Fair Use, the Four Factors, and When It Doesn't Protect You

By Hank FasthoffJuly 4, 2026

Fair use is the most commonly invoked and most commonly misunderstood defense in copyright law. Under Section 107 of the Copyright Act, fair use of a copyrighted work for purposes such as criticism, comment, news reporting, teaching, scholarship, or research isn't infringement.

Those examples don't establish automatic categories of fair use. A court examines the challenged use under at least four statutory factors. Fair use is an affirmative defense, so the party relying on it ordinarily bears the burden of establishing the defense.

The Four Statutory Factors

Section 107 requires consideration of the purpose and character of the use, including whether it is commercial or for nonprofit educational purposes. The court also considers the nature of the copyrighted work, the amount and substantiality of the portion used, and the effect on the potential market for or value of the copyrighted work.

No single factor controls. Courts weigh the factors together in light of copyright's purposes, and the importance of a factor may change with the circumstances. The ultimate fair use determination is a legal question, although it may depend on disputed underlying facts.

Factor One and the Purpose of the Use

The first factor examines what the accused user did with the copyrighted work and why. Commercial character weighs in the analysis, but it doesn't control the factor by itself. A nonprofit or educational label likewise doesn't establish fair use.

In Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994), the Supreme Court considered 2 Live Crew's commercial parody of Roy Orbison's "Oh, Pretty Woman." The Court held that a commercial parody may qualify as fair use and rejected a presumption that commercial character made the use unfair. It reversed the court of appeals and remanded for further consideration rather than finally deciding that every aspect of the use was fair.

Campbell described a use as transformative when it adds something new through a further purpose or different character. Parody may require recognizable use of the original because the parody comments on or criticizes that work. Satire directed at something else requires a different justification for borrowing the original expression.

In Google LLC v. Oracle America, Inc., 593 U.S. 1 (2021), the Court assumed that the copied Java API declaring code was copyrightable and held that Google's use was fair. Google copied approximately 11,500 lines, or 0.4% of the API code at issue, so programmers could use familiar commands in the different computing environment created for Android smartphones.

The Court tied its decision to the functional nature of the declaring code, the purpose of reimplementing the interface, the amount needed for that purpose, and the absence of market substitution on the record. The decision doesn't establish a general rule for copying software or other works.

In Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith, 598 U.S. 508 (2023), the Supreme Court examined one specific use. The Andy Warhol Foundation licensed "Orange Prince" to Condé Nast for a magazine about Prince. In 1984, Lynn Goldsmith licensed the photograph to Vanity Fair for one use as an artist reference, and she also licensed photographs of Prince to magazines for stories about him.

The Court held that factor one favored Goldsmith because the two uses served substantially the same purpose and the foundation's use was commercial. New expression, meaning, or message didn't control the factor. Courts must compare the purpose and character of the specific challenged use with those of the original.

The Court declined to decide whether the creation, display, or sale of the original Prince Series works presented the same analysis. It also noted that use of "Orange Prince" in an article about Warhol might present a different question. The same copying may be fair for one purpose and not fair for another. Because the foundation didn't challenge the rulings that the other three factors favored Goldsmith, the Supreme Court considered only factor one and affirmed the judgment against the foundation.

Factor Two and the Nature of the Work

The second factor considers the type of work copied. Use of factual, functional, or informational material is more likely to favor fair use than use of highly creative expression such as a novel, song, film, or photograph.

Publication status also affects the analysis. An author's interest in controlling the first publication of an unpublished work may weigh against fair use. Section 107 nevertheless states that unpublished status alone doesn't bar a fair use finding when the court considers all four factors.

The weight assigned to this factor depends on the case. It may contribute little when the purpose of the use supplies a strong justification for copying. It may weigh more heavily when the original is highly creative and the accused use serves substantially the same purpose.

Factor Three and the Amount Used

The third factor considers both quantity and quality. A court asks how much of the original was used and whether the user took its most important or expressive portion. The amount should also be reasonable in relation to the asserted purpose.

No statute or decision establishes a fixed number of words, seconds, or pages, or a fixed share of a work, that is automatically fair. Copying a small portion may weigh against fair use when the selection represents the heart of the work. Copying an entire work may favor fair use when the purpose reasonably requires the whole work and the remaining factors support the defense.

In Harper & Row, Publishers, Inc. v. Nation Enterprises, 471 U.S. 539 (1985), The Nation used approximately 300 copyrighted words from President Ford's unpublished manuscript. Although those words were a small part of the approximately 200,000-word manuscript, the Court agreed that The Nation took the heart of the book. The excerpts included some of the manuscript's most powerful passages and appeared before the excerpt that Time magazine had licensed.

In Campbell, the Court held that the lyrical copying wasn't excessive in relation to the parodic purpose. It remanded for further evaluation of whether the repeated bass riff copied too much music.

Factor Four and Market Effects

The fourth factor considers actual and potential market substitution. A court examines the challenged conduct and the effect that similar widespread conduct would have on the original work and legally recognized derivative markets.

The relevant harm is substitution, not every adverse economic consequence. A critical review may reduce demand for the original because readers find the criticism persuasive. Copyright law doesn't treat that response as market harm caused by infringement.

A copyright owner also can't defeat fair use merely by identifying a hypothetical market in which users would pay for permission to engage in criticism, parody, or another use that owners ordinarily wouldn't license. That reasoning would assume the answer by treating every unlicensed use as lost licensing revenue.

Existing and customary licensing markets remain important. In Warhol, Goldsmith and the foundation both licensed Prince images to magazines to illustrate articles about him. The foundation's license therefore occupied a market in which Goldsmith already participated.

Commercial duplication of an entire work presents a different problem. When the copy serves as a replacement for the original, market harm may be readily inferred. A use serving a distinct purpose is less likely to act as a substitute, but that conclusion depends on the record.

Common Fair Use Misconceptions

Attribution doesn't make an otherwise infringing use fair. Giving credit may be professionally appropriate, but the four factors govern the defense.

No fixed portion is automatically permissible. A small but qualitatively important selection may weigh against fair use, while use of an entire work may be justified under different facts.

Commercial use isn't automatically unfair. Commercial character is one part of factor one, and commercial duplication may also affect factor four. Neither point eliminates the required review of the complete use.

Educational or nonprofit use isn't automatically fair. A business, school, nonprofit organization, or individual is subject to the same statutory analysis.

Adding a disclaimer such as "no infringement intended" doesn't affect the four factors. A sincere belief that the use is fair likewise doesn't establish the defense.

Calling a use transformative doesn't resolve the issue. The court examines the actual purpose, the justification for copying, the amount taken, and market substitution.

What Warhol Means for Business Uses

Warhol didn't abolish transformative use or announce that all commercial uses are unfair. It required courts to analyze the specific use alleged to infringe and clarified that new aesthetics or expression alone don't control factor one.

A business shouldn't assume that altering a photograph for an advertising campaign, sampling a recording in a new track, or adapting an illustration for merchandise supplies a different purpose. Those changes may add new expression while competing with an existing market for the original or its licensed derivatives.

The analysis should identify the precise use, not only the new work in the abstract. The same image might be used as the subject of criticism in one setting and as a substitute for a licensed illustration in another.

When the proposed use serves the same purpose as the original and competes in an existing or customary licensing market, obtaining permission reduces infringement risk. The existence of a licensing market doesn't itself foreclose fair use, especially when the challenged use is criticism, commentary, or parody.

Fair Use and AI Training

Courts are applying the four factors separately to AI training, source acquisition, stored datasets, and competing products. The early district court decisions don't establish that AI training is categorically fair or categorically infringing.

In Bartz v. Anthropic PBC, 787 F. Supp. 3d 1007 (N.D. Cal. 2025), the district court treated Anthropic's conduct as several distinct uses. It granted Anthropic summary judgment that the copies used to train specific large language models were fair use. It separately held that creating digital replacement copies from purchased print books was fair use under the facts presented, where the print copies were destroyed and the digital copies weren't redistributed.

The court denied Anthropic summary judgment on its fair use defense for downloaded pirated copies used to build and retain its central library. The court reasoned that creating a general library for indefinite retention was a separate use requiring its own justification.

The later class settlement covered eligible books in the versions of Library Genesis or Pirate Library Mirror that Anthropic downloaded and that appeared on the settlement's Works List. On July 20, 2026, the court approved the settlement, entered final judgment, and dismissed the action with prejudice.

In Thomson Reuters Enterprise Centre GmbH v. ROSS Intelligence Inc., 765 F. Supp. 3d 382 (D. Del. 2025), the district court rejected fair use where ROSS used material derived from Westlaw headnotes to develop a competing legal research product. The court found that the commercial purposes were similar and that the competing product threatened the relevant market.

The Third Circuit heard oral argument on June 11, 2026. As of August 30, 2026, it hadn't issued an opinion.

These cases involve different works, methods of acquisition, technologies, products, outputs, and market records. Their different results don't supply a general answer for every model or dataset.

Evaluating a Proposed Use

The analysis begins by defining the exact material to be copied and the specific use the business intends to make of it. It should distinguish creation, internal storage, public distribution, display, licensing, and any later reuse.

A sound analysis compares the purpose of that use with the ordinary and licensed uses of the original. The amount copied should correspond to a documented need, and the market review should address substitution, existing licenses, customary derivative markets, and the likely effect of similar widespread conduct. When a business intends to use protected expression for the same purpose as the original, or when the analysis depends primarily on avoiding a license fee, permission is ordinarily the more reliable course.

Fair use remains flexible because it must address many kinds of works and uses. That flexibility also prevents a responsible analysis from resting on attribution, a fixed share, a nonprofit label, a disclaimer, or the word "transformative."