Yep... sorry, but you're not in a good position for this one.
You have no rights to use the footage. Not only does the actual footage belong to someone else, but there may be other ancillary rights (performances, etc.) that you do not have rights to, either.
You also do not have the right to now, after the fact, asked to be paid for the job. You agreed to do the work as a freebie. That's about the end of that road.
The best you can do is ask nicely for permission to use the project. Apparently you've already done that and they have said "no."
You
could have just gone ahead and used the footage, following the old axiom "It's easier to ask for forgiveness than permission" (I hate that phrase). But... you
did ask permission, and were denied. Therefore the rights-owner has clearly defined his position on your usage of the footage.
At this point there is nothing you can do about it, except go ahead and use his project without his permission... which would most certainly set you up for legal action since he has already clearly forbade that... there's no way to plead ignorance of his position on it. Will he actually do anything about it? Hard to say... but I know if I were in his shoes, I would.
Yes, just chalk this one up as a life lesson and move on to the next job. Keep this in perspective with the rest of life... we're not talking about a huge gig and you weren't cutting "Gone With the Wind," you said it was only a two-day edit... so just move on. And when that next job comes, make sure you get
in writing all the permissions you think you'll need.
T2
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Todd Terry
Creative Director
Fantastic Plastic Entertainment, Inc.
fantasticplastic.com