The fact that compression is incredibly lossy does not change the fact that it's copyright infringement.
I have a lossy compression algorithm with simply outputs '0' or '1' depending on the parity of bits of the input.
If I run that against a camcording of a disney film, the result is a 0 copyrighted by disney, and in fact posting that 0 in this comment would make this comment also illegal so I must disclaim that I did not actually produce that from a camcorded disney film.
If I run it against the book 'dracula' the result is a 0 under the public domain.
The law does not understand bits, it does not understand compression or lossiness, it understands "humans can creatively transform things, algorithms cannot unless a human imbues creativity into it". It does not matter if your compressed output does not contain the original.
> The court held that framing and hyperlinking of original images for use in an image search engine constituted a fair use of Perfect 10's images because the use was highly transformative
The fact that compression is incredibly lossy does not change the fact that it's copyright infringement.
I have a lossy compression algorithm with simply outputs '0' or '1' depending on the parity of bits of the input.
If I run that against a camcording of a disney film, the result is a 0 copyrighted by disney, and in fact posting that 0 in this comment would make this comment also illegal so I must disclaim that I did not actually produce that from a camcorded disney film.
If I run it against the book 'dracula' the result is a 0 under the public domain.
The law does not understand bits, it does not understand compression or lossiness, it understands "humans can creatively transform things, algorithms cannot unless a human imbues creativity into it". It does not matter if your compressed output does not contain the original.