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When a new website is being built for a client, it often begins as a "development" site that uses one or more methods to make sure that it is not accessible by normal and customary means. You can use a robots.txt file to let search engines know not to index it, you can password protect the whole thing so that only privileged users can see it, you can put it on a an unregistered subdomain so that it can only be accessed by computers using local DNS rules, etc. Whatever the method, the outcome is the same: it prevents the site from having any effect on the market outside of the relationship between the developer, content creator, and client.

With this context in mind, many websites are built using stock media that you have to purchase licenses for from online libraries. Many web developers will begin by downloading a watermarked, unpurchased version of a copyrighted image and upload this to thier under construction websites so that they can decide if they will purchase the image because they need to first make sure that it will crop well, fit the color pallet of the website, fit well with other stock images that are being considered, etc. As such, it is a common practice to completely build a development site using these unpurchased, watermarked images, get client approval on the design, and then purchase and swap out the approved images for fully licensed versions before going live with the website.

Is this practice allowed under fair-use or other similar laws, and are there any court cases where this practice has been ruled on one way or the other?

My confusion here comes from the 4th factor of Fair Use: the effect of the use upon the potential market for or value of the copyrighted work. My understanding of this provision (and I may be wrong here) is that the copyright holder needs to be able to demonstrate damages to be able to sue. In this case, the content creator would need to prove that the developer is causing them damages when in effect, the developer is advocating the purchase of the stock image to thier client from the content creator. Since this activity increases the creator's market value, there should be no damages to sue for regardless of if the developer violated the copyright.

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Probably not. The copyright holder has the exclusive license to make copies of the copyrighted material, and you're talking about making copies.

I don't really see a strong argument for fair use, as you're building out a website using copyrighted material that is meant for building out a website. The fact that the website owner isn't driving any profit from the use of those copyrighted images isn't particularly relevant, because the website designer is, i.e. he's using those images to sell his services.

Even if the web designer were working for free or or directly employed by the website owner, it still wouldn't really matter, because you don't need to drive a commercial benefit or profit from the use of a copyrighted image to infringe on that copyright.

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    The only argument that I see, which isn't a fair use argument, is that this use doesn't amount to publication of a copy.
    – ohwilleke
    Nov 21, 2023 at 21:58
  • Does infringement require publication? I think it's just the act of copying that constitutes the violation. Otherwise I'd be free to pirate whatever I want, as long as I don't reseed.
    – bdb484
    Nov 22, 2023 at 2:32
  • @ohwilleke notwithstanding, it's still a commercial use - publication per see isn't part of the criteria.
    – Dale M
    Nov 22, 2023 at 4:35
  • What about linked images: as in, the watermarked images are still hosted on the original server, but are being called by the dev site?
    – Nosajimiki
    Nov 22, 2023 at 14:00
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    I agree about the mechanics. But I think it's a stretch to say that that implied license extends to commercial reproductions on other sites.
    – bdb484
    Nov 22, 2023 at 23:08
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If you plan to license your final artwork for your website from some commercial company, they may allow you to download and use samples, obviously with “sample” in big letters printed on them.

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