JUNE 7, 2012

South Park creators prevail in copyright infringement action based on fair use defense

By John A. Chatowski

The creators of the popular television show South Park won a victory in the Seventh Circuit Court of Appeals in a case testing the bounds of the fair use defense to a claim of copyright infringement. In Brownmark Films, LLC v. Comedy Partners, et al., 7th Cir. Case No. 11-2620, decided June 7, 2012, Brownmark, the owner of the copyright of a video that went viral on the Internet several years ago— “What What (In the Butt)” (“WWITB”)—sued the creators of South Park and others arguing that the defendants infringed Brownmark’s copyright when they featured a parody of its video in one of their episodes. The defendants moved to dismiss the action at the pleading stage, before any discovery took place, on the grounds that as a matter of law their parody version of Brownmark’s video constituted “fair use” under Section 107 of the Copyright Act. The district court granted the defendants’ motion and the Seventh Circuit affirmed, holding not only that the district court had the power to consider the merits of this defense at the initial stages of the action, but also that on the merits the district court correctly found that the defendants’ use of the plaintiff’s video constituted fair use, even though the defendants used “the ‘heart’ of the work; the work’s overall design and visual elements.”

Many young and old are familiar with the show South Park and its “unique” cast of characters— Cartman, Stan, Kyle, Butters, and, of course, Kenny (who never survives an episode). In the episode “Canada on Strike,” the show’s creators spoofed the 2007-2009 Writers’ Guild of America strike by depicting Canada “on strike” and demanding its share of the “Internet money” it claims is generated from on-line videos. To earn their own “Internet money” to “buy off” the strikers, Cartman, Stan, Kyle, and Butters created a video of their own—named WWITB—that depicts Butters singing and dancing. The video is an admitted parody with many of the same visual elements and dancing of a real video by the same name showing an adult man also singing and dancing. After Brownmark sued the creators of South Park and others for copyright infringement in the Eastern District of Wisconsin, the defendants moved to dismiss the case on the pleadings on the grounds that their use of the plaintiff’s work constituted fair use. The district court agreed. The two primary issues on appeal were (1) whether the district court erred in considering the defendants’ fair use defense by way of their Rule 12(b)(6) motion to dismiss for failure to state a claim, and before any discovery had taken place, and (2) whether the defendants’ use of a significant portion of the plaintiff’s work nevertheless constituted fair use.

As to the first issue, the Seventh Circuit acknowledged that while courts should normally refrain from granting Rule 12(b)(6) motions based on affirmative defenses, in this case, all that was necessary for the court to consider the motion (the original work and the allegedly infringing one) were before the district court. The motion, therefore, was properly before the court. The court side-stepped an interesting issue not briefed by the parties: whether the “incorporation by reference doctrine” can be applied to content of television programs and similar works. Normally a court ruling on a Rule 12(b)(6) motion to dismiss cannot consider matters outside of the “four corners” of the complaint. The incorporation by reference doctrine, however, permits a court to consider documents attached to a motion to dismiss if those documents are referred to in the complaint. Although the Seventh Circuit noted that no court of appeals has decided whether the doctrine can be applied to works such as the South Park episode at issue, and cited to several district court decisions in California where it has been held that the doctrine does apply, the court “reserve[d] the resolution of the question for a later date.”

Turning to the fair use question, the court noted that Brownmark never addressed the merits of the defense in the district court, arguing instead that the court did not have the power to rule on the motion when it did. Although the Seventh Circuit held that Brownmark’s silence constituted a waiver of the issue, the court, nevertheless, addressed the merits and agreed with the district court that this was an “obvious case of fair use,” considering the four non-exclusive factors courts consider in determining whether a work constitutes fair use; (1) the purpose and character of the use, (2) the nature of the copyrighted work, (3) the amount and substantiality of the portion of the copyrighted work used in relation to the copyrighted work as a whole, and (4) the effect of the use upon the potential market value of the copyrighted work. 17 U.S.C. § 107.

As to the first factor, the court concluded that the purpose and character of the use “was to comment on and critique the social phenomenon that is the ‘viral video,’” and that “[t]his kind of parodic use has obvious transformative value, which under § 107 is fair use.” As to the second factor—the nature of the copyrighted work—the court held that this factor “offers little help to Brownmark because ‘parodies almost invariably copy publicly known, expressive works.’” The court also held that although the defendants used a substantial portion of the plaintiff’s work, because the challenged work is a parody, it did not “supplant” Brownmark’s video. Finally, the court held that the defendants’ parody cannot have an impact on the market value for Brownmark’s work because there is no “Internet money” for Brownmark’s video on YouTube, but rather only “advertising dollars that correlate with the number of views a video has had.” The court also quipped that it seemed that the defendant’s “likely effect, ironically, would only increase ad revenue.” The South Park boys would be proud.

2 For more information, please contact your Nixon Peabody attorney or:

 John A. Chatowski, (415) 984-8410, [email protected]

 Jason C. Kravitz, (617) 345-1318, [email protected]

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