17 U.S.C. § 107. Limitations on exclusive rights: Fair Use

Notwithstanding the provisions of sections 106 and 106A, the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include —

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

(2) the nature of the copyrighted work;

(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

(4) the effect of the use upon the potential market for or value of the copyrighted work.

The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made upon consideration of all the above factors.

A faculty member's use of work does not need a determination of "fair" in the following cirmcumstances:

• The use is covered under current exemptions to copyright law.  For example, 17 U.S.C. 110(1) allow faculty to display a work in a face-to-face classroom setting without getting permission from the author of the work.  A number of exemptions to copyright law exist for librarians and educators.
  
  
• The use concerns work not governed by copyright law.  For example, work that is in the public domain can be freely used.
  
  
• Use of the work falls within a license for the work.  For example, work assigned a creative commons license for re-use can be used without invoking fair use.
  
  
• The work is a government publication or a purely factual work.

The Digital Millennium Copyright Act of 1998 makes it unlawful to circumvent technological barriars (e.g. DRM) in order to use the work, even if that use is clearly protected under fair use.

A license governing the work that specifically restricts fair use overrides a users right to fair use.

The courts distinguish between willful and non-willful infringers.  If someone knowingly infringes on copyrighted work, the penalties could be severe and include attorney fees.  However, if the infringer reasonably believed their infringement was a fair use the court can choose to limit the amount of damages awarded to the copyright owner even if the court deems the use unfair.  This helps protect educators who are legitimately trying to stay within the bounds of the law.  See 17 U.S.C 504(c)(2).

Determination of fair use must be made on a case-by-case basis by taking into account a number of factors.  It is helpful to think of the factors as a scale.  On one end, actions are clearly seen as fair use; on the other end, uses are clearly unlawful infringement on the original author's copyrights.  To determine whether a use is fair, see which ways the scales tip for each factor and then look at the factors as a whole.  A use can be fair without all four factors tipping toward the fair use side of the spectrum.

Factor 1: “What is the purpose and character of the use?”

Whether or not a work is used for educational purposes is not the deciding factor in determining fair use!  (For example, a faculty member could be developing course materials for commercial use.)  Educational use is an important factor, but must be supported by additional factors.  One characteristic of use that has become particularly important is whether the use is "transformative"?  According to the Center for Intellectual Property Handbook (2006), transformative use "adds a new content or meaning to the work, thereby creating a different sort of work."

Factor 2: “What is the nature of the work to be used?”

Work that contains objective data is more likely to be considered in the public domain and, thereby, fair use would apply.  A factual work that does not contain creative elements (e.g. phone book listings) especially tips the scale towards fair use.  In addition, the courts take seriously the right of original authors to decide whether or not to publish their work.  Using unpublished work would tip the scales toward infringement.

Factor 3: “How much of the work will be used?”

The amount of work is an important factor in determining fair use.  Courts look not only at the quantitative amount (i.e. percentage of the whole), but also at whether the most significant pieces of the work are being used.  Again, whether a use is commercial or not for profit and whether a use is transformative comes into play.  For example, a faculty members use of a work in it's entirety for nonprofit, educational uses would tip the scales towards infringement far less than if that faculty member were using an entire work for commercial purposes.

Factor 4: “What effect will the use have on the potential market for
or value of the copyrighted work?”

This factor is often considered the most important from the point of view of the courts.  (Although transformative use is becoming another major factor.)  Although, it is important to recognize that this factor may not apply if the first three factors show a clear case of fair use.  Use may be determined infringement if it results in competition (e.g for profits within an existing market, etc.) or if the user of the work is avoiding costs that would benefit the original author of the work (e.g. if fair use is claimed in order to avoid paying royalties or copyright fees).