I'm not commenting on whether this whether this was "Fair Use" or not.
I don't believe issues of copyright infringement are "black and white" though. Fair Use wasn't part of previous copyright law. It was codified into chapter 107 later as a result of various court decisions. The application of it still isn't easy to deterimine in many cases.
See
http://www.copyright.gov/fls/fl102.html
They, the Copyright Office, recommend always asking for permission.
John Y.