Q: Can we take pictures of celebrities from the internet and Photoshop students into them without violating copyright law?
A: Probably not, unless you have a license from the photographer to alter the image, or if the image is in the public domain. Using Photoshop (or any other program) to change an image does not excuse you from obtaining permission to use the photo. Because the copyright owner retains the exclusive right to prepare derivative works, changing an image you find online by adding someone else’s face into it just means you not only need permission to print the image, but you need a license to prepare a derivative work too.
Occasionally, altering a photo may qualify as a parody of the work, which would be an exception to copyright infringement. A parody is created when a work — in this case, an image — is altered to make some commentary or critique of the underlying work. However, taking a copyrighted image and adding a student into it will rarely, if ever, qualify as a parody.
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