It's very simple
If the material is copyright protected then you have to pay for it unless the owner of the copyright allows it to be specifically displayed or disseminated. That requires prior written agreement. Since Malamud did not obtain legal rights to publish copyright materials he is guilty and should be fined and if appropriate for repeat offenses, sent to jail.
The laws are very clear. If you want to access, use or distribute copyright protected materials then you must pay for them or go to prison for piracy and be fined handsomely. You can spin it any way you like but that is the law and copyright law exists for the purpose of protecting "art". End of discussion.