MEMORANDUM
MEMORANDUM
TO: Professor Mika
FROM: 5479
DATE: February 10, 1995
RE: Millie's Vanilla Cookies v. N.R.D. Network Corp.
ISSUE
WHETHER A FOUR MINUTE TELEVISION SKETCH THAT CLOSELY TRACKS, EXPANDS UPON, AND PARODIES A COPYRIGHTED THIRTY SECOND TELEVISION COMMERCIAL CONSTITUTES A FAIR USE OF THAT COPYRIGHTED MATERIAL UNDER 17 U.S.C. § 107.
STATEMENT OF FACTS
The defendant, N.R.D. Network Corp. (N.R.D.), is the producer and broadcaster of the late night television comedy, "After Hours." The plaintiff, Millie's Vanilla Cookies (MVC), is a national chain of cookie sellers. Recently, the defendant aired a four minute skit that was a take-off of the plaintiff's well-known and successful television advertisement. The sketch and song closely tracked, expanded upon, and parodied MVC's copyrighted commercial. As a result, MVC filed a complaint in the Federal District Court seeking damages for copyright infringement. In its reply, the defendant conceded that they based the sketch and song on the plaintiff's campaign and jingle. However, N.R.D. claimed that the borrowed material did not qualify as a copyright infringement because the skit was a parody, which is protected under the fair use doctrine of the Copyright Act of 1976. Both parties moved for summary judgment. After determining that the defendant's "borrowing" of material was too substantial to constitute a fair use, the court granted the plaintiff's motion. The defendant plans to appeal the court's judgment, and our firm has been asked to determine what arguments can be made to support the premise that the borrowed material constitutes “fair use.”
DISCUSSION
17 U.S.C.A. § 107 (West 1994) (the "fair use" doctrine) states in part:
[T]he fair use of a copyrighted work . . . for purposes such as criticism, comment, news reporting, teaching . . . , scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include
(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
(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 upon the potential market for or value of the copyrighted work.
"Fair use" has been a successful defense in numerous copyright cases. In determining whether an alleged infringement is a fair use, courts must consider all four statutory factors together on a case-by-case basis. Campbell v. Acuff-Rose Music, 114 S. Ct. 1164 (1994). To successfully raise the defense, N.R.D. should also prove that their work is a valid parody. They must prove their taking of the plaintiff's material was not too substantial, and it did not replace the market demand for the plaintiff's work. Id. Based on applying these four factors, the defendant's parody is likely to constitute a fair use of the plaintiff's copyrighted advertisement.
The first factor courts must consider in determining fair use is the purpose and character of the use. 17 U.S.C.A. § 107(1). Even though the fair use doctrine does not specifically state that a parody is a protected work, many courts have held that a parody may qualify as fair use. Campbell, 114 S. Ct. at 1168. Parody has been defined as "a literary or artistic work that imitates the characteristic or style of an author or a work for comic effect or ridicule." The American Heritage Dictionary 1317 (3d ed. 1992). To qualify for protection under the fair use doctrine, a parody must "use. . . some elements of a prior author's composition to create a new one that, at least in part, comments on that author's works." 114 S. Ct. at 1169. Thus, not all parodies are considered fair use, rather only those that comment on or criticize an original work by expanding upon it. Id.
In considering the first factor, courts must also assess the commercial or nonprofit educational purpose of the use of the copyrighted work. Id. at 1170. If a parody is created for a commercial purpose, that weighs against, but does not preclude, a finding of fair use. Id. As an example, in Campbell, the defendant, 2 Live Crew, created a song, "Pretty Woman," which parodied the plaintiff's copyrighted Roy Orbison song, "Oh Pretty Woman." Id. at 1175. The defendant released records, cassette tapes, and compact discs of the parody. Id. In reversing the decision of the lower court and remanding the case, the Supreme Court held that a parody's commercial purpose serves as only one factor to be weighed in determining fair use. Id. The Court stated that although the use of a copyrighted work for commercial purposes may weigh against a determination of fair use, its significance will depend on the context of each case. Id. at 1170.
In considering the purpose and character of N.R.D.'s use of MVC's material, the defendant should find it relatively simple to prove that their skit was the type of parody protected by the fair use doctrine. It is likely that their skit commented on the original commercial, since it closely tracked and expanded upon the advertisement. In assessing the commercial or nonprofit educational purpose of the defendant's use, N.R.D.'s television sketch serves a commercial purpose. This commercial purpose will weigh against a finding of fair use. However, its commercial purpose may not weigh that heavily because the sketch, at four minutes, was relatively short and was aired late at night. Unlike Campbell, the parody was not sold on records, cassette tapes, and compact discs to millions of people.
The second factor considered in determining a fair use is the nature of the copyrighted work. 177 U.S.C.A. § 107(2). In examining the nature of the work, courts may consider the work's creativity, and originality. M.C.A. Inc. v. Wilson, 677 F.2d 180 (2d Cir. 1976). They may also consider if a large amount of effort was expended in creating the work, in hopes of receiving an economic gain. Id. at l82. However, courts have generally not considered this factor helpful in parody cases, since almost all parodies imitate creative works. Campbell, 114 S. Ct. at 10. Thus, the nature of MVC's copyrighted work should not prove important in considering whether N.R.D.'s parody constitutes a fair use. The plaintiff's commercial is a creative work, as is the object of most parodies.
The third factor proves more important in determining if a parody is a fair use. Analyzing this factor involves comparing the amount and substantiality of the portion borrowed to the original work as a whole. 17 U.S.C.A. § 107(3). The "conjure up" test is used to decide if the borrowing of the copyrighted material was too substantial to constitute a fair use. Berlin v. E.C. Publications Inc., 329 F.2d 541 (2d Cir. 1964). With this test, courts assess whether the defendant has taken more than is necessary to "conjure up" or recall the original work. Id. at 545. A parodist is justified in borrowing more from the original work than creators of fiction or drama because a parody needs to imitate an original work in order to achieve its humorous purpose. Elsmere Music, Inc. v. National Broadcasting Co., 482 F. Supp. 751 (S.D.N.Y. 1980).
Some courts have applied the "conjure up" test more strictly, such as the court in Walt Disney Prod. v. Air Pirates, 581 F.2d 751 (9th Cir. 1978). In Walt Disney, the court held that the defendant had infringed on the plaintiff's copyright by depicting Walt Disney cartoon characters engaging in unseemly activities in the defendant's underground comic book. Id. at 753. The defendant's characters had the same names and similar appearances to the Disney characters. Id. The court concluded that the defendant took more than was necessary to "conjure up" the image of the Disney characters. Id. at 757. The court explained that since the Disney characters are well known to the public, little imitation was needed to recall their image in order to parody them. Id. The court suggested that the copying would have been justified if the defendant's close tracking to "conjure up" the characters had been mitigated by adding a 'few significant twists.' Id. at 758. The court further noted that parodies in other mediums, as opposed to cartoon drawing, may be allowed to borrow more of the original because more imitation may be needed to "conjure up" the copyrighted work. Id.
Other courts have been less strict in applying the "conjure up" test. Recently, courts have followed this more liberal application as described in Elsmere. E.g., Campbell v. Acuff_Rose Music, 114 S. Ct. 1164 (1994); Fisher v. Dees, 794 F.2d 432 (9th Cir. 1986); New Line Cinema Corp. v. Bertlesman Music Group, 693 F. Supp. 1517 (S.D. N.Y. 1988). The Elsmere court held that the defendant did not borrow more of the plaintiff's original work than was needed to recall the work in the viewers' minds. Id. In Elsmere, the defendant's late night television comedy, "Saturday Night Live," aired a four minute skit and song that parodied New York City's advertising campaign and theme song, designed to improve the city's poor reputation. Id. The skit portrayed the leaders of the biblical town of Sodom discussing ways to improve their city. Id. The skit ended with a song called, "I Love Sodom," that was sung to the tune of the plaintiff's theme song, "I Love New York." Id. In concluding that the defendant's parody was a fair use, the court said that the purpose of the "conjure up" test was not to limit the amount a parody may borrow, but rather to recognize that parodies need greater borrowing freedom in order to achieve their humorous goals. Id. The court noted that "even more extensive use" would qualify as a fair use, as long as the parody imitates the original and adds something new to make a humorous comment about the copyrighted work. Id.
In analyzing the third factor, N.R.D. finds its strongest support in Elsmere. The facts of the two cases are almost identical. Both Elsmere and MVC involve a four minute skit, on a late night television show, that parodies a commercial campaign and a song. Since the cases are so similar, it is likely that the N.R.D.'s parody will constitute a fair use as N.B.C.'s parody did in Elsmere. The plaintiffs may argue that defendants must meet the stricter "conjure up" test as applied in Walt Disney. However, even if this standard is applied, the defendant's borrowing should qualify as a fair use based on the suggestions of the Walt Disney court. The court suggested that a parody in a different medium that closely tracks characters while adding "significant twists" might constitute a fair use. 581 F.2d at 758. Since N.R.D.'s parody was produced on television, a different medium than cartoons, and it closely tracked the plaintiff's commercial while expanding upon it, N.R.D's sketch could also qualify as a fair use following the conclusion reached by the court in Walt Disney.
The last factor that courts must consider in determining fair use is the effect of the parody upon the potential market for or value of the original work. 17 U.S.C.A. § 107(4). In analyzing this factor, the effects of a parody's critical element should not be considered. Fisher, 794 F.2d at 438. Even though a parody's criticism or comment may decrease the market demand for the original work, this type of economic harm is protected by copyright law. Id. at 438. Instead, courts must determine whether the parody usurps the market of the original work. Id. With this, courts must consider not only the damage to the original's market, but also the harm to the original's market for derivative works. Campbell, 114 S. Ct. at 1172. A derivative work has been defined as, "a work consisting of editorial revisions, annotations, elaborations, or other modifications which, as a whole, represents an original work of authorship." 17 U.S.C.A. § 107. For example, a derivative work of a book might be a motion picture version of the book. Thus, in considering the fourth factor, courts should assess whether the parody acts as a substitute for the original or its derivative and takes the copyrighted work's place in its current or future markets. 114 S. Ct. at 1172.
This market substitution test is articulated in Fisher v. Dees, 794 F.2d 432 (9th Cir. 1987). The Fisher court held that the defendant's parody of the plaintiff's song was a fair use of the copyrighted work because it did not act as a commercial substitute for the original. Id. at 438. In Fisher, the defendant's song "When Sonny Sniffs Glue," parodied the plaintiff's copyrighted song, "When Sunny Gets Blue." Id. at 434. The court concluded that the defendant's humorous song would not replace the demand for the plaintiff's romantic song. Id. at 438. The court explained that, "infringement occurs when a parody supplants the original in markets the original is aimed at, or in which the original is, or has reasonable potential to become, commercially valuable." Id. at 438.
Other courts have applied the market substitution test as explained in Fisher and have found that the borrowed material constituted a fair use. In Elsmere, the court concluded that the defendant's skit did not act as a substitute for the plaintiff's advertising campaign and song in any way. Id. at 746. In Eveready Battery Co. v. Adolph Coors Co., 765 F. Supp. 440 (N.D. Ill. 1991), the court held that the defendant's commercial, which parodied the plaintiff's "Energizer Bunny" advertisement, would not fulfill the demand for the plaintiff's work. They explained that television viewers would not start watching the defendant's parody in place of the plaintiff's advertisement. Id. at 448.
However, in New Line, the court held that the defendant's parody was not a fair use because it would serve as a substitute for the plaintiff's copyrighted work in a derivative market. 693 F. Supp. at 1528. In New Line, the defendant produced a music video that parodied the plaintiff's "Nightmare on Elm Street" movie series. Id. at 1520. The plaintiff planned to release a music video of the film shortly after the release of the defendant's parody. Id. In issuing an injunction to prevent the release of the defendant's video, the court concluded that the defendant's work would fulfill the demand for the derivative version of the plaintiff's film in the market for music videos. Id. at 1528. They explained that the defendant's and the plaintiff's works would compete with each other. Id. at 1530.
Based on these cases, the defendant's skit is likely to pass the market substitution test. Similar to Fisher, it is unlikely that N.R.D.'s humorous skit will act as a commercial substitute for MVC's advertisement. Like Eveready, it is also unlikely that the defendant's parody will cause television viewers to stop watching the plaintiff's commercial and to stop buying their cookies. Most importantly, since N.R.D's parody is similar to the protected parody in Elsmere, it is most probable that a court would analyze the fourth factor in the same manner as the Elsmere court. The defendants may argue that, similar to New Line, the defendant's television parody would harm the derivative market for the plaintiff's television commercial. However, this can be countered by asserting that, unlike New Line, demand for any derivatives produced from the plaintiff's commercial, such as t_shirts, cookbooks, and toys, would not be filled by the defendant's parody.
CONCLUSION
According to the fair use doctrine, the fair use of a copyrighted work for the purpose of criticism or comment is not an infringement of copyright. Parody, as a humorous type of comment or criticism, may qualify as a fair use of copyrighted material. However, the parody must be examined as to the amount it borrows from the copyrighted work. The parody may not qualify as a fair use if it "conjures up" more of the original than is necessary to meet its humorous purpose. In addition, the effect of the parody on the potential market for or value of the original work must be assessed. If the parody fills the market demand for the copyrighted work, it will not be protected under the fair use doctrine. Since a similar parody qualified as a fair use of a television advertisement in Elsmere Music, Inc. v. National Broadcasting Co., 482 F. Supp. 751 (S.D. N.Y. 1980), the defendant's sketch should constitute a fair use of the plaintiff's copyrighted commercial.
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