Just a bit about copyright..from a WC archived discussion....From the FAQ at the US Copyright Office
How much of someone else's work can I use without getting permission?
Under the fair use doctrine of the U.S. copyright statute, it is permissible to use limited portions of a work including quotes, for purposes such as commentary, criticism, news reporting, and scholarly reports. There are no legal rules permitting the use of a specific number of words, a certain number of musical notes, or percentages of a work. Whether a particular use qualifies as fair use depends on all the circumstances. See Circular 21 and FL 102.
How much do I have to change in my own work to make a new claim of copyright?
You may make a new claim in your work if the changes are substantial and creative -- something more than just editorial changes or minor changes. This would qualify as a new derivative work. For instance, simply making spelling corrections throughout a work does not warrant a new registration -- adding an additional chapter would. See Circular 14 for further information.
How much do I have to change in order to claim copyright in someone else's work?
Only the owner of copyright in a work has the right to prepare, or to authorize someone else to create a new version of that work. Accordingly, you cannot claim copyright to another's work, no matter how much you change it, unless you have the owner's consent. See Circular 14.
From their Circular 14:
A “derivative work,” that is, a work that is based on (or derived from) one or more already existing works, is copy-rightable
if it includes what the copyright law calls an “original work of authorship.” Derivative works, also known as “new versions,” include such works as translations, musical arrangements, dramatizations, fictionalizations, art reproductions,
and condensations. Any work in which the editorial revisions, annotations, elaborations, or other modifications
represent, as a whole, an original work of authorship is a “derivative work” or “new version.” A typical example of a derivative work received for registration in the Copyright Office is one that is primarily a new work but incorporates some previously published material. This previously published material makes the work a derivative work under the copyright law.
To be copyrightable, a derivative work must be different enough from the original to be regarded as a “new work” or must contain a substantial amount of new material. Making
minor changes or additions of little substance to a preexisting work will not qualify the work as a new version for copyright purposes. The new material must be original and copyrightable in itself. Titles, short phrases, and format, for example, are not copyrightable.
EXAMPLES OF DERIVATIVE WORKS
The following examples show some of the many different types of derivative works:
Television drama (based on a novel)
Motion picture (based on a play)
Sculpture (based on a drawing)
Drawing (based on a photograph)
Book of maps (based on public domain maps with some new maps)
Lithograph (based on a painting)
COPYRIGHT PROTECTION IN A DERIVATIVE WORK
The copyright in a derivative work covers only the additions, changes, or other new material appearing for the first time in the work. It does not extend to any preexisting
material and does not imply a copyright in that material.
One cannot extend the length of protection for a copyrighted work by creating a derivative work. A work that has fallen in the public domain, that is, which is no longer protected by copyright, may be used for a derivative work, but the copyright in the derivative work will not restore the
copyright of the public domain material. Neither will it prevent anyone else from using the same public domain work for
another derivative work. In any case where a protected work is used unlawfully,
that is, without the permission of the owner of copyright, copyright will not be extended to the illegally used part.
WHO MAY PREPARE A DERIVATIVE WORK?
Only the owner of copyright in a work has the right to prepare, or to authorize someone else to create, a new version of that work. The owner is generally the author or someone who has obtained rights from the author.
In short, I think the answer is "no". You can get away with inspiration, and probably a photo as a reference for detail, but just the act of making a painting instead of the photo isn't enough to move out of the "derivative work" category. And to make a derivative work, you need the permission of the holder of the original copyright.
If push came to shove, it's going to be a matter for lawyers and courts to decide, because the rules are inherently fuzzy.
Another handy site with a good summary of copyright law:
As discussed earlier, copyright gives its owner the exclusive right, for example, to reproduce protected subject matter (such things as ideas and facts being excluded). Sometimes a question arises as to whether a second, similar work was copied or independently created. If the person creating a second work had access to the original work and the works are virtually identical, copying is likely to be presumed even if the chance of access is remote.
When an artist sells copyright in a work, however, access is obviously not an issue if the same artist later executes a similar work. To avoid problems, it is important that the artist and purchaser of the copyright reach clear agreement about such matters. It is important that artists understand that a work does not have to be identical to infringe copyright in an earlier one. The legal test of infringement is "substantial similarity" -- which translates (roughly) into whether an ordinary observer would recognize a work as copied in whole or in part from an earlier one.
In a similar vein, artists occasionally ask if it is OK to base a painting on, for example, a magazine photograph -- even though most appreciate that turning a photograph (or some part of it) into postcards would infringe copyright. Such questions are not easy to answer. First, an artist is unlikely to be sued for using a relatively small element from another work -- particularly if it used only for reference and is not copied in detail. (One who photographs a tropical scene does not get exclusive rights to all palm trees that might vaguely resemble those depicted there.)
UK laws and laws of other countries can differ...but it's basically the same...if you copy an image/photo that YOU didn't make...get the PHOTOGRAPHER'S PERMISSION TO USE IT....before you open yourself liable to compensate the copyright holder....and ALWAYS, when you have permission to use it, CREDIT THE PHOTOGRAPHER or ARTIST.