## Fair use of copyrighted material in North Carolina **Fair use** is a federal copyright doctrine (17 U.S.C. § 107) that allows limited use of copyrighted material without permission. It's an affirmative defense to copyright infringement, not a positive right — you may still get sued, even if you ultimately win. ## The four fair-use factors **Section 107 of the Copyright Act:** **1. Purpose and character of the use:** - Commercial vs non-commercial - **Transformative** vs merely reproductive - Educational, news, criticism, comment, scholarship, research - Parody (often fair use) - Satire (less protected) **2. Nature of the copyrighted work:** - Factual/informational (more fair-use friendly) - Creative/expressive (less) - Published (more) - Unpublished (less) **3. Amount and substantiality of portion used:** - Quantity used (small portion better) - Quality (heart of work matters) - Whole works sometimes OK (e.g., images) **4. Effect on potential market:** - Often most important factor - Does use substitute for original? - Does it harm licensing market? - Mere criticism not market harm - Even hypothetical market matters **No factor is dispositive — weighed together.** ## Transformative use — the key concept **Modern fair-use focus:** - Adds new expression / meaning / message - Different purpose than original - Creates something new - Doesn't merely supersede original **Strong transformative examples:** - Parody (Campbell v. Acuff-Rose, 2 Live Crew "Pretty Woman") - Documentary using clips for criticism - News commentary - Educational analysis - Search engine indexing (Perfect 10 v. Amazon) - Reverse engineering (under specific tests) **Weak / not transformative:** - Verbatim copying - Substituting for original - Mere repackaging - Aggregation without comment - Decorative use ## Recent landmark — Warhol v. Goldsmith (2023) **Supreme Court ruling:** - Andy Warhol's silkscreen of Prince photo - Used for Vanity Fair magazine cover - NOT fair use - "Same essential commercial purpose" as original - Transformative meaning ALONE not enough - Must be transformative purpose / character **Practical effect:** - Even artistically transformative use can fail - Commercial purpose + similar use = often not fair - Especially in licensing markets ## Common fair-use scenarios **News reporting / criticism:** - Quoting articles, news clips - Generally protected if reasonable amount - Commentary + criticism strong - Even unpublished works sometimes OK **Educational use:** - Classroom display - Course materials - Generally protected if non-commercial - TEACH Act adds protections - Library uses (108) parallel **Parody:** - Comments on or ridicules original - Strong fair-use protection - Distinguished from satire (uses original to comment on something else — weaker) - Must be recognizable comment on original **Research / scholarship:** - Academic articles - Generally favored - Especially with proper citation - Substantial quoting often OK **Commentary / criticism:** - Reviews, op-eds, blogs - Strong fair-use protection - Quoting to criticize protected **Time-shifting / format-shifting:** - Recording TV shows for later viewing (Sony v. Universal) - Personal use copies - Limited applicability now (streaming) **Search engines + indexing:** - Thumbnails (Perfect 10 v. Amazon) - Snippet display (Authors Guild v. Google) - Indexing for discovery **Reverse engineering:** - Software interoperability (Sega v. Accolade) - Limited circumstances - Specific tests apply ## Areas of high risk **Photo / image use:** - Most photos copyrighted - Stock photos require licenses - Even "free" sites have terms - Watermarks don't make it fair use - Old photos may be public domain **Music sampling:** - Generally NOT fair use - Bridgeport Music v. Dimension Films — even small samples need license - Multiple licenses needed (composition + recording) - Some circuits more flexible **Video / film clips:** - Often not fair use - Documentary clips require licenses typically - Even short clips can be infringement - DMCA takedowns common **Movie posters / album art:** - Often not fair use - Decorative use weak - Discussion + criticism stronger **Fan fiction / fan art:** - Sometimes OK, sometimes not - Non-commercial helps - Transformative helps - Don't use trademarks - Limited safe harbors **Online reproduction:** - Sharing articles in full = bad - Quoting + linking = better - Memes can be infringement - DMCA takedown risk ## DMCA + safe harbors **OSPs (online service providers):** - DMCA Section 512 protections - Safe harbor for hosting platforms - Notice + takedown procedure - Counter-notice option - DMCA agent registration **For users:** - Counter-notice if claim wrong - 17 USC § 512(f) — false claims actionable - Lenz v. Universal — must consider fair use before takedown ## Public domain — no copyright issue **Truly free to use:** - Pre-1928 US works (as of 2024) - Federal government works (typically) - Works expressly placed in public domain - Works that lost copyright (rare for new works) **Always changing — Copyright Term Extension Act + others.** ## Licensing alternatives **Often cheaper / safer than fair use:** - **Direct licensing** — contact rightsholder - **Stock photo / music** — licenses for nominal fees - **Creative Commons** — free with attribution / restrictions - **Royalty-free** — pre-cleared for specific uses - **Public domain databases** - **Editorial-use licenses** (often cheaper for news) ## Risk management **For commercial users:** - License when uncertain - Document fair-use analysis - Insurance covering IP claims - Indemnification from contributors - Trademark vs copyright distinction - Right of publicity issues **For platforms:** - DMCA agent registration - Notice + takedown processes - Repeat-infringer policy - Safe-harbor compliance ## Common myths **Wrong:** - "Crediting = fair use" (NO) - "Non-profit = fair use" (only one factor) - "30 seconds / 30 words = fair use" (NO bright lines) - "Disclaimer makes it OK" (NO) - "Available online = free to use" (NO) - "Old works = public domain" (depends on date) - "Educational use always fair" (NO) - "For comment / criticism always fair" (factors apply) ## Defenses to infringement claims **Beyond fair use:** - License (express or implied) - First-sale doctrine (physical copies) - Statute of limitations (3 years) - Independent creation (no copying) - Failure to register (limits damages) - Innocent infringement (limits statutory damages) - Sovereign immunity (limited) - Estoppel / acquiescence - Misuse of copyright ## Damages exposure **Statutory damages:** - $750-$30,000 per work (regular) - Up to $150,000 per work (willful) - Per work, not per use - Multiple works = multiplied - Severe penalty exposure **Actual damages:** - Lost licensing fees - Lost profits - Defendant's profits **Plus:** - Attorney's fees (sometimes) - Injunction stopping use - Destruction of infringing copies ## When in doubt — license **License is almost always cheaper than:** - Defending lawsuit ($50K+) - Statutory damages - Attorney's fees - Injunction disrupting business - Reputation damage ## What you should do If you're considering using copyrighted material in North Carolina: do a fair-use analysis (or have an attorney help) before commercial use. License when in doubt — usually cheaper than defense. For platforms, register DMCA agent + implement notice/takedown. North Carolina IP attorneys handle copyright; many offer flat fees for analysis ($1,000-$3,000). --- *This guide is general information about US federal copyright law as of mid-2026 and is not legal advice. Fair use is fact-specific. Talk to a licensed copyright attorney about your specific situation.*