IMO it is quote simple. Google is blatantly infringing copyright with this new system, which effectively makes it unnecessary for people to visit the websites that legally display the images. Or in other words Google is flagrantly using other peoples content to improve their bottom line.
I'm not sure how that would fly in court because the option of blocking Google Images bot with robots.txt does exist.
Yep however many, probably most, haven't a clue how to do it and just how long this suit would take is another thing.
After initially losing traffic and AdSense earnings and then implementing my improved, even stronger htaccess coding, I'm actually seeing an increase in both traffic and earnings.
Google need not claim this for themselves! I've done this and it has nothing to do with their claimed predictions when they brought this in.
And in case anyone's wondering, all of my sites except the two largest have permanent watermarked images now, all new uploaded ones have them and the remaining images I'm going through slowly but have already completed the most popular ones.
After speaking to the attorneys responsible, I think that this is more of a publicity stunt than anything serious.
This being said, I appreciate that it might raise awareness and make people, and search engines more careful.
Again I am not a lawyer, but other than suing for statutory damages on my registered works for the period of time where they were displayed by Google Images, I do not foresee a successful argument where (1) Google owes me the traffic and (2) I owe Googlebot access to my material.
If I created a website that contains millions of Getty images, full size, and they were all hotlinked to Getty, using their bandwidth, does anyone really think I wouldnt find myself in court, in a split second, getting sued to death?
So why can google get away with the exact same thing? Its blatant copyright infringement. No way in hell this falls under fair use. But they have billions, and are a corrupt and immoral corporation looking to profit at any cost with an ocean of attorneys standing behind them.