Selling access to clips of copyrighted programming isn’t fair use

August 27, 2018
Patterson Thuente IP

In an era that features hundreds of television channels and interactive, interconnected media, video clips have become a hot item. Not surprisingly, though, the sale of such clips by third parties raises copyright infringement concerns, as demonstrated by a recent case heard by the Second Circuit Court of Appeals.

 

News channel sues

TVEyes, Inc., continuously records the audiovisual content of more than 1,400 television and radio channels and imports that content into a text-searchable database. For a monthly fee, it offers a service allowing its “business and professional” clients to easily locate, view, archive, download and email clips of up to 10 minutes on topics of interest.

Fox News Network, LLC, sued TVEyes, alleging TVEyes infringed its copyrights by redistributing Fox’s copied audiovisual content, thereby permitting TVEyes’ clients to access that content without Fox’s permission. The trial court found that some of the defendant’s functions infringed, but it ruled that the “Watch” function that allowed for searching and viewing of clips was a permissible fair use of copyrighted material.

Fair use defense defined

The U.S. Copyright Act provides that the “fair use” of a copyrighted work for purposes such as criticism, comment, news reporting, teaching, scholarship or research isn’t infringement. The law identifies four factors that courts should consider when determining whether a use of copyrighted material is indeed fair. They are:

  1. The purpose and character of the use (including whether it’s of a commercial nature or for nonprofit educational purposes),
  2. The nature of the copyrighted work,
  3. The amount and substantiality of the portion used compared with the copyrighted work as a whole, and
  4. The effect of the use on the potential market for or value of the copyrighted work.

No single factor is determinative.

Second Circuit decides

As the Second Circuit explained, the primary inquiry regarding the first factor is whether the use is transformative, meaning it communicates something new and different from the original work or otherwise expands its utility. The court found that TVEyes’ redistribution of Fox content was at least somewhat transformative because it allowed its clients convenient and efficient access to a subset of content.

But the first factor also considers whether the use is commercial. According to the Second Circuit, the commercial nature of a use weighs against a finding of fair use — especially when, as in this case, the transformative character of the use is “modest.” This factor, therefore, favored TVEyes only slightly.

The court noted that the second factor rarely plays a significant role in the fair use evaluation and was neutral here. As for the third factor, the appellate court stressed that the relevant consideration is the amount of copyrighted material made available to the public, rather than the amount used by the alleged infringer.

TVEyes, the court pointed out, made available virtually all of the Fox programming its clients wanted to see and hear. While courts have rejected a bright-line rule proclaiming that the copying of a work’s entirety can’t be fair use, fair use is less likely when the copying is extensive or encompasses the heart of the original work and the transformative use of the work is thin. Given the brevity of the typical news segment on a particular topic, 10-minute clips of Fox News programming likely provided TVEyes’ clients all the programming they sought and the entirety of Fox’s message in the original. The third factor, the court said, strongly favored Fox.

Finally, the court weighed what it described as “undoubtedly the single most important element of fair use.” Citing the success of the TVEyes business model, it concluded that, by selling access to Fox’s content without a license, TVEyes deprived Fox of revenues that Fox was entitled to as the copyright holder.

Programming change

Ultimately, the Second Circuit ruled that the balance of the factors strongly favored Fox and thus wasn’t fair use. It sent the case back to the trial court with instructions for the district court to prohibit the “Watch” function via a permanent injunction. •

Fox News Network, LLC v. TVEyes, Inc., No. 15-3885, Feb. 27, 2018, 2d Cir.

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