The “Eyes” Don’t Quite Have It: Judge Rules Against TV Indexer’s Fair Use Defenses

Stephen Carlisle September 4, 2015

In a significant ruling on the boundaries of fair use, on August 25, 2015, District Court Judge Alvin K. Hellerstein in the Southern District of New York has ruled against three affirmative defenses raised in a suit brought by Fox News Network against TVEyes, Inc. ¹

This blog has written about the TVEyes case before. ² 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. ³ 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. ⁴ It is not available to the general public. ⁵

Fox felt that TVEyes was unfairly using its copyrighted content in a way which harmed the market for clips shown on Fox News’ own website. ⁶

“[L]ive online streams of FNC and FBN are available to viewers with cable or satellite subscriptions through Fox’s TVAnywhere platform for authenticated streaming. In addition, Fox makes a limited number of video clips available on its websites, FoxNews.com and FoxBusiness.com, although the amount of content is sharply limited by Fox’s contracts with the cable companies. Currently, only about 16% of broadcast content is available on Fox’s website. Fox receives advertising revenue when viewers watch videos on its websites, including revenue from banner advertisements on the page itself, and from “pre-reel” advertisements that play before a video clip begins. Fox also has agreements with syndication partners, including Yahoo!, Hulu, and YouTube… [a]nd Fox licenses its video clips to clients, including companies, journalists, and politicians, through its agents, ITN Source and Executive Interviews.” ⁷

The Court had initially ruled in favor of TVEyes on whether the indexing was fair use. ⁸ It concluded that, like the Hathi Trust case, where Google created searchable databases of books, that the use by TVEyes in performing a similar function was “transformative” and thus fair use. ⁹ The Court did however, reserve ruling on four points of TVEyes operations: ¹⁰

• 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

Archiving

Under normal practice, TVEyes deletes video segments from its servers after 32 days, obviously to free up server space. If a subscriber so elects, a video segment may be “archived” so that it can be viewable again, and this archive can be stored indefinitely. ¹¹ The archived segments are stored on TVEyes’ servers and are not downloaded to subscriber servers. ¹² This is an important distinction we will discuss later.

The Court ruled that this was fair use. It found that the archiving function was an “integral” part of TVEyes service, allowing a subscriber to analyze, for example, whether a news outlet’s coverage of a story changed over time. ¹³ If the video segment was deleted after 32 days, then this comparison would be impossible. It also found that Fox News has failed to identify “any actual or potential market harm arising from archiving.” ¹⁴

Live Linking

The Court was not so accepting of the live linking aspect of TVEyes’ service. Any video segment, archived or not, enabled subscribers to provide a link to that material to virtually anyone, a link which totally bypassed TVEyes’ log-in requirements. In other words, it was a public link that anyone could use. And since the link was “live” to the subscriber, and not stored on TVEyes’ servers, the link could be passed around indefinitely.

While TVEyes argued that there were advantageous uses to the live link function, it admitted that the function was not “integral” to its service in the same manner as the achieving function.

The Court ruled against TVEyes and found that this function was not fair use. It ruled:

“If TVEyes cannot prevent indiscriminate sharing, it risks becoming a substitute for Fox’s own website, thereby depriving Fox of advertising revenue.” ¹⁵

“TVEyes has the burden to show fair use. (citation omitted) It must develop protocols to reasonably assure that, when subscribers share video clips, they do so consistent with § 107. Until the development of reasonable and adequate protections and a satisfactory showing thereof, TVEyes’ e-mailing function cannot be considered fair use.” ¹⁶

Date and Time Search Function

TVEyes argued that the search by date and time function provided a “necessary compliment” to its search function, since the closed captioning is frequently bedeviled by homophones and misspellings (e.g. “Ted Crews” instead of “Ted Cruz”). ¹⁷ The Court was not swayed by this argument, noting that a date and time search function would correct for misspellings if and only if the subscriber knew exactly what they were looking for, in which case they could easily get the clip from Fox. ¹⁸

“In such cases, TVEyes is not so transformational, since users should be able to procure the desired clip from Fox News or its licensing agents, albeit for a fee.” ¹⁹

“Unlike TVEyes’ core business, its “Date–Time search” function duplicates Fox’s existing functionality. Fox’s contention that TVEyes’ Date–Time search is likely to cannibalize Fox News website traffic and sales by its licensing agents is persuasive. TVEyes ‘bears the burden of showing an absence of usurpation harm’ to Fox News. (citation omitted) I cannot say that it has carried its burden.” ²⁰

Downloading

TVEyes contended that the downloading function was “absolutely critical in these respects:” ²¹

• Allowed for access where the internet is not available
• Easily transfer clips between devices
• Improves efficiency by allowing files to be grouped in to folders, which existing TVEyes platform cannot

To which the Court responded: ²²

• You’re kidding, right? The internet is everywhere.
• Different devices can easily access the material on TVEyes servers either by internet or wireless data networks
• Improve your software and platform instead of making infringing copies

To quote the Court:

“I believe that TVEyes’ downloading function goes well beyond TVEyes’ transformative services of searching and indexing… TVEyes is transformative because it allows users to search and monitor television news. Allowing them also to download unlimited clips to keep forever and distribute freely may be an attractive feature but it is not essential. Downloading also is not sufficiently related to the functions that make TVEyes valuable to the public, and poses undue danger to content-owners’ copyrights.” ²³

“Convenience alone is not ground for finding fair use.” ²⁴

The Electronic Frontier Foundation blasted the ruling in a three page diatribe on its website. ²⁵ Most likely the EFF felt a tad bruised by the ruling since they had filed a friend of the Court brief in this case. The Judge obviously found the EFF legal theories non-persuasive or just plain wrong, since the Judge never once mentioned the amicus curiae brief in his opinion. An analysis of their blog post will demonstrate why the Judge was correct to ignore the position of the EFF, which relies on material omissions of law and fact, loopy logic and of course, since this is the EFF, fear mongering.

Fair Use is an Affirmative Defense

The Court on several occasions reminds the reader that fair use is an affirmative defense. ²⁶ As an affirmative defense, TVEyes bears the burden of proof, not Fox News. This is the most important legal principle in this case, but it is never mentioned, not even once, in the EFF Blog post.

Fair Use is a Balancing Test in Which No One Factor Trumps the Other

Just in case you are new to this blog, any fair use analysis requires the consideration of four factors (the rest of you can skip the bullet points). They are:

• The purpose and character of the use, including whether the use is “transformative,” or “why is this being used”
• The nature of the work used, or “what is being used”
• The amount and substantiality of the taking or “how much and how important is the portion used”
• Negative impact on the market for the work or “has money been lost”

The purpose and character of the use is to index Fox News reporting so that it can be analyzed by third parties. The Judge found that the search function resulted in a “transformative use” and that this factor weighed in favor of TVEyes. This is the only factor discussed in detail by the EFF, and yet they act as if “transformative use” trumps all other considerations, which is not an accurate statement of the law. The EFF states:

“[I]f TVEyes’ original capture and storage of the video is fair use (as the court already found), and the downloaded copy is being used for exactly what the court considered to be fair…” ²⁷

“[U]sing a tool like TVEyes to access it does not change the underlying purpose of criticizing and analyzing the media.” ²⁸

Again, Courts have ruled time and time again that a useful purpose is not a trump card. ²⁹ Fair use is a balancing test. One must consider all the factors, not just the purpose of the use, ³⁰ an analysis the EFF never mentions nor performs. If the downloading has the potential to harm the market for Fox News licensing the work itself, the market harm may outweigh the benefit of the supposed “transformative” use. Which is precisely what the Judge ruled and the EFF virtually ignores.

The EFF never discuss the nature of the work used, the fact that TVEyes captures all of Fox News broadcasts, or the fact that on several points, TVEyes failed to carry its burden of proof as to negative market effect.

TVEyes is a Direct Infringer, not a Contributory Infringer, Part I

Time for loopy logic. The EFF states:

“Sharing a link, in and of itself, is not an infringement, because it’s not a reproduction, distribution, or performance of any work. If anything, the ability to share a link might be seen as either (1) contributory infringement or (2) inducement of infringement, if someone later used that link to make a non-fair, unlicensed use of the video. Fox didn’t even raise a claim for contributory infringement or inducement, much less prove one.” ³¹

The EFF once against ignores the point that fair use is an affirmative defense, for which TVEyes, not Fox bears the burden of proof. ³² Fox did not plead contributory infringement because TVEyes is a direct infringer, not a contributory infringer.

Sharing a link with another person is not an act of infringement unless the person has reason to know that the link goes to infringing material. ³³ It is not the act of TVEyes allowing the link to be publicly distributed that is an act infringement , it’s that TVEyes streams the clip to anyone of the general public that has the link which is the infringing act. In short, TVEyes is now Grooveshark. ³⁴ They are streaming to the public, on demand, copyrighted material for which they have no permission to copy or license to perform. This is direct infringement. TVEyes competes with and acts as a market replacement for Fox’s own news clip service on their website and other platforms. Just as the Judge ruled:

“If TVEyes cannot prevent indiscriminate sharing, it risks becoming a substitute for Fox’s own website, thereby depriving Fox of advertising revenue.” ³⁵

The solution is rather simple, and not as the EFF suggests that the Judge demands that TVEyes become a “copyright cop” and “do the impossible.” ³⁶ Simply disable the download function and make all streaming links go to a login wall. For example, I recently tried to trace a link to my blog back to the referring website, only to land on a login wall that asked for my username and password. Seems simple enough.

TVEyes is a Direct Infringer, not a Contributory Infringer, Part II

Time for more loopy logic with a little fear-mongering thrown in for good measure.

The EFF argues:

“[A]s there are obvious “substantial non-infringing uses” of the link—the court itself recognized that—so linking falls squarely into the Supreme Court’s Sony Betamax doctrine, making any claim for contributory infringement a non-starter. The rule that creating a tool with substantial non-infringing uses doesn’t give rise to contributory infringement has been a bedrock of innovation. Besides the videocassette recorder that was the subject of the Sony Betamax case, it’s quite likely that the iPod, the digital video recorder, and many vital Internet applications would not have been brought to market without it. That’s why ignoring the Sony Betamax rule in this case is very concerning.” ³⁷

Ah, yes, the tried and true barrier to “innovation” that would prevent “the iPod, the digital video recorder, and many vital Internet applications” which is “concerning” and later “alarming” and even later “dangerous.” This of course ignores the fact that the iPod was a success precisely because it was launched with the iTunes service, which ahead of time properly and legally licensed millions of musical compositions and sound recordings for use on the iPod. It also ignores the fact that TVEyes is not “innovative.” It is no more innovative than any other searchable database is “innovative,” like my email inbox. But I digress.

The TVEyes case does not “fall squarely” into the Betamax case, nor is it as the EFF suggests later, akin to the Grokster case, because this is a case of direct infringement, not contributory infringement nor inducing infringement.

Sony was not making the infringing copies, third parties who used the Betamax machine were. Grokster was not making the infringing copies, third parties using their P2P software were. So, theories of liability for third party actions raise the issue of contributory and inducing infringement, and have nothing to do with direct infringement.

TVEyes is the one making the copies here, all without permission or license from Fox News. TVEyes is making the clips available via streaming and downloading to the general public, provided one has the link, and the resulting copy can be freely redistributed. ³⁸ In other words, they are now the Pirate Bay. TYEyes avoids direct liability by raising the affirmative defense of fair use, for which again, (all together now) TVEyes bears the burden of proof. They failed to do so. The Court ruled:

“Downloading … is not sufficiently related to the functions that make TVEyes valuable to the public, and poses undue danger to content-owners’ copyrights.” ³⁹

Sorry, TVEyes, but the “eyes” do not have it.