Last month, the Second Circuit ruled that media-monitoring service TVEyes violated copyright law by re-distributing searchable audiovisual content clips from news outlets, including Fox News Network, reversing an earlier ruling that the service was protected by the fair use doctrine. The Second Circuit held that TVEyes’ use was transformative, but since the redistribution made available virtually all of Fox News’ content and denied Fox News of its copyright rights, the court ruled against a finding of fair use and held that TVEyes was liable for copyright infringement, based on TVEyes’ watch function of its service. (TVEyes will still be able to offer its search function under the order).
How TVEyes Works
- Subscription service
- Records all TV broadcasts
- 24 hours/7 days a week
- Clients: journalists, government and political organiztions, law enforcement, the military, for-profit companies, and not-for profit enterprises
TVEyes records essentially all television broadcasts as they happen, recording 24 hours a day, 7 days a week. It also copies the closed-captioned text that accompanies the content it records and creates a text-searchable transcript of the words spoken in each video. The videos and transcripts are then consolidated into a database that clients can search to get a list of the relevant videos. Clients can click on a thumbnail of the video clip, beginning 14 seconds before the search term is spoken, and the search results display a segment of the transcript with the search term highlighted. The clips can be played for no more than 10 minutes, but clients can play an unlimited number of clips.
The Status of Fair Use Under the Law
Fair use is an affirmative defense to a claim of copyright infringement under the Copyright Act. There are a number of factors courts consider including:
- the purpose and character of the use, including whether such use of a commercial nature or is for nonprofit educational purposes;
- the nature of the copyrighted work;
- the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
- the effect of the use upon the potential market for or the value of the copyrighted work.
The burden of proof is on the party asserting the defense, in this case TVEyes. There is no bright line rule to apply a fair use analysis and courts undertake a case-by-case analysis in which each factor is considered and the results are weighed together. Evaluation of each of the factors is required.
The Google Books Case
The parties in this case relied heavily on the Google Books case, as it was directly relevant to the instant case. In Google Books, a group of libraries worked together to make digital copies of millions of books, many of them still under copyright. Google collected these digital copies into a text-searchable database. When a user entered a search term, Google returned a list of books that included the search term, and for each responsive book, Google provided a snippet that contained the search term. The court held the Google’s copying was a transformative, fair use because it created a text-searchable database that “communicated something new and difference from the original. [T]he result of a word search is different in purpose, character, expression, meaning, and message from the page (and the book) from which it is drawn.” An important distinction between how Google Books works versus TVEyes is that Google Books had safeguards in place to prevent users from seeing the authors original work. In the TVEyes format, the entire video clip and transcript was available to subscribers.
Application of the Fair Use Factors
The first statutory factor is “the purpose and character of the use.” The more commercial the use, the less likely the use is to be held fair use. The court in this instance found the first factor slightly in TVEyes’ favor since subscribers of TVEyes use Fox News’ video clips for the same purpose as authorized Fox News viewers would – for the purpose of learning the reported information. This is a non-commercial purpose.
The second statutory factor is “the nature of the copyrighted work.” This factor rarely plays a significant role in fair use determinations and this case is no exception to the general rule. TVEyes argued, unsuccessfully, that since the news is comprised of a series of facts, it has a right to copy Fox News’ copyright protected news reports. The court rejected this argument.
The third statutory factor is “the amount and the substantiality of the portion used in relation to the copyrighted work as a whole.” This factor favored Fox News. The court’s rationale was that since the video clips TVEyes made available to its subscribers were in 10 minute increments, the copying was extensive and contained the “important” part of the news.
The fourth statutory factor is the “the effect of the [seconday] use upon the potential market for or value of the copyrighted work” and is considered “the single most important element of [any] fair use” analysis. This factor focuses on whether the copy offers the marketplace a competing substitute for the original or its derivative work, such that the copyright holder is deprived of the right to make substantial income from purchasers who may choose to buy the copy instead. The court held that TVEye’s subscription model deprives Fox of the ability to generate licensing revenue from TVEyes and similar entities. Similarly, the court noted, TVEyes has “usurp[ed] a market that properly belongs to the copyright holder.”
After balancing the four factors above, the court found that TVEyes’ subscription watch service is not justifiable fair use.
Based on the allegations in the court documents, it appears the TVEyes originally and unsuccessfully approached Fox News for a license. However, this does not give one the right to proceed with any business concept because you rightfully ask for permission and are told no. Whether you are asking for permission to use another’s copyright rights or trademark rights, asking for permission does not absolve you of infringement. This case and the law are clear that certain rights are bestowed to rights holders. If you have any questions about this case or any intellectual property matter, please contact us.
Stacey C. Kalamaras is the founding partner of Kalamaras Law Office, LLC. She has extensive intellectual property experience with a particular focus on trademark prosecution and enforcement. She has protected some the world’s largest brands in more than 150 countries and specializes in helping small and medium sized businesses grow and protect their brands. Contact her at firstname.lastname@example.org.
Stacey is also the founder and lead instructor of Trademarkabilities®, an online trademark academy for lawyers, whose mission it is to prepare lawyers to be confident and effective practitioners before the USPTO. To learn more, please visit https://www.trademarkabilities.com/.