The following is not meant to be legal advice.
In Perfect 10 v. Google, the Court held that framing did not violate the distribution right, because distribution requires the actual dissemination of a copy. Thumbnails are fair use. Deemed distribution would not be applied where Google does not maintain a collection of stored full sized images.
The Court stated that while in-line linking and framing may cause computer users to believe they are viewing a single Google webpage, the federal Copyright Act, unlike the federal Trademark Act, does not protect a copyright holder against acts that cause consumer confusion.
To be held liable, the Court stated that a computer system operator must have actual knowledge that specific infringing material is available using its system and continue to provide access to infringing works though it could take simple measures to prevent further damage to the copyright holder.
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