Fair use is a legal exemption to copyright protections that allows some uses of copyrighted works for educational and research purposes without securing permissions from or paying royalties to the copyright holder. However, not all educational use qualifies as fair use.
Fair use is complex, and there is no simple formula for determining whether a use qualifies. Many organizations have come up with their own guidelines and recommendations (such as using no more than 10% of a source), but these rules of thumb are not legally recognized and may not be sufficient to avoid copyright violation. Rather than relying on these recommendations, it's safer to assess the circumstances of each use on a case by case basis to determine whether fair use applies.
When determining whether your use of a copyrighted work qualifies as fair use, you will need to conduct a fair use analysis focusing on these four factors, outlined in Section 107 of the U.S. Copyright Act:
"1. the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
2. the nature of the copyrighted work;
3. the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
4. the effect of the use upon the potential market for or value of the copyrighted work."
Consider all four factors in your analysis. A finding of fair use will require that all four factors, when taken together, weigh in favor of fair use, and the relevant importance of all factors may not be equal, so be careful not to form a conclusion based solely on one or two factors.
Carefully document your analysis and retain all relevant records as evidence of your good faith attempt at applying fair use.
The first factor addresses how you intend to use the work. Nonprofit educational uses are favored over commercial uses. The fair use provision also lists "criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research" as accepted purposes.
This factor focuses on characteristics of the work itself. Certain attributes may effectively strengthen the copyright protections of a work. For example, works of nonfiction are favored in fair use rulings while stronger protections are granted to highly creative works. Publication may also be considered. If a work has not previously been published, courts are likely to reason that the original creator of the work should have control over the circumstances of first publication, weighing against a fair use exemption.
Although there is no precise rule for how to calculate the amount of a work that is acceptable to use, the smaller the percentage of the original work you use, the more likely it is that your use falls within fair use. In addition to the amount, courts will consider substantiality of the portion used. Even using a very small amount of the work may not be considered fair use if the portion used is considered the "heart of the work."
This factor focuses on the impact your use has on the copyright owner's financial interests. Is the copyright holder, through your use, missing out on a profit they would otherwise have gained? If you or your students could have reasonably purchased or licensed the work, this factor will likely weigh against fair use.