Southern District of New York Court Parses ‘Fair Use’ in Fox News’ Copyright Infringement Dispute with Media Monitoring Service

On 25 August 2015, the U.S. District Court for the Southern District of New York (SDNY) ruled that certain functions of the TVEyes media-monitoring service infringe Fox News’ copyrights in its programming content.

TVEyes is a for-profit, media-monitoring service with over 22,000 subscribers that indexes nearly all news-related television and radio content in a searchable database. TVEyes allows users to track the usage of words or phrases of interest and to view the transcripts and video clips of the portions of the television broadcast that use the search term. Subscribers may set ‘watch lists’ for terms to receive real time alerts when certain terms are used and search past broadcasts. TVEyes also provides subscribers with analytic data such as a segment’s Nielsen viewership rating, the frequency with which a term has been mentioned over a specified time period and the geographic markets and channels where a term is used. Additionally, TVEyes users may archive, indefinitely, video clips that appear in response to search queries on TVEyes’ server. Users can also email the video clip links to others, allowing the recipients of the link to view the video clip on TVEyes’ server, as well as download copies of identified digital video clips for offline use and permanent storage.

Although viewers primarily watch Fox News content on television, Fox News content is also available online through its website and other online distribution and licensing arrangements. Fox News sued TVEyes for copyright infringement, alleging that, by making Fox News content available via the TVEyes service, TVEyes is diverting potential licensees and website visitors away from Fox News. TVEyes asserted the affirmative defense of fair use, arguing that its use of Fox News content is transformative and otherwise qualifies a fair use.

In September 2014, the SDNY upheld TVEye’s affirmative defense of fair use with respect to its core function of indexing news clips in a searchable database. The court reasoned that this indexing function is transformative because it “converts copyrighted works into a research tool to further learning.” The court declined to decide whether TVEye’s secondary functions of allowing users to archive videos, download videos by e-mail, and search for content by date and time, rather than by keyword, also constitute fair use. The court instead granted the parties additional time to conduct discovery and brief those issues in cross-motions for summary judgment.

Courts undertake a multi-factor inquiry, guided by the principles noted in section 107 of the U.S. Copyright Act, to determine if a new work is a ‘fair use’ of copyrighted material. Here, the court focused on two prongs of that analysis:

  1. whether TVEyes’ use is transformative
  2. whether TVEyes’ use affects the market for Fox News’ copyrighted content.

Considering those elements, the court held that the archiving function constitutes fair use, but the other three functions may infringe on Fox News’ copyright. The Court parsed the meaning of ‘fair use’ by considering its application to each of the four functions in turn.

First, the court confirmed its earlier ruling that the searching function constitutes fair use “because it serves a different purpose than the original. While Fox aims to report the news, TVEyes aims to monitor what the media reports as news, the latter having qualities of news in its own right.”

Second, the court held that archiving video clips was a fair use. Archiving ensures the clips continued availability, facilitating the search function and is integral to TVEyes’ service and its transformational purpose of media monitoring. Without that function, users would be required to conduct repeated searches and would be unable to access content after a certain time period. This would severely limit users’ ability to monitor news trends over time, which is the central purpose of the TVEyes service. The court also noted that Fox had not identified any actual or potential market harm arising from archiving.

Third, the court held that the email sharing function, in its current iteration, infringed on Fox News’ copyright. Although the court noted that “to prohibit e-mail sharing would prevent TVEyes users from realizing much of the benefit of its transformative service,” the court recognized the “potential for abuse.” The court held that, “[u]ntil the development of reasonable and adequate protections and a satisfactory showing thereof, TVEyes’ function cannot be considered fair use.”

Fourth, the court held that the downloading function infringed Fox News’ copyright. Although this function is useful, the court concluded that it was not essential to TVEyes’ transformative purpose, reasoning that offline access was not a necessity given the wide availability of connectivity.

Finally, the court held that the channel-specific, date-time search function (that enables users to access specific clips with that information) also infringed on Fox News copyright. The court noted that the function is less a ‘search’ function than a ‘content delivery’ function that merely provides an alternate avenue for users to access content that could be acquired from Fox News or its licensing agents. Because this function “duplicates Fox’s existing functionality,” the court concluded that it “is not integral to TVEyes’ core service” and threatens Fox News’ derivative businesses.

Either party may appeal the ruling, but as it stands the ruling will force TVEyes either to modify its services or obtain licenses from Fox News and other content providers. The ruling also provides useful guidance for others that wish to rely on fair use arguments for specific activities that arguably are transformative uses of existing copyright-protected content.

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