True, but this ignores the fact that characters themselves can be protected by copyright.
They can be, but there are limits. The key is how well-defined the character is. Also, bear in mind that really the character is not protected by copyright per se -- the character is just a part of a greater work, which is protected by copyright. Whenever a work which establishes some trait of a character falls into the public domain, so too does that part of the character. Unauthorized uses of the character are really unauthorized uses of the work, which is what can give rise to infringement. A character cannot be copyrighted separately from the work in which he appears, however.
Fan fiction sites can exist legally only to the extent that the character copyright owner grants permission
Or to the extent that the work is not protected, either because it is in the public domain, or because some exception to copyright law applies.
Why on Earth would the studio pay those fees, if they didn't have to?
Clarity; To avoid paying greater fees for litigation down the road, even if they were confident that they would win; As a favor wrapped in a plausible excuse; For good PR. There are good reasons to do so, is the point.
Copyright law holds that you can satirize or parody someone else's work without their permission; thus Jason Friedberg and Aaron Seltzer do not have to pay licensing fees for the movies that they rip off in their awful "parodies."
No it doesn't. Copyright law in the US states that if a copyright is prima facie infringed, but constitutes fair use, then there is no infringement. Parodies and satires -- and for that matter, literally any other sort of use -- can potentially be fair uses, but are not necessarily fair uses. Certainly there have been both parodies and satires which were not fair uses.
But no English speaker would use the word "satire" or "parody" to describe Kahn's movie, precisely because of the qualities that people loved about it (dark, violent, almost completely humorless).
It can easily be seen as a satire. Whether it's a parody is a slightly more difficult question. The legal distinction, for those unfamiliar with this, is that a parody somehow makes fun of the work being used; a satire makes fun of something else, but uses the work to do so. Making fun of the trend of 'gritty reboots' in cinema by using the Power Rangers is certainly satire -- it makes fun of other gritty reboot films and shows. I'd have to have seen it, and know something about the regular Power Rangers to have an opinion as to whether it's a parody, and I frankly don't care enough to bother.
The question of whether the filmmakers meant it as a satire at the time that they made it and released it, and whether that matters, is certainly an interesting one. I can't think of caselaw that indicates that the timing matters or not, but please feel free to cite some.
since "fair use" is a catch-all for several scenarios in which you can legally use copyrighted content without the owner's permission (parody/satire, brief excerpt for the purpose of commentary/criticism, etc.), which defense applies here?
This is an incorrect view of fair use.
Fair use applies to any sort of use of a copyrighted work, which but for fair use would be infringing, and which is fair. I know this sounds like a tautology, but there it is. There is a four-factor test as to whether a use is fair or not, which we'll get into shortly. That's really what matters. True, there is a list of examples in the statute, but it's really meaningless: It's not an exhaustive list of all types of fair use, and the types of uses listed are not necessarily fair. While it was meant to provide guidance, the list of uses has turned out to only cause serious confusion. I strongly encourage you to ignore it completely.
One of the criteria for "fair use" is how much of the original work you re-used -- if your online review of The Dark Knight links to a 10-second clip that you posted to show that the fight scenes are kick-ass, that might be OK, but a 30-minute excerpt would not be. But if we apply that logic to the use of a copyrighted character, in a story you're either using someone else's copyrighted character, or you're not. Given that characters are protected by copyright at all, it doesn't make much sense to talk about "using 0.5% of a character", the way that a 30-second clip would constitute only 0.5% of a 100-minute movie. It certainly wouldn't make sense in the case of Kahn's remake, where the copyrighted Power Rangers characters are onscreen in every single scene.
For those reading along, the four factor test is:
(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
(4) the effect of the use upon the potential market for or value of the copyrighted work.
The key thing to bear in mind is that the test is not to be applied in a strictly mathematical way; it's really just a tool to provide guidance for the ultimate question of: Is the use fair?
Fair uses have been found when most of the factors weigh against it. And the four factors are not the only factors worth considering; courts must consider them, but can also consider additional factors if they like, with no rules as to what those factors are.
In any case, you're looking at the 'amount and substantiality of the portion used' in too mechanical a fashion. Remember, the copyright for a character is really all about the details that go into describing the character. What does he look like? What clothes does he wear? What sort of method of speaking does he have? What kinds of behavior are typical for him? And so forth.
For example, if the character in question were Harry Potter, the character would be used less if, for instance, his scar did not appear, or there were no mention of his crappy home life. Those aren't the only traits that define the character, obviously, but the fewer you use, the more likely it is that you're engaged in fair use. (New traits made up by the user, which do not appear in the original work don't matter, btw; so if you add fluency in Magical Esperanto, it doesn't weigh against fair use, since it never arises in Rowling's books or in the movies)
Again, I haven't seen anything involving Power Rangers, but if it's just that the characters are dressed in similar outfits and otherwise bear no relation to the originals, this would indicate that relatively little of the characters were used.
And of course, remember that even if 100% of a work is used, it can still be fair use, under the right circumstances. Instances of time shifting and space shifting have been found to be fair uses, and they use all of the work.
The director's defenders rightly pointed out the absurdity of Vimeo removing the short film just hours after giving it a "Staff Pick" award
It doesn't sound absurd to me. Whether it has artistic merit has no connection to whether it's legal. The silent movie Nosferatu is a classic but infringed on the copyright of the novel Dracula. Luckily, while the courts ordered the film destroyed, one copy survived, and we have that to thank for the preservation of the film.
Presumably they had heard of the Power Rangers and knew that the movie was using the characters without permission.
There's no central registry of copyright registrations, assignments, and licenses. There probably should be, but there isn't. How would Vimeo know that the filmmakers didn't have permission? They could've gotten the rightsholder to grant them an oral or implied license, and there would be no way for Vimeo to distinguish that from them having no license at all. It's not Vimeo's job to know these things, and usually they're in no position to find out. Requiring rightsholders to search for infringements is the best way to go.
Moreover, there's not just a legal argument against an unauthorized "gritty reboot" of the Power Rangers, there's a moral one as well.
No there's not. There is no moral aspect to copyright; it's amoral and utilitarian. Though if pressed, I would say that it is more moral to create and publish works than it is to prohibit the creation and publication of works (particularly if it's just about money).