"Fair use" is a portion of copyright law that can allow the unauthorized use of another’s original copyrighted work for criticism, commentary, news reporting, teaching, scholarship, and research. In the court of law the term “fair” is determined by four main factors:
The purpose and character of a use.
The nature of a copyrighted work.
The amount and substantiality of the portion of the work used.
The effect upon the copyright holder's potential market for the work.
Fair use is applicable in defense of many works, but still has murky aspects that can present difficult scenarios for even expert analysts. Seeking legal counsel with an attorney before using materials that you know to be copyrighted is advised, even if you believe your content to be “fair use”. One way to evaluate whether a use is "fair" is to consider your own reaction if someone used your work without permission.
If in doubt, assume any unlicensed use is not a fair use. Fair use of an image for commercial purposes is treated differently than use for informative purposes or commentary. In general, a claim of fair use of an image on merchandise may not hold up in court, especially if the merchandise is sold for profit.