Public Domain vs. Fair Use
"Fair use" is a term that is often linked with "public domain," but they are not the same. Public domain materials may be used freely. Fair use refers to the practice of using materials that may be under copyright, but which have been transformed through some way. Stanford's library explains the two major fair use practices as commentary or criticism of a work, or parody of a work. Copyrighted materials may also be used in art as reference, reframing, or some process that renders the work identifiable, but significantly transformed.
Here are a few short resources to further clarify the concept: