I work for a production company and we are currently making a video for a client (a paying client, so we would be making money). The video is for the client's company-wide conference; it will be shown to a large audience, but is not intended to be distributed/shown beyond that point.

The question I have is about what can and cannot be used in that video. As I understand it, anything we use - if we did not make it - must be used with permission from the owner. For example, if we were given a number of video clips from television shows, news broadcasts, etc. with permission from their respective sources to include in the video we create, we could use them and be in the clear. However, if we were to go to other web sites (similar in nature - News, Television Shows, etc.), find a way to download videos they're hosting, and use those in the video we create (without seeking permission), we could be in a heap of trouble.

Currently this discussion is causing a bit of a fuss in the office. My superior believes that since, if you were to visit a website, you've technically already "downloaded" the content, so downloading it isn't illegal or wrong (even though certain sites like YouTube say in their Terms of Service that this is a no-no). He goes on to say that using it in our own production (that we are being paid for, mind you) is totally fine because it falls under fair use. I am obviously not a legal expert, but my limited understanding of Fair Use was that it applied to teaching, criticism, comment, news reporting, or research - not commercial purposes and personal gain. As a creator and owner of content, myself, I find this person's perception on the legalities of the matter alarming.

Any professional advice or clarification this topic would be greatly appreciated.