In a 2008 episode of the animated comedy South Park, the characters Cartman, Stan, Kyle and Butters create a video called What What (In The Butt), a parody of a real-world viral video of the same name. Plaintiff owns the copyright to the original video, and sued the defendant, creators and producers of South Park, for copyright infringement. Defendants moved for dismissal for failure to state a claim, based on the affirmative defense of fair use. The district court found fair use and dismissed the case. (Click here to read our summary of the district court’s decision.) Plaintiff appealed, arguing that courts should refrain from granting motions to dismiss on affirmative defenses. The Seventh Circuit affirmed, finding that, while the court should have treated defendants’ motion as one for summary judgment, that the district court could properly consider an affirmative defense in the context of a motion for summary judgment, and that the use was fair.
The Seventh Circuit elected to treat defendants’ motion as a motion for summary judgment because the procedures for both a motion for summary judgment and a motion to dismiss are “essentially the same” and that the only possible disadvantage to plaintiff would be the lack of notice. In plaintiff’s case, however, this error was harmless because, according to the court, plaintiff could not have offered any evidence in response. Because plaintiff had failed to make any concrete contention that the South Park episode reduced its financial returns from the original video, the district court required only the video of the South Park episode that included its What What (In The Butt) parody and the original What What (In The Butt) video, both of which defendants attached to the motion to dismiss, to properly consider the affirmative defense of fair use.
Treating the motion as a motion for summary judgment, the Seventh Circuit affirmed the district court’s decision, finding that plaintiff had waived its fair-use argument on appeal by failing to address the substantive issue. Even had plaintiff addressed the issue, however, the appeals court concluded that defendants’ use of the original video clearly constituted fair use, finding that the South Park episode clearly meets the four non-exclusive factors for fair use under the Copyright Act – the purpose and character of use, the nature of the copyrighted work, the amount and substantiality of the portion used in relation to the copyrighted work as a whole, and the effect of the use upon the potential market for or value of the copyrighted work. First, the court found that the use of the video was transformative, because defendants used it as a part of an episode that critiqued and lampooned viral videos like the original What What (In The Butt). Second, that the original video is protected by the Copyright Act is of little help to plaintiff, according to the court, because parodies almost invariably copy publicly known, expressive works. Third, the court found that though the defendants used the heart of the original video – the work’s overall design and distinctive visual elements – their use was to create a parody. When a parody achieves its intended aim, the amount of the original work taken is considered reasonable as long as the parody does not serve as a market substitute for the work. Lastly, the court reasoned that because it has found South Park’s use to be a parody, defendants’ use could not have an actionable effect on the potential market for, or value of, the original video.