As a student, you can manipulate any work anyway you choose. This would certainly be helping the student learn to retouch an image and therefore be improving their skill.
For the strict purposes of "educational" fair use, yes it would allow taking somebody else's image and screwing around with it and using it for a class, but the line is drawn very easily at "using" that image for any purpose outside of the scope of a class. Using it as a promo for a promo poster for a conference is in no way an "educational use". The scool screwed the pooch.
It's infringement, clear and simple and if the infringing party took the time to remove the watermark, it's willful infringement. The only real question is whether or not Alain has a Copyright Registration...if he did, a simple letter to the school proving willful infringement would shut this down immediately and result in a settlement.
The registration of a copyright in the US has major implications. If a post registration infringement occurs, it's pretty easy to force the infringer to settle otherwise face punitive damages (50K per infringement plus attorneys fees). The problem with non-registered copyright is that in order to sue in Federal Court for infringement, you have to first register the copyright. Infringement AFTER a registration presumes you are the copyright holder, infringement BEFORE registration requires the copyright holder to PROVE ownership. That is a HUGE friggin' difference...in the case of an infringement of a registered copyright, you'll have IP attorneys lining up outside your door to work on contingency, infringement after registration, you'll need to front the money just to file in Federal Court...
There is no question that academia is totally friggin' clueless regarding intellectual property...look, they can barely teach their classes let alone understand any sort of legal nuances of copyrights...
I've yet to actually have a copyright infringement case get to court, but I have settled out of court many times. Why? I try to register all my copyright with the Library of Congress. When the apposing council finds out that the infringement is of a registered copyright, the attorneys tell their clients to settle or else face punitive damages plus attorneys fees (which can be far more than actual damages).
The main problem with copyright in the US is that yes, authors are accorded copyright protection at the point of creation...but, if you don't register your copyright BEFORE infringement, you have to prove you ARE the copyright holder (which it much tougher in court with rules of evidence) AND you have to prove actual damages (which is a much harder proposition than you might imagine).
The school screwed up big time. If Alain had registered his copyright BEFORE infringement, he could own the friggin' school at this point. If it's not a registered copyright, well, the best he can hope for is to slap the hands of the student/teacher and teach the friggin' school a lesson or two. The odds of getting lots of money isn't great. On the other hand, I've successfully gotten money from a wide array of infringers of my images–largely because many/most of my images are registered...my Globe Hands image (as seen on my
home page) has been licensed legally for nearly $1/4 million and almost $50K just in infringements...I take this shyte pretty seriously :~). Business is business...