Perhaps as someone who has written programs, stories, and non-fiction,
drawn and painted, taken photographs and video; and written and performed music — and made modifications of other people’s versions of most of the above — and desired to reprint generally unavailable-due-to-copyright instances of most of the above — I am more inclined to see the big picture?

Do you believe that TWDG is a “derivation that infringes the copyright?” If you do, then SunTrust v. Houghton Mifflin was hardly a “fiasco:” it was a legitimate copyright owner asserting his rights. If you don’t, then wouldn’t clarity on what is “fair use” and “transformative” be of help? Doesn’t shorter term lengths just confine these “fiascos” to a shorter window?

A derivative work that infringes a copyright infringes it as much on the last day of the monopoly’s existence as on the first. And of course the existence of these monopolies reduces the public’s freedom, including its freedom to criticize in certain ways, while the monopoly endures. During the copyright it is not “okay to criticize” a work by creating a derivation that infringes the copyright. Tough. If we’re serious about promoting progress by means of these monopolies, the monopolies need to be robust enough to be a credible incentive, and that means we forego for a time some of the rights we would otherwise enjoy over the work in question. The theory is that we give authors these monopolies, thereby reducing our freedom in the short term, in order to get “progress”, thereby enhancing our freedom in the long term. In practice, of course, Congress is expanding the scope and duration of copyright, reducing our freedom, and we have gotten almost nothing in return.

How much time needs to pass before it’s okay to criticize?

It’s also interesting that on one of his sites Kelly appears to be trying to limit the scope of the default judgement to just the specific case at hand, placing the images directly in an image editing program, without accompanying that presentation with the context of the original placement. Given that, I’m even less inclined to draw any conclusions beyond “if you’re writing an image editing program that has web serarch links, be sure that when an image is loaded for closer examination by your end user, you also retrieve and make available the accompaning context so the rights can be considered if it turns out that the end user likes the image”. Briefly: don’t discard copyright information.

Placing things in that sort of context appears not to be an unreasonable requirement, so I’m reluctant to draw any dire conclusions, particularly given the generally unsatisfactory nature of default judgements as the basis for a good conclusion.

Very broad transformative use, far beyond what’s prudent in the US today, doesn’t bother me at all. I trust that to the extent the original work’s market might be affected, the original creating party has the experts in the work and can do a better job of exploiting and marketing it.

Of course, drawing the line between such commentary and fanfic, which is more derivative, could be challenging.