


































Economics, Law and Policy 
ISSN 2576-2060 (Print) ISSN 2576-2052 (Online) 

Vol. 8, No. 2, 2025 

www.scholink.org/ojs/index.php/elp 

137 
 

Original Paper 

The Development Dilemma and Institutional Breakthrough of 

Fair Use of Copyright in the Network Environment 

Jie Jing
1 

1
 Southwest Petroleum University, Chengdu, Sichuan, China 

 

Received: July 20, 2025        Accepted: August 5, 2025       Online Published: August 7, 2025 

doi:10.22158/elp.v8n2p137               URL: http://dx.doi.org/10.22158/elp.v8n2p137 

 

Abstract 

As a core mechanism for balancing the exclusive rights of right holders and the public’s need to access 

knowledge, the fair use system of copyright is facing multiple challenges in the network environment. 

By analyzing the current status of the system, this study points out the predicaments it is conconfronted 

with, such as the limitations of the legislative model, the imbalance of interests between right holders 

and the public, and the ambiguity of the “reasonableness” judgment criteria. To respond to the new 

requirements of the internet era for interest balance, innovation incentives, and public expression 

space, it is necessary to improve the system from three aspects: innovation of the legislative model, 

reconstruction of value concepts, and refinement of judgment criteria. This aims to achieve a balance 

of interests among right holders, users, and the public, and promote the coordinated development of 

copyright protection and cultural communication in the network environment. 

Keywords 

network environment, copyright Law, fair use system 

 

1. The Value and Function of the Copyright Fair Use System 

1.1 Balance between Fairness and Efficiency 

The fair use system embodies the rational concept of fairness and justice, ensuring a fair environment 

for creative works. By allowing the use of others’ works under specific circumstances, this system also 

breaks the copyright holders’ exclusive position over knowledge, enabling knowledge to be 

disseminated and shared on a broader scale (Gao, L., 2023, pp. 41-52). It achieves a balance of interests 

between creators and users, ensuring that everyone can enjoy and use intellectual wealth on a fair basis. 

The fair use system improves the efficiency of the dissemination and utilization of works. It permits the 

use of works without the permission of copyright holders or the payment of remuneration under 

specific conditions, thereby reducing transaction costs, accelerating the speed of information 



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circulation, contributing to the optimal allocation of social resources, and promoting the development 

of cultural and scientific undertakings. 

1.2 Interest Coordination and Balance 

The fair use system is a restriction on copyright rights. In traditional concepts, copyright means that the 

author or right holder has absolute control over their work. However, the fair use system stipulates that 

in certain circumstances, others can use the work free of charge without the copyright holder’s consent. 

This essentially limits the scope of copyright exercise, clarifies that non-commercial use of copyrighted 

works in specific situations does not constitute infringement, thereby providing a legal safe haven for 

the public to use these works and effectively reducing the risk of legal disputes arising from 

unintentional infringement (Wu, H. D., 1996, pp. 30-38). Although the fair use system imposes certain 

restrictions on the rights of copyright holders, such restrictions are reasonable and necessary. They 

prevent copyright holders from excessive monopoly and abuse of their works, and promote the healthy 

development of the cultural industry. 

 

2. Changes in the Impact of the Fair Use System in the Network Environment 

2.1 Expansion of the Scope of Copyright Holders’ Rights 

The ongoing expansion of copyright has sparked concerns about the public interest, but excessive 

expansion may threaten the openness and free flow of information, increasing the likelihood of 

anti-competitive behavior. When copyright holders impose excessive protection on works, they may 

limit the public’s access to and use of such works, thereby hindering the dissemination and sharing of 

information. The openness and free flow of information are crucial for maintaining the balance of the 

information ecosystem. However, the excessive expansion of copyright may disrupt this balance, 

leading to unequal distribution of information resources and excessive commercialization, thereby 

exacerbating information asymmetry and the digital divide. Additionally, the excessive expansion of 

copyright may hinder market competition. When copyright holders overly control the market, the entry 

and innovation of other competitors may be restricted, undermining the market competition mechanism. 

Ultimately, the excessive expansion of copyright may harm consumer interests. When copyright 

holders overly control the market, consumers may be unable to access better products and services, 

thereby increasing their consumption costs and risks (Wang, X. J., 2016, pp. 14-17, p. 26). Therefore, 

in the expansion of copyright, special attention should be paid to maintaining a balance between the 

interests of authors and other copyright holders and the public interest. 

While the expansion of copyright protection has strengthened the protection of works, it has also 

intensified the conflict of interests between rights holders and users: rights holders seek to strengthen 

control through technology to curb infringement, while the public expects more convenient access to 

information. This contradiction may hinder the dissemination of information, disrupt market 

competition mechanisms, and harm consumer rights. Therefore, it is necessary to achieve a dynamic 

balance between copyright protection and the public interest by improving legal systems, clarifying 



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rights boundaries, strengthening regulatory enforcement, and promoting technological innovation. 

2.2 Limited Scope of Application of Fair Use 

With the rapid advancement of the internet and digital technology, the ways in which works are 

disseminated and utilized have undergone profound transformations. However, the high degree of 

openness and anonymity of the internet makes it challenging to regulate the use and dissemination of 

works. Users can easily access, copy, disseminate, and adapt works through various devices, and this 

convenience has, to some extent, undermined the traditional restrictions imposed by copyright law on 

the use of works. In response to the weakening of control over works, copyright holders have begun to 

adopt measures such as digital watermarking and encryption technology to prevent unauthorized 

copying and dissemination, thereby protecting their legitimate rights and interests. While these 

technical measures not only strengthen copyright holders’ control over works but also generate 

additional economic returns for them, such technical protection methods may also overly restrict the 

scope of fair use by the public, thereby impacting the public’s freedom to access information and 

knowledge (Lai, X. P., & Xu, Y., 2022, pp. 185-198). 

Under Chinese current legal framework, the Copyright Law explicitly lists the circumstances under 

which fair use is permitted (Zhang, Y. T., 2010, pp. 107-109). Although these provisions are specific 

and clear, their limitations have become increasingly apparent in the rapidly evolving and complex 

environment of the internet. Relying solely on these explicit circumstances to determine whether online 

behavior constitutes fair use makes it difficult to adapt to new situations and issues that arise, thereby 

limiting the scope of fair use. In 2020, the Copyright Law underwent its third revision, introducing a 

catch-all provision for “other circumstances specified by laws and administrative regulations” to 

enhance flexibility. However, due to the limited specific provisions in laws and administrative 

regulations regarding such circumstances, this catch-all provision has not substantively expanded the 

scope of fair use. 

2.3 The Boundary between Reasonable Use and Infringement Is More Ambiguous 

In the digital age, the boundaries between fair use and infringement have become increasingly blurred 

due to technological advancements, leading to diverse and flexible judicial practices. While 

information technology has transformed the ways in which works are disseminated and utilized, posing 

challenges to the principle of fair use, courts may issue non-compensation rulings in infringement cases 

based on a balancing of interests, thereby safeguarding the rights of copyright holders while avoiding 

excessive punishment. This reflects the legal system’s wisdom in balancing the protection of private 

rights with the promotion of public interest. The core value of copyright law lies not only in protecting 

the individual rights of creators to stimulate creativity but also in promoting social and cultural 

prosperity and progress. It must respect authors’ rights while also considering the overall well-being of 

society, ensuring the reasonable flow of knowledge and information, and providing sustained 

momentum for cultural diversity and social innovation (Chen, J., 2019, pp. 50-64, p. 207). 

 



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In the Internet environment, fundamental changes in the ways works are obtained and used have 

blurred the line between fair use and infringement. The rapid dissemination of digital works has 

reduced the cost of obtaining them, making it easy for the public to access and use them. To strengthen 

control, copyright owners often use technical measures to restrict access and require payment for legal 

rights of use. In this context, the public may circumvent technical measures to use works for free. Such 

behavior may appear to be infringement on the surface, but in essence, it is no different from traditional 

fair use and does not cause additional harm to rights holders. 

2.3.1 Blurred Boundaries of Private Copying 

In the online environment, private copying has become extremely common and difficult to regulate. 

Users can easily search for and download the resources they need online, often accompanied by 

statements such as “for personal learning, research, and exchange purposes only.” However, the 

boundaries of private copying are not clear-cut and may gradually evolve into large-scale unauthorized 

distribution, thereby harming the interests of copyright holders. Additionally, the distinction between 

private and commercial copying has become blurred. Some activities that were originally intended for 

private use may, in the online environment, be transformed into commercial activities through sharing 

or uploading, thereby generating economic benefits. 

2.3.2 Temporary Duplication Causes Controversy 

During web browsing or caching processes, computers automatically generate temporary copies of 

works, which are referred to as temporary reproductions. There is no consensus among academics and 

judicial practice regarding whether temporary reproductions constitute infringing acts. The complexity 

of this issue primarily stems from the nature, purpose, and impact of temporary reproductions on the 

rights of copyright holders. In academic circles, some scholars argue that temporary reproductions 

should not be considered infringing acts due to their technical neutrality and non-commercial nature. 

Temporary copies are often an unavoidable part of technical processes. When artificial intelligence 

uses works as training data, it does indeed generate copies of the works. However, not all of these 

copies are permanently stored, and thus do not constitute legally significant “copies” under copyright 

law (Hua, J., 2019, pp. 29-39). However, these copies often exist solely as intermediate products in the 

processing phase, with the purpose not being to preserve or disseminate the works long-term, but rather 

to enhance the model’s performance. Once training is complete, these temporary copies may be 

discarded or overwritten and no longer retained in the system. This process does not involve the 

long-term preservation or dissemination of the works. Characterizing these technical, unintentional 

copying actions as infringement could hinder the normal development and application of technology. 

Furthermore, many temporary copying actions lack commercial intent and are instead performed by 

users for personal learning, research, or appreciation purposes. In such cases, classifying temporary 

copying as infringement may be overly stringent. However, some scholars hold opposing views, 

arguing that even temporary copying may pose a potential threat to the interests of copyright holders 

and should therefore be subject to copyright law regulations. This controversy further blurs the 



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boundaries between fair use and infringement. 

2.3.3 Technological Advances Blur Boundaries 

The development of internet technology has opened up new possibilities for the dissemination of works, 

but it has also blurred the lines between fair use and infringement. The application of technologies such 

as deep learning and artificial intelligence has made it easier to automatically create, adapt, and 

disseminate works. These technologies can generate new works based on large amounts of data and 

algorithms, but in the process of creation, they may draw heavily on the content or style of existing 

works. If such works are created without the permission of the original copyright holder, they may 

constitute infringement. The extent to which such automatic creation and adaptation constitutes fair use 

versus infringement has become an urgent issue requiring resolution. Additionally, certain technical 

tools such as VPNs and cloud storage have facilitated the unauthorized dissemination of works, further 

blurring the lines between fair use and infringement. 

 

3. Review of Issues Related to the Existence of the Fair Use System  

3.1 The Rational Use of Legislative Models Has Limitations 

The fair use system plays a crucial role in copyright law. On the one hand, by reasonably defining the 

boundaries of use, this legislative model ensures the free flow of knowledge and information, providing 

the public with opportunities to access, learn from, and utilize existing works, thereby promoting the 

inheritance and development of culture. On the other hand, the fair use principle also provides creators 

with the necessary creative space and sources of inspiration, allowing them to legally quote, draw from, 

or comment on others’ works while respecting the original author’s rights, thereby stimulating creative 

enthusiasm and innovative vitality. However, the fair use legislative model currently faces a series of 

challenges, particularly the tension between the certainty and adaptability of legal rules, as well as 

issues related to the interaction between legislation and judicial practice (Liu, S. L., & Ding, Y. C., 

2024, pp. 61-65). Article 24 of China’s Copyright Law adopts an explicit enumeration legislative 

model, clearly specifying which behaviors constitute fair use. The advantage of this approach lies in its 

clarity and guidance, but its drawback is that it cannot cover all potential fair use scenarios. With the 

emergence of new technologies and new forms of works, and the continuous expansion of the subject 

matter and forms of copyright, existing legal provisions may no longer apply, leading to legal gaps in 

practice. In contrast, the open-ended legislative model, particularly the “fair use” principle, 

demonstrates high flexibility. This principle permits the use of copyrighted works without the copyright 

holder’s permission under specific conditions, aiming to promote the widespread dissemination of 

knowledge and innovative development. This principle skillfully balances the protection of copyright 

holders’ rights with the public’s legitimate need for use. By establishing reasonable terms of use, it 

ensures that the public can fully utilize copyrighted works while respecting copyright, while also 

preserving necessary rights protection for copyright holders. However, due to the relative ambiguity of 

its standards, this may lead to unpredictable outcomes in judgments, increasing the complexity of 



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judicial rulings. Secondly, there is the ambiguity of the four criteria for consideration. The 

determination of fair use is typically based on four criteria: the purpose and nature of the use, the nature 

of the copyrighted work, the quantity and substantiality of the portion used, and the effect of the use on 

the potential market or value of the copyrighted work. However, these criteria themselves possess a 

certain degree of ambiguity. This ambiguity may result in unpredictable outcomes, increased 

complexity in judicial adjudication, and uncertainty in the application of the law. Under an enumerative 

legislative framework, while fair use scenarios are specifically defined, determining whether a 

particular act constitutes fair use still requires judges to exercise discretion based on the specific 

circumstances. Especially in the online environment, where the ways and contexts of work use are 

extremely diverse, this poses challenges for judges when exercising discretion (Wang, H. Y., 2013, pp. 

187-189). 

3.2 Imbalance of Interests between the General Public and Copyright Holders 

With the rapid development of the internet, the role of information network dissemination rights in 

copyright law has become increasingly prominent, providing strong legal support for the protection of 

copyright holders’ rights in cyberspace. This change has undoubtedly enhanced copyright holders’ 

control over the online dissemination of their works, but it has also raised an issue that cannot be 

ignored: the public’s reasonable use of works has been inadvertently restricted. While technical 

protection measures have significantly improved the effectiveness of copyright protection, they have 

also inevitably created obstacles for the public’s reasonable access to and use of works. While the 

public enjoys the convenience of the internet, they find that their right to fair use has been weakened to 

some extent, exacerbating the imbalance in the balance of interests (Sun, S., 2016, pp. 62-65). More 

complexly, driven by commercial interests, some copyright holders tend to adopt stricter protective 

measures to maximize their economic interests. This trend toward excessive protection not only 

restricts the public’s fair use rights but may also hinder the free flow of knowledge and cultural 

exchange, thereby adversely affecting societal innovation and development. 

3.3 The Criteria for Determining “Reasonableness” Are Being Challenged 

Chinese current legal system tends toward a rule-based legislative model, which is known for its clarity 

but also exhibits certain closed characteristics. In judicial practice, when faced with novel or complex 

situations not explicitly covered by legal provisions, judges’ differing interpretations of the “fair use” 

principle often lead to inconsistent rulings in similar cases, which undoubtedly poses a challenge to the 

uniformity of the rule of law and the authority of the law. To address this challenge, judges may refer 

to internationally recognized standards such as the “four elements of fair use” and the “three-step test” 

as supplementary criteria during the adjudication process. However, since these standards have not 

been explicitly codified in China’s legal system, such practices by judges may raise questions about 

“judicial lawmaking,” thereby undermining the authority and stability of the law. Even if judges can 

make fair rulings based on these non-statutory standards and resolve disputes in specific cases, since 

China’s legal system is a codified legal system rather than a common law system, these case rulings 



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can only serve as typical cases for reference and learning, but cannot directly serve as legal basis for 

subsequent similar cases (Wang, G. J., 2024, pp. 94-97).  

 

4. Recommendations for Improving the Fair Use System for Copyright in the Network 

Environment 

4.1 Improving the Legislative Model for the Reasonable Use of Copyright in the Network Environment 

Chinese current copyright legal framework is primarily rooted in a rule-based model. However, with 

the rapid rise of internet technology, the limitations of this legislative approach have become 

increasingly apparent. Its inherent certainty and closed-framework structure struggle to keep pace with 

the ever-changing online environment and the constant emergence of new copyright issues. Traditional 

rule-based approaches struggle to swiftly capture and regulate the diverse and rapidly evolving forms 

of copyright usage in the digital environment, leading to some innovative yet potentially controversial 

usage practices temporarily operating outside legal oversight. More critically, this lag may 

inadvertently provide space for malicious actors to evade legal regulations and operate in gray areas, 

thereby harming the legitimate rights of copyright holders and disrupting fair market competition. 

To overcome this dilemma and enhance the adaptability and flexibility of copyright law, it may be 

worthwhile to consider adopting a legislative model that combines factorism with rule-based 

approaches. This hybrid model retains the specificity and clarity of rule-based approaches, providing 

clear guidance for judicial practice, while incorporating the flexibility of factor-based approaches, 

granting judges the discretion to apply general principles when faced with new circumstances. In this 

way, the law can swiftly adapt to the challenges posed by technological advancements while 

maintaining a reasonable balance between protecting the rights of copyright holders and the public’s 

need for access to information. While drawing on the advanced experiences of other countries, we must 

adhere to our domestic stance, closely aligning the fair use system with China’s legal framework, deep 

cultural traditions, and current socio-economic development trends. This ensures that the system aligns 

with international trends while remaining deeply rooted in China’s actual national conditions (Sun, S., 

2020, pp. 21-29).  

4.2 Adhering to the Value Concept of Balancing Interests 

In the digital environment, the continuous emergence of new technologies and business models 

necessitates a re-examination and adjustment of the fair use system, while upholding the principle of 

balancing interests. This principle requires us to strike a balance in legislation and judicial practice: on 

one hand, we must fully respect and protect the legitimate rights and interests of copyright holders, 

stimulate their creative enthusiasm, and promote cultural prosperity; on the other hand, we must also 

take into account the reasonable needs of the general public for access to information and knowledge 

sharing, avoiding excessive restrictions on information flow caused by copyright protection that could 

hinder social progress. Improving the fair use system requires us to deeply understand the legislative 

purpose of copyright law, which is to seek a reasonable balance between individual rights and public 



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interests (Liu, N., & Zhao, W. P., 2016, pp. 11-15). In the online environment, the widespread adoption 

of internet technology has significantly expanded the speed and scope of work dissemination, providing 

the public with unprecedented convenience in accessing and using works. On the other hand, we must 

also be vigilant, as the increasing prevalence of infringement activities poses an unprecedented threat to 

the legitimate rights and interests of copyright holders. 

Therefore, the key to improving the fair use system lies in balancing the public’s reasonable needs for 

information access and knowledge sharing with providing adequate legal protection for copyright 

holders to prevent the illegal use of their works. It may be worthwhile to consider introducing more 

flexible and diverse fair use standards to accommodate the diversity and complexity of work usage in 

the online environment. At the same time, we can also strengthen the application of technical measures 

to protect the legitimate rights and interests of copyright holders through technical means. 

4.3 Clearly Define the Criteria for Determining Fair Use in the Online Environment 

China amended Article 24 of the Copyright Law in 2020, adding the following wording at the 

beginning of the first paragraph: “Such acts shall not impair the normal exploitation of the work or 

unreasonably prejudice the legitimate rights and interests of the copyright owner.” This amendment 

aligns with the three-step test standard stipulated in international conventions such as the Berne 

Convention. However, regarding the specific application of the three-step test standard, there is no 

unified standard for its specific connotation and application logic, and practical experience remains 

insufficient. This situation undoubtedly poses numerous challenges for judicial practice (Wang, Y. H., 

2021, pp. 119-121). To fill this legal gap and promote a new balance between copyright protection and 

public interest, we urgently need to establish a scientific and reasonable standard for assessing 

“reasonableness.” This standard should comprehensively consider multiple factors, including not only 

the “four elements” but also whether it infringes upon the author’s moral rights, etc. When evaluating 

the legitimacy of public use of works, we must approach it from both individual and societal 

dimensions. From an individual perspective, the use must be lawful and made in good faith; from a 

societal perspective, it should be assessed whether it contributes to stimulating creative vitality and 

promoting social progress. Although the fair use principle typically applies to published works, given 

the principle of automatic copyright protection, the use of unpublished works should not be 

categorically excluded but should be carefully evaluated, with strict definitions of the conditions, 

content, and purpose of such use. 

When assessing the impact of usage behavior on the market value of a work, the consideration of 

objective losses is particularly important. This requires a comprehensive analysis of the work’s market 

positioning, potential value depreciation, the actual benefits obtained by the user, and the competitive 

nature of the usage behavior in the market. Additionally, while fair use primarily focuses on copyright 

property rights, the protection of copyright moral rights should not be overlooked. In certain cases, 

even if the usage behavior formally meets the requirements of fair use, it may still constitute improper 

conduct due to infringement of the author’s moral rights, such as privacy rights or reputation rights (Yu, 



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Y., 2007). Therefore, when establishing and improving the fair use system, we must ensure that the 

public’s reasonable needs are met while also fully respecting and protecting the legitimate rights and 

interests of copyright holders, particularly in terms of moral rights. Only in this way can we establish a 

fair and efficient copyright legal environment that promotes cultural prosperity and innovation. 

 

5. Conclusion 

In the face of the digital and information technology revolution, the fair use doctrine stands as the legal 

cornerstone balancing the exclusive rights of copyright holders with the reasonable needs of the general 

public, and its importance has become increasingly evident. However, as the online environment 

continues to evolve at an unprecedented pace, the applicability and effectiveness of the traditional fair 

use doctrine are being severely tested. Whether it can effectively address new types of copyright 

disputes has become an urgent issue requiring further exploration. Against this backdrop, this paper 

explores the construction of the fair use system in the online environment, proposing the improvement 

of the legislative model for fair use of copyright in the online environment, adhering to the value 

concept of balancing interests, and clearly defining the criteria for determining fair use in the online 

environment. The aim is to reduce unnecessary copyright disputes, further stimulate the enthusiasm and 

creativity of creators, promote the vigorous development of cultural innovation and exchange, and 

drive the rapid prosperity of human civilization. 

 

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