Eyes Wide Shut: TVEyes Video Clip Service Not Fair Use

Stephen Carlisle March 2, 2018

February 26, 2018 saw the commencement of “Fair Use Week.” ¹ Intentionally or unintentionally, but certainly ironically, the Second Circuit Court of Appeals used this week to release its long awaited opinion in Fox News Network, LLC v. TVEyes, Inc. ² This decision completely rejects the fair use defense of TV video indexer TVEyes.

Faithful readers of this blog will recognize the business known as TVEyes. I have written about this service twice before, and in a lengthy post here, ³ described the basis of the dispute with Fox News Network and the legal analysis of the fair use claim. Back then I wrote:

“TVEyes is a video indexer. It offers, for a fee, searchable segments of television shows. It uses the closed-captioning function to create a searchable database where one can search for how many times, and in what context, certain words and phrases occur in television shows. To this end, it records all of the content on more than 1,400 television and radio stations. One of these stations is the Fox News Network.

A subscriber can not only obtain a transcript of the segment of the show selected, he/she can also see a copy of the original video in which the usage occurred. TVEyes is definitely a “for profit” enterprise and has 22,000 subscribers.  It is not available to the general public.” ⁴

The District Court ruled on four specific points as to whether they were fair use:

• Allowing subscribers to “archive” segments on TVEyes’ servers indefinitely
• Allowing subscribers to provide links to video content to non-subscribers of TVEyes
• Allowing searches by date and time, rather than keywords
• Allowing subscribers to download to their own computers’ video segments free of restrictions

The District Court found that the first bullet point was fair use, but ruled the remaining three were not fair use. Both sides appealed.

To say that the TVEyes case was a closely watched case would be an understatement. The following organizations filed or joined in “friend of the Court” briefs.

• Internet Archive
• American Library Association
• Association of College and Research Libraries
• Association of Research Libraries
• Society of American Archivists
• Electronic Frontier Foundation
• Public Knowledge
• Computer & Communications Industry Association
• Media Critics
• Professors of Intellectual Property Law
• National Association of Broadcasters
• Copyright Alliance
• American Photographic Artists
• American Society of Media Photographers
• Digital Media Licensing Association
• National Press Photographers Association
• Professional Photographers of America
• American Society of Journalists and Authors, Inc.
• National Cable & Telecommunications Association
• Cable News Network, Inc.
• Gray Television Group, Inc.
• Hearst Television, Inc.
• ITV America
• Intellectual Property Scholars

Bear in mind that the Court hearing the appeal is the Second Circuit Court of Appeals. This court in the past has constituted the “home court advantage” for anyone seeking to claim fair use on the grounds of “transformative use.” The Second Circuit’s outrageous decision in Cariou v. Prince ⁵ has been widely criticized by commentators, including me, ⁶ and for good measure, the Seventh Circuit Court of Appeals. ⁷

Surprisingly, the Court sides completely with Fox News, and greatly dials back the expansive interpretation of the Court’s own ruling in the Google Books case. ⁸

This leads the Electronic Frontier Foundation to blast the Court’s decision with the headline “Second Circuit Gouges TVEyes…,” a headline so great I wish I’d thought of it first.

But I digress.

The Court starts off by acknowledging the 500 pound elephant in the room, the Court’s own decision in the Google Books case. “…[W]e cautioned that the [Google Books]case ‘test[ed] the boundaries of fair use.’ (citation omitted). We conclude that defendant TVEyes has exceeded those bounds.” ⁹

Then it drops the hammer:

“TVEyes’s re-distribution of Fox’s audiovisual content serves a transformative purpose in that it enables TVEyes’s clients to isolate from the vast corpus of Fox’s content the material that is responsive to their interests, and to access that material in a convenient manner. But because that re-distribution makes available virtually all of Fox’s copyrighted audiovisual content—including all of the Fox content that TVEyes’s clients wish to see and hear—and because it deprives Fox of revenue that properly belongs to the copyright holder, TVEyes has failed to show that the product it offers to its clients can be justified as a fair use.” ¹⁰

TVEyes has two basic modes. A “search” function allows the subscriber to find video segments that contain certain buzzwords. The “watch” function allows that same subscriber to view that same segment for up to 10 minutes of video, unaltered from its first performance by Fox News. ¹¹ The District Court ruled that the “search” function was fair use, a ruling I agreed with, ¹² and which Fox News did not challenge on appeal. The problem is with the “watch” function.

The Court likens the “view” function to the VCR which was the subject of the Supreme Court’s Sony Betamax decision, ¹³

effectively allowing the subscriber to “time shift” the Fox News programming. Yet the Court holds this is only “somewhat transformative.” ¹⁴

The Court reasons “[t]he Watch function has only a modest transformative character because, notwithstanding the transformative manner in which it delivers content, it essentially republishes that content unaltered from its original form, with no ‘new expression, meaning or message.’” ¹⁵

As to the “research as transformative” argument advanced by TVEyes, the Court stated in a footnote:

“[I]f copying were deemed transformative “simply because [it was done] in the course of doing research,” then “the concept of a ‘transformative’ use would be extended beyond recognition.”(citation omitted) ¹⁶

Then:

“The commercial nature of a secondary use weighs against a finding of fair use. (citation moitted) And it does so especially when, as here, the transformative character of the secondary use is modest. (citation omitted) (“[T]he [less] transformative the new work, the [more] will be the significance of other factors, like commercialism….”). The Watch function has only a modest transformative character because, notwithstanding the transformative manner in which it delivers content, it essentially republishes that content unaltered from its original form, with no “new expression, meaning or message.”(citation omitted) ¹⁷

Thus, factor one of fair use, the purpose and character of the use, favors TVEyes only slightly.

For factor two, TVEyes advanced the argument that since the Fox News reports were “factual” and that facts are not copyrightable, factor two, the nature of the work used, should be held to be in their favor. This argument totally misses the idea/expression distinction that is at the heart of copyright for …umm …200 years. The Court dismisses this argument in two sentences. ““Those who report the news undoubtedly create factual works. It cannot seriously be argued that, for that reason, others may freely copy and re-disseminate news reports.” (citation omitted) ¹⁸

The Court holds that factor two does not play a significant role in the fair use analysis. ¹⁹

Factor three, the amount and substantiality of the portion used, goes down solidly in favor of Fox News. This is because TVEyes copies not a portion, but all of Fox News’ programming and repackages it to its subscribers. “In this respect, the TVEyes Watch function is radically dissimilar to the service at issue in Google Books.” ²⁰

Later in the opinion:

“TVEyes redistributes Fox’s news programming in ten-minute clips, which—given the brevity of the average news segment on a particular topic—likely provide TVEyes’s users with all of the Fox programming that they seek and the entirety of the message conveyed by Fox to authorized viewers of the original… TVEyes’s use of Fox’s content is therefore both ‘extensive’ and inclusive of all that is ‘important’ from the copyrighted work.” (citation omitted) ²¹

As to the fourth factor, market effect, the Court also comes down solidly on the side of Fox News.

“Since the ability to re-distribute Fox’s content in the manner that TVEyes does is clearly of value to TVEyes, it (or a similar service) should be willing to pay Fox for the right to offer the content. By providing Fox’s content to TVEyes clients without payment to Fox, TVEyes is in effect depriving Fox of licensing revenues from TVEyes or from similar entities. And Fox itself might wish to exploit the market for such a service rather than license it to others. TVEyes has thus ‘usurp[ed] a market that properly belongs to the copyright-holder.’ (citation omitted) It is of no moment that TVEyes allegedly approached Fox for a license but was rebuffed: the failure to strike a deal satisfactory to both parties does not give TVEyes the right to copy Fox’s copyrighted material without payment.” (emphasis added) ²²

When I read that last sentence I thought “at last somebody gets it.” We are constantly told that all these new fangled tech gadgets are somehow “different” and thusly normal restrictions on certain activity, such as copyright infringement, do not apply. Copyright infringement is against the law. It does not become legal just because it is accomplished with a computer, over the internet.

That the third and fourth factors favor Fox, and the first factor favors TVEyes “only slightly,” the result is that TVEyes service is infringing and not fair use. ²³ The Court, having determined that the “watch” function is infringing, directs the District Court to re-issue the injunction to prohibit all of the “watch” function, not just some of it. ²⁴

The criticism of the decision hinges on what fair use might be made of the clips by third parties. For its part, the EFF, probably stung by the universal rejection of the points raised in its amicus curiae brief, does a big swing and a miss on a very simple point.

“If use of someone’s words was contingent on the permission of the person who said them, you would never be able to critique what was being said. Fair use allows the use of copyrighted material without permission for this very reason. It’s not in the interest of anyone to license out clips of their material for the purpose of it being debunked, which is why the service provided by TVEyes is so valuable.” ²⁵

This might be true if TVEyes was engaging in criticism of Fox News. But TVEyes is not doing that. It is not saying anything about Fox News at all, just copying 100% of Fox’s output and retransmitting it, which as the Court found, is copyright infringement. TVEyes cannot bootstrap itself into a fair use safe harbor based on what some third party might do with the clips that TVEyes copies. Some might be fair use. Some might not.

The good take-away from this decision is that a simple finding of “transformative use” was in the past a trump card that negated every other consideration of fair use, particularly in this Circuit. This was occurring despite the fact that the Courts had consistently ruled that all four factors must be considered. Also good was a growing skepticism about the way the “transformative use” test had been expanded beyond its original very narrow concept by the tech industry at large. A dissenting opinion would have not found that TVEyes use was transformative at all. The dissent stated:

“Also closely aligned with this case are others that dealt with technologies relating to digitized music, mp3s, and music sharing. Defendants in those cases argued that their technologies should be considered fair use because they permitted ‘space-shifting’—they allowed users to store music in different, more convenient forms that allowed them to listen to it in venues more desirable to them. In other words, the technology enhanced efficiency and convenience. But courts presented with this argument either rejected the idea that space-shifting is a transformative purpose or considered the space-shifting argument relevant only to the question of the commercial nature of the use.

These cases support my inclination to conclude that a technological means that delivers copies of copyrighted material to a secondary user more quickly, efficiently or conveniently does not render the distribution of those copies transformative, at least standing alone.” ²⁶

And finally:

“Similarly, Authors Guild, Inc. v. HathiTrust and Google Books cite Sony for various principles, but never for the proposition that efficiency-enhancing technology is transformative, despite that idea’s obvious potential application in those cases. Because HathiTrust and Google Books so clearly confront an issue closely related to that here, I see as instructive their omission of the idea that Sony declared efficiency-enhancing delivery technology to be transformative. I would join those cases in declining to construe Sony as offering significant guidance regarding transformative use.” ²⁷

So, in sum. TVEyes, it’s time for your eyes to shut.