Google has been cleared of any wrongdoing over its practice of using thumbnails to display images in its image search product. The original suit had been brought forth by adult entertainment company Perfect 10.

A District Court ruled in favor of Perfect 10 last year, issuing a preliminary injunction that prevented Google from thumbnailing the company's imagery. However, an appeals court judge said Google could not be held liable for indexing a site that is illegally copying Perfect 10's images.

The judge ordered the lower court to reconsider its decision, calling the granting of the preliminary injunction an error, and the thumbnail should be considered "fair use" under copyright law.

Additionally, Perfect 10's claims that search engines can be held liable for linking to pirated material should have also been dismissed, the appeals court ruled.

Google was happy with the court's decision, saying it affirmed the principles of fair use, and that the application is of value to consumers. Perfect 10 also said it was generally pleased with the decision, although it did say it could appeal.

The original suit was filed in 2004, and Perfect 10 sued Amazon's A9 search service the following year. The cases were later consolidated, and Wednesday's decision applies to both companies.