I think publishing someone else's image does indeed trigger copyright
regardless of where it is hosted,  and linking to the copy on their server
further does them economic "harm" in terms of bandwidth costs, even if it
doesn't really cost them anything extra that month.

See
http://blog.2createawebsite.com/2010/08/16/are-you-using-images-on-your-website-illegally/
For an article written by somebody who sends DMCA takedown notices for a
living.

Adi was right that this is essentially a fair use question. You have to ask
yourself about the purpose of the use, commerciality,
educational/journalistic use etc. I happen to believe in a more expansive
vision of fair use than the limited version staked out so far in US courts,
but the only way to expand those courts' definitions is consideration if
more unauthorized use circumstances. Not that I would let a matter like this
get to court, because I would probably be responsive to any takedown
requests, formal or not.

Consider how Google image search makes a fair use argument with its hosting
of images without permission. They mitigate their infringement by
responsiveness to takedowns, linking, and hosting only thumbnailed versions
themselves.

I cited a thought experiment in the first pages of my thesis
http://ottonomy.net/portfolio/thesis showing just how much our lives bump up
against copyright law every day. The law wasn't originally intended to apply
to the masses like this, but copying an image on our own website is actually
one of the more blatant offenses we might commit in everyday life.

Nate.
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