Fair Use is the only exception to the copyright law that applies to all of the rights in the copyright “bundle” — reproduction, distribution, public display, public performance and derivative works. If it applies, fair use can allow otherwise unauthorized uses that involve any or all of these rights. The problem is that it is very hard to predict when fair use will apply.
Fair use was an exception to copyright created by judges in order to maintain an equitable balance between copyright holders rights and the legitimate needs of users. It was incorporated into the new copyright law in 1976 with no intention to change the flexible, factor-based analysis that judges had been using all along. So instead of a set of requirements that have to be met for all the other exceptions to apply, fair use has a set of four non-exclusive factors that judges are to balance. It is not a checklist nor a mathematical equation, but rather considerations to be balanced in order to help judges decide what is fair.
The four fair use factors listed in section 107 are 1) the purpose and character of the use, 2) the nature of the copyrighted work, 3) the amount and substantiality of the portion used, and 4) the effect of the use on the potential market for or value of the original. In addition to these factors, section 107 lists some illustrative examples of activities that might be fair use — “criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship or research.”
Because it is “an equitable rule of reason” applied by judges, and therefore quite uncertain, some people are afraid to apply fair use. Nevertheless, it is an essential tool for higher education and the only copyright exception that is flexible enough to accommodate new uses and new technologies. It is very important, for this reason, that academics continue to consider the four factors and make good faith decisions about fair use whenever appropriate.