The Question of Copyright
When can a copyrighted image be reproduced legally?
'Kate Moss' Barbie
Copyright law prevents an image from being reproduced by someone other than the copyright holder, usually the creator of the image. There is a clause in the law that allows copyright to be "infringed", but legally, under certain circumstances. If the person copying the original image is doing so in order to comment on or critique the original image, then the copying may be allowable. For instance, if the copier is making a parody of the original image, then the case can be made that the copier has to use the original image in order to make a point.
This is of course a grey area. The copyright holder can argue that the copier is using more of the original image than he needs to to make his point. Or they can argue that the copy is not really parody, but satire, and so does not need to refer to a specific image.
Take the case of the 'Kate Moss Barbie' pictured above. Is this a parody of Barbie, or of Kate Moss? Do I need to refer to the image of Barbie to make a point about Kate Moss's eating habits and figure? Shouldn't I just use a generic doll face? I could argue that I'm making a point about the effect of Barbie on our society. I'm parodying the idealized, faceless quality of Barbie by transforming her into a 'real' woman, especially a woman who is part of the fashion industry, an industry that has influenced and been influenced by the Barbie phenomenon.
Could I simply write all this down, and not use images at all to make my point? I believe that since I'm discussing images and presenting ideas in a medium (the web) that is largely about images, that this critique requires images to be complete.
The bottom line of all this legal arguing is dollars. Does the copy infringe on the copyright holders market? Am I selling dolls through my website? Clearly not. A more vague question, though, is this: does my use of the Barbie image "dilute" or diminish the market for Barbie? Perhaps I scare people away from buying Barbies. Perhaps I confuse the public into thinking that a Kate Moss Barbie really exists? These are the really tough questions, that mere mortals are not fit to answer. For questions like these, you need a lawyer.
See The Copyright Website for an excellent guide to copyright law, with examples of cases described in clear, plain english.