Right, determined fair use by the supreme court in Williams & Wilkins Co. v. United States. You can walk into a library and make a wholesale copy for research purposes. The case involved a medical journal publisher suing medical doctors, who made a strong argument that their ability to make copies was a matter of life and death. Winner: Xerox.

https://en.m.wikipedia.org/wiki/Williams_%26_Wilkins_Co._v._...

That's an interesting example because it illustrates out how fair use is in part defined by its effect on the market.

A teacher copying a New York Times article verbatim and distributing it to a classroom for the purpose of analysis or criticism is likely to be held by the courts as fair use. On the other hand a teacher photocopying an entire textbook (or distributing a PDF) would probably not be considered fair use.

Both are copying educational material in full, but they have a different impact on the market. Distributing copies of an old news article to 30 students realistically isn't a direct substitute for 30 subscriptions to The New York Times. But a textbook publisher's business model specifically revolves around selling its textbooks to students - the teacher is distributing their copyrighted material to their target market and removing any incentive for the students to pay the publisher.

Yes, the damage to the market of the original is a key factor in a fair use analysis.

It makes you wonder why "Open"AI started getting into legal trouble only when they closed everything down and became a commercial project. When they were a research project, stepping on copyrights was a lot more acceptible (both socially and legally).