The US Copyright law provides an exception from copyright infringement for "fair use" of the copyright work for "purposes such as criticism, comment, news, reporting, teaching (including multiple copies for classroom use) scholarship or research". In deciding whether a use is fair, courts must consider:

In 1994 the Supreme Court in the case of Campbell v. Acuff-Rose Music (a case about a rap parody of the song "Pretty Woman") made it clear that the mere fact that a copy of a work protected by copyright was made for a commercial purpose did not prevent the making of that copy from being a fair use of the copyright work. Two recent cases have applied this ruling to different situations in which copying of computer software took place.

In the first, Sony Computer Entertainment v. Connectrix, the defendants analyzed the basic input-output system (BIOS) of Sony's PLAYSTATION software so as to produce a program that would enable a regular computer to emulate such software. None of Sony's code ended up by being included in the emulation software. The analysis had involved making copies of Sony's BIOS. It was admitted that this was an act of copyright infringement unless it was excused under the fair use doctrine. The Ninth Circuit reversed the district court ruling which had held that this was an infringement to which the fair use exception did not apply because a result of the emulation would have an adverse effect on the sales of Sony's PLAYSTATION software and so the fourth factor in the statutory list weighed heavily against a finding of fair use. The Ninth Circuit considered the first and fourth of the statutory factors the most important in the present case.

On the first factor (purpose and character of the use), the Court focused on the Supreme Court's decision in Campbell v. Acuff-Rose Music Inc., where it had been held that a key question in fair use analysis was the extent to which the new work "adds something new, with a further purpose or different character, altering the first with new expression, meaning or message, in other words, whether and to what extent the new work is transformative". The Ninth Circuit found that in the present case, the defendant's product was "modestly transformative".

On the fourth factor (effect of the use on the potential market) the Ninth Circuit again relied on Campbell v. Acuff-Rose, noting that the mere fact that the copying was done for a commercial purpose is not dispositive and that the harm to the copyright holder is less likely when the infringement is a transformative work than when it supplants or supersedes the original work. Unlike the Sega case, in the present situation, there would be some economic loss to the copyright owner. But the court held that the competition that would arise to Sony's PLAYSTATION products by sale of the defendant's emulation software "does not compel a finding of no fair use". With virtually no reasoning or analysis to support its view, the court held that "because [the defendant's emulation software] is transformative, and does not merely supplant the PlayStation console, [it] is a legitimate competitor in the market for platforms on which Sony and Sony-licensed games can be played".

The court therefore found that three of the factors that needed consideration favored the defendants and so the use in question qualified as fair use.

The second recent case applying the fair use doctrine to computer software was Kelly v. Arriba Soft Corp. In this case the act of infringement was the display of "thumbnail" pictures of the plaintiffs work as part of a listing of works produced by a "visual search engine" which was used for searching the Internet. The site that was alleged to infringe produced a list of sites where pictorial works meeting the criteria of the search could be found together with a small image of the work that could be found at such a site. The search engine operated against a data base containing approximately two million thumbnail pictures. The owner of the copyright in some of the original works referenced in the data base alleged copyright infringement and claimed that it was damaged in that the search engine when giving a site address for the original work took the searcher directly to the image in question and so by-passed other material that browsers approaching the image in other ways would have to view before reaching the images in question. This deprived the owner of the copyright in the original work of advertising opportunities. Relying heavily on the Supreme Court's decision in Campbell v. Acuff-Rose referred to above, the court held that in the present case the most important of the four factors that need to be considered in a fair use analysis was the first. Since the product in this case was a significantly transformative one, and there was no evidence to support a claim of possible harm to the copyright owner, the factors in favor of a finding of fair use outweighed the facts that the entire work had been copied and that this therefore included the core of what was protected by copyright.