Factor 1: Purpose and character of the use
Nonprofit, educational use vs. commercial use - The U.S. Copyright Act favors nonprofit, educational uses of works as fair ones. Commercial uses are less favored, but this doesn't one can't make a fair use defense for using a work for profit.

Transformative uses

• A work is transformative if, in the words of the Supreme Court, it “adds something new, with a further purpose or different character, altering the first with new expression, meaning or message.” Use of a quotation from an earlier work in a critical essay to illustrate the essayist’s argument is a classic example of transformative use.
• A use that supplants or substitutes for the original work is less likely to be deemed fair use than one that makes a new contribution and thus furthers the goal of copyright, to promote science and the arts.
• To quote the Supreme Court again, transformative works “lie at the heart of the fair use doctrine’s guarantee of breathing space within the confines of copyright.” A transformative work has a new purpose or use or appears in a new context.

Factor 2: Nature of the copyrighted work
Fact over fiction

• Uses of works that are factual or non-fiction in nature are more likely to be considered fair ones. As copyright expert Kenneth Crews states in Copyright Law for Librarians and Educators, the reason for this is because "a central purpose of copyright law, including fair use, is to allow for the growth of knowledge" (p. 62). To accomplish this goal, Crews states, "We regularly need to use and build upon earlier works . . . [and] most often, these efforts depend on using the nonfiction works of earlier scholarship" (p. 62).
• Notwithstanding the point above, we need to exercise caution if the copyrighted material was prepared primarily for the higher educational market—e.g., a textbook? (Fair use is likely to be more restricted for such material, since photocopying it is more likely to harm the market for it than would be true if the original were aimed primarily at a different market.)
• The use of creative works (fiction, art, photography, music, and films, etc.) are less likely to be viewed as fair. However, that doesn't mean that you can't use them for purposes such as commentary, criticism, reporting, etc. Rather, the bar is set higher for the use of creative works. As with all fair use analyses, you should consider all four factors when determining whether your use is a fair one.

Consumables

• Despite fair use favoring factual works, there are times when the use of copyrighted factual works weighs against fair use.
• Consider "consumable" materials--works such as workbook exercises and tests (among others) that are designed to be used (consumed by the user), then repurchased.
• Such as use might not be considered a fair one, in part because of the nature of the work but also because of the use's effect on the market for the work.

Factor 3: Amount and substantiality of the portion used
How much can you use?

• It's not possible to give a specific amount of content that a copyrighted work can be used for a use to still be considered fair--although some publishers, libraries, and copyright owners have tried over time as a way to define (and limit) fair use.
• Some fair use guidelines do recommend specific amounts that are allowed--so many words, so many lines, 10 percent or less, etc.
• A good rule of thumb is that the less the amount used, the more likely the use is a fair one.
• Nevertheless, no specific amount or percentage appears in U.S. law and acknowledging the source of the copyrighted material does not substitute for obtaining permission.

The heart of the matter

• While quantity should figure into a fair use analysis of a work, so should quality: It's important to pay attention to what you're using, not just how much.
• Is what you're hoping to use the "heart of the work," the main point, the "big reveal" that eliminates the need for anyone else to consult the work?

Factor 4: The effect on the potential market or value of the copyrighted work
The fourth factor measures the effect that the allegedly infringing use has had on the copyright owner's ability to exploit his original work. The court not only investigates whether the defendant's specific use of the work has significantly harmed the copyright owner's market, but also whether such uses in general, if widespread, would harm the potential market of the original. The burden of proof here rests on the copyright owner, who must demonstrate the impact of the infringement on commercial use of the work.

For example, in Sony Corp v. Universal City Studios, the copyright owner, Universal, failed to provide any empirical evidence that the use of Betamax had either reduced their viewership or negatively impacted their business. In Harper & Row, the case regarding President Ford's memoirs, the Supreme Court labeled the fourth factor "the single most important element of fair use" and it has enjoyed some level of primacy in fair use analyses ever since. Yet the Supreme Court's more recent announcement in Campbell v. Acuff-Rose Music Inc that "all [four factors] are to be explored, and the results weighed together, in light of the purposes of copyright" has helped modulate this emphasis in interpretation.

In evaluating the fourth factor, courts often consider two kinds of harm to the potential market for the original work.

• First, courts consider whether the use in question acts as a direct market substitute for the original work. In Campbell, the Supreme Court stated that "when a commercial use amounts to mere duplication of the entirety of the original, it clearly supersedes the object of the original and serves as a market replacement for it, making it likely that cognizable market harm to the original will occur".
• Second, courts also consider whether potential market harm might exist beyond that of direct substitution, such as in the potential existence of a licensing market. This consideration has weighed against commercial copy shops that make copies of articles in course-packs for college students, when a market already existed for the licensing of course-pack copies.