I agree there has to be a court case about it. I think the current argument, however, is that it is transformative, and therefore falls under fair use.
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Yea, a finding that training is transformative would be pretty significant and it's likely that the precedent of thumbnail creation being deemed transformative would likely steer us towards such a finding. Transformative is always a hard thing to bank on because it is such a nebulous and judgement based call. There are excellent examples of how precise and gritty this can get in audio sampling.
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