While I can find no legal documents that say link other people images from their own website is "copyright infringement", and I can find some saying it is not. Live journal is threatening to shut down people journals if someone files a DMCA complaint against the linker.
From markf of the LJ Abuse team, we have this:
Interesting link. It establishes that the use of images being retrieved by search engines is fair use. It doesn't establish a blanket "image tags cannot be copyright infringements", though.
http://www.copyright.gov/fls/fl102.html outlines the criteria considered for fair use.
Right now, unless it's absolutely blatant beyond any reasonable doubt, the Abuse Team doesn't make judgements on what is or isn't fair use. The DMCA basically requires that an online service provider remove the content in question upon receipt of a properly filled out copyright infringement notice or face any legal damages associated with it.
It's not documented as well as it should be (and I do plan on fixing that), anyone who's being asked to remove anything as a copyright infringement has the right to file DMCA counter-notification. This shifts all liabilty to the person filing counter-notification, meaning we're only going to require the person to take the image off of LJ for 14 days (again, DMCA requirement), after which they can put it back up if no lawsuit has been filed. The basic theory is that if the user wants to risk the lawsuit (which in most cases I'd agree they'd win easily), they're free to do so, but it's not wise for LiveJournal as a business to put itself at risk of lawsuits.
I do appreciate the links everyone's providing, and I am hoping there's some precedent out there that establishes this to the point we can reject quite a few more DMCA complaints than we currently do.
So becareful what you link. Or on the other hand, if you hate someone, file an assload of DMCA complaints against them.
Does someone want to explain to me how linking an image someone has posted publicly for the world tosee if copyright infringement? You aren't copying or distributing it. You are just posting a link to the owners own server they they have the copy and they distribute it themselves.