Broadcast Monitoring Service is (Partly) Fair Use for New York Judge

Judge Alvin Hellerstein from the Southern District Court of New York (SDNY) held yesterday that, for a broadcast monitoring company to provide, in a searchable database, television clips and snippets of transcripts of Fox News programs to its subscribers is transformative fair use. The case is Fox News Network, LLC v. TVEyes Inc., No. 1:13-cv-05315.

Defendant TVEyes is a company which “monitors and records all content broadcast by more than 1,400 television and radio stations twenty-four hours per day, seven days per week, and transforms the content into a searchable database for its subscribers.” It is available to businesses only, not to the general public, and it counts the White House, the U.S. Army, ABC, CBS, and the Association of Trial Lawyers amongst its subscribers. Police departments are also using its service to make sure that news coverage about a particular event is factually correct.

This  Broad Cat Is Only Partly Fair 

Defendant’s database is searchable by keywords. The search result page includes portions of the transcript highlighting the keyword and a thumbnail image of the show which used that keyword. By clicking on the thumbnail, the subscriber is able to see a video clip of the show, which starts 14 seconds before the keyword is mentioned. Clips are limited to 10 minutes and most are shorter than 2 minutes. They are available on the company’s site for 32 days only, but subscribers can download and save these clips, and can even email them to non-subscribers or post them on social media. Subscribers agreed by contact to use these clips for internal review, analysis, or research only. Public reproduction is forbidden, and a subscriber must contact the original broadcaster if he wishes to make the clip public.

Cable television channel Fox News filed a suit last July against TVEyes to enjoin it from copying and distributing clips of its programs. It claimed copyright infringement under the Copyright Act and unfair competition and misappropriation under New York laws. Defendant asserted a fair use defense, and both parties moved for summary judgment.  

17 U.S.C. § 107 lists four fair use factors, which the courts must considered to determine if a unauthorized use of a protected work is fair:

(1)    The purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

(2)    The nature of the copyrighted work;

(3)     The amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

(4)     The effect of the use upon the potential market for or value of the copyrighted work.

Judge Hellerstein found the first factor to weigh in favor of Defendant. He considered whether Defendant’s use was transformative, defined earlier this year by the Second Circuit in Authors Guild, Inc. v. HathiTrust as a work which “does something more than repackage or republish the original copyrighted work.” If Defendants would be a clipping service, it would provide the same service which could be provided by the content provider, and that would be infringement. However, Judge Hellerstein did not find Defendant to merely be a clipping service, as it allows its subscribers, not only to access news content, but also to find how a particular news item was reported.

Judge Hellerstein noted that “[t]he actual images and sounds depicted on television are as important as the news information itself.” Such service is transformative, as subscribers have access to both the news and how the news was presented and how it was commented on. As such, it serves a different function than the original broadcast. Judge Hellerstein thus distinguished the case from AssociatedPress v. Meltwater U.S. Holdings, when the SDNY found last year that an Internet news monitoring service was not transformative, as it only crawled the Internet for content already publicly available without creating a database.

The second factor had limited value here, as the nature of Plaintiff’s programming is news, even though the way it is communicated is protected by copyright. As such, Judge Hellerstein found the second factor neither to weigh in favor nor against a finding of fair use.

Judge Hellerstein came to the same conclusion about the third factor, even though Defendant copied all of Plaintiff’s content. However, it does not employ more than is necessary to accomplish its transformative use, as Defendant’s business model requires it to copy all of the programs.

Judge Hellerstein did not find that the fourth factor, the effect on the market, weighed against a finding of fair use. Courts consider under this factor the economic injury for a copyright holder if a secondary use serves as a substitute for the original work, but do not consider the economic harm caused by transformative uses, as such uses do not serve as substitutes for the original work.

Fox News based its suit of 19 individual hour-long programs it aired in 2012 and 2013, alleging that Defendant’s service deprived it of carriage fees and viewership ratings. Judge Hellerstein noted that Defendant erases content every 32 days, and that, during that time, only 560 clips of the Fox News programs at stake in this suit were played, with an average length of play of 53.4 seconds.

Judge Hellerstein also noted that Defendant’s general statistics were consistent with these figures, and concluded that Plaintiff failed to prove that Defendant caused or was likely to cause, loss of revenue or income from advertisers  or cable providers, adding that “[n]o reasonable juror could find that people are using TVEyes as a substitute for watching Fox New broadcasts on television.” Also, Judge Hellerstein found that Defendant provided “substantial benefit” to the public as its subscribers use its service to comment and criticize the news, and also to monitor its accuracy.

Weighing all the four factors together, Judge Hellerstein found that Defendant’s copying of Plaintiff’s broadcast content for indexing and clipping services was fair use. However, he did not decide the issue of fair use for the full extent of Defendant’s service, including allowing users to download, save, email and share the clips, as the factual record on this issue must be developed. Both the hot news misappropriation claim and the misappropriation claim are preempted by the Copyright Act.