I love the copyright law, but really appreciate the way Fair Use protects education. I did my final project for my masters degree on the copyright law and education, and while I made an enemy of one teacher - I got my A! I'll also be the first to admit that I believe I have violated the copyright law somehow, one way or another, by accident - but never for a class project and never for a competetion.
Basically under Fair Use, you may use 5 images or 10% of a website, which ever is less. So if a student uses 1 image from a website for a project - then it falls under fair use. HOWEVER, if they are going to make that project available online, they lose the Fair Use Coverage. Double checked on the use of Fair Use for educational purposes, and once that project hits the open web, you lose those rights granted to you under Fair Use for educational purposes. Now if it is on a secure site that is unsearchable except by log-in users, then you are okay. Just make sure it is known WHY the presentation or website cannot go public.
What if they are using a template from a site such as BrainyBetty or an open source document/page layout? I would still document the source. The creator is not getting paid for it, but props is always nice.
What if it is from the Smithsonian or an actual Public Domain site? Check thier rules for use, and again- it only takes a few strokes of the keys to actually document it on a works cited page.
What if you paid for the collection? Then say images/media came from a paid subcription from XYZ and then send them back to that site. One site I use to use would even pay for the referral if people actually clicked on your site to get to theirs. It's all part of CYA.
What if it's a free streaming media site, such as You Tube, and you're going to embed a video from their site to your blog or web page? There are rules that apply. For You Tube, you must not download the video and then upload it to your site. (You should not be able to download the video!) You should embed the video and link back to the original source.
What about a video from a site such as Discovery Streaming that says that you have the right to edit it and is used in a digital storytelling piece? Again, just document the source. Teachers Domain also has some great videos that they don't mind you sharing with others. All they want is credit back to their own website.
Teaching students how to use a tool like the Citation Machine from David Warlick or The Citation Maker from Tech4Learning would be a smart thing to do.
So teachers, when you teach your students multimedia, WebPage Design or anything else that might be posted on the web, teach them how to cite their sources and encourage them to list each source, even if they think it's Public Domain. It's part of CYA - Cover Your Assets so you don't get in trouble later. Especially if it is something that will appear on the web, in an unsecured location and is part of a searchable page.
Oh, and let's all practice what we teach.
For those who need a chart to follow: http://www.copyright.cornell.edu/public_domain/