Unfair Use: The Lack of Fair Use Protection for Satire Under § 107 of the Copyright Act -- Adriana Collado, Journal of Technology: Law & Policy (June 2004)
This article gives a summary of fair use and parody decisions and attempts to show how satire should be protected under fair use because it is transformative. The primary argument against protecting satire under fair use is that “owners are likelier to allow use of their works in satire because satires do not target the copyrighted works directly” (II.A). This, of course, ignores the problem encountered in cases such as Dr. Seuss Enterprises v. Penguin Books USA, where, for instance, “satirists that propose using copyrighted works to criticize something else in an offensive manner are not likely to be granted licenses because copyright owners may fear the use will reflect negatively on their works” (IV.A). That is, courts have reasoned that because specific copyright holders aren’t being directly targeted by satirists, they will gladly license their work.

This line of reasoning willfully ignores reality; however, this reasoning still should not preclude fair use of satire, as, Collado notes, “reputational harm is not an interest that copyright law is designed to protect” (IV.A). Certain copyright holders, such as Disney and Dr. Seuss, notoriously guard their property against parody. Yet because of the rich nature of these works, they are ripe for parody and satire; by disallowing fair use of satire, the law in effect stifles the free speech and creativity of new authors. “The assumption,” writes Collado, “a satirist can ‘shop around’ for copyrighted works to employ in his satire ignores the nature of the creative process” (IV.C).

Finally, we may be headed towards a future where a court will rule that satire is protected under fair use. As Collado notes, “In Campbell [v. Acuff-Rose Music], the Supreme Court defined satire as ‘commentary.’ In turn, the Fair Use Doctrine states ‘fair use of a copyrighted work ... for purposes such as criticism [and] comment ... is not an infringement of copyright’” (V). If a court were to acknowledge this--and the Supreme Court has nearly already done so with Campbell--then it would place satire under the fair use umbrella alongside parody. This would have an enormous impact on society; however, because most satire, like parody, does not compete in the same market as the original work, there can be little argument besides greed and prudishness against this result. Yet, as noted before, prudishness cannot be a legal justification for stifling free speech; as for the competing markets: satires and parodies, by their very natures, nearly never compete in the same markets as their progenitors, which would render moot the main argument against their fair use.

Walt Disney Productions v. Air Pirates (581 F.2d 751) -- LexisNexis
This Circuit Court case from 1978 involved a suit by Disney alleging copyright infringement of its characters by Air Pirates for its adult counter-culture comic book. Air Pirates mocked Disney’s Silly Symphony books with its own Silly Sympathies line of comics; the defendant also parodied well-known Disney characters such as Toby Tortoise and Max Hare by changing their personalities. Judge Cummings deliberated back and forth over both (1) whether or not a character from an illustrated book could be copyrighted, and (2) whether or not the change in personalities of the characters was enough to warrant a claim to fair use.

Ultimately, Judge Cummings ruled in favor of Disney, writing that

Defendants' assertion that they copied no more than necessary appears to be based on an affidavit, which stated that ‘the humorous effect of parody is best achieved when at first glance the material appears convincingly to be the original, and upon closer examination is discovered to be quite something else.’ The short answer to this assertion, which would also justify substantially verbatim copying, is that when persons are parodying a copyrighted work, the constraints of the existing precedent do not permit them to take as much of a component part as they need to make the "best parody." Instead, their desire to make the ‘best parody’ is balanced against the rights of the copyright owner in his original expressions. [7]

Though he cited as important Air Pirates’ defense that their characters--though similar in appearance and clearly meant to mock Disney’s characters--”parodied [Disney characters’] personalities, their wholesomeness and their innocence,” Judge Cummings’ ruling was ultimately decided primarily by the third copyright factor: the amount and substantiality of the portion taken.

This was an important ruling because it was cited in Original Appalachian Artworks v. TOPPS Chewing Gum, and in that case helped with the ruling that the Garbage Pail Kids were a copyright infringement of the Cabbage Patch Kids. The precedent set here that a parody cannot be the “best parody” without copying more than fair use allows was later overturned in Campbell v. Acuff-Rose Music, which established that sometimes a parody must be the “best” in order for it to qualify for fair use.