The Four Factors Courts Use to Evaluate Fair Use

Fair use is a legal defense that permits limited use of copyrighted material without the owner’s permission. Courts weigh four factors to decide whether a particular use qualifies:

  1. Purpose and character of the use—Is it educational, commentary, or criticism? Nonprofit and educational uses get more favorable treatment than commercial ones.
  2. Nature of the copyrighted work—Factual works receive less protection than highly creative ones.
  3. Amount used—Using a small portion weighs in your favor; copying the whole work weighs against you.
  4. Market impact—If your use substitutes for the original and harms the creator’s sales, that’s the strongest factor against fair use.

Practical Examples

Showing a book cover in an educational video? That’s likely fair use—small portion, educational purpose, no market harm, and it may actually help book sales. Quoting one sentence from a book in a video review? Also likely fair use. But copying an entire chapter and distributing it to customers would be much harder to defend.

Transformation matters too. If you significantly change the work—from one medium to another, or by adding substantial commentary—a court is more likely to find fair use.

Fair Use Is a Defense, Not a Permission Slip

Fair use doesn’t prevent you from getting sued—it’s a defense you raise after being accused of infringement. There’s no bright-line rule, and courts apply the four factors case by case. When in doubt, get a license or get legal advice before using someone else’s work.

If you want to use someone else’s copyrighted work and fair use doesn’t clearly apply, the answer is a license—a contractual right to use the work under specific terms and limitations. And once you move from protecting creative expression (copyright) to protecting brand names and logos used in commerce, you’ve crossed into trademark law—a related but distinct area of intellectual property.

Video Transcript

When you can legally use someone else’s work without permission

Aaron Hall: When can you legally use someone else’s work without asking permission? In this video, we’re diving into educational fair use a critical concept for business owners, content creators, and anyone using third party materials in their marketing or educational content we’ll cover. When showing a book cover, quoting a sentence, or transforming a piece of content could be protected under the law.

Educational use explained

And when it could still land you in legal hot waters. Another example is educational purposes. This video is educational. Previously I showed the cover of various books and other items. I. In E essence, I am providing a copy of this book. So because I don’t have permission of the owner of whoever created this book, I have now infringed the copyright of the owner of the front of this book.

Now, that might be a different owner than who actually created. The text of the book, I didn’t infringe the text because I didn’t read it all. I didn’t provide a copy to you. But as far as the cover, I have clearly infringe the copyright of the owner of this book. But I did so for the purpose of education.

It didn’t take away any sales of the book. In fact, it probably helped the sale of the book because this is a fantastic book for business owners. But I clearly infringed as an educational video. This clearly qualifies. Under the educational category of fair use. Thus, this is copyright infringement that is permitted under the fair use doctrine, and I would not be liable if I got sued by the owner of this book cover for copyright infringement.

Clearly this is an example of educational use that’s fair use. Another factor courts will look at is, was the copying without permission. So the infringement done by a for-profit company. Or nonprofit? Was it done to benefit the public without any financial motive, or was there some sort of financial benefit to whoever did the copying?

Why money matters in the analysis

That’ll be a factor considered by the court because if you’re making money off the art of another, the idea with copyright is that should be shared with the artist, or it should be exclusively the right of the artist. One other thing to keep in mind is that if you significantly transform the art from one medium to another, a court might say that transformation is enough to argue for fair use.

Example from reading a single sentence

I’ll give you an example. Let’s say I read a sentence out of this book. I didn’t copy the whole book, but I clearly copied one sentence, so clearly we have copyright infringement of that sentence. That’s undisputable. But did I really undermine any sales? No, I didn’t take the whole book. I just read a little sentence.

I transformed. What is an entire book into simply a video with a copy of one sentence, and the courts will say, because you only took a little element, and it’s such a different medium, it didn’t take any way any sales. And in this case, by the way, it’s educational as well. All of those reasons would argue in favor of fair use.

How courts weigh many factors

Now you might be saying, wow, Aaron, you’re giving me a lot of factors to consider. To con, think about fair use. I would really like some just general rules, like this is fair use, this isn’t, unfortunately, fair use isn’t that way. The courts and Congress have specifically designed the law. So that many factors can be weighed by a judge.

Fair use as a defense

As a result, if you decide to violate the rights of another artist, so you decide to infringe a copyright, you are going to have to demonstrate in court that your right to use the artist’s work was permitted. By fair use. In other words, clearly you’ve infringed a copyright. Now you have to raise the fair use defense.

Maybe you’ll win, maybe you’ll lose. But there’s always a risk if you are going to use somebody else’s work without their permission that you may get sued for trademark infringement, and you’re gonna have to demonstrate you have the burden to show. That under fair use law, you should be allowed to do that without actually having to pay money to the artist.

Ownership from the moment of creation

So let’s recap. Anytime an artist creates anything, they immediately acquire a copyright. When an artist creates a work, the artist owns the right to that work, including any subsequent use or copies. The artist can give permission. For somebody else to use copies, that’s called a license. The artist can sell the copyright entirely.

License and assignment

That’s called an assignment. If somebody else infringes the artist’s rights, the artist can send a cease and desist letter or demand letter, or the artist can sue for copyright infringement. But only after registering. The copyright. Remember, in order to get a registered copyright, you need to file in the US Copyright Office.

Registration and enforcement basics

You can generally do that without an attorney and by registering you get the right to sue and some other rights that go along with that. That’s the gist of copyright law. The whole idea is to protect artists and the work they create. So whether you and your company are creating artistic works or you’re using the artistic works of others, you now know I.

Who owns what in your business

People have to pay for the right to use that. You can get a copyright registered if you so choose, or you can just live with the idea of not having a copyright registered. A lot of times small businesses don’t spend the money to register a copyright unless they get close to the timing of suing. Whether you actually wanna do that is a great question to have.

Discussed with your attorney. So that’s it. That’s copyright law in a nutshell. You now know all of the key things that a business owner needs to know to identify what’s stuff in your business can be protected by copyright. You’ve identified who has the right to that. So your company, if your employees created it or if somebody else created it, they have the right to it.

Getting permission from the owner

And we’ve talked about how do you get permission? Well, if you want to get permission from the owner of a copyright, you typically pay for a license. So like if you buy a copy of Microsoft Word, you’re getting a license to that. And a license can be for software as a service. It can be for digital products.

It can be a right to use for a period of time. There can be all sorts of limitations on the right to use somebody else’s work. We call that a license. We call that license terms. So now we’re going to transition from the rights of an artist, which we call copyright, to the rights of somebody who is selling a product.

Or a service. And when somebody’s selling a product or a service uses some sort of brand name or brand mark, we call it a trademark. Actually, in the case of selling services, we call it a service mark. And in this circumstance where we’re selling products, we call it a trademark, but often. We’ll just call it trademark generically so that we don’t have to differentiate every single time between a service mark and a trademark, because generally speaking, even if a mark is for services, the same law applies for trademarks to service marks as well.

More help for business owners

If you’d like to know more about how to avoid trouble like this, I have a free resource AaronHall.com/free. I provide information for business owners of small to midsize companies on how to avoid common legal problems. That includes a PDF. It includes videos talking about important issues. I’m Aaron Hall.

I’m an attorney for business owners and entrepreneurial companies. If you’d like, subscribe to this channel so you can get more educational content like this.