Agence France Presse recently brought a copyright infringement action against Google. Prof Patry sums it up quite plainly:
The case arises out of the Google News service, which displays headlines after search results of news stories. The headline is a live link, sending searchers to the web page from which the headline had been pulled. AFP claims that it owns copyright in the headlines and that Google has infringed them. Baloney.
While I tend to agree with his analysis, it's also relevant that, in some cases, more than just the headline is reproduced. AFP is likely making the case that the combination of the headline, excerpt and photo would constitute the "heart of the matter".
The fair use analysis is also interesting. One would think the fact that Google directs the reader to the source would weigh in their favor for the fourth factor, but they could also be adversely affecting the market as a competitor in the news portal business. This is especially true if they post an excerpt from a subscription site to entice users and offer them alongside free alternatives.
An interesting question that I would love to see addressed by the Court. It's unlikely it will get that far, though - I'm assuming that one element of this suit is positioning and that it will probably settle.