Why fair use doesn't work unless you've got a huge war-chest for paying lawyers

Last year, Waxy released Kind of Bloop, a chiptunes tribute to Miles Davis's Kind of Blue. He meticulously cleared all the samples on the album, and released it for $5 (backers of his Kickstarter project got it for free -- Waxy is founder of Kickstarter). One thing Waxy didn't clear was the pixellated re-creation of the iconic cover photo he commissioned. He believed and believes that it is fair use -- a transformative use with minimal taking that doesn't harm the market for the original, produced to comment on the original. Jay Maisel, the photographer who shot the original, disagreed, and sued Waxy for $150,000 per download, plus $25,000. Waxy ended up settling for $32,500, even though he believes he's in the right -- he couldn't afford to defend himself in court. He's written an excellent post on copyright, fair use, and the way that the system fails to protect the people who are supposed to get an exception to copyright:

In practice, none of this matters. If you're borrowing inspiration from any copyrighted material, even if it seems clear to you that your use is transformational, you're in danger. If your use is commercial and/or potentially objectionable, seek permission (though there's no guarantee it'll be granted) or be prepared to defend yourself in court.

Anyone can file a lawsuit and the costs of defending yourself against a claim are high, regardless of how strong your case is. Combined with vague standards, the result is a chilling effect for every independent artist hoping to build upon or reference copyrighted works.

It breaks my heart that a project I did for fun, on the side, and out of pure love and dedication to the source material ended up costing me so much -- emotionally and financially. For me, the chilling effect is palpably real. I've felt irrationally skittish about publishing almost anything since this happened. But the right to discuss the case publicly was one concession I demanded, and I felt obligated to use it. I wish more people did the same -- maybe we wouldn't all feel so alone.

Kind of Screwed