MediaLaw Monitor | Fall 2012 Issue

Media, Technology and First Amendment Legal Developments from Davis Wright Tremaine

summer/fall 2012

medialawmonitor.com

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infringement issues and how they affect media companies

Butters’ viral rendition of “What What in the Butt” is fair use, says judge

Digital Edition Patent

When Journalists Tweet Social Media guidelines for news organizations

Parodies & Fair Use

INSIDE P.04 #@$%!

Supreme Court Invalidates FCC’s “Fleeting Expletives” Indecency Decisions; Denies Review of Invalidated Super Bowl Fine New policy was found to be too vague to put broadcasters on notice

BY CAMILLE CALMAN

S

ocial media websites such as Twitter, Facebook, and Tumblr provide opportunities for media companies and their employees to engage and communicate with their audiences and to gather news.

Many media and news companies have active social media presences, as do many journalists, who may use these sites for professional or personal purposes or both. Even if an employer wanted to monitor or pre-screen all of its employees’ online activities, it

Even if an employer wanted to monitor or pre-screen all of its employees’ online activities, it would be near-impossible, given the profusion of social networking platforms. would be near-impossible, given the profusion of social networking platforms. For that reason, many news organizations have added social media policies and guidelines to their existing employee handbooks in recent years.

While any company may face legal and reputational risks from employees’ behavior on social media

websites, there are particular perils for news organizations, whose credibility depends on their reputation for impartiality. Journalists’ behavior on the Internet, including behavior they intended to limit to their private circles of online friends, can have a negative impact on their employers, leading to embarrassment and, in some cases, litigation. For instance, even a casual status update or tweet could give rise to a defamation lawsuit.

Given the potential risks, media companies are increasingly seeking guidance on implementation of social media guidelines. Instead of creating generic guidelines, news organizations should consider carefully what risks worry them most and how best to guard against them. For some organizations, it may be enough to remind employees that the same principles that govern their offline behavior also apply online.

Others may prefer a more detailed approach, clarifying the company’s expectations through specific rules for social media activities. The right social media guidelines for your organization will depend on your organization’s culture, values, traditions, and style.

This article attempts to glean a set of best practices and practical tips for drafting guidelines, based on a review of publicly-available social media policies and our firm’s experience with assisting clients in drafting such guidelines. ...continued on page 08

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breaking news. upcoming events. commentary from media professionals. facebook.com/dwtmedia

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Video Policy

First Application of Video Privacy Protection Act to Solely Streamed Video

Hulu now subject to the Video Privacy Protection Act (VPPA), according to U.S. District Court for the Northern District of California

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Supreme Court

Stolen Valor Act Ruled as Violation of First Amendment

Reaffirms that First Amendment “protects the speech we detest as well as the speech we embrace”

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Patent Infringement Issues Affecting Media Companies

BY STUART R. DUNWOODY AND BENJAMIN J. BYER

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s media companies develop and use innovative business methods and technologies, they face risk of patent infringement claims in addition to the more-familiar risks of defamation, invasion of privacy, and copyright infringement. While many of the patents asserted against media defendants cover various aspects of the Internet, such as providing click-to-call links in Internet search results, playing games over the Internet, and web browsing, other areas are covered as well, including providing media and content to mobile devices, systems for generating billing statements for

published advertising, and electronically displaying advertisements and information in elevators.

Patent holding company Acacia Technologies claims to have more than 870 licensees, including Bloomberg, Gannett, and Walt Disney Company, and last year won a lawsuit against Yahoo for infringement of a patent covering advertisements in instant messaging.

By understanding the risks and using some defense strategies, media companies can reduce the danger patent infringement claims pose.

Find the rest of this story at medialawmonitor.com

summer/fall

A Word From the Editors

With the media world shifting ever more to a digital platform, new legal issues and challenges are continually emerging. That’s part of what makes this practice area so exciting for us. Social media policies for journalists, privacy litigation affecting deliverers of onlineonly video, and state laws targeting online adult advertising are just some of the issues we examine in the current issue of MediaLaw Monitor—all of them unheard of just two decades ago.

MediaLaw Monitor also embodies the digital shift. Just like you, we’re offering extra features online. At our robust digital edition (medialawmonitor.com), you can find an online-only story about trademark risks affecting innovative media companies as they embrace new technology. And did we mention you can subscribe online? No need to wait for the next conference— the digital version of MLM can be delivered to your inbox every quarter. It recently won an American Web Designers Award from Graphic Design USA magazine.

Whatever platform you read us on, our nationally recognized media team is eager to engage with you and hear your thoughts on what you’d like to read about. Message us at media@dwt.com, or join the conversation on Facebook. We’ll also be in-person at lots of media industry events in the rest of 2012, so please stop by and say hello.

Editors-at-Large,

Sarah Duran Camille Calman INCLUDING:

An overview of patent law Patents on the internet The increasing patent attack on media companies Defensive measures after a suit has been filed

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2012

Editors-at-Large Sarah Duran, SEATTLE Camille Calman, NEW YORK

Contributors

Benjamin J. Byer Camille Calman Robert Corn-Revere Stuart R. Dunwoody Mark Fefer Jeff Glasser Jim Grant Bradley W. Guyton Ambika Kumar Doran Dan Laidman Ronald G. London Erin Reid Alonzo Wickers IV

Media Practice Chairs Robert D. Balin, CHAIR Thomas R. Burke, CHAIR Constance M. Pendleton, DEPUTY CHAIR

Art & Production CREATIVE DIRECTOR

Jennifer Castleberry PROJECT MANAGER

Kat Adinolfi

LAYOUT & COPY

Alex Liberato DESIGN

Sara Psachos Kitri Wood WEB ADMINISTRATORS

Robin Garman Justin Shaw

media@dwt.com | 877.398.8417 MediaLaw Monitor brought to you by:

Our attorneys have decades of experience in the areas of communications, media, information technology and intellectual property. We represent clients across all media, from traditional print media and established electronic mass media to the next generation of technology. We have received a No. 1 ranking in Media Law and First Amendment from “Best Lawyers in America,” and our nationwide media group has received an Award for Excellence from Chambers USA. Many of our individual lawyers also have been named as “America’s Leading Lawyers” in their communications and media specialties by Chambers USA, and have been awarded the highest recognitions from the industries they serve. Our lawyers have worked as professional journalists, engineers and lawyers in these industries, as well as for the government agencies that regulate them. With these capabilities, we offer a deep understanding of our clients’ businesses.

Federal Court Enjoins Enforcement of Washington State Law Targeting Adult-Oriented Advertisements

BY AMBIKA KUMAR DORAN & JIM GRANT

A

federal court in Washington last month preliminarily enjoined enforcement of a new state law targeted at adult-oriented advertisements (but encompassing much more) because, the court found, the law likely is preempted

by Section 230 of the Communications Decency Act and violates the First and Fourteenth Amendments and the Commerce Clause of the United States Constitution. Backpage.com, LLC v. McKenna, 2012 WL 3064543 (W.D. Wash. July 27, 2012).

The statute—Senate Bill 6251— makes it a felony to knowingly publish, disseminate, or display or to “directly or indirectly” cause content to be published, disseminated or displayed, if it contains a “depiction of a minor” and any “explicit or implicit offer” of sex for “something of value.” It is not a defense that the defendant did not know the age of the person depicted, nor may the defendant rely upon any representation by or apparent age of the person depicted. Instead, the only defense requires the defendant to have obtained and maintained a record of government or school identification for the person depicted.

Although the law was targeted at Backpage.com, the nation’s second largest online classified

ad website (after craigslist), both Backpage.com and the Internet Archive (publisher of the Wayback Machine, which archives pages on the Internet) filed suit, contending that SB 6251 was preempted by Section 230 of the Communications Decency Act, 47 U.S.C. § 230 and violated the First and Fourth Amendments and Commerce Clause of the federal constitution.

The court agreed.

SECTION 230

Section 230 prohibits the government from treating websites and other online service providers “as the publisher or speaker of any information provided by another information content provider.” It also prohibits holding any such provider liable for “any action voluntarily taken in

an express preemption clause that “[n]o cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with this Section.”

The court found that Section 230 likely preempted SB 6251 for two reasons. First, it found, SB 6251 treats websites “as the publisher or speaker of information created by another information content provider.” Second, the law is inconsistent with Section 230 because it “criminalizes the ‘knowing’ publication, dissemination, or display of specified content … creat[ing] an incentive for online service providers not to monitor the content that passes through its channels.”

The court rejected the state’s argument that because Section

…the possibility of mistaken factfinding… will create the danger that the legitimate utterance will be penalized.” good faith to restrict access to or availability of material that the provider… considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable.” Finally, it contains

230 has an exception for federal criminal laws, one must exist for state criminal laws consistent with federal laws. It found that SB 6251 is not consistent with federal ...continued on page 05

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Photo by Joe Cavaretta, Associated Press

Unanimous Supreme Court Invalidates FCC’s “Fleeting Expletives” Indecency Decisions

BY ROBERT CORN-REVERE & RONALD G. LONDON

O

n June 21, 2012, the U.S. Supreme Court decided FCC v. Fox Television Stations by holding that Federal Communications Commission (FCC) decisions targeting “fleeting” broadcasts of allegedly indecent material were unconstitutional under the Due Process Clause. The decision reviewed FCC indecency findings against utterances of expletives by performers on Fox’s live 2002

as the Second Circuit, which invalidated the FCC’s actions on grounds its revised indecency regime was unconstitutionally vague under the First Amendment, though the Supreme Court did so on Due Process rather than First Amendment grounds. It thus vacated the decision below.

Justice Kennedy’s unanimous 8-0 opinion ( Judge Sotomayor having taken no part in the case)

constitutionality of the current indecency policy as revised by the FCC’s 2004 Golden Globes decision on “fleeting expletives,” and it did not address whether the 1978 Supreme Court decision in FCC v. Pacifica Foundation, Inc. is still valid. The Fox decision states that it leaves the FCC free to modify its current indecency policy in light of Fox and “other applicable legal requirements,” and lower courts

there remain grounds to treat “indecent” speech on broadcast media differently from such content on media like cable and the Internet (where it gets full First Amendment protection), the narrow decision invalidated the FCC’s indecency findings on traditional Due Process grounds. Justice Kennedy’s opinion held that Fox and ABC lacked constitutionally sufficient notice of the FCC’s policy as applied to these broadcasts, because the FCC historically had exempted fleeting material from its indecency enforcement policy. As such, application of the policy to the broadcasts at issue was “void for vagueness” under the Due Process Clause of the Fifth Amendment.

As the Court explained, this doctrine applies generally to all laws, and requires that regulated parties are able to know what is expected of them, and regulators to have guidelines that prevent arbitrary enforcement. The opinion adds, however, that these requirements have special force in the First Amendment context to avoid chilling speech. Here, the Court held, the FCC’s regulatory history “makes it apparent that the Commission policy in place at the time of the broadcasts gave no notice to Fox or ABC that a fleeting expletive or a brief shot of nudity could be actionably indecent.”

In particular, all the shows at issue aired before the FCC rendered its Golden Globes decision, which reversed course on such “fleeting” material, and also held the expletives used in the broadcasts were presumptively indecent.

Justice Kennedy wrote that the Due Process command that “a person of ordinary intelligence [have] fair notice of what is prohibited” pre-

The FCC’s regulatory history “makes it apparent that the Commission policy in place at the time of the broadcasts gave no notice to Fox or ABC that a fleeting expletive or a brief shot of nudity could be actionably indecent.” and 2003 Billboard Music Awards shows, and a scene from ABC’s “NYPD Blue” depicting the nude buttocks of an adult actress for seven seconds and the side of her breast momentarily. The Court reached the same ultimate outcome

held the FCC standards, as revised in its indecency crackdown commencing in 2004, “as applied to these broadcasts were vague, and the Commission’s orders must be set aside.” The Court declined to address the overall

free to review that or any modified policy based on its content and application.

Though Fox presented such broad issues as whether the overall FCC indecency regime is unconstitutionally vague, and whether

vented the FCC from issuing indecency findings against broadcasts that aired before the policy change.

“This would be true with respect to a regulatory change this abrupt on any subject,” he wrote, “but it is surely the case when applied to the

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2012 continued from page 3... “Adult-Oriented Advertisements”

regulations in question … that touch upon sensitive areas of basic First Amendment freedoms.”

The Court rejected the FCC’s argument that Fox could not raise its vagueness challenge because the agency did not impose a sanction. Even though the FCC pledged it would not consider the prior indecent broadcasts in any context (such as on license renewal, or the amount of future fines, if any), the Court held that the mere fact that its rules allowed it to make the findings against Fox sufficed: “Just as in the First Amendment context, the due process protection against vague regulations does not leave regulated parties at the mercy of noblesse oblige.” The Court further held that the injury to a broadcaster’s reputation with viewers and advertisers was “further reason for granting relief.”

The Court also rejected claims that ABC had sufficient notice the nudity in “NYPD Blue” could be punishable, based on a 1960 FCC decision stating that “televising of nudes might well raise a serious question” of indecency. This, the Court held, was too “isolated and ambiguous” a statement to put broadcasters on notice, especially when subsequent decisions involving fleeting nudity resulted in FCC findings that the broadcasts were not actionable.

The Court stopped short of deciding the First Amendment issue, however, and declined to offer any opinion on whether the FCC may enforce its policy against isolated words or images in the future under Golden Globes.

It also put off for another day any decision on the continuing validity of Pacifica. And it concluded, “this opinion leaves the [FCC] free to modify its current indecency policy in light of its determination of the public interest and applicable legal requirements,” and “courts free to review the current policy or any modified policy.” In other words, the FCC could try to enforce its policy under Golden Globes going forward, or it could try to tweak the policy to make it clearer, but reviewing courts are free to rule on the constitutionality of its choice(s).

Ultimately, the Court vacated the Second Circuit opinions and remanded for further proceedings consistent with “the principles set forth in this opinion.” Justice Ginsburg wrote a one-paragraph concurring opinion saying she would have reached the First Amendment issues and overruled Pacifica, which was “wrong when it was issued.” In the wake of the Supreme Court’s decision, the Second Circuit has already definitively vacated the FCC’s fine in “NYPD Blue” and terminated that case.

The Fox decision also all but ensured the Court would decline to review the Third Circuit’s re-affirmance that the FCC improperly fined CBS for the “wardrobe malfunction” at the end of the Super Bowl XXXVIII halftime show, which also was broadcast before the agency’s change in policy on fleeting broadcasts of allegedly indecent material. And, sure enough, on June 29, 2012, the Supreme Court denied certiorari in FCC v. CBS Corp.

The denial brings finality to the Super Bowl indecency action, and entitles CBS to a refund of the $550,000 fine it had paid in the case.

As in Fox, Justice Ginsburg wrote a one-paragraph concurring opinion in the denial of certiorari in FCC v. CBS, noting that the Fox decision gives the FCC a chance to reconsider its indecency policy “in light of technological advances” and the FCC’s “uncertain course since this Court’s ruling in FCC v. Pacifica.”

The Chief Justice also issued a concurring opinion in the FCC v. CBS denial, writing somewhat more expansively to question whether the appeals court was in fact correct that the FCC’s fine departed from agency precedent. Nonetheless, the Chief Justice ultimately concluded, any error in that regard has been rendered moot by the Fox decisions.

He added, however, that “[a]ny future ‘wardrobe malfunctions’ will not be protected on the ground relied on by the court below.” m

criminal laws. It also rejected defendants’ claim that Section 230 does not apply to liability under state criminal laws: “If Congress did not want the CDA to apply in state criminal actions, it would have said so.”

FIRST AMENDMENT

The court also found that SB 6251 likely “runs afoul of the First Amendment” on three grounds.

First, by dispensing with any scienter requirement as to the age of the person depicted in an advertisement, SB 6251 impermissibly creates strict liability. “A pre-screening mechanism as set forth in SB 6251 would limit the amount of content available on some publishers’ websites to the amount of content that such publishers had the time and money to screen.

Some individuals would be reticent to provide government identification in connection with borderline content….The Constitution does not permit such collateral burdens on protected speech.” The law would also incentivize publishers, faced with any notification that content might be illegal, to remove the content altogether, “whether or not it constitutes protected speech.” Finally, the court found, the affirmative defense could not save the statute because “the possibility of mistaken factfinding… will create the danger that the legitimate utterance will be penalized.”

Second, the court found, SB 6251 is impermissibly vague because it fails to provide adequate notice as to what is prohibited. For example, the court reasoned, defendants could not be expected to know “what… it mean[s] for the website operator to ‘know’ that an advertisement ‘implicitly’ offers sex.” The court rejected the government’s attempt to define the terms because “nothing binds Defendants, or their successors to their current interpretations.”

Third, the court found the law to be overbroad. The law “criminalizes more than offers to engage in illegal transactions because the statute encompasses transactions that are not illegal.” “Assuming that the undefined term ‘something of value’ means anything that can be traded on a free market—including a bottle of wine, a nice dinner, or a promise to do the dishes—SB 6251’s definition of ‘commercial sex act’ encompasses vast swaths of legal, consensual, non-commercial sexual activity.” The court also took issue with the absence of any requirement that the minor depicted have anything to do with the offer itself, and its prohibition on the “indirect publication, dissemination, and display” of offers.

Finally, the court found the law was a content-based restriction that failed strict scrutiny. Although the state “certainly” had a compelling interest in curbing the exploitation of minors, defendants, by failing to acknowledge the statute reaches protected speech, “fail[ed] to show that SB 6251 is the least restrictive means” to achieve the interest.

COMMERCE CLAUSE

The court also held that SB 6251 likely violated the dormant Commerce Clause because it “regulates conduct that occurs wholly outside the state of Washington”; the out-of-state burden “will be significant”; and “the Internet is likely a unique aspect of commerce that demands national treatment.”

The decision threatens the efforts of legislators to hold the publishers of third-party content liable for that content.

Similar laws have been proposed in New Jersey and New York, and Backpage. com has another challenge pending to an analogous law in Tennessee. That court held a hearing on Backpage.com’s motion for preliminary injunction on August 29, 2012. Davis Wright Tremaine LLP represents Backpage. com in both the Washington and Tennessee lawsuits. m Footnotes and citations for this story can be found in the digital edition of MediaLaw Monitor, available at www.medialawmonitor.com

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summer/fall

Convictions Overturned in Oregon Pro Bono Speech Case

BY MARK FEFER

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n a victory at the State Court of Appeals, a DWT team from Portland succeeded in overturning the conviction of several anti-war protestors who had been arrested for trespassing on the steps of the Oregon Capitol building.

An appellate panel ruled in April that the trial judge had erred in quashing DWT’s subpoena of two state legislators. The panel said the lawmakers were not immune from testifying and that their testimony could be used to determine whether the enforcement action against the protestors had violated their right of free expression, as DWT contends.

DWT attempted to get the rule under which the protestors were arrested—a ban on activity on the capitol steps between 11 p.m. and 7 a.m.—and the process under which that rule was created, declared a violation of the state constitution. But the appellate panel disagreed with those arguments. As a consequence, DWT will file a petition for review of the appellate court’s decision with the Oregon Supreme Court, says Portland associate Alan Galloway, who did much of the research for the First Amendment and state constitutional issues in the case.

The arrests took place in February 2009, following several months of round-the-clock protests at the Capitol against the deployment of Oregon National Guard troops to Iraq and Afghanistan. Previous arrests had aroused the interest of the ACLU, but charges were never filed by the county. This time, the state chose to prosecute.

At the trial stage, DWT sought to subpoena two high-ranking state legislators—the Senate president and the former House Speaker—in order to learn what

discussions took place in the run-up to the decision to enforce the activity-ban against the protestors. As DWT noted at the trial and in its briefs, at least two groups—a church group conducting a Bible-reading marathon and participants in a three-on-three basketball tournament— had been previously permitted to use the steps overnight without interference.

Writing for the three-judge panel, Appeals Court Judge David Schuman found that the nighttime ban, created by a Legislative Administrative Committee, had been properly promulgated and authorized. But he said, whether the rule was properly enforced in this case “depends on whether the motive driving the enforcement was a desire to protect public safety, as the state maintains, or to stifle defendants’ expression, as they maintain.”

Construing the Debate Clause of the Oregon Constitution for the first time ever, Judge Schuman further held that the protections that the Debate Clause grants state legislators from being “questioned” extend only to legislative work, and do not insulate them from inquiries into discussions they might have had about enforcement.

DWT’s pro bono team on the matter was led by Tim Volpert. He and Galloway wrote the opening and reply briefs to the Court of Appeals, while Tim Cunningham helped with the supplemental brief, requested by the Court of Appeals, on the Debate Clause. Volpert, who is himself running for a seat on the Oregon Appeals Court this year, made the oral argument.

In April, Galloway was named the recipient of DWT’s 2012 Heart of Justice Award in part for his work on this matter. m

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Privacy Litigation Marks First Application of Video Privacy Protection Act to Solely Streamed Video

BY RONALD G. LONDON AND BRADLEY W. GUYTON

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nternet video streaming site Hulu.com is subject to the Video Privacy Protection Act (VPPA), 18 U.S.C. § 2710, according to a recent decision by the U.S. District Court for the Northern District of California, marking the first time a court has subjected a provider of exclusively online streaming video services to the VPPA. This is notable insofar as the VPPA prohibits “video tape service providers” from knowingly disclosing the personally identifiable information (“PII”) of any consumer of the provider except

purposes for which it was collected, and affords those harmed by any act in violation of the VPPA to bring a civil action, which is how the Hulu Privacy Litigation arose. The decision could have a wide-ranging impact on Internet video providers who may have viewed themselves as potentially not subject to the VPPA. In denying Hulu’s motion to dismiss a class-action suit alleging Hulu wrongfully disclosed users’ PII and video viewing histories to online ad networks and other third parties, the court rejected conten-

intangible formats, not just hard copies. Further, the VPPA’s legislative history, the court observed, “suggests Congress’s intent to cover new technologies for pre-recorded video content.” Thus, the court held, online streaming video content is covered by the VPPA despite the statute’s emphasis on video tapes.

Hulu also argued its alleged disclosures fell under the VPPA’s exemption for disclosures that are “incident to the ordinary course of business.” However, the court found this to be a material issue

online services like Hulu (or other websites, or even ISPs or others in the online ecosystem).

Finally, Hulu argued the plaintiffs were not “consumers” under the VPPA—defined as “any renter, purchaser, or subscriber of goods or services from a video tape service provider”—because they used Hulu’s free streaming services. But the court held the plaintiffs could be “subscribers” under the law because the term does not imply payment of money: “If Congress wanted to limit the word ‘subscriber’ to ‘paid

Plaintiffs say... Hulu wrongfully disclosed users’ PII and video viewing histories to online ad networks and other third parties... to that consumer, or in limited circumstances, including incident to the provider’s ordinary course of business (as well as disclosure with consumers’ consent, and/or pursuant to a warrant or court order). The VPPA also requires destruction of PII once no longer necessary for the

tions that the VCR-era VPPA only applied to brick-and-mortar providers of video tapes, and/or only physical audio-visual media.

Rather, the court held the VPPA’s reference to “prerecorded video cassette tapes or similar audio visual materials” covers video content in

of fact that could not be resolved on a motion to dismiss. This is an important point in the VPPA context, and perhaps more globally, as it may require delving into whether deriving revenue from online ad networks is part of the “ordinary course of business” for providers of

subscriber,’ it would have said so.”

It will be interesting to see if Hulu proceeds to discovery and a litigated decision, or settles, as Netflix did last year in a similar suit. m

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When Journalists Tweet

Why Have a Social Media Policy?

Few things become dated more quickly than a list of popular websites, but as of August 2012, some of the best-known social media websites include: Facebook, which allows users to create and communicate with a network of friends and to “like” the pages of companies, brands, and individuals; Twitter, on which users can creates posts of 140 characters or less (known as “tweets”), and can “follow” favorite posters, respond to the tweets of others, and post photographs; Google+, a service not unlike Facebook and designed for communicating with networks of friends ; Tumblr, a microblogging site that allows users to share creative written and/or visual content easily on short-form blogs called tumblelogs; LinkedIn, designed primarily for professional networking; Pinterest, a site that allows users to post collections of images organized by theme; Foursquare, a site that allows users to “check in” by announcing their location at a particular venue.

Media companies and their employees are a part of this trend.

Some news organizations have hired full-time social media editors. There are many good reasons for journalists and their employers to use social media: to provide their news content in real time; to drive traffic to their websites and their publications and broadcasts; to engage in two-way communications with their audiences and find out what issues are important

to them; to provide behind-thescenes detail that might not have made it into a finished article; to gather information (from individuals, groups, or crowdsourcing); and to find experts and other sources.

According to the Pew Research Centers, 9% of the average news organization’s traffic comes from social media and 9% of online consumers of news in the U.S. “very often” get their news via Facebook or Twitter; those numbers have risen since 2010 and the Pew Research Centers expect that they will continue to rise.

But there is a potential downside to the faster-paced, less-vetted world of social media. For instance, in 2011 in Britain, a confidential source accidentally revealed himself with a Twitter post (presumably meant to be private) reading “From someone else fine, but I do not want my fingerprints on that story.” Imagine the fallout for the publication if it had been the journalist, rather than the source himself, who outed the source. News organizations may also be embarrassed by reporters making private statements that inadvertently go public in which they mock, or praise, individuals and companies whom they cover, thus calling into question their objectivity. Reporting information tweeted by others, without checking facts, can also lead to embarrassment, such as reporters erroneously tweeting that famous individuals have died.

More than embarrassment is at stake. A plaintiff who sues a journalist for defamation, copyright infringement, or other torts allegedly committed via social media may decide to sue the

deeper-pocketed employer as well, on a theory of respondeat superior.

Even if the allegedly tortious material appears on the employee’s personal social networking page, a plaintiff could try to hold the employer responsible.

There may also be conflicts between the employers’ and employees’ goals for social networking. Journalists may use social media (and their visibility as employees of a news organization) to build a brand for themselves, separate and apart from their employer’s identity. When they leave the organization, they may take their brand – and their valuable fans and followers – with them to another publication. For example, Phonedog, an online source for news about mobile phones, is currently suing a former employee who left the organization, changed his online name from “@Phonedog_Noah” to “@ noahkravitz,” and took his 17,000 Twitter followers with him. News organizations need to decide how much control they want to exercise over their employees’ branding activities.

We believe that it is prudent for news organizations to have policies regarding social media.

While even the most thoughtfully crafted social media policy cannot remove all risk, a policy can start a conversation about responsible use of social media and can remind all employees to use common sense and good judgment. Whether to reduce policies to writing is an individual decision; some organizations may prefer not to have written policies, fearing that a failure to follow those policies may be used as evidence of negligence in litigation. Nonetheless, many news organizations have issued social media policies in writing.

What Should the Policy Look Like?

RULES VERSUS STANDARDS

Some news organizations have very short social media policies, the gist of which is to remind journalists to follow existing professional and ethical standards and to exercise good judgment. Other media companies have lengthy, detailed

policies containing specific rules on what employees should and should not do.

There is no one-size-fits-all answer to whether your organization’s policy should be short or long. A shorter, more general standard-based approach can make practical sense; it will be easy to draft and will not need revision every time a new form of social networking comes along. If you are confident that your staff can apply your existing ethical standards to the online world, you may side with editor John Robinson of the Greensboro, North Carolina News & Record, who has been quoted as saying, “We have a code of ethics and professionalism that covers our behavior, period. That said I’ve told my staff that my social media policy is this: Don’t be stupid. It seems to work.” Another advantage of a standard-based policy is that it may be too vague to be used against as evidence of an organization’s negligence; it would be difficult to prove in court that someone violated the “don’t be stupid” standard.

On the other hand, in a new format where the lines between personal and professional behavior may become confusingly blurred, even experienced professionals can make mistakes, and the applicability of existing rules may not be obvious. A rule-based policy gives employees a clearer sense of what behavior is expected of them, and alerts them to risks they might not have considered. Such a policy will take more time to draft and will need to be monitored for obsolescence and rewritten when necessary – but the potential risklowering effect of more explicit rules may justify the extra investment of time.

No matter what form your social media policy takes, you should reserve the right to modify your policy as social media changes.

BEST PRACTICES

Certain basic themes recur across many media organizations’ social media policies.

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WHY HAVE A SOCIAL MEDIA POLICY? Social networking has grown so fast in the last few years that it is virtually impossible to find (or write) an article about the phenomenon that does not use some form of the word “explode.” Data gathered by Edison Research in January and February 2012 suggest how ubiquitous social media have become:

Nearly

56% 2/ 3

of these users visit a social networking site at least once a day

54%

of Americans have a profile on Facebook (up from 8% in 2008)

1 41% 76%

in

10

Americans aged 12 and older use Twitter

of Twitter users access the site “nearly every day” or more, and

29%

do several times a day

of users who use Twitter once a month or more post status updates; in 2010, only

Post With Caution

Many organizations remind staffers that online privacy settings are fallible, and therefore they should assume that anything they post via social media will be publicly accessible. Some also remind staffers that anything posted may be permanently available even if the poster tries to delete it. They may also remind users that even if they post privately, not in their capacity as a journalist, readers may assume that they speak on the employer’s behalf.

Do Not Violate Anyone’s Rights

of Americans have a profile on a social networking site

The casual, chatty, real-time atmosphere of social networking sites may lull people into making statements online that they would never make in a newspaper. These statements may be merely embarrassing, or they may be libelous.

47%

Even though employees of news organizations surely know that they should not defame people, some news organizations consider it useful to remind them in their guidelines that this obligation applies to social media posts. On Twitter, where the culture encourages “retweets” (also known as “RTs”) of others’ posts, there is a danger that a user could add additional content that would make the tweet defamatory. If a story has been legally vetted, social media posts about the story should not contain material that was left out of the article for legal reasons.

Many news organizations’ guidelines also warn against expressing messages on social media that contain racism, sexism, or other forms of bias. Even if such posts are not made on the news organization’s behalf, they may have an impact on its credibility.

of users did so

Employees also should be aware of the danger of violating intellectual property rights, including those of their employers. Some news organizations advise employees to link to the organization’s content rather than copying it.

News organizations may also risk violating others’ copyrights if they use material posted to social media sites, since the person posting the material may not in fact own the copyright.

Be Accurate

Some organizations remind journalists that they should not lower their investigative standards for material obtained by means of social media. While it may seem obvious that reporters should apply the same healthy skepticism to social media as they should to any information source, examples of failure to do so abound. In addition

to false reports of celebrity deaths, major news organizations have been fooled by unfounded stories about political figures or even April Fool’s jokes. There is an inevitable tension between the instantaneous culture of social media and the slower and more deliberate pace of traditional reporting.

Be Transparent

Many of the policies we examined require journalists to identify themselves as journalists when using social media. Some require that journalists identify themselves not only as reporters, but as reporters for their specific organization.

In the same vein, some media policies instruct journalists not to use a false name or anonymous identity online. This last concern is more than just an abstract fear; a Texas couple recently won a $14 ...continued on page 10

10 continued from page 9... When

summer/fall Journalists Tweet

million jury verdict against anonymous posters on an online message board (though the judge granted defendants’ motion to overturn the verdict). Anonymous posters may also be found out and embarrassed.

One media outlet specifically recommends that staffers not recruit their family or friends to promote or defend their work.

Be Polite

Social media opens the door to dialogue with readers and viewers —but not all dialogue is friendly.

Audience members may hold passionate opinions and may express them stridently. Many policies suggest that its staffers participate in conversations but avoid arguments and angry responses.

Avoid Conflicts of Interest

Some social media policies suggest that employees post a disclaimer stating that the opinions they express are their own rather than those of employers. More commonly, policies require that journalists avoid the appearance of conflicts of interest by refraining from expressing their political opinions or advocating for particular issues or agendas on social media. Some policies compare such expressions of opinion to political yard signs and bumper stickers, which are already prohibited by their existing employee handbooks.

Reporters whose beats include reviewing products may also want to be careful to avoid the appearance that they are endorsing products that the manufacturer has provided to them for free to review.

Failure to reveal the source of the products would violate the FTC’s endorsement guidelines if done in a news story. News organizations may want to remind employees that these guidelines would apply with equal force if they post a positive comment on social media about the product while failing to disclose that they received the product free from the manufacturer.

Maintain Confidentiality

Some news organizations include broad confidentiality provisions in their social media policies, warning against revealing information

about the organization’s internal operations, business practices, or personnel decisions. As discussed below, however, confidentiality provisions that sweep too broadly may run afoul of the National Labor Relations Act. Less controversial is the suggestion that journalists avoid scooping their employer. Nonetheless, certain categories of journalists—in particular, sportswriters—appear to

to engage in protected concerted workplace activities.

Employees, whether unionized or not, have the right under Section 7 of the NLRA “to selforganization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.”

Social media opens the door to dialogue with readers and viewers — but not all dialogue is friendly. do so routinely. One organization has recently updated its guidelines to include rules for “live tweeting events.” These rules give staffers valuable guidance on how not to scoop their employer.

POLICIES TO AVOID Policies that Violate Labor Laws

Some social media policies, in an effort to avoid embarrassment to the news organization or its parent company, tell employees to avoid discussing internal company policies, company decisions or business activities, or personnel matters.

Depending on how they are worded, such policies may potentially violate the National Labor Relations Act (“NLRA”) because they may affect employees’ right

This includes the right to discuss or criticize an employer’s policies or its treatment of employees as long as those discussions or criticisms are not maliciously false.

Recently, the National Labor Relations Board (“NLRB”) has taken a series of actions against employers whose social media policies violate employees’ Section 7 rights. For instance, an employee of American Medical Response, an ambulance service in Connecticut, posted on Facebook that her supervisor was a “scumbag” and was subsequently fired for violating a company policy prohibiting “making disparaging remarks about the company or depicting it online without permission.” The NLRB filed a complaint against the employee, alleging that the policy

was overbroad and the firing unfair; it found the Facebook posting to be concerted activity because it concerned work-related activities; the employee’s co-workers responded by posting supportive comments; and the employee then posted further negative comments about the supervisor. The parties settled and AMR agreed to change its policy. Similarly, the NLRB acted against a car dealership that fired an employee for posting comments on Facebook about his disapproval of a hot dog stand that had been set up at a company event. Again, the Facebook posting was related to working condition and triggered a response from co-workers; thus it was protected concerted activity.

On the other hand, the NLRB declined to take action against the Arizona Daily Star when it fired an employee who made a series of Twitter posts disparaging his colleagues, a local television station, and the city of Tucson, and then refused to stop doing so when warned. The NRLB found that the employee was disciplined for conduct that did not relate to the terms and conditions of his employment, and that the employee did not seek to engage other employees in concerted action. Nor did the employer seek to impose an overbroad rule on other employees; rather, it appropriately warned this individual employee that his particular conduct was inappropriate.

These cases suggest that it may be acceptable to ask employees to avoid disparaging others, embarrassing the company, or revealing confidential information about third parties, as long as you do not frame the rule in such a way that it would chill them from exercising their right to discuss working conditions with their fellow employees, engage in protected concerted activity with them, or criticize their working conditions or their supervisors. As the NLRB has explained: “Rules that are ambiguous as to their application to Section 7 activity, and contain no limiting language or context that would clarify to employees that the rule does not restrict Section 7 rights, are unlawful. In contrast, rules that clarify and restrict their scope by including examples of clearly illegal

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or unprotected conduct, such that they would not reasonably be construed to cover protected activity, are not unlawful.”

Therefore, when you draft or revise your policy, we advise that you make crystal clear that you do not prohibit, and will not retaliate against employees for engaging in, employment-related concerted activity.

Policies that Overreach

Organizations that try to assume too much control over their employees’ non-work related behavior run the risk of igniting a firestorm within the organization. Worse yet, employees might simply ignore a policy altogether if it attempts to restrict the most basic social networking activities.

For these reasons, it makes sense to poll key social media users within the organization and identify ways in which the employer can achieve its risk-reduction goals while still allowing employees to use social media in productive and practical ways.

An overreaching policy can also lead to embarrassment outside the organization. Your organization’s social media policy is likely to be posted online even if you do not choose to post it on your website.

If your policy makes your organization sound out-of-touch with social media trends, you could be mocked; if your policy is inconsistent with the public positions your organization takes on issues such as newsgathering or fair use, your organization may be exposed to charges of hypocrisy.

CONCLUSION

Social media has become an important part of news gathering and delivery. An ideal social media policy will be tailored to your organization. It will be drafted by people who are sensitive to your organization’s concerns and familiar with social media culture.

It will provide protection for your organization’s reputation while not providing unnecessary (or unlawful) restrictions on your staff. And it will be flexible enough that its basic principles will still apply even as social networking inevitably changes form. m

Policies on Which News Organizations Differ

Joining Groups

“Friending” Sources

Policies differ on whether journalists should join or friend or follow a group that advocates a particular political viewpoint or cause. While doing so might be useful as an information-gathering tool for reporting, at least one organization’s policy expressly forbids it. Another recognizes that joining a political group may compromise standards but may also be necessary to get the news.

Several organizations recommend that if journalists do join such groups, they follow advocates on all sides of the issue. Some organizations suggest, or even require,

Some news organizations caution their reporters about accepting Facebook “friend” requests from sources.

Some suggest that if you “friend” a source on one side of a debate, you should “friend” the other side as well. Others are less concerned about “friending”; Craig Whitney, the now-retired standards editor at the New York Times, was quoted before his retirement as saying, “Basically what it comes down to is we believe that being a friend on Facebook, and I speak as one who has a Facebook page, is essentially meaningless, and everybody knows

a disclaimer stating that retweets, links, and following groups are not endorsements.

that. So it’s hard to imagine any real conflict of interest that could arise from your being a friend of somebody on Facebook and writing about that person.”

Retweeting “Retweeting” is a regular feature of the Twitter culture.

Twitter users share the posts of other users by reposting them with the initials “RT” in front and the Twitter ID of the original poster. (If the retweeter modifies the original post, he or she uses the initials “MT,” for “modified tweet,” instead of RT.)

Reporters must guard against exposing their confidential or anonymous sources by “friending” them on social media sites. Posting to social media using a mobile device, or use of a social media site (such as FourSquare) that allows one to “check in” at a physical location may also inadvertently disclose the location of a

If a reporter tweets on her news organization’s behalf, and then leaves the organization, does she own the social media account and all of its followers or fans?

News organizations differ on their policies towards retweets. Some organizations feel that retweets are endorsements of the original content; others state that they can be taken as an implicit endorsement. One organization suggests that the retweeter add content to make clear that he or she is not expressing an opinion or an approval of the original poster’s opinion. Some organizations suggest a disclaimer on the user’s Twitter profile stating that retweets are not endorsements.

Regular users of Twitter seem bemused by policies that equate retweeting with endorsement. But not all Twitter users who follow news organizations are savvy about Twitter culture, and a disclaimer about retweets may be helpful in reconciling a news organization’s culture of impartiality with the Twitter culture of connecting to the community by circulating the thinking of other users.

In any event, the differences of opinion over retweeting suggest that it is important that whoever drafts your social media policy have familiarity with social media culture and its particular pitfalls.

reporter or the source he or she is visiting – although we have not found any social media policies that specifically warn against this practice.

“De-Friending” Embarrassing Acquaintances A few news organizations recommend that their employees delete comments that could damage the news organization’s reputation and distance themselves from the people who left those comments. Other news organizations leave this decision to the good judgment of their employees.

Ownership of Social Media Accounts Many organizations do not address the question of ownership. If a reporter tweets on her news organization’s behalf, and then leaves the organization, does she own the social media account and all of its followers or fans? Failing to have a policy on account ownership in place can lead to misunderstandings and even litigation.

News organizations may want to consider setting up institutional accounts to retain their followers and fans even as individual staffers move on.

Footnotes and citations for this story can be found in the digital edition of MediaLaw Monitor, available at www.medialawmonitor.com

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7th Circuit Affirms Early Dismissal Based on Fair Use in "South Park" Parody Case

BY DAN LAIDMAN

A

“South Park” parody of a popular viral video was such an obvious fair use that a judge was correct to promptly dismiss a copyright infringement claim against the show without putting its creators through burdensome discovery, the 7th U.S. Circuit Court of Appeals has ruled.

Courts have long recognized in other First Amendment-related contexts like defamation and the right of publicity that early dismissal of weak claims is crucial to avoid chilling protected speech with the prospect of costly, drawn-out litigation and invasive discovery. The 7th Circuit’s opinion in Brownmark Films, LLC v. Comedy Partners is the first appellate decision to extend this reasoning into the realm of copyright fair use. The Brownmark decision is also significant for recognizing that parody cases require more than a rote application of the traditional fair use factors, and that while a parody must inherently borrow a significant amount of the underlying piece, it does not necessarily supplant the market for the original work.

The case began with a 2008 “South Park” episode titled “Canada on Strike” that lampooned the growing phenomenon of Internet viral videos. At one point in the episode, the “South Park” schoolboys produce their own video that is a send-up of one of the earliest and most popular YouTube sensations, Samwell’s “What What (In The Butt).” The original “WWITB” video features a real-life adult singer who vamps through choruses of “I said, what what, in the butt” and “you want to do it in my butt, in my butt?” while highly sexualized

imagery appears in the background.

In the “South Park” cartoon parody, the song’s crudely sexual lyrics are delivered by Butters Stotch, a naïve fourth grader who performs the song wearing versions of Samwell’s iconic outfits, but who also appears dressed as an astronaut, a teddy bear, and a daisy.

More than two years after the episode first aired, Brownmark Films LLC, the purported co-owner of a copyright in the WWITB video, sued Comedy Partners, MTV Networks, Paramount Home Entertainment Inc., Viacom International Inc., and South Park Digital Studios LLC (collectively “South Park”) for copyright infringement. On July 6, 2011, Judge J.P. Stadtmueller of the U.S. District Court for the Eastern District of Wisconsin granted South Park’s motion to dismiss the lawsuit under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. Judge Stadtmueller concluded that viewing WWITB and “Canada on Strike” side-byside provided everything he needed to find that the “South Park” video was “a classic parody” constituting a protected fair use.

Brownmark appealed, arguing that fair use is a fact-based defense that cannot be decided on a motion to dismiss for failure to state a claim. South Park argued that early dismissal of copyright claims challenging obvious parodies serves important First Amendment and public policy goals, because the specter of having to defend against costly lawsuits and undergo burdensome and intrusive discovery could discourage important but controversial expression, such as parody and criticism—a classic

“chilling effect.” In an unusual (but apparently persuasive) alliance, South Park was supported in this argument by an amicus brief from the Electronic Frontier Foundation, which characterized the lawsuit as an example of the “rapidly escalating problem of ‘copyright trolls’— i.e., entities that embrace copyright litigation as a business model.”

On June 7, 2012, a unanimous 7th Circuit panel ruled in South Park’s favor, affirming Judge Stadtmueller’s opinion while calling it “well-reasoned and delightful.” For the first time in a federal appellate decision, the court recognized the importance of early dismissal in the fair use context, acknowledging that the “expense of discovery … looms over this suit.” Agreeing that “the only two pieces of evidence needed to decide the question of fair use” were the original WWITB video and the “South Park” episode, the 7th Circuit concluded that it was “an obvious case of fair use.”

Judge Stadtmueller granted South Park’s motion to dismiss after finding that the videos were incorporated by reference into the pleadings. The appellate panel took a slightly different approach, noting that whether the incorporation-by-reference doctrine applies to videos is a question ...continued on page 15

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Stolen Valor Act Ruled as Violation of the First Amendment

BY ROBERT CORN-REVERE & ERIN REID

T

he Supreme Court’s June 28, 2012 decision in United States v. Alvarez reaffirmed the important First Amendment principle that the First Amendment “protects the speech we detest as well as the speech we embrace.” The Court voted 6-3 to strike down the Stolen Valor Act, 18 U.S.C. § 704, which made it a federal crime to falsely claim receipt of military decorations or medals, upholding a decision of the U.S. Court of Appeals for the Ninth Circuit.

The key issue in the case was whether the First Amendment protects false statements of fact made without any attempt to defraud or gain anything of value. On this question, six justices agreed that some measure of protection was warranted but disagreed as to the level of protection, while the three

dissenters wrote that knowingly false statements are unprotected by the First Amendment.

Writing for a plurality that included Chief Justice John Roberts as well as Justices Ruth Bader Ginsburg and Sonia Sotomayor, Justice Anthony Kennedy concluded that the Stolen Valor Act failed to satisfy strict First Amendment scrutiny.

The plurality noted that, with few exceptions, content-based restrictions on speech always face strict scrutiny, and are therefore almost always unconstitutional. Applying a finding from two Terms ago in United States v. Stevens, Justice Kennedy observed that false statements of fact do not fall within any of the historically recognized exceptions to the First Amendment (such as defamation, obscenity, incitement, or fraud), and that the Court was

not going to create a new exception without some historical basis.

The plurality opinion contrasted the Stolen Valor Act with statutes that punish fraud, defamation or false claims made in an attempt to gain something of value. It distinguished the prohibition on false statements in the Stolen Valor Act in that it sought to “control and suppress all false statements on this one subject made in limitless times and settings,” and applied “without regard to whether the lie was made for the purpose of commercial gain.”

Empowering the government to prohibit false statements without proof of some kind of harm would have “no clear limiting principle,” according to the plurality.

Justice Kennedy faulted the government for failing to present any evidence that a criminal prohibition

on speech was necessary to protect the integrity of military honors and the esteem accorded to the public for them. In particular, the government did not explain “why counterspeech would not suffice to achieve its interest.” Citing an amicus brief Davis Wright Tremaine LLP filed on behalf of the Reporters Committee for Freedom of the Press and twenty-three news media organizations, Justice Kennedy wrote, “[t]he remedy for speech that is false is speech that is true. This is the ordinary course in a free society.

The response to the unreasoned is the rational; to the uninformed the enlightened; to the straight-out lie, the simple truth.”

Justice Kennedy wrote that the public’s reaction in exposing liars and expressions of outrage and contempt toward faux heroes “can serve to

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reawaken and reinforce the public’s respect for the Medal, its recipients, and its high purpose.” The United States does not need a “Ministry of Truth” as in George Orwell’s Oceania, he explained, because “[t]ruth needs neither handcuffs nor a badge for its vindication.”

Justice Stephen Breyer, joined

by Justice Elena Kagan, concurred separately. Justice Breyer agreed with the plurality’s holding that the Stolen Valor Act violated the First Amendment but disagreed with the plurality’s holding that strict scrutiny was the appropriate standard of review.

Breyer argued that “intermediate scrutiny” or “proportionality” was the proper analytical framework for the courts to use in those instances such as here, in which a statute adversely affects constitutionally protected interests but warrants neither nearautomatic condemnation (as “strict scrutiny” implies) nor near automatic continued from page 13... “Fair

approval (as is implicit in “rational basis review”), because the government should have some ability to regulate false statements of fact.

Nevertheless, the concurring Justices agreed that the Stolen Valor Act is unconstitutional because the statute lacked any limiting factors and applied in family, social, or other contexts where it would often cause

Justice Samuel Alito, joined by Justices Antonin Scalia and Clarence Thomas, dissented on grounds that false statements about military medals merit no First Amendment protection whatsoever. Analogizing the Stolen Valor Act to speech such as fraud, defamation or lies to government agencies — speech the courts have consistently held can be

constitutional immunity when their prohibition would chill otherwise protected speech, but concluded the lies prohibited by the Stolen Valor Act do not rise to that level.

In the wake of the Alvarez decision Congress may try to rewrite the law to impose a narrower restriction on speech. Last year, Congressman Joe Heck introduced the Stolen

The remedy for speech that is false is speech that is true.

The response to the unreasoned is the rational; to the uninformed the enlightened; to the straight-out lie, the simple truth.” little harm. Both the concurring Justices and the plurality opinion suggested that a less restrictive alternative, such as a publicly available government database listing medal winners, might be sufficient to serve the government’s interest.

prohibited within the confines of the First Amendment– the dissenters argued that the Government should be allowed to prosecute those who lie about having earned military honors. The dissenters acknowledged that false statements might gain

Valor Act of 2011 which would make it a crime to lie about serving in the military or earning a military decoration in order to obtain some tangible benefit. If adopted, such a restriction may have a better chance of surviving constitutional review. m

Use in South Park Parody Case”

of first impression in the 7th Circuit, and opting not to resolve the issue.

Rather, the 7th Circuit treated South Park’s Rule 12(b)(6) motion to dismiss as a Rule 56 motion for summary judgment, and affirmed on that basis. The court acknowledged that South Park had avoided captioning its motion as a request for summary judgment because such motions usually come after discovery. However, the 7th Circuit explained that district courts do not have to grant discovery requests at this stage, and that they “ought not” in cases like this where “it is clear that the case turns on facts already in evidence.”

The court noted that Brownmark argued—for the first time on appeal— that it needed discovery into the state of mind of South Park’s creators, “all relevant video images or clips” including images created for purposes divorced from the “Canada on Strike Episode,” and licensing information related to the episode. The panel found 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.’” Therefore, the court concluded that regardless of the caption on South Park’s motion, the district court properly decided the case based on the two videos alone without requiring additional discovery.

Turning to the substance of the fair use argument, the 7th Circuit agreed with South Park that Brownmark waived its opposition to the defense by failing to argue the merits of fair use in the district court. However, the Court nonetheless went through the Section 107 factors and affirmed Judge Stadtmueller’s conclusion that South Park’s use was privileged, providing a rare and important appellate decision about the scope of the parody defense.

Section 107 of the Copyright Act presents four non-exclusive factors to determine if a use is protected: (1) the purpose and character of the use; (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 on the potential market for or value of the copyrighted work.

On the first factor, the court held that the show’s “parodic use has obvious transformative value.” As to the second factor, the court acknowledged that WWITB is itself a creative work within the “core of copyright protection,” but it explained that “[i]n the context of parody, this factor offers little help to Brownmark” because parodies inevitably copy known expressive works.

Regarding the amount used, the 7th Circuit found that the show’s use was “not insubstantial” and that it had used the “heart” of the original work, but again held that this was not especially important in the context of parody.

The court reasoned that “when parody achieves its intended aim, the amount taken becomes reasonable when the parody does not serve as a market substitute for the work.” Because the “South Park” video was “clearly a parody,” the Court explained that it “has not supplanted” the market for the original WWITB video. Therefore, with respect to the fourth factor, the Court held that Brownmark failed to present 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. The 7th Circuit concluded its analysis with the observation that the “South Park” episode’s “likely effect, ironically, would only increase ad revenue” for Brownmark.

Comedy Partners, MTV Networks, Paramount Home Entertainment Inc., Viacom International Inc., and South Park Digital Studios LLC are represented in this matter by Alonzo Wickers, Jeff Glasser, and Dan Laidman of Davis Wright Tremaine in Los Angeles and Michelena Hallie of Viacom Media Networks in New York. Screenshot of parody video for the purpose of this article used with permission. m

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