If a company is being sued for copyright infringement because a photograph was used in a news article on its website does fair use come in to play?

Fair use always has the chance to come into play in any copyright situation. Fair use analysis is always very fact specific and often depends on the surrounding circumstances. One big key to take away from it is that fair use is almost never a yes/no determination.

The defense of Fair Use may apply if the company can show that its unauthorized use of the photo was truly "news" related, important for the education of the audience about a particular issue, and the company is at least partly in business to provide a news service. However, if the photo can damage the reputation of a person or company, is misleading, is part of a story that doesn't qualify as "news", or the photograph violates law or custom, it is unlikely that Fair Use will protect the company. More importantly, the company that uses unauthorized photos can ruin its reputation and lose the trust of its providers of stories and images, as well as the audience. No reputable news organization will risk that.

Fair Use is defined in the US Copyright statute at 17 U.S. Code, Section 107. Fair use of a copyrighted work, including such use for purposes such as criticism, comment, news reporting, teaching ... scholarship or research, is not an infringement of copyright. Fair use is an equitable defense to a copyright charge, but a federal judge will need to agree that the use was properly qualified as a "fair use." To possibly resolve the case quickly - agree to and remove the photograph from the website.