To make a reasonable judgment about whether the use you make of a copyrighted work is Fair Use, the Copyright law provides a set of four criteria in Sec. 107. These criteria include:
It is important to note that while no one factor is paramount, all four factors should be considered in your analysis. Note also that the preamble to Sec. 107, lists criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research as examples of Fair Use. That does not mean that ALL used for these purposes are necessarily Fair Use, but it does point to the purposes that Congress had in mind when writing Sec. 107.
In recent years, the courts have embraced a concept of "transformative use" as a measure of Fair Use. Stated simply, transformative use refers to a re-purposing of the work rather than simply reproducing it, often in a different context and for a different audience. Or, as Kevin Smith has noted in somewhat more economic terms "the new use does not compete with the original [use] in the same market." (Kevin Smith. Owning and Using Scholarship, 114).
Fair use is a copyright principle that allows users of information to be able to use intellectual property while still enabling the creator to be able to own and profit from their work. If you are using an intellectual work for any of these reasons then you are more than likely falling under the fair use principle of copyright.
These reasons include: criticism, comment, news reporting, teaching, scholarship and research.
What counts as “fair use” of something depends on these four main factors:
1) The Purpose and Character of Use: How have you used the work? Have you transformed the original work by adding new expression or meaning?
2) The Nature of the Copyrighted Work: Is the work factual in nature or creative? Is it unpublished or published? Different factors about the original work will have an effect on fair use.
3) The Amount and Substantiality of the Portion Used: How much of the original work are you quoting, summarizing or using? (Quoting three lines of a six line poem is different than quoting three line from a five minute song). And, of the portion that you are using - how much of the “substantial” idea of the work are you using?
4) The Effect of the Use on the Original Work in the Market: Does the way you use the work deprive the copyright owner of income? Or does it undermine a new or potential market for the original work?
For more information on fair use check out Stanford University's guide to Fair Use.