Technically, the entire process is illegal, as the original Japanese magazines and tankoubon scanned are copyright in Japan. But Japanese publishers are not particularly concerned about such theft because they feel that in the end, it brings more readers to their series, and results in more purchases of their magazines and tankoubon.
Publishers in America are much more sensitive about copyright material (as are all mass-media producers: music, film, etc.) because of the thrust of capitalism and their fear of losing money. So, most scanlation studios drop projects after they have been licensed in America because 1. an official publisher has started translating the series into English, so they don't need to 2. American publishers could come after them and shut down their work.
For manga on the Internet being scanlated, the fans who scan, translate, and edit chapters want to be credited for their work, so it is considered theft when someone takes their work without crediting or without their permission. Technically, however, they do not hold copyright, save the translators who (I'm almost certain) have copyright over their translation. |