WHAT IS COPYRIGHT
What is copyright? The question seems to cause more confusion than anything else in publishing, though the main points are not disputed:
copyright exists to protect intellectual property.
copyright is what you sell to publishers (and why you must check the contract: the material is theirs to use or not thereafter).
ideas cannot be copyright-protected, but their expression can (and is).
copyright is automatically yours the moment you create the work.
though not legally necessary, it may be wise to register copyright.
copyright applies even if the original is greatly modified.
boosting publicity and sales is no defence against copyright theft.
compensation is based on the court's view of the financial damage inflicted (plus defendant's fees).
Clearly it's common sense to avoid trouble in the first place by getting written authorization to use copyright material from the person entitled to give it. Also to have some documentation for your own work: application forms from US Copyright Office: fee is $30 per item.
But perhaps the 'what is copyright?' type questions arise from the law in practice. Edges are blurred, and the law varies from country to country. Copyright benefits lawyers and middlemen far more than authors. Institutions purchasing material with public funds can use their copyrights (denying publication or charging exorbitant fees) to prevent that material being used for its intended public good. The exclusion cause 'fair usage' is often unclear in practice, giving victory in disputed cases to the company with the deeper pockets. All the same, unless you're a legal crusader for intellectual property, you'll stay within its narrower provisions.
Fair Usage
So that material can be used in reviews and for educational purposes, the laws of copyright are ameliorated in what is called 'fair usage', which very broadly applies in the following circumstances. Copyright is relaxed when original material:
is used for reviews or non-commercial purposes
does not damage the interests of the copyright holder
is properly attributed
is a small part of the original source — generally no more than a paragraph in a book, or 40%/10 lines of a poem.
Copyright and fair usage are shadowy areas, immensely complicated in detail, as you'll quickly see from these sites:
A History of Copyright and Why it Matters. NWU article: includes registration advice.
Crash Course in Copyright. University of Texas online course.
Copyright and Fair Use. Stanford University links: extensive
Copyright Internet Resources. Library of Congress listings.
Australian Intellectual Property Law Locus. Includes patents and trademarks.
Publishing Law Center. Many links and free articles.
Ivan Hoffman. Legal matters for small publishers.
US Copyright Office. Forms and information: fee is $30 per item.
eTime Stamp. Service authenticating electronic documents. $10 for 25 stamps.
Libel
Far more threatening to the writer is libel, particularly in England, in whose courts so many cases end up. Libel is a written form of defamation defined as a "false or unjustified injury to someone's good reputation." That injury may be unintentional, and libel is a lurking danger to everyone who puts pen to paper. No newspaper office is without a resident expert or their horror stories. All statements have to be double-checked, not only that the person quoted did in fact say that, but what they said was true and can be readily so demonstrated. Any doubt and the article is spiked, or the MS remains in the publisher's drawer. Disclaimers are not enough, and you are most unwise to portray a villain who could in any way, however unwittingly, be linked to an innocent living person. Your fictitious Hector Sepulveda of DeepShade Mansions is apt to spring to life with a writ if you haven't exhaustively ruled out the possibility.
Avoid giving the publisher a further reason to turn down your manuscript by consulting these sites. Many more articles can be found on the Internet, and do not make happy reading.