It's interesting for many reasons, not least because it is explicit in rejecting many of the misunderstandings people have used to object to various fair use cases. Hopefully the explicit statements will resolve those misunderstandings. Nothing actually new in the decision but it makes some things really obvious (I hope! :))
First the case itself: a history of the Grateful Dead group, used many pictures of posters and tickets where a copyright holder had refused permission under fair use and won in a relatively inexpensive summary judgment.
"Illustrated Trip is a biographical work, and the original images are not, and therefore accorded a strong presumption in favor of DK's use. In particular, the district court concluded that DK's use of images placed in chronological order on a timeline is transformatively different from the mere expressive use of images on concert posters or tickets. Because the works are displayed to commemorate historic events, arranged in a creative fashion, and displayed in significantly reduced form, the district court held that the first fair use factor weighs heavily in favor of DK."
This aspect applies to almost all uses in articles in the work called Wikipedia by its authors. Whether it's a baseball card, poster, album cover, book cover, mural, painting or postcard, it's not an encyclopedia article and the use is in one is transformative and strongly favors fair use.
Exceptions: using artwork to look pretty. But the same artwork to illustrate a style of dress or suit of armor is being used for factual value, not beauty, and is fine because that is transformative. Of course, using a scientific image to look pretty would be a transformative use from factual to artistic and hence transformative...
"Appellant asserts that each reproduced image should have been accompanied by comment or criticism related to the artistic nature of the image. We disagree with Appellant's limited interpretation of transformative use and we agree with the district court that DK's actual use of each image is transformatively different from the original expressive purpose." "In some instances, it is readily apparent that DK's image display enhances the reader's understanding of the biographical text. In other instances, the link between image and text is less obvious; nevertheless, the images still serve as historical artifacts graphically representing the fact of significant Grateful Dead concert events selected by the Illustrated Trip's author for inclusion in the book's timeline. We conclude that both types of uses fulfill DK's transformative purpose of enhancing the biographical information in Illustrated Trip, a purpose separate and distinct from the original artistic and promotional purpose for which the images were created."
You don't need to have specific justification for each image use - readers know from the context that you're illustrating your point (but we should still say so in the fair use explanation, because it's prudent to do so and remove doubt about our intentions).
On to image size but not that at this point the decision has already said that the use was fine and it's merely strengthening an already strong position:
"DK was not required to discuss the artistic merits of the images to satisfy this first factor of fair use analysis. This conclusion is strengthened by the manner in which DK displayed the images. First, DK significantly reduced the size of the reproductions. ... While the small size is sufficient to permit readers to recognize the historical significance of the posters, it is inadequate to offer more than a glimpse of their expressive value. In short, DK used the minimal image size necessary to accomplish its transformative purpose."
"(noting that a work that comments about "pop culture" is not removed from the scope of Section 107 [fair use]simply because it is not erudite)."
Sadly for those who dislike articles about popular culture, merely being about popular culture doesn't remove fair use. :) You get to use Beanie Baby pictures as well as the most admired modern art under fair use.
"nearly all of the illustrative uses listed in the preamble paragraph of ยง 107 . . . are generally conducted for profit ... Here, Illustrated Trip does not exploit the use of BGA's images as such for commercial gain. Significantly, DK has not used any of BGA's images in its commercial advertising or in any other way to promote the sale of the book. Illustrated Trip merely uses pictures and text to describe the life of the Grateful Dead. By design, the use of BGA's images is incidental to the commercial biographical value of the book."
For those who wonder about fair use and commercial reusers of content placed in Wikipedia by its authors. Those commercial users also get fair use and that was part of the original intent of fair use law.
"Accordingly, we conclude that the first fair use factor weighs in favor of DK because DK's use of BGA's images is transformatively different from the images' original expressive purpose and DK does not seek to exploit the images' expressive value for commercial gain."
This highlights the important parts: transformative and not the _expressive_ value but the historic value. Size is a factor but not critical.
"we hold that even though BGA's images are creative works, which are a core concern of copyright protection, the second factor has limited weight in our analysis because the purpose of DK's use was to emphasize the images' historical rather than creative value."
Not in favor of fair use but the factual use not the artistic use largely eliminates the concern about protecting art.
"We conclude that such use by DK is tailored to further its transformative purpose because DK's reduced size reproductions of BGA' s images in their entirety displayed the minimal image size and quality necessary to ensure the reader's recognition of the images as historical artifacts of Grateful Dead concert events. Accordingly, the third fair use factor does not weigh against fair use."
Reduced resolution is helpful but do remember that you can use whatever size is required. You do need to use sufficient resolution of portion so the viewer can clearly see what you're trying to show! We're already using suitable sizes, I think, so no change necessary, except reassurance for those who wondered whether small images were a problem if it was showing a small version of it all.
"the parties agree that DK's use of the images did not impact BGA's primary market for the sale of the poster images."
This should also be the case for almost all uses in Wikipedia, since Wikipedia use isn't the same as the originals - the only cautions here would be news agency images in current breaking news situations and the same ones in historical articles would be fine, because that's history not news.
On to a bit that often causes confusion... loss of revenue for the copyright holder. Best summarized with the simple sentences "[C]opyright owners may not preempt exploitation of transformative markets. ... Since DK's use of BGA's images falls within a transformative market, BGA does not suffer market harm due to the loss of license fees." (because it's not entitled to them anyway). Since use in Wikipedia will always be transformative, this is very unlikely to be a negative factor for a use in Wikipedia.
"Appellant argues that DK interfered with the market for licensing its images for use in books. Appellant contends that there is an established market for licensing its images and it suffered both the loss of royalty revenue directly from DK and the opportunity to obtain royalties from others. ...
We have noted, however, that 'were a court automatically to conclude in every case that potential licensing revenues were impermissibly impaired simply because the secondary user did not pay a fee for the right to engage in the use, the fourth fair use factor would always favor the copyright holder.'
Moreover, Appellant asserts that it established a market for licensing its images, and in this case expressed a willingness to license images to DK. Neither of these arguments shows impairment to a traditional, as opposed to a transformative market. In a case such as this, a copyright holder cannot prevent others from entering fair use markets merely "by developing or licensing a market for parody, news reporting, educational or other transformative uses of its own creative work."
"[C]opyright owners may not preempt exploitation of transformative markets . . . ."
"Moreover, a publisher's willingness to pay license fees for reproduction of images does not establish that the publisher may not, in the alternative, make fair use of those images. Since DK's use of BGA's images falls within a transformative market, BGA does not suffer market harm due to the loss of license fees."
And the conclusion:
"we conclude, as the district court did, that the fair use factors weigh in favor of DK's use. For the first factor, we conclude that DK' s use of concert posters and tickets as historical artifacts of Grateful Dead performances is transformatively different from the original expressive purpose of BGA's copyrighted images. While the second factor favors BGA because of the creative nature of the images, its weight is limited because DK did not exploit the expressive value of the images. Although BGA's images are copied in their entirety, the third factor does not weigh against fair use because the reduced size of the images is consistent with the author's transformative purpose. Finally, we conclude that DK's use does not harm the market for BGA's sale of its copyrighted artwork, and we do not find market harm based on BGA's hypothetical loss of license revenue from DK's transformative market."
And that's the reasoning that's going to apply to uses in Wikipedia as well, for pretty much the same fundamental reasons: transformative use and not primarily of value just because of the images, which are accompanied by the articles that provide the main part of the content.
But once this legal aspect is taken care of, do remember that it's nice to seek to replace fair use images with more freely licensed images as those become available. Recruit friends, take pictures on vacations and around your town and encourage others to do so, so we can gradually replace all those that can be replaced. It'll take a while to get everyone on the planet working with us so we have done this for everything but it'll happen eventually... meanwhile, remember we're a wiki and successive improvement over time is one of the fundamental principles of wiki use. We don't insist on perfect first versions of an article and nor should we do so for images. But we should encourage perfection in both over time.
James Day