Fair use is a familiar term to those who are interested in copyright law. Many understand it as a legal principle that somehow justifies the use of copyrighted material, especially since bloggers, filmmakers, artists and other content creators in the digital age tend to be vocal proponents of the concept. But despite the buzz, fair use is not a blanket defense against copyright liability or even a consistent of law.

The reality is that fair use is based on a sum of factors and that the end result in any given case will vary according to how a judge or jury evaluates and balances these factors. Even though there is a federal copyright statute that addresses fair use, courts are free to adapt the rule to facts on a case-by-case basis, and in the process, continue to develop this area of law through an endless variety of situations and combinations of circumstances.

The law doesn’t clearly spell out the definition of what makes a use fair, but there are some general principles that are useful to those who are considering the use copyrighted material. In determining whether a use is indeed fair, courts look at the following four factors:

1. Purpose and character of the use
The first factor is whether the purpose and character of the use are fair within the meaning of the statute. In assessing the purpose and character of the use, courts look at whether the use is commercial in nature and whether the use is transformative.

Here, a commercial use is defined as any kind of use where an individual or company reaps an economic advantage from copying, even if the benefit is indirect and even if the copying serves a broad public purpose. If the copies are made to save the expense of licensing material or purchasing authorized copies, the likely result will be a finding of commercial use. This means that works of “criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research” tend to merit fair use protection.

In addition to the commercial nature of the use, courts look at whether the use is transformative. Uses that are transformative tend to “add something new, with a further purpose or different character, altering the first with new expression, meaning or message.” For example, the court in Kelly v. Arribasoft, one of the key cases in this area, held a commercial image search engine’s inclusion of thumbnail-sized copies of copyrighted images was protected by fair use because it was transformative. Likewise, a parody may also be considered a transformative work if it “provide[s] social benefit, by shedding light on an earlier work, and, in the process, creating a new one.”

2. Nature of the copyrighted work
Courts also look at the nature of the copyrighted work itself to determine whether fair use applies. Creative works, such as fictional stories, films, and other creative works, are given a higher level of protection in fair use cases. By contrast, works that are factual or functional in nature, such as databases, are given limited protection. Works that have not been published are given more protection than works that have been published.

3. Amount and substantiality of the work used
In addition, courts consider the amount and substantiality of the portion used in relation to the copyrighted work as a whole. Copying a work in entirety or copying the heart of the work may be considered unfair. In the case of Basic Books v. Kinko’s, it was held that Kinko’s infringed the publisher’s copyright by photocopying entire chapters of the publisher’s books for students. But in the case of Harper & Row Publishers v. The Nation, fair use protection was also denied for a news magazine that excerpted “the most interesting and moving parts” of an unpublished manuscript, even though the quotes made up only a small portion of the entire manuscript.

4. Effect of use on the potential market for the work or on the value of the copyrighted work
Another factor that carries weight in the discussion of fair use is the effect of the use upon the potential market for or value of the copyrighted work. If a use is fair, it should not materially impair the marketability of the copied work or adversely affect the value of any of the rights in the copyrighted work. Even if the use isn’t commercial, courts may find market harm where the use would affect the potential market for the copyrighted work.

The area of fair use law continues to evolve as a reflection of the tension between copyright owners and users of copyrighted content, particularly since technology has made it possible to easily and instantaneously make copies. It is important to keep in mind that fair use is a defense and not an outright shield against liability. Because of this, many companies find that fair use protection does not afford much protection at all and opt instead to license the content from the copyright holders.

-By Dava Casoni, Annie Lin