As a recent FMC blog post points out, Girl Talk and his label Illegal Art believe his work is legal under the "fair use principle, a term in copyright law that recognizes that a copyrighted work can be used for "purposes such as criticism, comment, news reporting, teaching, scholarship or research without being considered infringing. Also, because Gillis samples are short and "his music sounds so little like the songs he takes from, it is unlikely to affect their sales, a New York Times article wrote. Gillis therefore contends he should be covered under fair use.
The FCM post then looks at the sampling clearance process itself, which is pretty complex for our small minds. From what we can gather, in a nutshell Girl Talk would have to get the original artists to say "yes or "no to the use of their work for the album to be totally legit. To do this Gillis would have to get all copyright owners and the composer/publisher for each work he sampled on board, which for his latest album Feed the Animals would mean getting 600 people to say "Yes and zero to say "no. This would all take a long, long time and would need all lot of sweat, determination and luck to go down.
So, if Girl Talk could somehow track down everyone who owns all the copyrights and get permission for all the samples, then he would come face to face with the cost of it all. Gillis would have to negotiate the licensing with each party individually (again, thats 600 people) and then the price of using the sample would all be case by case, with things like the original artists street cred, negotiating history between publishers and managers and how the sample will affect the artists back catalog all being factors that could raise costs. Basically, it would all take Gillis so much time to do this and cost so much cash that he would sooner ditch the album than make it legal. But hey, theres a reason his label is called Illegal Art.
For a more complete, detailed version of all this, check out the Future of Music Coalition post. Its a doozy.
Girl Talk "Bounce That (fan video)