What are the rules for fair use, etc. in terms of running a news
clipping service?  For example, I am subscribed to an email list where
newspaper articles are circulated daily.  All references are provided
to the orginal article.  Is this considered fair use (or whatever the
legal term is) and considered lawful?

Bottom line: if one offers a free news clipping service (where no
profit is involved), what rules must one abide by to remain within the
law?

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Clarification of Question by jlb0001-ga on 08 Mar 2004 12:40 PST

Surely there is a legal opinion written somewhere on this exact topic.
 I'm thinking FindLaw, an Attorney General's opinion, some particular
cases one could reference ...

"News Clipping" services are very common and free services are
relatively common (via listservs, etc).  So, I find it hard to believe
that this question remains unanswered.  Is my price too low?  If so,
suggest a price!

The Fair Use Doctrine, codified at 17 U.S.C. Section 107, provides
that no permission is needed to copy or reproduce items otherwise
protected by copyright for purposes such as criticism, comment, news
reporting, teaching (including multiple copies for classroom use),
scholarship, or research, SUBJECT TO THE BELOW FACTORS:
(1) the purpose and character of the use, including whether such use
is of a commercial nature or is for nonprofit educational purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in relation to
the copyrighted work as a whole; and
(4) the effect of the use upon the potential market for or value of
the copyrighted work.

Thus, it is difficult to offer an exact opinion on whether this use of
these articles for a free news-clipping service is a fair use. 
Clearly the news organizations own some copyright interest in the
stories being "clipped."  Also, it appears that the entire story, and
not just a link to the story, is being clipped and disseminated,
right?  These facts clearly impact the third and fourth fair use
factors.  It's always risky to conclude that a use is a fair use?it?s
always better to assume you need permission.  Oh, and by the way, my
favorite axiom of copyright law: "Attribution is not permission."

If I understand a clipping service, hundreds of news items are clipped
daily, so it would not be practical to ask permission for each item.
Most newspapers, electronic publications will not give you blanket
permission, as they are sure they are thin ice on some of what they
have published reguarding copyrights. If you clip and distribute to a
large audiance, and make considerable profit directly, or indirectly,
expect a lawyer to sucessfully shake you down eventually. If you can't
live with that, you should forget the clipping business. You should
warn the persons who use your clippings that they may need to get
permission if they use more than a small portion of any one clipping,
but you may be named as a co-violator of someones original material,
reguardless of disclimers and other reasonable precautions IMHO.  
Neil