Fair use is a part of Copyright law. Copyright is a balance between the owner's right to make money off of their intellectual property and the public's right to build off of pre-existing knowledge. Fair use is one of those balancing acts. Fair use looks at the nature and purpose of the work being created (not the original; the new work); the nature of the original work; the amount of the original work the new work uses and what part of the original work is used (for example: does it give away the main plot twist in a mystery). This usage is only considered fair if it is used in criticism, comment, reporting the news, teaching (non profit), and/or scholarship and research (US Copyright Office, 2012).
It is still a VERY slippery slope.
US Copyright Office. (2012). Fair use. Retrieved from http://www.copyright.gov/fls/fl102.html