Comedy Central’s South Park opened the door for fair-use defenses...

case concerned the cartoon’s parody of a popular Internet video, “What What (In the Butt),” in which the South Park character Butters makes a nearly identical viral video. The episode “Canada on Strike” lampoons the juxtaposition of viral videos’ popularity with their typically paltry financial returns through advertising and licensing. Brownmark Films, which owns the copyright in the original video, sued Comedy Central for infringement. The appeals panel unanimously agreed (http://1.usa.gov/MKETbx) with the trial court’s “well-reasoned and delightful” opinion that the Butters parody video was “obvious” fair use, “providing commentary on the ridiculousness of the original video and the viral nature of certain YouTube videos,” and upheld the suit’s dismissal. But the 7th Circuit trod new ground in the panel’s discussion of the role of early dismissal of “weak claims” in fighting against the “chilling effects” of First Amendment-related litigation. “Despite Brownmark’s assertions to the contrary, the only two pieces of evidence needed to decide the question of fair use in this case are the original version of WWITB and the episode at issue,” said the appeals opinion, written by Judge Richard Cudahy and joined by Judges Frank Easterbrook and David Hamilton. Brownmark had mentioned the two videos yet failed to attach them in its complaint, and when Comedy Central attached the videos in its own motion to dismiss for failure to state a claim -- a so-called Rule 12(b)(6) motion -- Brownmark protested that an “unpleaded affirmative defense of fair use is an improper basis for granting a motion to dismiss,” the panel said. But it’s “well settled that in deciding a Rule 12(b)(6) motion, a court may consider” attached documents that the plaintiff had only referred to. The question is whether TV shows and similar works can be “incorporated by reference,” the panel said -- a question answered affirmatively by several lower courts but never decided on appeal. “We think it makes eminently good sense to extend the doctrine to cover such works, especially in light of technological changes that have occasioned widespread production of audio-visual works,” but since the parties didn’t brief it, the 7th Circuit won’t rule on that question. Comedy Central should have filed a motion for summary judgment, the panel said, but the judges downplayed the error, because the network appeared to be concerned that “such a maneuver would open the door to discovery,” the ruling said. “The expense of discovery ... looms over this suit,” with Comedy Central and the Electronic Frontier Foundation, an amicus filer, reminding the appeals court that “infringement suits are often baseless shakedowns,” the panel said. “Ruinous discovery heightens the incentive to settle rather than defend these frivolous suits.” Comedy Central needn’t have worried because a court would have to approve discovery, and “district courts need not, and indeed ought not, allow discovery when it is clear that the case turns on facts already in evidence,” the panel said. Regardless of how Comedy Central’s motion was captioned, Brownmark could have offered its own evidence to defeat the fair-use defense but chose not to, the panel said: Its “broad” discovery request made Brownmark look like a “copyright troll” and would allow “expensive e-discovery of emails or other internal communications.” Brownmark’s only possible claim might be that the South Park parody harmed the market for the original video, but “as the South Park episode aptly points out, there is no ‘Internet money’ for the video itself on YouTube, only advertising dollars that correlate with the number of views the video has had,” the panel said. “It seems to this court that” the parody video’s “likely effect, ironically, would only increase ad revenue."