University employees, including faculty members, can be held personally liable for their infringing acts. In all likelihood, a copyright owner would sue the University too, but that will not necessarily insulate her from the cost of defending a lawsuit or from personal liability if she's found to have infringed.

The penalties for infringement are very harsh: the court can award up to $100,000 for each separate act of willful infringement. Willful infringement means that she knew she was infringing and did it anyway. Ignorance of the law, though, is no excuse. If she doesn't know she is infringing, she still will be liable for damages - only the amount of the award will be affected. Then there are attorneys' fees...

There is one special provision of the law that allows a court to refuse to award any damages at all if it so chooses, even if the copying at issue was not a fair use. It is called the good faith fair use defense [17 USC 504(c)(2)]. It only applies if the person who copied material reasonably believed that what he or she did was a fair use - as would likely be the case if she followed the University's Copyright Policy! If she qualifies for this defense, she'll be a very poor prospect for a lawsuit. On the other hand, if she disregards sound advice about fair use, a court would be free to award the highest level of damages available. This would make her a handsome target.

Finally, state Universities may claim sovereign immunity to shield them from suits for money damages. Individuals sued in their individual capacity cannot claim sovereign immunity but may qualify for a more limited immunity, but only where their activities are within the bounds of a Copyright Policy or otherwise defensible as a fair use. Even if an individual qualifies for this defense, the facts that support it must be proven at a trial, so it does not result in the immediate dismissal that a claim of sovereign immunity does. Where a faculty member's conduct violates a Copyright Policy qualified immunity may not be available and the individual would be liable for money damages. See University Liability for Faculty Infringements for a summary of that paper's conclusions about University and individual liability.