Fox News' Copyright Infringement Claim Blunted by TVEyes' Fair Use: SDNY

Practical Law Legal Update 7-580-7225 (Approx. 5 pages)

Fox News' Copyright Infringement Claim Blunted by TVEyes' Fair Use: SDNY

by Practical Law Intellectual Property & Technology

Background

TVEyes is a media-monitoring service that enables subscribers to track when keywords or phrases of interest are mentioned on television or radio. It records television and radio broadcasts in their entirety and uses closed captions and speech-to-text technology to create a searchable database of that content for its subscribers. Subscribers can track news coverage of particular events through the following features:

Watch List Page. This page monitors a subscriber's selected keywords and terms and organizes search results by day. It also allows subscribers to run a Google News search comparing the keyword or term to other mentions within the database and set up specific time frames to tabulate the frequency of terms and e-mail alerts for when a television or radio station mentions specific keywords or terms. The e-mail alerts include a thumbnail image of the show, a transcript snippet and a short video clip starting 14 seconds before the word was used.
Results List Page. When a subscriber clicks on a Watch List Page hyperlink showing how many times the term was mentioned on a particular day, the subscriber is brought to the Results List Page. The Results List Page lists each mention of the word or term in reverse chronological order. Each result includes a transcript segment highlighting the keyword, a thumbnail image of the show that used the term, and a video clip starting 14 seconds before the word was used. When the user clicks the thumbnail image, the video clip begins to play automatically alongside the transcript on the Transcript Page.
Transcript Page. This page provides a transcript of the video and a variety of other information concerning the clip.

TVEyes also provides website pages that organize and present relevant data graphically and pictorially. In addition, subscribers can save, archive, edit and download to their personal computers an unlimited number of clips generated by their searches. The clips are limited to ten minutes, although a majority of the clips are less than two minutes. Unless saved or downloaded, the clips are available for only 32 days from the date the clip first appeared on television.

Fox News sued TVEyes for copyright infringement seeking to enjoin TVEyes from copying and distributing clips of Fox News programs and for damages. Fox News alleged that TVEyes will divert viewers of its news and commentary programs and visits to its websites. Fox News also asserted claims for misappropriation and violation of New York state unfair competition law.

Outcome

The court weighed the four non-exclusive statutory factors to determine that TVEyes' database and provision of television clips and transcript snippets are transformative and thus fair use under the Copyright Act (17 U.S.C. § 107). However, the court determined that it could not determine whether features that allow searches by date and time, and that allow clips to be archived, downloaded, e-mailed and shared via social media are fair use. The court also determined that Fox News' hot news misappropriation claim and New York state misappropriation claim failed because they were preempted by the Copyright Act.

Purpose and Character of the Use

The court found that the nature and character of the use weighed in TVEyes' favor because TVEyes' search engine combined with its display of result clips was transformative.

The court reviewed the relevant case law cited by the parties in support of their positions. Notably, the court considered:

Authors Guild, Inc. v. Hathi Trust In this case, the US Court of Appeals for the Second Circuit held that a full-text searchable database of scanned books was transformative and therefore fair use (755 F.3d 87 (2d Cir. 2014)). For more information on this case, see Legal Update, HathiTrust Digital Library is Fair Use: Second Circuit.
Authors Guild, Inc. v. Google Inc. In this case, the SDNY found that Google's creation of an online digital library of copyrighted books was fair use because, among other reasons, the digital library included an index of all the words in each scanned book, users can search a particular book to see how many times a word or phrase appears in the book and Google provides only a snippet view of the page where the word or phrase appears (954 F. Supp. 2d 282 (S.D.N.Y. 2013)). For more information on this case, see Legal Update, Google Books Protected as Fair Use: SDNY.
Associated Press v. Meltwater U.S. Holdings, Inc. In this case, the defendants created a news monitoring service for news articles that appeared on the internet, which included a searchable database that allowed users to see the number of times and where keywords were used. Although the court in that case ruled against the defendants, it noted that they did not offer evidence of how their customers actually used the service and therefore failed to prove the fair use defense (931 F.Supp. 2d 537 (S.D.N.Y. 2013)).

Factors supporting the court's finding of transformativeness included that:

TVEyes is not merely a clipping service for print, unlike the Meltwater case Fox News relied on. Instead, its search results combine visual images and text. The court distinguished between indexing and excerpting the printed word compared to television content. While the printed word conveys the same meaning regardless of the medium or forum in which it is presented, TVEyes' service goes beyond what a transcript or summary can show because elements like images and audio on television are just as important as the news itself.
TVEyes' indexing and excerpting of all content appearing in television allows access to more than just the news. TVEyes' service allows subscribers to access the presentation of the news.
TVEyes' database consists of otherwise unavailable content because it is the only service that provides a database of everything that is broadcast, which is not all available online. This is different from the facts of the Meltwater case where the defendants merely collected available content that a dedicated researcher could assemble with enough time, effort and internet searching.

The court also found persuasive TVEyes' evidence that its subscribers use the service for research, criticism and comment. As a result, the court found that this first factor weighed in favor of TVEyes' fair use defense.

Nature of the Copyrighted Works

The court noted that where the creative aspect of the work is transformed, this second factor has limited value. Therefore, it found this second factor did not weigh for or against fair use.

Amount and Substantiality of the Portion Used

The court also found this factor to be neutral. Although TVEyes copied all of Fox News' content, the court noted that sometimes copying the entire work is necessary to accomplish the work's transformative function or purpose. Because TVEyes' service depends on copying everything that is broadcast, the court found this factor also did not weigh for or against fair use.

Effect on the Potential Market

The court found this factor did not weigh against a finding of fair use because TVEyes' service provides a public benefit that substantially outweighs the small possible market harm to Fox News.

Fox News argued that people watching copies on TVEyes instead of Fox News channels decreases viewership ratings and therefore Fox News' advertising revenues and income from cable and satellite providers. The court rejected this argument as speculative. It noted several facts disproving Fox News' assumption that TVEyes' subscribers used TVEyes as a substitute for Fox News' channels, including that:

None of the shows on which Fox News based its argument remain available to TVEyes subscribers after 32 days.
Actual TVEyes' subscriber usage did not support Fox News' allegations. The court cited a number of statistics showing that TVEyes' subscribers only viewed clips for a short period of time, typically less than 10 minutes.

The court therefore concluded that no reasonable jury could find that people use TVEyes as a substitute for watching Fox News on television.

In addition, the court agreed with TVEyes' argument that assembling a library of television broadcast content that is easily and efficiently text-searchable provides an immense benefit to the public interest because:

There is no other way to sort through more than 27,000 hours of programming broadcast on daily television in a searchable database.
Subscribers use TVEyes to comment on and criticize broadcast news channels.

Overall Assessment

Weighing the four factors and considering that TVEyes captures and indexes broadcasts that otherwise would be largely unavailable after airing, the court found that TVEyes' copying of Fox News' broadcast content for indexing and clipping services constitutes fair use. However, the court also required further proceedings concerning whether the following were integral to the transformative purpose of TVEye's service and its fair use defense:

Features that allow subscribers to save, archive, download, e-mail or share clips of Fox News' television programs.
The search function allowing subscribers to search for television clips by date and time instead of by keyword or term.

Practical Implications

While the court will conduct further proceedings to determine whether other aspects of TVEyes' service are fair use, this case is noteworthy for the SDNY's reliance on Second Circuit precedent that databases that convert copyrighted works into a research tool to further learning are transformative and for the court's emphasis on the fact that without TVEyes' service, the information provided by that database cannot be gathered and searched.

Fox News' Copyright Infringement Claim Blunted by TVEyes' Fair Use: SDNY | Practical Law