Blogger Perez Hilton is being sued for copyright infringement for using 51 celebrity pics without the permission of the paparazzi photo agency who own them. At issue is whether the blogger can “borrow” the pics under the fair use exception, alter the pics to make a point, and post them on his site. From biting commentary on Mary-Kate Olsen’s latest hairdo to the misadventures of Britney Spears, Hilton pulls no punches.

Although I’ll be personally rooting for the blogger to win this battle, legal precedent suggests the courts are going to side with the copyright owner.

However, this case raises a larger issue. Like RIAA and MPAA battling P2P file sharing, the photo agency is fighting a losing battle in the long run. Even if Hilton loses, somewhere in Eastern Europe or Asia there are dozens of replacement bloggers ready to meet the demand for this content…posting to the Internet from locations beyond the reach of U.S. intellectual property law. The paparazzi need to find a way to profit share in joint ventures with domestic bloggers like Hilton to adapt to online media trends.

Hat tip to Robin Abcarian at the L.A. Times.