A nude photography firm is suing Microsoft for including links and images of the company's material in search results. The results are often taken from other websites that are infringing Perfect 10's copyright by reproducing the material.

The case, filed in the US District Court in California, could prove to be a landmark one. However, Perfect 10 previously lost cases against Amazon.com and its subsidiary A9.com according to legal site Out-law.com . However, the photography firm is currently appealing against that decision.

Perfect 10's beef is that MSN 's image search creates thumbnails of the images against its wishes and links to the full-size images with no charge attached. The suit also says that MSN is making money from sites that are linking to the images.

Perfect 10

Norm Zada, president of Perfect 10, said Microsoft's search engine - as well as those of Google and Amazon.com - have caused his company to lose $4 million a month. He said that Microsoft had shown no willing to reach a settlement. "Our business is being destroyed," Zada told infoworld.com . "This is a life and death battle for us."

In previous rulings a Judge ruled that search engines could be liable for displaying the thumbnails. But this was overturned by an appeal court which ruled that the thumbnails displayed on the search engines are fair use, while the search engines themselves do not store the full-size images.