Business Law
Copyright and fair use - must knows for startups and SMEs
In the age of TikTok edits, YouTube reaction videos, LinkedIn content repurposing, and meme marketing, many startups and small businesses operate with all focus on the end result, getting attention from their target audience. However, how about copyright, the risk for copyright infringement and the right to use copyright protected material within the scope of “fair use”?
The concept of fair use is basically a “free zone” whereas you CAN use copyrighted material without infringing on it. But, it is often misunderstood—and misused—especially by businesses creating content for promotion, education, or criticism. Misapplying fair use can lead to copyright takedowns, demonetization, and even legal battles.
This article is Part 1 of 2 - and will look at US Copyright/fair use regulation (Part 2 will look at the EU equivalent) - breaks down what fair use really means, how to use it responsibly, and the biggest misconceptions—particularly for startups and SMEs using platforms like YouTube, Instagram, or LinkedIn.
What is fair use?
Fair use is first and foremost a US concept. It is a legal doctrine that allows limited use of copyrighted material without the need to ask for permission or pay a fee, but only under very specific conditions.
The most prominent ways whereas fair use can come into question will concern:
Commentary and criticism
Where you use the copyrighted material with the purpose to comment and, or critic it.
News reporting
In news reporting it can be fair use to use protected material provided that the intent is not to share is as it is and with the same purpose and usage as the original material but rather to report information that is news worthy.
Teaching and scholarship
Material that has copyright may be used within teaching and scholarship provided that the use is warranted and, when the totality is assessed, the benefits of allowing the material to be used for this purpose outweights the harm it may cause for the copyright owner (for instance that it should not affect its ability to monetize on the material within its originally intended use).
Parody and satire
There is an opening to use copyright material for the purpose of making parody and satire.
Fair use is found in the US Section 107 of the Copyright Act, but similar doctrines exist elsewhere (e.g., “fair dealing” in the UK, Canada, and parts of the EU—though generally narrower in scope).
The 4 factor test
Courts use four factors to determine whether a use qualifies as fair – however it is always a case by case assessment based on all relevant factors in each specific case:
Factor | Meaning |
1. Purpose and character of the use | Is the use transformative – this means that the material you produce, in its totality, has a different meaning, expression and or meaning? Is it commercial or nonprofit? |
2. Nature of the copyrighted work | Is the original highly creative (e.g., music, film) or more factual (e.g., data)? If it is the latter, the protected scope will typically be more narrow compared to if it is a highly creative work. |
3. Lenght / amount of use | How much of the original is used? Did you take “the heart” of the work? The shorter section of the work that is used (relative to its totality) the more likely it is that the usage could be acceptable under the fair use doctrine. |
4. Effect on the market | Does the use harm the commercial market of the original or act as a substitute? In case it does harm the commercial market for the copyright owner there is little to no chance that it will be legitimate use under the fair use doctrine, and will rather be seen as copyright infringement. |
No single factor guarantees fair use—the decision is based on a weighing of all four. Courts may interpret this differently depending on context.
Why fair use matters for Startups and SME:s
Startups and small businesses often:
Hire freelancers or agencies who produce material rather uncontrolled for the startup. The freelance may for example take material it finds on the internet without making sure that the material is not copyright protected and without assessing if it falls within fair use or not.
Want to use clips, images, or music that is available on the market, created by someone else (famous or not) in its customer communication, general marketing and social media (who wouldn’t prefer to use a Drake, Taylor Swift or Sabrina Carpenter song as intro song to their promo video rather than generic elevator music?)
Go viral or at least create reactions and get attention on social media through the creation of reaction videos, reviews, or commentary based on famous social media accounts, happenings, films or sports events.
Use the coolest stock images and other media in presentations, pitch decks or online content.
These actions can trigger copyright flags, takedowns of the material and closing of social media accounts, or algorithmic penalties (especially on YouTube or Meta platforms). And this can happen even if the startup and its founders believe they are using on-copyrighted material or that the use is covered by the fair use exception.
Top misconceptions about fair use
❌ 1. “It’s ok as along as I credit the creator its ok.”
Wrong. Attribution does not make unauthorized use legal. Giving credit doesn’t replace the need for permission or a legal exception.
❌ 2. “It’s under X amount of time its ok.”
There is no fixed amount of material that guarantees fair use. Even 1 second of video or music can be infringing if it uses “the heart” of the work (e.g., a famous chorus).
❌ 3. “I’m not making a profit so its ok.”
Commerciality is only one factor—and non-commercial use can still be infringing. Many YouTube takedowns affect non-monetized videos.
❌ 4. “It’s already on YouTube, so its ok.”
Not true. YouTube hosts copyrighted material under strict licenses and takedown policies, not because everything is free to use. Downloading and reusing YouTube content is often against both copyright law and YouTube's comprehensive Terms of Service.
❌ 5. “It’s parody/satire/meme, so its ok.”
Parody MAY qualify as fair use, but it must, to a sufficinet degree, comment on or critique the original work itself - so that the majority of the "new" work is a work in its own right. Just being funny or meme-worthy while shoing someone elses copyrighted material is generally not allowed.
How to use "fair use"
1. Ask: is this use really transformative?
If you're changing the message, purpose, or context of the original (e.g., turning a song into commentary about culture), fair use may apply.
2. Only use necessary bits
Use only what’s needed to make your point. Avoid using full works, intros, or logos unless you're critiquing them directly.
3. Add clear commentary, citicism and creativity
Make your own voice and purpose visible and central in all cases where the aim is to make the material transformative. This shows you’re not just republishing someone else’s work but instead creating something of your own even if it has elements of material that has copyright protection.
4. Use pre-cleared material
Use services that have the clear offering that the material you download and use is not covered by copyright – i.e. make sure to use pre-cleared media for commercial use.
5. Educate the team
Freelancers, marketers, and social media managers often take content from sources without proper understanding. Create a copyright and fair use policy internally. Also make sure that all material produced on behalf of the startup is owned by the startup by having clear terms and conditions outlining this in employment agreement, consultant agreements and any procurement from agencies.
Final word
Fair use is a powerful, but narrow exception to copyright law—not a blank check for content reuse. For startups and SMEs operating in a digital-first world, especially those relying on YouTube, Instagram, or TikTok to build audiences, the line between inspiration and infringement is easy to cross.
By understanding what fair use really means—and applying it with care—you can stay creative, stay compliant, and avoid costly takedowns or lawsuits.
Stockholm, 2025-04-22
Author: Kat Strandberg
What is fair use?
Fair use is first and foremost a US concept. It is a legal doctrine that allows limited use of copyrighted material without the need to ask for permission or pay a fee, but only under very specific conditions.
The most prominent ways whereas fair use can come into question will concern:
Commentary and criticism
Where you use the copyrighted material with the purpose to comment and, or critic it.
News reporting
In news reporting it can be fair use to use protected material provided that the intent is not to share is as it is and with the same purpose and usage as the original material but rather to report information that is news worthy.
Teaching and scholarship
Material that has copyright may be used within teaching and scholarship provided that the use is warranted and, when the totality is assessed, the benefits of allowing the material to be used for this purpose outweights the harm it may cause for the copyright owner (for instance that it should not affect its ability to monetize on the material within its originally intended use).
Parody and satire
There is an opening to use copyright material for the purpose of making parody and satire.
Fair use is found in the US Section 107 of the Copyright Act, but similar doctrines exist elsewhere (e.g., “fair dealing” in the UK, Canada, and parts of the EU—though generally narrower in scope).
The 4 factor test
Courts use four factors to determine whether a use qualifies as fair – however it is always a case by case assessment based on all relevant factors in each specific case:
Factor | Meaning |
1. Purpose and character of the use | Is the use transformative – this means that the material you produce, in its totality, has a different meaning, expression and or meaning? Is it commercial or nonprofit? |
2. Nature of the copyrighted work | Is the original highly creative (e.g., music, film) or more factual (e.g., data)? If it is the latter, the protected scope will typically be more narrow compared to if it is a highly creative work. |
3. Lenght / amount of use | How much of the original is used? Did you take “the heart” of the work? The shorter section of the work that is used (relative to its totality) the more likely it is that the usage could be acceptable under the fair use doctrine. |
4. Effect on the market | Does the use harm the commercial market of the original or act as a substitute? In case it does harm the commercial market for the copyright owner there is little to no chance that it will be legitimate use under the fair use doctrine, and will rather be seen as copyright infringement. |
No single factor guarantees fair use—the decision is based on a weighing of all four. Courts may interpret this differently depending on context.
Why fair use matters for Startups and SME:s
Startups and small businesses often:
Hire freelancers or agencies who produce material rather uncontrolled for the startup. The freelance may for example take material it finds on the internet without making sure that the material is not copyright protected and without assessing if it falls within fair use or not.
Want to use clips, images, or music that is available on the market, created by someone else (famous or not) in its customer communication, general marketing and social media (who wouldn’t prefer to use a Drake, Taylor Swift or Sabrina Carpenter song as intro song to their promo video rather than generic elevator music?)
Go viral or at least create reactions and get attention on social media through the creation of reaction videos, reviews, or commentary based on famous social media accounts, happenings, films or sports events.
Use the coolest stock images and other media in presentations, pitch decks or online content.
These actions can trigger copyright flags, takedowns of the material and closing of social media accounts, or algorithmic penalties (especially on YouTube or Meta platforms). And this can happen even if the startup and its founders believe they are using on-copyrighted material or that the use is covered by the fair use exception.
Top misconceptions about fair use
❌ 1. “It’s ok as along as I credit the creator its ok.”
Wrong. Attribution does not make unauthorized use legal. Giving credit doesn’t replace the need for permission or a legal exception.
❌ 2. “It’s under X amount of time its ok.”
There is no fixed amount of material that guarantees fair use. Even 1 second of video or music can be infringing if it uses “the heart” of the work (e.g., a famous chorus).
❌ 3. “I’m not making a profit so its ok.”
Commerciality is only one factor—and non-commercial use can still be infringing. Many YouTube takedowns affect non-monetized videos.
❌ 4. “It’s already on YouTube, so its ok.”
Not true. YouTube hosts copyrighted material under strict licenses and takedown policies, not because everything is free to use. Downloading and reusing YouTube content is often against both copyright law and YouTube's comprehensive Terms of Service.
❌ 5. “It’s parody/satire/meme, so its ok.”
Parody MAY qualify as fair use, but it must, to a sufficinet degree, comment on or critique the original work itself - so that the majority of the "new" work is a work in its own right. Just being funny or meme-worthy while shoing someone elses copyrighted material is generally not allowed.
How to use "fair use"
1. Ask: is this use really transformative?
If you're changing the message, purpose, or context of the original (e.g., turning a song into commentary about culture), fair use may apply.
2. Only use necessary bits
Use only what’s needed to make your point. Avoid using full works, intros, or logos unless you're critiquing them directly.
3. Add clear commentary, citicism and creativity
Make your own voice and purpose visible and central in all cases where the aim is to make the material transformative. This shows you’re not just republishing someone else’s work but instead creating something of your own even if it has elements of material that has copyright protection.
4. Use pre-cleared material
Use services that have the clear offering that the material you download and use is not covered by copyright – i.e. make sure to use pre-cleared media for commercial use.
5. Educate the team
Freelancers, marketers, and social media managers often take content from sources without proper understanding. Create a copyright and fair use policy internally. Also make sure that all material produced on behalf of the startup is owned by the startup by having clear terms and conditions outlining this in employment agreement, consultant agreements and any procurement from agencies.
Final word
Fair use is a powerful, but narrow exception to copyright law—not a blank check for content reuse. For startups and SMEs operating in a digital-first world, especially those relying on YouTube, Instagram, or TikTok to build audiences, the line between inspiration and infringement is easy to cross.
By understanding what fair use really means—and applying it with care—you can stay creative, stay compliant, and avoid costly takedowns or lawsuits.
Stockholm, 2025-04-22
Author: Kat Strandberg