When do viral videos constitute fair use? According to Paolo Strino and Calvin May of Gibbons, a California U.S. District Court judge recently weighed in on the issue.

The case was between two Internet media companies featuring viral videos on their sites. One company enters licensing agreements with the video creators and the other sometimes takes the first company's videos, but introduces them with sarcastic commentary. “The primary issue in the case was whether the disputed clips were protected by the fair use doctrine based on the fact that the jokes about the underlying content were transformative,” explain the authors.

The judge evaluated the clips at issue and found that most of them could be categorized as parodies due to the host's jokes, narration, costumes and graphics. “However, the Court concluded, when a clip is not sufficiently transformative, it is likely to cause market harm by usurping demand for a cognizable derivative market,” say Strino and May.