On September 8, 2014, a federal court found that a company’s monitoring and recording of content broadcast by television and radio stations for use in a searchable database used by a broad range of government and private subscribers constituted a permissible fair use of copyrighted material. Fox News Network, LLC v. TVEyes, Inc., 13 Civ. 5315, S.D.N.Y. (September 8, 2014).

TVEyes, Inc. (“TVEyes”) recorded the content of more than 1,400 television and radio stations. Subscribers to this service, including the White House, 100 current members of Congress, and major news agencies and businesses and others, use search terms to determine how, when and where the specific terms were used, and obtain transcripts and video clips of the broadcasts containing those terms. Slip op. at 1. Fox News sued, claiming that TVEyes had copied and distributed clips of its programs, thereby infringing Fox’s copyrights in these works. TVEyes conceded that it had infringed Fox’s copyrights, but asserted a defense of fair use.

To determine whether infringing use of a copyrighted work is a fair use, a court will apply the following factors:

  • The purpose and character of the use, including whether such us is of a commercial nature or is for non -profit educational purposes;
  • The nature of the copyrighted work;
  • The amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
  • The effect of the use upon the potential market or value of the copyrighted work.

17 U.S.C. §107. “The ultimate test of fair use,” the Court noted, “is whether the copyright law’s goal of promoting the Progress of Science and useful Arts would be better served by allowing the use than by preventing it.” Slip op. at 12 (internal citations omitted).

Applying these factors, the Court focused most heavily on the purpose and character of the use, and specifically, on whether TVEyes’ use of the content was “transformative,” i.e., did it “add [] something new, with a further purpose or different character, altering the [original work] with new expression, meaning or message.” Slip op. at 13 (internal citations omitted). Citing the Second Circuit decision in Authors Guild, Inc. v. Hathi Trust, 755 F3d 87 (2d Cir. 2014), the Court added that “[t]ransformation almost always occurs when the new work ‘does something more than repackage or republish the original copyrighted work.’” Id.  Hathi Trust’s creation of a full-text search database, the Second Circuit held, was “quintessentially transformative” because the search results served a different character, meaning and purpose from that of the original works involved. Id. at 97. Applying the 2nd Circuit’s reasoning, the court ruled that “TVEyes search engine, together with its display of results and clips, is transformative because “it serves a new and different function from the original work and is not a substitute for it.” Slip op. at 19 (internal citations omitted).

The Court’s application of the remaining factors is shaped by this analysis. Turning to the “nature of the copyrighted work,” the Court found that, notwithstanding the nature of Fox’s original work, “where the creative aspect of the work is transformed, as is the case here, [this] factor has limited value. Slip op. at 21.

With respect to the amount and substantiality of the portion used in relation to the copyrighted work as a whole, the Court stated that this factor “does not . . . counsel a simple, crude quantitative comparison.” Rather it asks “whether the secondary use employs more of the copyrighted work than is necessary, and whether the copying was excessive in relation to any valid purpose asserted under the first factor.” Slip op. at 21 (internal citations omitted). Here, the Court held that TVEyes’ copying the entire work was “necessary to accomplish the transformative function or purpose” in so far as its database depended on the copying of everything the television and radio stations broadcast.   Slip op. at 21-22. This factor therefore did not weigh in favor of either party.

Turning to the final factor, the Court held that there was no evidence to support a conclusion that TVEyes service was a substitute for watching Fox News, and hence, no evidence that Fox suffered economic harm. The Court also noted that TVEyes provided a significant public benefit by offering the only method for subscribers to sift through hours of television and radio broadcasts. Slip op. at 26.

This decision applied only to TVEyes’ copying for indexing and clipping services for its subscribers. The Court specifically did not rule on whether the fair use defense applied to the full range of TVEyes’ services, including allowing subscribers to save, archive, download, email and share clips of Fox’s television programs. Those issues remain before the Court.

*Louis J. Levy is an attorney with the law firm of Belles Katz LLC, specializing in the fields of trademark, copyright, e-commerce, and data privacy and protection. He can be reached at llevy@belleskatz.com.