Corynne McSherry at the Electronic Frontier Foundation explains the details concerning the latest round of litigation:
A quick recap: In 2004, porn company and frequent litigator Perfect 10 sued Google for direct and secondary copyright infringement. Perfect 10 claimed that Google violated its copyrights by linking to websites that hosted infringing material, caching websites that hosted infringing photos of nude models, and hosting infringing images uploaded by Blogger users. In 2007, the Ninth Circuit Court of Appeals reversed a preliminary injunction in favor of Perfect 10 on its direct infringement claims, and sent the case back to the district court for a determination of some of the secondary infringement claims. Google moved for summary judgment, asserting that it was protected from secondary liability by the DMCA safe harbors.
...Judge Howard Matz of the U.S. District Court in Los Angeles mostly agreed with Google, whittling Perfect 10's remaining case down to a small subset of allegedly infringing images. Why? Mainly because Perfect 10 didn't trouble itself to provide Google with the information Google needed to figure out what to take down in a form that Google could readily use.
Be sure to read Corynne's complete analysis here:
You can read Judge Mat'z full decision here (in PDF):
Yesterday, the 9th Circuit Court of Appeals heard oral arguments on Judge Matz's decision. You can listen to how it all went down here (* requires Windows Media Player):
You gotta love the part about 15:50 in when the tech-savy Chief Circuit Judge Alex Kozinski asks Perfect 10's attorney in annoyance: "Have you ever heard of the word 'Yes'? Is your answer 'Yes'? I don't want a whole story."