And the intersection of these two viewpoints is where Fair Use doctrine comes in. I'm not even remotely a lawyer and this isn't my country's legal system anyway, but the case as to whether this was covered by fair use was felt to be arguable by both sides.
The real story here isn't 'unreasonable artist sued me' but 'lawsuits used as scare tactic'.
Was it really a scare tactic in this case, though? The copyright holder felt that his copyright had been infringed, so he sent a cease and desist, backed up with the threat of legal action. What should the copyright holder have done instead? Sent a polite note? Threaten violence? Like it or not the court is where Fair Use is decided. Just because the threat of a lawsuit is scary doesn't always mean it's being used as a scare tactic.
The real, real story here is, as the author asks, where do you draw the line? Personally I don't think the author had much of a leg to stand on given that the image was being used to sell an album and was easily recognizable as a simulacrum of the original work.
$32k is an awful lot of money to have handed over for something like this, on the scare of it being potentially a lot more. That's what I mean; on an arguable point, the cost of defending the lawsuit and facing costs - let alone the potential damages - meant that the smaller party simply rolled over. That's the scare tactic.
Yes, but that's not specific to copyright law, it's a problem with tort law in the US in general (although, admittedly, its abuse is pretty prevalent when it comes to copyrights).
For the record: the pixelated image was hand drawn by a pixel art artist. But actually, I don't care about that: lets assume it was a computer-pixelated version that anyone could make with Photoshop. Then Maisel is still wrong.
This tiny project doesn't threaten his firmly established reputation or commercial interests in any way. The audience is severely limited and the pixelated image has only appeared on the cover of an even smaller number of physical CD's and otherwise was simply displayed on the website as the visual representation of the music. For which it was incredibly appropriate. It wasn't used to 'sell the music': you couldn't even buy that pixelated image.
Maisel should allow a thousand of these tiny suns to bloom, even if that requires a thousand of his photographs to be pixelated and use in tiny projects that make a few people happy. All analogies are off, specifically because Maisel is in a supreme position to ignore all commercial and legal interests. That makes his legal action petty and unartistic and makes the world a worse place.
What should the copyright holder have done instead? Sent a polite note?
Yes. What's wrong with starting off with a polite note? Are you really backing the plaintiff's starting demands for $150,000 per use as a reasonable request?
The real story here isn't 'unreasonable artist sued me' but 'lawsuits used as scare tactic'.