Copyright law has established four factors to consider in determining fair use. They are: the purpose and character of the use, the nature of the copyrighted work, the amount use, and the effect of the use on the market. Please be aware that these are factors for consideration and not hard and fast rules. Also, while each factor needs to be considered, the first and fourth factor usually weigh more heavily in the decision.
Factor 1: The Purpose and Character of the Use
Specifically this focuses on the whether the use is commercial or non-commercial. If it is for commercial use it is less likely to be considered fair use. Commercial being charging or making money from the item. This also focuses on transformative uses which add something new , further the purpose or a different character, and does not substitute for the original work. An example of transformative fair use, may be to take the original work and create an art piece. If it is transformative in nature it is more likely to be considered fair use.
Factor 2: The Nature of the Copyrighted Work
The nature of the work itself is the next factor. If the work is factual and non-fiction it is more likely to be considered fair use. If the work is unpublished then it will not favor fair use. Also if it is highly creative it tends to not be considered fair use.
Factor 3: The Amount Used
This factor compares the amount used to the amount of the copyrighted work as a whole. The less of the copyrighted work used, the more likely it is to be considered fair use. However, this factor also considers qualitative factors, if the portion of the copyrighted work being used is considered the "heart of the work", then this would mostly not be considered fair use. Note: there is a "rule of thumb" of about factor 3 that as long as the portion used is a chapter or 10% or less of the entire copyrighted then it is considered fair use, this is not true.
Factor 4: The Effect of the Use on the Market
Factor 4 considers the effect of not only the use of the item, but how this could effect the entire market for that item. If the use harms the owner's market for that material now or in he future, it will most likely be considered not fair use. If little or no money is lost it will most likely be considered fair use. In order for something to not be considered fair use, the portion used most have actual or most likely money lost.