So I’m wondering, does Lego hold copyright on all of the MoCs that I produce using their parts?
Let’s say that I make a MoC out of Lego bricks that looks nothing like an official Lego set and put it on the cover of a book I plan to sell, for example. The book has nothing to do with Lego. Does TLG have the grounds to sue me for copyright infringement?
Related: could I be accused of misrepresenting TLG by using their parts and be sued for libel?
I’m not a lawyer (so take this with a grain of salt), but I very much doubt it.
If that were true, clay companies could sue people for using their product, Games Workshop could sue people for painting their Warhammer models a non-regulation paint-job, and many other things.
Besides, even if they could, if you look at their policies, they’re only coming after you if you claim to BE Lego. Otherwise, you safe.
I have to agree here for the most part (again, not a lawyer, so this isn’t legal advice).
You can’t copyright individual components of certain creative works. As @ProfSrlojohn said, that would mean anyone producing works that require materials or components could never be legally made.
The best, but imperfect, example of this is music. No single person can own an individual musical note. If that were the case, that note could never be used in any songs. Instead, people can own certain arrangements or configurations of those notes (in other words, they own the rights to their own songs).
Now, it’s not quite a perfect analogy because LEGO does own the actual design of the LEGO brick and any other piece they produce. In this case, the components themselves are owned by an entity, but any creation you make with them is legally your work.
With MOCs, though, it’s a bit weird. People like to give credit for particular piece combinations (the “Gringat hand” is the most popular in the Bionicle community, for instance), but personally I’d argue that it isn’t strictly necessary, but a courtesy thing.
I don’t know, it’s an odd situation. If someone recreates your MOC and passes it off as their own, can they do so legally? It might be a hard case to make.
But, for your question, I don’t think LEGO can or would do anything legally about a picture of a custom LEGO creation.
You own the MoC, but TLG still owns the part designs in that MoC.
To use your example - if my book cover features a custom MoC that was completely original and looked nothing like any existing Lego set, but it has a Kanohi Hau as a visible part of the build, Lego could probably take action against the book. They would have no ground against the model I’d made, but plenty against the components of that model because it’s a recognizable, original design.
If you were using brick designs that are no longer property of Lego (think the 2x4 and stuff, there’s some legal stuff about how Lego doesn’t own the concept of interlocking plastic bricks anymore) you might have more leeway. That’s how bootleg companies get away with literally stealing molds - although they can get in trouble for copying set designs, unless they’re in a country with weird copyright laws.
That said, they would also have no rights to what you’ve built, and couldn’t sell it or market with it or anything. If someone were to try and sell your MoC, or if they tried to use it in another way (say, a movie or video game that is depicting your MoC as a character, though you’d need a very unique design that had obviously been plagiarized to have a case there) you’d have grounds to defend that, I believe.
A good example is the Rahi Contest winners, if you’ve ever seen the contract they had to sign - they gave Lego the rights to use their builds in marketing and promotional material (such as the Rahi Beasts book, and the comic that the Tahtorak appeared in) but the builder still retained the rights to the design. Lego would not be allowed to sell the Tahtorak as a set, legally - that’s still property of the respective contest entrant.
Disclaimer: I am not a lawyer. This could all be completely wrong. 
If they did, then every MOCist in existence would’ve been sued by now.
Most MoCs aren’t used for commercial purposes, though. There’s a difference between posting a MoC online (and not earning money from it) and putting it on something that it obviously going to be sold.
For example, some fonts are allowed to be used for personal use (like a wedding invitation) but not allowed to be used for commercial use (like using it for your book or website).
Yeah, this is where the “headscratch” part of the argument comes in. I’d likely have to consult a lawyer for the specific design in question. Masks would probably be out in general because they represent copyrighted characters.
On the other end of the spectrum is Nathan Sawaya’s Art pieces (you know, the gold exploding man), and the models for Rebel Nature Faber posted with CCBS parts in them. It may even depend on the specific part - but I have no idea the difference between Mask vs. CCBS bone vs. brick. Technic may be an even stranger world.