By John Timmer
October 13, 2008 - 07:10PM CT

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.