Copyright Fair Use: How the Four Factors Apply to AI Editing and Derivative Uses

AI tools make it easy to edit images, rewrite text, create variations, or transform existing content. But when the original material belongs to someone else, using AI to change it does not automatically make the new use fair use.

Under U.S. copyright law, fair use is determined case by case. Giving credit, using only part of a work, making substantial edits, or using material for a noncommercial purpose does not by itself establish fair use.

When copyrighted material is downloaded or uploaded to an AI tool, modified, and later published or used commercially, different rights and legal questions may arise at different stages. The analysis therefore begins with the copyright owner’s exclusive rights under Section 106 before considering whether Section 107 fair use or another limitation may apply.

Copyright fair use may allow certain uses of copyrighted works without permission, but only when the particular use qualifies as fair use under U.S. copyright law.

Section 106 of the U.S. Copyright Act gives copyright owners certain exclusive rights, including reproduction, preparation of derivative works, distribution, and, depending on the type of work, public performance and public display.

Section 107 recognizes fair use as a limitation on these exclusive rights. It identifies criticism, comment, news reporting, teaching, scholarship, and research as examples of purposes that may qualify for fair use, but none automatically makes a particular use fair.

Courts instead examine the specific facts of the use under the statutory fair use framework.

Fair Use Is a Limitation on Copyright Owners’ Exclusive Rights

Fair use can permit certain uses of copyrighted material without authorization. However, there is no general rule allowing someone to copy or modify another person’s work simply because the use is educational, creative, AI-assisted, personal, or noncommercial.

The relevant question is whether the particular use qualifies under Section 107 based on the circumstances.

How Are Fair Use and Copyright Infringement Related?

Fair use can provide a legal basis for using copyrighted material without the copyright owner’s permission. The same principle may apply when AI is part of the creative process, but using AI does not create a separate copyright exception.

If a workflow begins with a third party’s copyrighted work, different Section 106 rights may become relevant. Depending on how the service technically processes and stores the material, downloading or uploading a copyrighted work may implicate the reproduction right under Section 106. AI modification may also raise questions involving the exclusive right to prepare derivative works, depending on how protected expression from the original is used in the resulting material.

Fair use or another limitation may nevertheless apply depending on the circumstances.

If a Use Is Not Fair Use, Does That Automatically Mean Legal Liability?

No. A finding that a use does not qualify as fair use is not, by itself, the complete infringement or liability analysis.

Fair use addresses whether an otherwise unauthorized use may nevertheless be permitted under Section 107. Other copyright questions may still need to be considered before determining infringement or liability.

For that reason, “not fair use,” “copyright infringement,” and potential legal liability should not be treated as interchangeable conclusions.

U.S. fair use is a case-by-case doctrine governed by Section 107 rather than a fixed list of permitted percentages or editing rules.

There is no general rule stating that changing 30%, 50%, or any other percentage of an image, article, or other work makes the new use lawful. Likewise, simply crediting the original creator does not automatically establish fair use.

Section 107 identifies four statutory factors:

1. the purpose and character of the use;

2. the nature of the copyrighted work;

3. the amount and substantiality of the portion used; and

4. the effect of the use upon the potential market for or value of the copyrighted work.

The statutory factors are weighed together in a fact-specific inquiry, and no single factor automatically determines the outcome. Courts may also consider other relevant circumstances where appropriate.

The four factors of fair use must be considered together in light of the particular facts of the use.

There is therefore no universal formula for deciding whether an AI-edited image, rewritten article, remix, or other modified work qualifies as fair use.

1. Purpose and Character of the Use

The first factor examines the purpose and character of the particular use.

Relevant considerations can include whether the use is commercial or nonprofit and whether the challenged use has a different purpose or character from the original.

This is also where transformative use often appears. However, transformative use is not simply a test of how much a work has been changed.

In Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith (2023), the U.S. Supreme Court emphasized the specific use at issue and whether its purpose and character are sufficiently different from the original use.

Turning a photograph into a different visual style, changing colors, adding effects, or using AI to make an output look substantially different does not by itself establish transformative use or fair use. A new meaning, message, or aesthetic also does not automatically determine the first factor or the overall fair use analysis.

The challenged use must still be evaluated together with the remaining Section 107 factors.

2. Nature of the Copyrighted Work

The second factor considers the nature of the copyrighted work.

Highly creative works such as photographs, illustrations, novels, songs, or films can present a different fair use analysis from material that is primarily factual or informational.

Copyright protects an author’s original expression, but it does not protect ideas or facts themselves. Accordingly, using factual information to create new expression raises a different copyright question from copying or closely paraphrasing protected expression from the source.

Questions about AI-generated content copyright, including whether an AI-generated output may itself qualify for copyright protection, involve a different legal issue.

3. Amount and Substantiality of the Portion Used

The third factor considers both how much of the copyrighted work was used and the significance of the portion taken.

There is no fixed percentage that guarantees fair use. Using a small portion does not automatically make a use fair, particularly if the portion taken represents an important part of the original work.

For AI editing, a user therefore should not assume:

Fair use does not operate through a universal percentage threshold.

4. Effect on the Potential Market

The fourth factor considers the effect of the use upon the potential market for or value of the copyrighted work.

A key question is whether the new use substitutes for the original or harms markets that copyright law recognizes as relevant to the copyrighted work.

An AI-edited output used as a substitute for the original may therefore present a different fair use analysis from a use serving a substantially different purpose.

Market effect remains one part of the overall inquiry. The existence of some market effect does not by itself determine the entire fair use analysis or automatically establish copyright infringement.

U.S. fair use is not a universal copyright standard. Taiwan, Singapore, and the United Kingdom use different legal frameworks to determine when copyrighted works may be used without permission.

Although some of these systems share similar concepts or considerations, the requirements and legal analysis depend on the law of each jurisdiction.

• Taiwan: Specific Copyright Limitations and Article 65
  Taiwan does not simply apply the U.S. four-factor fair use doctrine.
  Instead, its Copyright Act contains specific limitations on economic rights in Articles 44 through 63, while Article 65 also addresses fair use and provides a broader framework for determining whether certain uses fall within a reasonable scope.
  For provisions within Articles 44 through 63 that expressly require use to remain within a “reasonable scope,” the factors in Article 65(2) may be relevant to that assessment. Other specific statutory limitations do not necessarily require the four factors to be applied again once their statutory requirements are satisfied.
  This means that the U.S. Section 107 analysis should not be directly imported into Taiwanese copyright law.

• Singapore: Fair Use Under the Copyright Act 2021
  Singapore’s Copyright Act 2021 uses a general fair use framework.
  In determining whether a use is fair, the law directs courts to consider all relevant matters and identifies four principal factors, including the purpose and character of the use, the nature of the work, the amount and substantiality used, and the effect on the potential market or value of the work.
  Although these factors may look similar to the U.S. fair use factors, Singapore is a separate jurisdiction with its own legislation and legal interpretation.
  A conclusion reached under U.S. Section 107 therefore should not automatically be treated as the same conclusion under Singapore law.

• United Kingdom: Fair Dealing and Specific Statutory Exceptions
  The United Kingdom does not use the same open-ended general fair use doctrine found in U.S. law.
  Instead, UK copyright law provides specific statutory exceptions, with fair dealing applying to certain permitted purposes.
  As a result, it is generally necessary to first determine whether the use falls within a relevant statutory exception and then, where applicable, whether the dealing is fair.
  Simply describing an AI remix or edited work as “transformative” does not by itself establish that a UK copyright exception applies.

The key point is that fair use is not a universal copyright standard. A use that may qualify as fair use in the United States does not automatically qualify for a copyright exception in Taiwan, Singapore, the United Kingdom, or another jurisdiction.

AI editing or remixing a copyrighted work may raise a fair use question, but the fact that AI changed the original work does not itself make the use fair.

A useful way to examine an AI-assisted workflow is to separate it into stages:

Upload/Input → AI Editing or Generation → Publication, Sharing, or Commercial Use

Different stages may involve different copyright questions and should not automatically be collapsed into a single legal conclusion.

Editing a Copyrighted Work Does Not Automatically Make It Fair Use

Suppose a user downloads another photographer’s image, uploads it to an AI image editor, and asks the tool to change the background, clothing, lighting, colors, and visual style.

The final image may look very different, but visual difference alone does not answer the fair use question.

The analysis still considers the purpose and character of the use, the nature of the original work, the amount and significance of protected material used, and relevant market effects. After Warhol, visual changes, new meaning or message, and aesthetic differences cannot by themselves establish transformative use or fair use.

Uploading Someone Else’s Image to an AI Tool Requires a Separate Copyright Check

The legal analysis should not begin only after the AI produces its output.

Depending on the technical process involved, downloading or uploading a third party’s copyrighted work may implicate the reproduction right. AI modification may also raise derivative-work questions depending on how protected expression from the original appears in or is used in the resulting material.

The resulting content and later acts such as distribution, public display, or public performance may implicate additional Section 106 rights, depending on the type of work and the circumstances. Publishing, sharing, licensing, or commercially exploiting the result may involve one or more of these rights and may also affect the fair use analysis.

Fair use or another applicable limitation may nevertheless permit a particular use. A use that may be permissible at one stage should therefore not automatically be treated as legally cleared for every later stage.

AI copyright fair use depends on the facts of each use, so common AI workflows should be evaluated individually rather than through shortcuts such as “credit the creator” or “change enough of the original.”

Scenario 1: Uploading an Online Image to an AI Editor

Imagine finding an illustration online, downloading it, and uploading it to an AI tool to change the colors, background, characters, and composition.

The fact that AI produces a noticeably different image does not automatically establish fair use. Depending on the workflow, downloading or uploading the image may implicate the reproduction right.

The fair use analysis may then consider the purpose of the use, the creative nature of the original, the protected material used, and whether the resulting use substitutes for the original or harms a legally relevant market.

Later publication or commercial use should also be evaluated separately rather than assumed to be permitted simply because AI was involved.

Scenario 2: Using an Existing Work to Create an AI Remix

Suppose a user takes an existing copyrighted work and uses AI to create a remix with new elements, commentary, or a different creative presentation.

Adding new material may be relevant, but “new” does not automatically mean “transformative” in the legal sense.

A remix used for criticism or commentary, for example, presents different facts from a remix sold as a substitute for the original. The specific purpose and character of the challenged use and the remaining Section 107 factors still matter.

Scenario 3: Asking AI to Rewrite Someone Else’s Article

Using AI to rewrite an article does not automatically eliminate copyright concerns simply because the wording changes.

Copyright protects an author’s original expression, but it does not protect ideas or facts themselves. Using factual information to create new expression therefore raises a different copyright question from copying or closely paraphrasing protected expression from the source.

Replacing individual words, rearranging sentences, or asking AI to “rewrite” protected text is not itself a universal test for fair use or infringement.

Scenario 4: Commercially Using an AI-Modified Work

Commercial use does not automatically defeat fair use, but the commercial nature of a use is relevant under the first factor and must be considered with the other factors.

If a copyrighted image is uploaded to an AI tool, substantially modified, and then used in advertising, merchandise, or other commercial content, the extent of the edits does not itself resolve the fair use question.

The purpose and character of the use, the nature of the original, the protected material used, and the effect on relevant markets remain part of the analysis.

Before using someone else’s content with AI, check the source material, the actual AI use, and what you plan to do with the result.

1. Check the Source and Rights Before Uploading Content to AI

First determine where the image, text, or other material came from.

Content being publicly accessible online does not necessarily mean it is free to reuse or modify. Consider whether you created the material yourself, obtained permission or a license, or have another legal basis for the intended use.

Giving credit may be appropriate in some contexts, but credit alone does not create fair use or replace permission.

2. Do Not Rely on a “Percentage Changed” Rule

There is no universal rule saying that changing a copyrighted work by 30%, 50%, or another percentage makes the result safe to use.

Likewise:

major visual changes ≠ automatically transformative use ≠ automatically fair use.

The analysis should focus on the actual use and the Section 107 factors, not simply how different the final image looks.

3. Recheck the Intended Use After the AI Output Is Created

Finally, consider what happens to the AI-modified content after generation.

Keeping an output for a limited personal purpose, publishing it publicly, using it in marketing, licensing it, or selling products containing it are not necessarily equivalent uses.

However, U.S. copyright law does not provide a general exemption simply because a use is personal or noncommercial. Those circumstances may affect the fair use analysis, but they do not by themselves make the use lawful.

Publishing, sharing, licensing, or commercially exploiting an AI-modified result may involve one or more Section 106 rights depending on what is actually done with the work. These circumstances may also affect the fair use analysis.

AI changes how images, text, and other creative material can be edited and reused, but it does not replace existing copyright rules.

Under U.S. copyright law, copyright fair use remains a case-by-case, fact-specific inquiry centered on the four statutory factors in Section 107. A use does not become fair use simply because AI substantially changed the work, the creator was credited, the use was personal or noncommercial, only part of the work was used, or the final content looks different from the original.

For AI editing and remixing, it is useful to review the workflow in stages:

Source Material → Download or Upload → AI Editing or Generation → Publication or Commercial Use

At each stage, consider which Section 106 rights may be implicated and whether fair use or another applicable limitation may permit the particular use.

If the source material is your own work, properly licensed content, or material you otherwise have a lawful basis to use, the analysis may differ from a workflow that begins with someone else’s protected work.

GenApe and other generative AI tools can support creative workflows, but the tool itself does not determine whether a particular use qualifies as fair use. Before publishing or commercially using AI-modified third-party content, users should consider the source material, applicable rights, and how the resulting content will actually be used.