Now, I'm not a lawyer, so this isn't legal advice, but...
A derivative work is not fair use. If you end up with a significant portion of another person's program in yours, (such that a substantial portion of your program is in some way related to their program), that will likely be a derivative work - but the definition of a derivative work depends on your jurisdiction and use-case. If you're unlawfully using the source material to produce a derivative work, you cannot copyright that derivative work under 17 U.S.C. § 103(a), and under the same section, you can only copyright your modifications, not the original.
It would be hard to argue fair use in this case; fair use only really applies for parodies/criticism, reporting, and scholarly works - and generally that's an affirmative defense, rather than an express or implied right you have.
Honestly, Copilot is difficult because Copilot can't be the author of the code; the person who used Copilot is the "author" of the code, and I think they'd be the ones liable for copyright infringement if copyrighted content ends up in their code.
To argue someone performed copyright infringement, all you need is to prove (1) a valid copyright exists; (2) that the person had access to the work; (3) the person had the opportunity to steal the work; and (4) that protected elements of the work had been copied (afaik generally under a "substantially similar" standard). Copilot offers an easy way to check both (2) and (3) - a copyright holder could argue that people had access to their code through Copilot, and that Copilot offered an opportunity to steal the work.
A derivative work is not fair use. If you end up with a significant portion of another person's program in yours, (such that a substantial portion of your program is in some way related to their program), that will likely be a derivative work - but the definition of a derivative work depends on your jurisdiction and use-case. If you're unlawfully using the source material to produce a derivative work, you cannot copyright that derivative work under 17 U.S.C. § 103(a), and under the same section, you can only copyright your modifications, not the original.
It would be hard to argue fair use in this case; fair use only really applies for parodies/criticism, reporting, and scholarly works - and generally that's an affirmative defense, rather than an express or implied right you have.
Honestly, Copilot is difficult because Copilot can't be the author of the code; the person who used Copilot is the "author" of the code, and I think they'd be the ones liable for copyright infringement if copyrighted content ends up in their code.
To argue someone performed copyright infringement, all you need is to prove (1) a valid copyright exists; (2) that the person had access to the work; (3) the person had the opportunity to steal the work; and (4) that protected elements of the work had been copied (afaik generally under a "substantially similar" standard). Copilot offers an easy way to check both (2) and (3) - a copyright holder could argue that people had access to their code through Copilot, and that Copilot offered an opportunity to steal the work.