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The article deals with the exception to copyright for the purposes of parody and caricature. This exception is one of the tools ensuring the balance between the authors' interest to have the monopoly on the use of their works and the right of the members of the society to the freedom of expression. Another aim of parody exception is the promotion of creativity by the permission of the transformative use of copyrighted works. Three main aspects of this issue are discussed in this article. The first one deals with the legal regulation of parody exception. The parody exception is one of the exceptions permitted by the Information Society Directive. The countries under investigation have two main schemes of legal regulation related to the parody exception. The first group are droit d'auteur countries (France and Belgium) which have a special parody exception provision in their Copyright laws. The second group are copyright countries (the United States and the United Kingdom) with no special provision regarding the parody exception in their laws; however, in the case law of these countries this exception is recognised as one of the acts of fair dealing or faire use. The Lithuanian Copyright Act permits the use of copyrighted works for the purposes of caricature and parody. Another issue discussed in the article is the concept of parody exception. The conclusion that the legal perception of parody exception cannot reflect all arts genres' considerations is made. For the legal identification of the use of copyrighted material for the purpose of parody, the legal criterions of parody have to be taken into account. The second part of the article deals with the legal criterions of the parody exception established in case law and doctrines of the countries under investigation. These criterions are: the humoristic purpose of the use of work, the originality of parody, the condition that parody must not defame the work and its author, and the conditions related to the economic competition of primary and derivative works and to the amount of primary work used in the parody. In all the countries under investigation the criterions are more or less the same. The third issue discussed in the article is the Lithuanian case law establishing the content of the parody exception. The Supreme Court of the Republic of Lithuania ruled that the use of a work for the purpose of parody is permitted under the following conditions: the parody is an imitation of the copyrighted work, the use of a work is humoristic, the parodied work is the target of parody, the parody is an original work, the use of a work for the purpose of parody meets the triple test requirements (do not conflict with a normal exploitation of the work or other subject-matter and do not unreasonably prejudice the legitimate interests of the right holder). Conclusions in the end of the article describe the main rules of the application of the parody exception. [ABSTRACT FROM AUTHOR]