The Fair Use Doctrine provides for limited use of copyrighted materials for educational and research purposes without permission from the owners. It is not a blanket exemption. Instead, each proposed use must be analyzed under a four-part test.
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 determiniation 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factor is more likely to favor fair use if a work has been published and less likely if it has not, for example the unpublished letters of a historical figure.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.