of California, San Jose Division said yes and found that there is no Google monopoly. It will be interesting to see how the appeal court will decide on this issue. Even if both forms are interchangeable, Google could  have a monopoly in the online ad market after purchasing Double Click. Both companies would handle more than 80% of the advertisements served up to third-party Web sites. But on Nov. 13, the European Union's antitrust authority held off on approving Google's proposed acquisition of  DoubleClick, opting instead to subject the transaction to further review.
  • In July 2007, the Utah sports-floor maker Connor Sport Court International subpoenaed Google as part of a trademark lawsuit against a competitor. But Google refused to turn over information about its "sponsored links" advertising sales. Connor now filed a motion to compel Google to comply with its discovery request.
    Connor Sport Court International, Inc. v. Google Inc., CV-06-3066 PHX JAT // CV 07-80252 (N.D. Cal.
    motion to compel filed Oct. 31, 2007)
    Also see Goldman, Eric, Google Resists Subpoena for Keyword Ad Purchases--Connor Sport Court v. Google, Technology & Marketing Law Blog


New in Legal Resources

  • Chandler, Jennifer A. , "A Right to Reach an Audience: An Approach to Intermediary Bias on the Internet" . Hofstra Law Review, 2008 Available at SSRN:

  • Google, American Blind Settlement Leaves AdWords Controvers Unsettled, Electronic Commerce & Law Report 2007, 818-819

  • Baars, Wiebke / Schuler, Marc / Lloyd, Charles, Keyword-Advertising, CRi 2007, 137-142

  • Tietge, Yorck-Percy, Ist die Verwendung fremder Marken im Rahmen des Keyword-Advertising nach jüngster Rechtsprechung zulässig?, K&R 2007, 503-506

  • Band, Jonathan, The Perfect 10 Trilogy, CRi 2007, 142-148

  • Wimmers, Jörg / Schulz, Carsten, Anmerkung zu OLG München - Verletzung des Rechts am eigenen Bild durch einen Link, K&R 2007, 533-535

  • Schubert, Katja / Wilken, Timo, Markenrechtliche und wettbewerbsrechtliche Probleme bei der Nutzung der Internetservices Google AdWords und Google AdSense

  • Ott, Stephan, Mashups - Neue rechtliche Herausforderungen im Web 2.0-Zeitalter, K&R 2007, 623-628





The Links & Law website is updated regularily, so  check back for updated information and resources about search engine and linking issues.

You are currently in the archive with older news. A complete list of the updates can be found here!

Latest News - Update 71

Legal trouble for YouTube in Germany

Germany: Employer may google job applicant

EU: Consultation on the E-Commerce-Directive

WIPO Paper on tradmarks and the internet

The ECJ and the AdWords Cases



Masthead/Curriculum Vitae
Copyright © 2002-2008 Dr. Stephan Ott 

All Rights Reserved.