Fair use (Section 107 of the U.S. copyright law) is an exception to the rights of copyright owners. Fair use is the right to use copyrighted material without permission or payment under some circumstances, especially when the cultural or social benefits of the use are predominant. This includes purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, and research. Fair use balances the needs of the public with those of copyright owners and preserves copyright's purpose to promote "science and the useful arts."
According to Kenneth Crews, "For education and research, fair use is the most important exception to the rights of copyright owners, because it is flexible and adaptable to the many unpredictable situations and needs that occur as we pursue diverse projects and apply innovative technologies in academia." (Copyright Law for Librarians and Educators, American Library Association, 2012, p.54). The flexibility of fair use means that it can be used for all types of copyrighted materials in all formats and may apply to any type of use.
When institutions and individuals act reasonably and in good faith when evaluating whether their intended uses are fair, the law limits their liability if the use is later found to be infringing. In addition, state institutions benefit from sovereign immunity which essentially prevents rightsholders from seeking money damages against the institution for copyright violations.
For these reasons fair use is an essential tool for helping institutions balance the risks involved in the unauthorized use of copyrighted material with their institutional missions and the value of the projects that would not be possible if copyright permission was required in every instance.
The four factors
Congress provided guidance in determining whether the use made of a work in any particular case is fair. Section 107 of the 1976 Copyright Act specifies four factors for judges to take into consideration when analyzing the specific facts of a case. A final determination on fair use may be made after a careful balancing of each of the factors.
Factor One: The Purpose and Character of the Use
This factor favors nonprofit, educational uses over commercial uses. Use of copyrighted material is more likely to be fair use under the first factor if it is for teaching (including multiple copies for classroom use), research, scholarship, criticism, comment, or news reporting. It is less likely to be fair if the user profits from the use or if the use is for entertainment purposes.
Transformative uses are also favored under the first factor. These are uses in which the work is used in a new manner or context, distinct from the intended uses of the original.
Factor Two: The Nature of the Work
This factor favors fair use for nonfiction works that are factual in nature. Use under factor two is less likely to be fair for creative works such as novels, poetry, plays, art, photography, music, and movies.
The second factor is more likely to favor fair use if a work has been published and less likely if it has not, for example the unpublished letters of a historical figure.
Factor Three: The Amount and Substantiality of the Portion Used
The third factor is more likely to favor fair use when an appropriate amount of the copyrighted work is used in relation to the purpose of the use. Use of copyrighted material is more likely to be fair under the third factor when a small quantity is used and when the portion used is not central or significant to the entire work. It is less likely to be fair if a large portion or the whole work is used, and if the portion used is the "heart of the work."
This being said, there are instances where courts have ruled in favor of fair use even when the copyrighted work was used in its entirety.
Factor Four: The Effect on the Market
The fourth factor is more likely to favor fair use when the use of the copyrighted work does not harm the market for the work or its value. When a use is transformative, it is less likely that the market for the original work is damaged.
"Transformative" fair use
In recent years, judges have turned decisively to the framework of "transformativeness" when evaluating fair use cases. Two key analytical questions have emerged from the case law as core guiding principles for fair use reasoning:
Did the use "transform" the material taken from the copyrighted work by using it for a broadly beneficial purpose different from that of the original, or did it just repeat the work for the same intent and value of the original?
Was the material taken appropriate in kind and amount, considering the nature of the copyrighted work and of the use?
"These two questions effectively collapse the 'four factors.' The first addresses the first two factors, and the second rephrases the third factor. Both key questions touch on the so-called 'fourth factor,' whether the use will cause excessive economic harm to the copyright owner. If the answers to these questions are 'yes,' a court is likely to find a use fair—even if the work is used in its entirety."
Relying on transformativeness creates more certainty around fair use and removes some of the grey areas around the traditional four-factor analysis. A use does not have to be transformative to be fair, but transformative uses are almost certainly fair.
Furthermore, the concept of transformativeness is easier for many people to understand and apply. That is why we rely on transformativeness for most of the examples in this guide.