>>>My knowledge of law is limited, but I always thought that it's a parody if you aren't making any money off of what you are making fun of. There is a toyline(and a movie) about Garbage Pail Kids, if money were made, then wouldn't the people who made Cappage Patch Kids sue the ass off of the people who "made" Garbage Pail Kids? Unless they both were from the same company, then that would mean one of them is a spin-off.<<<
Most parody is done for profit. And, Campbell vs. Acuff-Rose Music, probably the definitive parody case, definitely involved for-profit parody. (And, like Cabbage Patch Kids and Garbage Pail Kids, involved parody aimed at a very different market than the product it parodied. CPK was aimed squarely at girls, and GPK was aimed squarely at boys. )
I don't ever remember seeing a Garbage Pail Kids toy line, BTW.
EDIT: It turns out that the creator of the Cabbage Patch Kids did sue Topps over Garbage Pail Kids a few years after they debuted, and Topps rolled over, making minor concessions regarding the design of the cards.