As much as people complain about the challenges of balancing copyrights and fair use in the US, overseas courts have been happy to provide examples that remind us that some aspects of US copyright law are actually fairly liberal. The latest such reminder comes courtesy of a case in Germany that revisits an issue that appears settled in the US: the right of image search services to create thumbnails from copyrighted works to display with the search results. The German courts have now determined that this is not OK in Germany, where Google has just lost two copyright suits over image thumbnails.

This is not the first tussle of this sort that Google has been involved with. The company had initially lost a copyright case based on its creation of thumbnails from porn site Perfect 10, but ultimately prevailed on appeal in that case. Although the appeal did not clarify all the legal issues, it did determine that the creation of thumbnails fell within the exceptions granted by US copyright law for transformative use.

The search giant hasn't always had good luck in European courts, however. Last year, Google lost a legal tussle with a Belgian newspaper trade group, and was left in the awkward position of seeing the excerpts it uses for Google News content be declared a violation of copyright. Negotiations have gotten the Belgian papers' content back in Google searches, but the case is still very active; Google is appealing, while the newspapers are looking to extract a healthy fine.

The latest case to be decided combines aspects of both of these others: image thumbnails and European courts. In this case, the venue was Germany, where Google was being sued for creating thumbnails from the copyrighted materials of a photographer and a comic artist. According to Bloomberg News, Google lost both of these cases, with courts declaring that shrinking images down to thumbnail size doesn't create a new work, and thus displaying the thumbnails is a violation of copyright.

Google was, not surprisingly, unamused. A Google spokesperson told paidContent, "Today's decision is very bad for Internet users in Germany, it is a major step backwards for German e-business in general, and it is bad for the thousands of websites who receive valuable traffic through Image Search and similar services."

Although copyright holders can easily let search engine indexing bots know what files to avoid, the ruling apparently leaves them with no legal need to do so. Instead, the burden lies on the search engines, which apparently need to determine what images they discover are subject to copyright. Given the impossibility of doing so in an automated fashion, the ruling is likely to see Google radically alter its image search offerings in Germany.

Google is unlikely to be the only one with this problem, too, as those who initiate these lawsuits rarely stop at one search engine. Perfect 10 later went after Microsoft despite having part of its case against Google thrown out. Meanwhile, the Belgian newspapers, fresh off their Google victory, went after the EU itself. It seems likely that it will be a matter of time before other image search services get served in Germany.