Beginning in May 2001, Perfect 10 sent notices to Google informing it of specific links to infringing images in its general Web search and requesting their removal.

After settlement discussions lasting several months, Perfect 10 filed for a preliminary injunction that would require Google to stop linking to and distributing its images.

Since Google only provided an instruction for the user's computer to fetch the infringing pages from servers not under its control, rather than hosting or transmitting the content itself, the court found that Perfect 10 was unlikely to succeed on this point, and so denied its request for an injunction.

The district court found that Google's use of the images was commercial and partially transformative (intended to serve a fundamentally different purpose than the originals).

The court found Google's use highly commercial, more so than in Kelly v. Arriba Soft Corporation (which was prevailing precedent), due mainly to its AdSense program, which a number of the infringing sites used.

Also distinguishing the case from Kelly, the court noted that in 2005 Perfect 10 leased the right to distribute reduced-size versions of its images for use on cell phones to Fonestarz Media Limited, putting it in direct competition with Google's thumbnails.

[2] The court rejected Google's argument that the images were uncreative; however, since the works in question were all published, it ruled that this factor too weighed only slightly in favor of Perfect 10.

Therefore, the court found that Perfect 10 did not demonstrate its likelihood to succeed in a contributory infringement claim, and consequently denied injunctive relief.

[3] In its appeal brief, Perfect 10 argued that the district court had "failed to even cite the broad definition of 'display' in the Copyright Act.

"[7] On appeal, the Ninth Circuit upheld the district court's "server test" and its decision that the hyperlinks did not infringe on Perfect 10's copyright.

Specifically, the court ruled that Google transformed the images from a use of entertainment and artistic expression to one of retrieving information, citing the precedent Kelly v. Arriba Soft Corporation.

"[3] The court pointed out that Google made available to the public the new and highly beneficial function of "improving access to [pictorial] information on the Internet.

"[1][3] This had the effect of recognizing that "search engine technology provides an astoundingly valuable public benefit, which should not be jeopardized just because it might be used in a way that could affect somebody's sales.

"[8] Google also raised a Digital Millennium Copyright Act (DMCA) safe harbor defense in respect to the issue of hyperlinks, which Perfect 10 contested.

In Nicklen v. Mashable Inc. et al. (2021), Judge Jed Rakoff of the District Court for the Southern District of New York rejected the server test, agreeing with the argument presented by Perfect 10 that the server rule is "contrary to the text and legislative history of the Copyright Act," which "defines 'to display' as 'to show a copy of' a work, not 'to make and then show a copy of the copyrighted work'.