7th Circuit Affirms Early Dismissal Based on Fair Use in "South Park" Parody Case

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[authors: Dan Laidman, Alonzo Wickers IV, Jeff Glasser]

A “South Park” parody of a popular viral video was such an obvious fair use that a judge was correct to promptly dismiss a copyright infringement claim against the show without putting its creators through burdensome discovery, the 7th U.S. Circuit Court of Appeals has ruled.

Courts have long recognized in other First Amendment-related contexts like defamation and the right of publicity that early dismissal of weak claims is crucial to avoid chilling protected speech with the prospect of costly, drawn-out litigation and invasive discovery. The 7th Circuit’s opinion in Brownmark Films, LLC v. Comedy Partners1 is the first appellate decision to extend this reasoning into the realm of copyright fair use. The Brownmark decision is also significant for recognizing that parody cases require more than a rote application of the traditional fair use factors, and that while a parody must inherently borrow a significant amount of the underlying piece, it does not necessarily supplant the market for the original work.

The case began with a 2008 “South Park” episode titled “Canada on Strike” that lampooned the growing phenomenon of Internet viral videos. At one point in the episode, the “South Park” schoolboys produce their own video that is a send-up of one of the earliest and most popular YouTube sensations, Samwell’s “What What (In The Butt).” The original “WWITB” video features a real-life adult singer who vamps through choruses of “I said, what what, in the butt” and “you want to do it in my butt, in my butt?” while highly sexualized imagery appears in the background. In the “South Park” cartoon parody, the song’s crudely sexual lyrics are delivered by Butters Stotch, a naïve fourth grader who performs the song wearing versions of Samwell’s iconic outfits, but who also appears dressed as an astronaut, a teddy bear, and a daisy.

More than two years after the episode first aired, Brownmark Films LLC, the purported co-owner of a copyright in the WWITB video, sued Comedy Partners, MTV Networks, Paramount Home Entertainment Inc., Viacom International Inc., and South Park Digital Studios LLC (collectively “South Park”) for copyright infringement. On July 6, 2011, Judge J.P. Stadtmueller of the U.S. District Court for the Eastern District of Wisconsin granted South Park’s motion to dismiss the lawsuit under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim.2  Judge Stadtmueller concluded that viewing WWITB and “Canada on Strike” side-by-side provided everything he needed to find that the “South Park” video was “a classic parody” constituting a protected fair use.

Brownmark appealed, arguing that fair use is a fact-based defense that cannot be decided on a motion to dismiss for failure to state a claim. South Park argued that early dismissal of copyright claims challenging obvious parodies serves important First Amendment and public policy goals, because the specter of having to defend against costly lawsuits and undergo burdensome and intrusive discovery could discourage important but controversial expression, such as parody and criticism—a classic “chilling effect.” In an unusual (but apparently persuasive) alliance, South Park was supported in this argument by an amicus brief from the Electronic Frontier Foundation, which characterized the lawsuit as an example of the “rapidly escalating problem of ‘copyright trolls’—i.e., entities that embrace copyright litigation as a business model.”

On June 7, 2012, a unanimous 7th Circuit panel3  ruled in South Park’s favor, affirming Judge Stadtmueller’s opinion while calling it “well-reasoned and delightful.” For the first time in a federal appellate decision, the court recognized the importance of early dismissal in the fair use context, acknowledging that the “expense of discovery … looms over this suit.” Agreeing that “the only two pieces of evidence needed to decide the question of fair use” were the original WWITB video and the “South Park” episode, the 7th Circuit concluded that it was “an obvious case of fair use.”

Judge Stadtmueller granted South Park’s motion to dismiss after finding that the videos were incorporated by reference into the pleadings. The appellate panel took a slightly different approach, noting that whether the incorporation-by-reference doctrine applies to videos is a question of first impression in the 7th Circuit, and opting not to resolve the issue.4  Rather, the 7th Circuit treated South Park’s Rule 12(b)(6) motion to dismiss as a Rule 56 motion for summary judgment, and affirmed on that basis. The court acknowledged that South Park had avoided captioning its motion as a request for summary judgment because such motions usually come after discovery. However, the 7th Circuit explained that district courts do not have to grant discovery requests at this stage, and that they “ought not” in cases like this where “it is clear that the case turns on facts already in evidence.”

The court noted that Brownmark argued—for the first time on appeal—that it needed discovery into the state of mind of South Park’s creators, “all relevant video images or clips” including images created for purposes divorced from the “Canada on Strike Episode,” and licensing information related to the episode. The panel found that “such a broad discovery request, surely entailing expensive e-discovery of emails or other internal communications, gives Brownmark the appearance of a ‘copyright troll.’” Therefore, the court concluded that regardless of the caption on South Park’s motion, the district court properly decided the case based on the two videos alone without requiring additional discovery.

Turning to the substance of the fair use argument, the 7th Circuit agreed with South Park that Brownmark waived its opposition to the defense by failing to argue the merits of fair use in the district court. However, the Court nonetheless went through the Section 107 factors and affirmed Judge Stadtmueller’s conclusion that South Park’s use was privileged, providing a rare and important appellate decision about the scope of the parody defense.

Section 107 of the Copyright Act presents four non-exclusive factors to determine if a use is protected: (1) the purpose and character of the use; (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 on the potential market for or value of the copyrighted work.5

On the first factor, the court held that South Park’s “parodic use has obvious transformative value.” As to the second factor, the court acknowledged that WWITB is itself a creative work within the “core of copyright protection,” but it explained that “[i]n the context of parody, this factor offers little help to Brownmark” because parodies inevitably copy known expressive works.

Regarding the amount used, the 7th Circuit found that South Park’s use was “not insubstantial” and that it had used the “heart” of the original work, but again held that this was not especially important in the context of parody. The court reasoned that “when parody achieves its intended aim, the amount taken becomes reasonable when the parody does not serve as a market substitute for the work.” Because South Park’s video was “clearly a parody,” the Court explained that it “has not supplanted” the market for the original WWITB video. Therefore, with respect to the fourth factor, the Court held that Brownmark failed to present any “concrete suggestion about potential evidence indicating that the “South Park” parody has cut into any real market (with real, non-Internet dollars) for derivative uses” of the original WWITB video. The 7th Circuit concluded its analysis with the observation that the “South Park” episode’s “likely effect, ironically, would only increase ad revenue” for Brownmark.

The original WWITB video can be viewed at this link; the “South Park” parody is available here.

Comedy Partners, MTV Networks, Paramount Home Entertainment Inc., Viacom International Inc., and South Park Digital Studios LLC are represented in this matter by Alonzo Wickers, Jeff Glasser, and Dan Laidman of Davis Wright Tremaine in Los Angeles and Michelena Hallie of Viacom Media Networks in New York.

FOOTNOTES

1 Brownmark Films, LLC v. Comedy Partners, No. 11-2620, 2012 U.S. App. LEXIS 11454 (7th Cir. June 7, 2012).
2 Brownmark Films, LLC v. Comedy Partners, 800 F. Supp. 2d 991 (E.D. Wis. 2011).
3 Judge Richard D. Cudahy wrote the opinion, and was joined by Chief Judge Frank H. Easterbrook and Judge David F. Hamilton.
4 The Court did note that “it makes eminently good sense to extend the doctrine to cover [television programs and other] such works, especially in light of technological changes that have occasioned widespread production of audio-visual works.” The Court’s stated rationale for not reaching the question was that the parties did not brief the issue, although South Park discussed the issue extensively in its briefing.
5 17 U.S.C. § 107.