2. As the recipient of the letter, you own the letter itself -- the paper and ink. You can show the letter to others, sell it, give it to a friend, donate it to a library, preserve it, or (with one possible limited exception I will come to in a moment) destroy it. Or to put it in a more lawyerly way, absent an express writing to the contrary, transfer of ownership of the tangible physical property of the letter from me to you does not carry with it the transfer of the copyright.
3. As the recipient of the letter, you cannot, however, publish the entirety of the letter without my consent (except for another possible limited exception I will come to in another minute). The reproduction right remains with me, as the copyright owner -- as does the right to create a derivative work. If you find my letter housed in a scholarly library, the library's permission to reproduce it will ordinarily not suffice (unless I assigned my copyright to the library). You will need to obtain permission from me or, if I'm dead, my heirs.
4. You (and others) can, however, quote portions of the letter I sent you, to the extent permitted by fair use. Alas, there are no bright lines as to what constitutes fair use -- no clear assurances that quoting, for example, 30 words from a two-page unpublished letter is surely fair use, while quoting 100 words from the same letter is not.
5. It is certain, however, that, because a letter is a short work, the number of words that you can safely quote is far smaller than the number you could safely quote from a longer work. You must also quote sparingly from other short works, such as song lyrics and poetry.
6. For a while, there was disturbing uncertainty as to whether you could quote anything at all from an unpublished letter. The fair use of unpublished letters and diaries was the subject of a series of cases about 20 years ago in which my firm and I represented the defendant biographers and publishers: Salinger v. Random House, New Era v. Henry Holt (see also this decision denying en banc rehearing), and Wright v. Warner Books. Ultimately in the Wright case, the Second Circuit Court of Appeals clarified that some amount of quotation from unpublished works, such as letters and diaries, can qualify as fair use. Congress then codified this finding by amending Section 107 of the Copyright Act to add this sentence: "The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made upon consideration of all the above factors."
7. Despite the Wright decision and the amendment to Section 107, unpublished status is still a factor to be considered in the fair use analysis, which tilts in the copyright owner's favor. So, as a general matter, publishers advise their authors to quote less from unpublished letters than they might quote if the same letters had previously been published.
8. I am surely no authority on British law, but my impression is that, under the doctrine of "fair dealing" (the UK equivalent to "fair use"), unpublished status takes on even greater importance than it does in U.S. law. See this good discussion by Emily Goodhand, aka @copyrightgirl, comparing the U.S. and UK doctrines.
9. As with any quotation, the more you "transform" what you are quoting -- comment upon it, analyze it, criticize it, put it into a larger context -- the more likely it is that your use will be found to be "fair use." Similarly, a starkly commercial use, such as quotation of a letter in advertising, is less likely to be found fair.
10. Don't forget that copyright protects expression, not facts and ideas. So, even though you can only quote a limited number of words from a letter, you may still be able to summarize and discuss the facts and ideas contained therein at greater length, as long as you do so in your own words (avoiding close paraphrase).
11. Letters written by U.S. government officials within the scope of their official employment are in the public domain and may be freely quoted. The same is not necessarily true of letters written by state government employees or government employees in other countries. Letters written by U.S. government officials in their private lives are copyright protected -- as are your letters and mine.
12. According to Paul Goldstein, the author of one of the leading treatise on copyright: "No reported decision has held that an exchange of letters constitutes a joint work." It is a tempting argument, though, considering that, as discussed in this prior post, some cases hold that the back-and-forth between an interviewer and interviewee gives rise to joint ownership of the copyright in the resulting interview. And I do think that, in the Wright case, the fact the quoted, unpublished letters in question were written by the novelist Richard Wright to the poet-biographer, Margaret Walker Alexander, may have helped push the court in the direction of finding fair use. That said, given that an exchange of letters does not constitute a joint work, the rule in point 1 above holds, i.e., I own the copyrights in the letters I send you, and you own the copyrights in the letters you send to me in reply.
13. An 1867 Kentucky case, Grigsby v. Breckinridge, established that the recipient of a letter is free to destroy it. However, a few interesting cases, including Baker v. Libbie (involving the letters of Christian Science founder Mary Baker Eddy) have held that, if the letters are still in existence, the writer may be entitled to gain access to them to make copies so as to preserve the intellectual property or to register the copyrights. This issue sometimes comes up when litigation is contemplated.
14. A few interesting cases, such as Avins v. Moll, suggest that the recipient of a letter may publish a whole letter, if publication is necessary to defend the recipient's reputation against charges made by the sender. In any event, fair use ordinarily would give the recipient the leeway she needs to deal with this rare circumstance.
15. Sometimes the circumstances in which a letter is sent can imply that the recipient has permission to publish it. One obvious example is a letter to the editor.
16. It is always advisable to credit your source when quoting letter or any other source materials, not merely as a matter of scholarly and journalistic ethics and etiquette, but also because some courts have said that the failure give proper credit cuts against the "quoter" in the fair use analysis.
Again, the philosophy of fair use quotation of letters and other source materials is neatly summed up in this quotation from The Chicago Manual of Style (brought to my attention by Peter Ginna aka Dr. Syntax);
Fair use is use that is fair--simply that....The right of fair use is a valuable one to scholarship, and it should not be allowed to decay through the failure of scholars to employ it boldly.