When a website or blog includes a photograph without obtaining the permission of the copyright owner, it could be copyright infringement, or it could be fair use. These are the four factors used to determine whether a use is fair:
- the purpose and character of the use;
- the nature of the copyrighted work;
- the amount and substantiality of the portion used; and
- the effect of the use upon the potential market.
The use of thumbnails — reproductions of an image at a significantly smaller size — is not a guarantee that a certain use is fair, but it can be an important factor in a fair use analysis. An argument that thumbnails are not infringing would be strengthened if the images were embedded from the original source rather than hosted on the servers of the alleged infringer, or if non-embedded images included a link to the source.
In the case of Kelly v. Arriba Soft , the U.S. Court of Appeals for the Ninth Circuit analyzed the issue of thumbnails, finding that it was fair use for Arriba Soft’s search engine to use thumbnail images in indexing photographer Leslie Kelly’s website. The court noted that the thumbnails were exact replications of the originals, but smaller and of lower resolution. However, a crucial factor was that the search engine was displaying the images for a much different purpose than the original: “improving access to information on the internet versus artistic expression.” The “entirely different function” of the thumbnails made Arriba’s use transformative. The court also analyzed whether the search engine’s use of thumbnail images would harm the market for or value of Kelly’s photographs. The court found that “the search engine would guide users to Kelly’s web site rather than away from it,” because they would have to go to Kelly’s website to see the full-size image.
The case of Bill Graham Archives v. Doris Kindersley  addressed the issue of reduced-size images outside of the context of the Internet. Doris Kindersley (DK) published a 480-page coffee-table book about the Grateful Dead, illustrated with images situated along a timeline of the band’s history. Bill Graham Archives claimed ownership of the copyright in seven images of concert posters, which were used in the book without permission. The U.S. Court of Appeals for the Second Circuit found that this was fair use, because the images were greatly reduced in size, and their use as part of a timeline in a biographical work was transformative.