At the suggestion of my online friend and fellow film pro, Sheri Candler, I read this very interesting blog post from Brian Newman (NY media consultant and immediate past CEO of Tribeca). Brian's comments are very well thought out but, in my opinion, incorrect. Of course, there is nothing better than a well-reasoned disagreement, so here goes.
I'm Still Here. In case you live under a rock and you are unaware of the film, it is a supposed documentary on Jaoquin's abandonment of acting in favor of a career as a rap artist. Jaoquin and Casey (who directed the film) both now acknowledge that the career switch was a hoax, played out for purposes of making the film and amusing the public.
As a part of the hoax, Jaoquin appeared on Letterman's show as his "character" and a clip of that appearance is included as a part of the film. In a follow up appearance by Jaoquin on Dave's show, a discussion ensued whether money was owed to Dave for the use of that clip in the film.
So, the legal question is whether the use of the Letterman clip constitutes "Fair Use" for purposes of copyright law (which would mean that no compensation is owed to Dave or his company, Worldwide Pants). Brian Newman says that it is indeed a Fair Use; I disagree.
Without going all legal on you, the primary purpose of Fair Use is to allow journalists and educators to use small portions of copyrighted material in order to inform and educate the public. That is why the law allows such (primarily non-commercial) uses to be undertaken without compensation to the copyright holder.
In this case, the primary purpose of this film is not to inform or educate the public. It is a spoof documentary, in much the same way that Borat was a spoof. It was done for amusement and commercial gain. Therefore, any use of copyrighted material within the film would be in furtherance of those purposes. That is inconsistent with the principles which underlie Fair Use.
The bottom line from my viewpoint is this: Just like this film might appear to be a documentary, the use of the Letterman clip might appear to be Fair Use. However, in both cases, the appearance is deceiving and both conclusions would be incorrect.