Fair Use

For teachers, researchers, and students, a special provision of the copyright statutes exists where limited parts of the original author's material may be copied and used without the requirement of obtaining the owner's written permission. This means that in a thesis or report, you may quote some passages of a book, or include a picture that you might use as a reference to support your arguments, provided proper credit is given. However, this concept of fair use is not always black-and-white. Each case must be considered individually, with tendencies leaning one way or the other depending on the circumstances of what is used and how it will be used.The University of Texas has a great site on the Four Factor Fair Use Test to determine whether a piece may be covered by the fair use provision. The test asks four questions:1. What is the Purpose and Character of Use? If it is for personal or educational use, then it leans towards the side of fair use. If the intended purpose is it for commercial use, it leans away from fair use and towards the need to obtain permission from the author.
2. What is the Nature of the Copyrighted Work? If the original work is mostly factual data, then the tendency is to allow for fair use. If the original is mostly creative work, it leans the other way.
3. What Amount and Substantiality of the Portion Used of the Copyrighted Work? If it's just a small portion of the work you’re borrowing, the balance tips towards fair use. If you plan to use a significant amount of the original, the scale tips in the other direction.
4. What may be the Effect Upon Potential Market or Value of the Copyrighted Work? If you widely distributed your paper or Web page, will it affect the original author financially? Are you taking away the original author's business by publishing your work?Even with this test, be cautioned that the outcome is not definitive. The test is based on judgment as to which way the scale tips for each question. If it tips towards the "fair use" side of the scale, you should be able to use the copyrighted material; if it tips in the other direction, it would be wise to obtain permission from the copyright owner or play it safe and not use the material at all.
ref:
http://www.hawaii.edu/infobits/w2001/copyright.html