Protecting trademarks or bullying fair use?

Factual Questions
1

Something Awful’s recent photoshop gallery of Muppet movies was shut down by lawyers representing Jim Henson’s company. They said the images violated their copyrights. An example of one of them is the film “Das Bert”, with Bert photoshopped into the cover of the DVD for “Das Boat”.

Isn’t this “parody”? I thought parody was considered “fair use” and thus exempt from copyright laws. I mean, MAD Magazine would have been sued into oblivion years ago if this wasn’t the case, right?

So is this just a case of a huge company and their lawyers bullying someone because a website owner is unlikely to actually fight back?

2

Something Awful’s usage seems to fall within Fair Use, but if they used too many images, it starts to go into a grey area.

Dunno, this is too close for me to call.

3

Interesting that I found this thread, as I was just reading up on the flak caused by Negativland’s “U2” single. Although, in that case, it does seem to veer a little too close to blatant copyright infringement as opposed to parody.

As for the Muppet thing…who knows? Sometimes these things all depend on who has the more expensive lawyers…