Wikipedia. Where you learn something new, everyday.
The “small penis rule” is a term that describes the strategies used by some authors to evade lawsuits from libelous rivals or human subjects.
…For a fictional portrait to be actionable, it must be so accurate that a reader of the book would have no problem linking the two," said Mr. Friedman. Thus, he continued, libel lawyers have what is known as "the small penis rule." One way authors can protect themselves from libel suits is to say that a character has a small penis, Mr. Friedman said. "Now no male is going to come forward and say, ‘That character with a very small penis, ‘That’s me!’
Link to the Wikipedia article.
[Found via Reddit]