Fox News Network, LLC v. TVEyes, Inc., No. 15-3885 (2nd Cir. Feb. 27, 2018), opinion hosted by USCourts.gov.
On February 27, the Second Circuit reversed the SDNY district court’s finding that TVEyes’ archiving of video clips constitutes fair use of Fox’s broadcasts and upheld findings that TVEyes’ other news monitoring functions are infringing.
The Second Circuit ultimately held that all of TVEyes’ services, with the exception of their text-searchable database of broadcast closed captions, did not constitute fair use because, although the use was somewhat transformative, the effect on Fox’s prospective revenue was too significant.
TVEyes constantly records network broadcasts and respective closed captions from over 1400 channels. It uses this captured footage to create a text-searchable database in which users can search for clips by keyword, time, date, and channel. Users can view up to ten-minute clips and can archive, download, and share broadcast clips. TVEyes is a for-profit company, charging “business and professional” users (e.g., journalists, law enforcement, non-profits) $500 per month for the service. TVEyes does not license its services to private individuals.
Because Fox did not challenge the district court’s ruling that the search function constituted fair use, the Second Circuit focused its fair use analysis on the “watch” function. In analyzing fair use claims, the Copyright Act instructs courts to examine four factors: (1) the “purpose and character of the use”; (2) “the nature of the copyright work”; (3) “the amount and substantiality of the portion used”; and (4) the effect on the “potential market for or value of the copyrighted work.” 17 U.S.C. § 107 (2012).
By analogizing to Google Books, Authors Guild v. Google Inc., 804 F.3d 202 (2d. Cir. 2015) , the court first found that the watch function was transformative because it allowed users to find the precise clip they were looking for in “an ocean of programming.” The court also found that, like the time-shifting function of VCRs, Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984), the watch function is transformative because it allowed users to see the clips they care about without having to personally monitor all of Fox’s programming. Ultimately, TVEyes’ commercial use undercut the transformative nature of its services, and the first factor therefore only “slightly” favored TVEyes. The court quickly dismissed the importance of the second factor, rejecting TVEyes’ argument that the factual nature of the news should weigh in their favor. The third factor favored Fox, as TVEyes took ten-minute clips, enough to negate the need to watch Fox News. Finally, the fourth and most important factor weighed heavily toward Fox, as the commercial nature of TVEyes service suggested the existence of a “potentially exploitable market” that should have been Fox’s to capture under their exclusive rights. On balance of the four factors, the court found that the watch function and archiving, downloading, and sharing features were not fair use of Fox’s copyrighted material and instructed the lower court to order a permanent injunction against TVEyes.
Judge Kaplan wrote a separate concurring opinion to express that he did not find TYEves’ watch function at all transformative.
Reactions to the decision have split advocates for content owners and user rights. In an opinion piece for Bloomberg, Stephen Carter argued that the Second Circuit reached the right decision, since TVEyes could simply have sought a license to use Fox’s content. However, the Electronic Frontier Foundation emphasized that the court’s decision endangers fair use cases in which one does not need a license and that it is a strong blow to journalists who “investigate and analyze the claims made on broadcast television and radio.” The Washington Post explained that although the text-searchable database survived the decision, the decision risks depriving the “historical record” of the body language and other visual cues of the actual footage.
Alex Noonan is a 2L student at Harvard Law School.