A recent Seventh Circuit decision, Brownmark Films v. Comedy Partners,1 breaks some interesting procedural ground by allowing a copyright defendant to assert—and prevail on—a fair use defense by way of a dismissal motion under Rule 12(b)(6). The decision underscores the dispositive role of comparing the works themselves, and confirms that where the court can make such a comparison it need not wait for any particular procedural juncture to resolve the fair use question. This result may be particularly helpful for defendants, such as the Comedy Central Network in Brownmark, who may avoid discovery completely where their fair use arguments are sufficiently compelling.
The plaintiff in Brownmark was a small film producer that scored an unexpected “viral” video hit on YouTube with a gay-themed dance number called “What What in the Butt” (hereafter, “WWITB”). In the video, the featured performer, professionally known as Samwell, dances on a distinctive red, white and blue stage, occasionally being shown in close-ups as he nibbles on a large chocolate heart or turns to reveal the words “What What” spelled out in sequins on the seat of his too-tight pants.
The defendant’s video, part of an episode of the satirical animated series South Park, likewise features one of the principal characters, a particularly naïve 9-year old boy named Butters, dancing to the same song, on a red, white and blue stage, intercut with close-ups of chocolate heart nibbling and “What What” lettering on the back of his pants. Video clips of both works can be found online at http://www.youtube.com/watch?v=napyhGiC00A.
Plaintiff Brownmark Films sued, claiming infringement as to Comedy Partners’ distribution of the South Park episode on television, through the South Park website, iTunes, Amazon.com, and on DVD and Blu-Ray. The complaint referenced the works at issue, but did not attach them. Defendant moved to dismiss under Rule 12(b)(6), attaching copies of the works and claiming that its video was a fair use parody of the plaintiff’s. Judge J.P. Stadtmuller of the Eastern District of Wisconsin granted the 12(b)(6) motion on July 6, 2011, noting that:
Federal lawsuits seldom touch on such riveting subjects and regard so many colorful parties as the present matter…. The music video begins with an array of bizarre imagery—from a burning cross to a floating pink zeppelin—and only gets stranger from there.2
The district court observed that “context is king” in fair use cases, and here the context was the whole South Park episode in which the video appeared: “here, the amended complaint discusses a very limited context for the alleged infringement…. Notably, the infringing actions are limited in the complaint to the distribution of the episode.” (Emphasis original). Accordingly, the court focused on whether the defendants’ use of the copyrighted material in the context of the episode was fair use. Viewing the episode and the original work satisfied the court that the use of the WWITB video was fair use under 17 U.S.C. §107. Therefore, the “allegations of the complaint and material that are expressly referenced in the complaint have set forth everything necessary to satisfy the affirmative defense” and dismissal was warranted because the complaint was purely speculative.3
The court also found nothing wrong with resolving the fair use question on a 12(b)(6) motion:
While evaluating an affirmative defense, and indeed the “fair use” defense, at the pleadings stage is “irregular,” Chicago Bd. of Educ. v. Substance Inc., 354 F.3d 624, 627 (7th Cir. 2003), given the scope and nature of the infringement alleged by the amended complaint, coupled with the rather obvious resolution of the substantive underlying issue, the court can conclude that this dispute simply does not warrant “putting the defendant[s] through the expense of discovery.”4
Further, the court noted that plaintiff’s opposition to the dismissal motion dealt solely with the procedural issue of reaching an affirmative defense at the 12(b)(6) stage. Plaintiff had “not even bothered to address the substance of the fair use question, providing this court with absolutely no indication of any evidence or factors outside of the episode in question that could even possibly influence the resolution of the fair use issue in the plaintiff’s favor.”5
Seventh Circuit Affirmance
The U.S. Court of Appeals for the Seventh Circuit was equally untroubled about resolving fair use at the dismissal stage, stating in its first sentence: “This is a case about how a court may dispose of a copyright infringement action based on the fair use affirmative defense while avoiding the burdens of discovery and trial.”6 Before delving into the 12(b)(6) and fair use issues, the court sua sponte considered whether it was even proper to review the video clips at issue since they had not been attached to the complaint.
Defendants below had relied on the incorporation-by-reference doctrine to avoid violating Rule 12(d), which requires that Rule 12(b)(6) or 12(c) motions containing materials outside of the pleadings be converted into motions for summary judgment. On appeal, the Seventh Circuit observed that no court of appeals has ruled that the content of television programs and similar works may be incorporated by reference, but “[W]e 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.” Despite this seeming adoption of the doctrine, the court also added that the parties “did not brief this issue, and so we reserve the resolution of the question for a later date.”7
The incorporation-by-reference doctrine mattered, however, because defendants feared that captioning their motion as a request for summary judgment, as Rule 12(d) requires if extrinsic materials are reviewed by the court, would subject them to discovery. The Seventh Circuit stated that such fears were ungrounded: “But discovery would only follow a Rule 56 motion if the district court granted a request for discovery. District courts need not, and indeed ought not, allow discovery when it is clear that the case turns on facts already in evidence.”8
The court then turned to the merits of whether an affirmative defense can be resolved on 12(b)(6). The panel recognized that courts should usually refrain from granting Rule 12(b)(6) motions on affirmative defenses, citing United States v. Lewis, 411 F.3d 838, 842 (7th Cir. 2005). But when all relevant facts are presented, the court concluded that pre-discovery dismissal may be proper on the basis of an affirmative defense, typically through a Rule 12(c) motion for judgment on the pleadings.
In this case, however, Brownmark did not request discovery, and in fact claimed that it could not, as the matter before the court was a 12(b)(6) motion, which does not allow for discovery requests. The court found this argument “hard to believe”:
The caption on a motion does not have some independent authority that litigants or courts must respect. Rather than relying on the notion that consideration of a fair use defense in the context of a 12(b)(6) motion was premature, Brownmark could have provided a list of possible evidence that would support its infringement claim and defeat SPDS’s [South Park Digital Studios'] fair use defense. Indeed, Brownmark provides such a list in its briefs. Brownmark argues that it should be allowed to discover: the intent of SPDS at the time the episode was created; all relevant video images or clips, especially where such uses are divorced from the Episode; and pre-airing licensing information related to the Episode. We noted during oral argument 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.” We are confident that the district court would have refused to grant such expansive demands.9
Therefore, rather than decide whether the videos may be incorporated by reference in defendant’s motion to dismiss, the Seventh Circuit elected to treat defendant’s motion as a motion for summary judgment. Defendants “ought to have captioned the motion as such, but the miscaptioning in this case should not have caused confusion, as the procedures for both motions are essentially the same.” Accordingly, the district court could properly consider an affirmative defense in the context of summary judgment, “which it did here, regardless of the caption defendants used.”10
Turning finally to the fair use issue, the Seventh Circuit’s forgiving attitude toward procedural irregularities suddenly evaporated: “Since Brownmark never opposed SPDS’s fair use argument in the district court, we consider the argument waived.”11
But even if the argument against fair use were not waived, the district court was correct to find in defendant’s favor. The Seventh Circuit agreed that the South Park episode is “clearly a parody of the original WWITB video, providing commentary on the ridiculousness of the original video and the viral nature of certain YouTube videos. This kind of parodic use has obvious transformative value.”12
As to market harm,
SPDS’s parody cannot have an actionable effect on the potential market for or value of the original WWITB video under the fourth factor. 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. It seems to this court that SPDS’s likely effect, ironically, would only increase ad revenue. Any effect on the derivative market for criticism is not protectable. [Citation omitted.] And the plaintiff has failed to give the district court or this court 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. We therefore agree with the district court’s well-reasoned and delightful opinion.13
The Brownmark decision may represent a turning point in the willingness of courts to bypass discovery in copyright cases that present compelling fair use defenses. Whether under the guise of a 12(b)(6) or 12(c) dismissal motion, or a motion for summary judgment, the defendant in such a case now has forceful support for arguing that it should not be subject to intrusive discovery as a matter of law, simply because the “rather obvious resolution” of the case takes the form of an affirmative defense.
Robert W. Clarida is a partner of Reitler, Kailas & Rosenblatt and is the author of the “Copyright Law Deskbook” (BNA). Robert J. Bernstein practices law in New York City in The Law Office of Robert J. Bernstein.
1. No. 11-2620, 2012 U.S. App. Lexis 11454 (7th Cir. June 7, 2012).
2. No. 10-CV-1013 (E.D. Wisc. July 6, 2011)(slip op.) at 1.
3. Id. at 18.
4. Id. at 19.
6. 2012 U.S. App. Lexis 11454 (7th Cir. June 7, 2012) at *1.
7. Id. at *7.
8. Id. at *9.
9. Id. at *9-10.
11. Id. at *12.
12. Id. at *13.
13. Id. at *15-16.