Lets face it. The Copyright Law is definitely one of the most complicated laws, and apart from being terribly difficult to decipher, it can also attract a pretty hefty lawsuit from some who believe in protecting their intellectual property. Hence, one needs to be pretty wary and careful when flirting with copyrighted stuff. Of course, there is a fair use clause which is supposed to help out those mired in this copyright quandary.
How to Use Copyrighted Material
As you all know, the person creating any creative material has the right to copyright it, which means that he pretty much stamps his authority on the work in question and makes sure that no one can use it for commercial benefit without his consent. Or at least, that's the objective the rule-makers had in mind when they came up with this particular legislation: to protect the works and the interests of the person from frauds, plagiarism, and others who wish to use the work without the permission of its creator, for their own monetary gain.
Of course, while all this sounds absolutely dandy for the creator of the materials, the Copyright Law does not ensure full exclusivity of the right of usage to the creator. This is where the very ambiguous and contentious fair use clause comes in. A fair use clause lays down the cases in which the work can be used fairly, without having to worry about being sued by the creator for its use.
Now of course, when it comes to legislation, one can never be too careful because of the ambiguity of it all. Obtaining the permission to use copyrighted material from the creator is the best way of using it, and simply citing it does not amount to fair use. With that in mind, let us see the common cases where using someone's work comes under the purview of this clause.
Criticism and Comment
Quoting copyrighted material seems to have a pretty unanimous thumbs up if the purpose for which it is used is for comment, criticism, or review. One can quote work for making a point in a wholly unrelated situation, with of course, the citation of the source. Even in the case of research and scholarship, the work can be quoted without any trouble.
An interesting instance of fair use of copyrighted material is in case of news reporting, where the reporter can quote it. So while this can be considered to be commercial use of the work (for the newspaper/news channel), it still comes under fair use.
Non Profit Education
Since it is non-profit, and by that we mean that the teacher or the institution has no intention of making commercial benefit from the use of the work, the material can be used for non-profit education, where only the student stands to benefit by gaining knowledge.
One little clause in the fair use rule which is sure to irk the copyright holder is that his work can be used to mimic/make fun of him or his work publicly. Ironic, but if one chooses to use the copyrighted work in an act of parody, it still amounts to fair use.
If you have any doubt about whether your use is fair or not, ask your self two questions: 1). Do you intend to copy the material or create something new? And 2). Do you intend your copied material to compete with the source? If you intend on simply copying and are commercially competing with the source, then it cannot be fair use.