Please note this is not intended as specific legal advice and no one should rely on it as such. Thank you.
To begin with, if you don't know what scans_daily *was*, a good idea might be to check out the new community that has been started in its wake over on InsaneJournal: Scans Daily 2.0. That should give you some idea of what the old community was like, although obviously 5-6 years worth of lost posts can't be encapsulated by the new community.
Now, on to fair use.
Let me first state that A LOT of people get this wrong. Including authors and creators. In fact, Orson Scott Card got it wrong back in the days of the Harry Potter Lexicon trial, and Peter David seems to be getting it wrong in his most recent post regarding scans_daily (e.g. "fair use" has nothing at all to do with whether bookstore owners allow you to rifle through a book in the store. Absolutely nothing at all. The decision of bookstore owners to let you flip through a book is a marketing decision, because they want you to decide you like the book and buy it. Much in the way that many people say they have bought comics after looking through scans on scans_daily, actually. And as a side note, bookstore owners rarely hold the copyright for what they sell. So any rules they have to regulate how their books are handled would likely fall under property law or similar, not copyright law at all).
So don't feel bad! It's lawyery stuff, it's not entirely cut-and-dried, and also, it's posted about a lot by people who aren't sure what they're talking about, or are misinformed, and thus, you may have received incorrect information that is now sitting in the back of your head coloring your thoughts.
So second, I will link and excerpt two posts I made previously regarding fair use, in the hopes of saving myself some time here.
1. Lexicon trial recaps: fair use.
This was my discussion of the part of the Lexicon case ruling that dealt with fair use. It has a more in-depth discussion of the concept as it related to that case. If you want to see how it was applied, go to the link. Otherwise, here is the actual, codified test of fair use:
Fair use is codified in 17 U.S.C. sec. 107:
The fair use of a copyrighted work, ... for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include —
(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.
The test is subjective, which means that the factors can be given different weights and the use as a whole is considered in the light of those factors.
The ultimate test of fair use is whether the copyright law’s goal of promoting the progress of science and useful arts would be better served by allowing the use than by preventing it.
2. My discussion of fair use in regards to Orson Scott Card's Lexicon post.
In this post I was explaining the difference between two concepts that OSC got mixed up in his article: fair use and the ideas/expression dichotomy. Here was my brief summary of fair use:
Fair use, in short, "...provides an essential safeguard to ensure that copyright does not stifle uses of works that enrich the public, such as 'criticism, comment, news reporting, teaching, scholarship, or research.'" Copyright Office, quoting 17 U.S.C. § 107. It exists for the purpose of studying what has gone before, extrapolating new ideas from old materials or creations.
Thus you might quote copiously from The Adventures of Huckleberry Finn in a paper examining Twain's use of satire to show his views of racism during that time period. Or you might display a copyrighted photograph in a photojournalism class in an assignment in which the class must try to determine the story behind the photo just by examination, in order to teach about storytelling through composition and detail. You might quote from someone's blog or an article she wrote when doing a news report. These are all examples that would likely fall under fair use, assuming that the factors for fair use were met. (For fun, examples of fair use in teaching.) The key point regarding works that are considered fair use is that they add in some way to something already in existence - by analyzing it, by discussing its ideas, by criticizing it, etc. The new work could not exist without the old, BUT if the new work has that modicum of originality which benefits the public and advances thought, it may be fair use.
OK, so now that you've seen the basic law and a few examples of fair use, a few key points:
1) Fair use is an affirmative defense, not a legal right. People forget this. People always forget this. You can't say, "I have the right to do this because of the copyright law of fair use." You can say, "If a copyright owner comes after me and sues me, I can defend my use by arguing that it was fair under the law, and I am therefore not liable. IF it meets the criteria according to the judge of my case (we are assuming the case has gone to court, here), then my use was fair."
2) Fair use *may* apply, but only if the use of the work is for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research. This is not an exhaustive list, but it shows what kinds of use may be permitted. The key here is that all of these have to do with essentially, advancing someone's knowledge or understanding of the work or something related to the work, or using the work to advance thought or knowledge in some way. If you are using the work for something that doesn't do this in some way, then it's pretty much certainly not fair use.
3) Even if your use is for one of the purposes in the point above, you still have to meet the criteria listed in the statute. This includes # 3 and 4, the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and the effect of the use upon the potential market for or value of the copyrighted work. These two are key to why scans_daily would have to be really, really careful with how it used scans in order to get away with a valid fair use defense. For one, it would have to ensure that it was using a very small part of the work as a jumping-off point for a discussion, critique, or otherwise meaningful commentary of some sort (And a very small part might be one to two pages, and not even that if you are posting the one to two pages that encapsulate the heart of the work). For another, even if they're really really careful, they'd still have to show that they didn't post so much of the work that nobody would then buy it, since they could just see all or the heart of the story online.
4) FYI, (Peter David mentioned this, which is why I am) the United States has no recognized "droits moraux" or "droit d'auteur" in copyright law. Moral rights, here in the United States, are supposedly covered under laws regarding defamation or unfair competition. So saying that a copyright owner has a moral right to a work, while perhaps true in one's opinion, is not legally valid here in the U.S. under copyright law.
How all this applies to the former scans_daily:
As it stood, scans_daily was, in large part, in violation of the copyrights of the various companies. There were half comics posted (which would likely have failed factor #3), there were whole comics posted, albeit usually or always with some kind of accompanying commentary (which could have been knocked out under #4 as well as #3), and there were comics posted that didn't include much commentary other than, perhaps, "I really liked this!" Which doesn't count. On the other hand, there were also posts that included a scanned page or two, along with a "why such-and-such book or team is the greatest book or team ever and people should be reading it; here's my commentary or critique." THOSE kinds of posts would likely have survived a test of fair use, presuming, again, that the occasion arose where they would need to use that defense. But as a whole, many posts on scans_daily existed because the companies whose comics were scanned chose not to pursue the enforcement of their copyrights in that particular instance. Yes, they had the right to do so. Yes, it's entirely probable that, in terms of business sense, another option would have been much better. But in the end, there it is: Marvel had the right to go after their work being posted on scans_daily, and it could have done so whenever it wanted to (assuming it was at a time when there were posts of Marvel comics on the community). That's just the way the copyright cookie crumbles. Now another community *might* avoid this problem by being very careful about what is posted and ensuring that it follows the above guidelines - but even then, if the copyright owners choose to enforce their rights, they still run the risk of either being shut down or sued. Because as I said before, fair use is a DEFENSE. We should not forget that.
In the end, I personally think that it's a shame scans_daily was shut down, because along with being a fun and interesting community that added to comics commentary and drew in new readers, it's how I personally ended up spending oodles of money on Marvel comics. However, legally, it was their right to do what they did (if it was, in fact, Marvel who contacted LJ - it's still not entirely clear what the chain of events was). C'est la vie.
For a few more thoughts on this, you can check out:
My roundup of links about the end of scans_daily
My initial reaction to the end of scans_daily