Petition for Writ of Certiorari — TVEyes, Inc., Petitioner v. Fox News Network, LLC

Supreme Court briefSep 12, 2018

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No. 18-____

IN THE

Supreme Court of the United States

TVEYES, INC.,

Petitioner,

FOX NEWS NETWORK, LLC,

Respondent.

On Petition for a Writ of Certiorari to

the United States Court of Appeals

for the Second Circuit

PETITION FOR A WRIT OF CERTIORARI

THOMAS C. RUBIN

QUINN EMANUEL URQUHART

& SULLIVAN, LLP

600 University Street

Suite 2800

Seattle, WA 98101

(206) 905-7000

KATHLEEN M. SULLIVAN

Counsel of Record

ANDREW H. SCHAPIRO

TODD ANTEN

JESSICA A. ROSE

QUINN EMANUEL URQUHART

& SULLIVAN, LLP

51 Madison Avenue

22nd Floor

New York, NY 10010

(212) 849-7000

kathleensullivan@

quinnemanuel.com

Counsel for Petitioner

September 12, 2018

QUESTION PRESENTED

In copyright law, the defense of fair use covers

the transformative use of a work for research, comment, criticism and parody. Whether a use is “fair”

depends upon four nonexclusive statutory factors,

the fourth of which is “the effect of the use upon the

potential market for or value of the copyrighted

work.” 17 U.S.C. 107(4). This Court has held that, in

assessing this fourth factor, market harm cannot be

presumed from a transformative use’s commercial

success and that harm arising from use of the copyrighted work for the purpose of criticism is not cognizable. See Campbell v. Acuff-Rose Music, Inc., 510

U.S. 569, 590-92 (1994). But in the decision below,

the Second Circuit held that the fourth factor presumptively weighs against a finding of fair use if a

transformative use is commercially successful and

thwarts the author’s desire to prevent analysis or

criticism of its work. The question presented is:

Can the transformative use of a copyrighted

work cause a cognizable market harm under

17 U.S.C. 107(4) if it is used in connection with

a commercially successful business that the

author is unlikely to enter or authorize?

RULE 29.6 STATEMENT

TVEyes, Inc. has no parent corporation, and no

publicly held company owns 10% or more of its stock.

iii

TABLE OF CONTENTS

Page

QUESTION PRESENTED........................................... i

RULE 29.6 STATEMENT ...........................................ii

TABLE OF AUTHORITIES........................................ v

INTRODUCTION ........................................................ 1

OPINIONS BELOW .................................................... 3

JURISDICTION .......................................................... 3

STATUTORY PROVISION INVOLVED.................... 3

STATEMENT OF THE CASE .................................... 4

Statutory Framework ............................ 4

The Parties ............................................. 7

The District Court Proceedings ........... 11

The Second Circuit Decision................ 12

REASONS FOR GRANTING THE WRIT ................ 14

REVIEW IS WARRANTED BECAUSE

THE DECISION BELOW CONFLICTS

WITH DECISIONS OF THIS COURT AND

THE COURTS OF APPEALS ........................... 14

A. This Court Has Held That Market

Harm Cannot Be Presumed From A

Transformative Use’s Commercial Success .............................................................. 14

B. This Court Has Held That A Copyright

Holder May Not Preempt Exploitation

Of A Transformative Market ..................... 17

II.

THE QUESTION PRESENTED IS EXCEPTIONALLY IMPORTANT ......................... 19

CONCLUSION .......................................................... 22

APPENDIX A – Second Circuit Opinion

(February 27, 2018) ....................... 1a

APPENDIX B – District Court First Summary

Judgment Opinion

(September 9, 2014) .................... 36a

APPENDIX C – District Court Second

Summary Judgment Opinion

(August 25, 2015) ........................ 73a

APPENDIX D – District Court Order Setting

Terms of Injunction

(November 6, 2015) ..................... 95a

APPENDIX E – Permanent Injunction and

Final Order

(November 6, 2015) ................... 100a

APPENDIX F – Second Circuit Order Denying

Rehearing

(May 14, 2018) ........................... 105a

TABLE OF AUTHORITIES

Page

Cases

Abrams v. United States,

250 U.S. 616 (1919) ............................................. 21

Campbell v. Acuff-Rose Music, Inc.,

510 U.S. 569 (1994) ..................................... passim

Eldred v. Ashcroft,

537 U.S. 186 (2003) ...............................................5

Golan v. Holder,

565 U.S. 302 (2012) ...............................................5

Harper & Row Publishers, Inc. v. Nation

Enters.,

471 U.S. 539 (1985) ......................................... 6, 17

Mattel, Inc. v. Walking Mountain Prods.,

353 F.3d 792 (9th Cir. 2003) ............................... 17

Peter Letterese & Assocs., Inc. v. World Inst. of

Scientology Enters.,

533 F.3d 1287 (11th Cir. 2008) ........................... 16

Sony Corp. of Am. v. Universal City Studios,

Inc., 464 U.S. 417 (1984) ...................................... 13

Stewart v. Abend,

495 U.S. 207 (1990) ...............................................5

Sundeman v. Seajay Soc’y, Inc.,

142 F.3d 194 (4th Cir. 1998) ............................... 18

Suntrust Bank v. Houghton Mifflin Co.,

268 F.3d 1257 (11th Cir. 2001) ....................... 5, 18

Statutes

17 U.S.C. 107 ......................................... 1, 3, 4, 5, 6, 17

17 U.S.C. 107(1)...........................................................6

17 U.S.C. 107(4)...........................................................6

Other Authorities

Andrew Marantz, THE NEW YORKER, “How

‘Fox & Friends’ Rewrites Trump’s Reality”

(Jan. 15, 2018)

https://tinyurl.com/y943nezw .............................. 20

Hunter Schwarz, CNN COVER/LINE, “Nearly a

quarter of Trump’s Instagram posts are

reposts of Fox News content” (Aug. 22,

2018) https://tinyurl.com/yb5ex8u7 ..................... 20

Josh Feldman, MEDIAITE, “Trump Tweets Out

Quotes from Fox News Segments Slamming

DOJ and ‘Police State” (Sept. 1, 2018)

https://tinyurl.com/yckr6h3m .............................. 20

Julie Hirschfeld Davis, NEW YORK TIMES, “In a

Fox-Inspired Tweetstorm, Trump Offers a

Medley of Falsehoods and Misstatements”

(July 3, 2018) https://tinyurl.com/ya7yoh8g ....... 20

Matthew Gertz, POLITICO, “I’ve Studied the

Trump-Fox Feedback Loop for Months. It’s

Crazier Than You Think” (Jan. 5, 2018)

https://tinyurl.com/ydzcrqrc................................. 20

Matthew Rozsa, SALON, “Trump’s ‘Spygate’

tweets perfectly illustrate his Fox News

feedback loop” (May 23, 2018)

https://tinyurl.com/yak8obbf................................ 20

Maxwell Tani, BUSINESS INSIDER, “The timing

once again suggests that Trump tweets after

watching Fox News segments” (Jan. 26,

2017) https://tinyurl.com/yd2rb8b3 ..................... 20

Mehdi Hasan, NEW STATESMAN, “How the

right-wing Fox News became Donald

trump’s state propaganda channel” (May

19, 2018) https://tinyurl.com/yclaz8ka ................ 20

Philip Bump, THE WASHINGTON POST, “The

Fox News president” (Oct. 16, 2017)

https://tinyurl.com/y984w36h .............................. 20

vii

Pierre N. Leval, Toward a Fair Use Standard,

103 HARV. L. REV. 1105 (1990) ........................ 6, 16

Ryan J. Reilly, HUFFPOST “Trump’s Latest

Pardon Shows The Best Way To Get One:

Go On Fox News” (Mar. 9, 2018)

https://tinyurl.com/y7d78d7w .............................. 20

William F. Patry, PATRY ON FAIR USE § 6:10

(2017) .................................................................... 16

INTRODUCTION

This Court has not reviewed a copyright fair use

case in more than twenty years. Extraordinary advances in digital technology—resulting in new tools

for research and analysis that could never have been

imagined even as recently as a decade ago—now provide the Court with an ideal opportunity to confirm

that fair use protects research services that facilitate

the analysis and criticism of copyrighted works.

TVEyes is one of those advances. Its customers

include government agencies and officials, such as

the White House and over 100 members of Congress;

branches of the military; and multiple news organizations. TVEyes indexes over 27,000 hours of television content every day, from across over 1,000 television channels. In so doing, TVEyes enables its subscribers to conduct internal research and analysis on

what, when and how information is conveyed on television, including by being able to view short clips

centered around searched-for keywords.

The decision below, however, allows Fox to use

that recently aired on Fox News Channel or Fox

Business Network. In evaluating the four fair use

factors set forth in 17 U.S.C. 107, the Second Circuit

held that TVEyes serves the “transformative” purpose of “enhancing efficiency” in research, comment

and criticism, quintessential fair use purposes identified in the preamble of 17 U.S.C. 107. But the court

nonetheless held that TVEyes’s service was not a fair

use because TVEyes’s economic success demonstrates that it displaces revenues that Fox hypotheti-

cally might want to pursue at some point in the

future.

The Second Circuit’s decision conflicts with this

Court’s decision in Campbell v. Acuff-Rose Music,

Inc., 510 U.S. 569, 590-92 (1994), followed by other

courts of appeals, which holds that: (1) market harm

cannot be presumed from a defendant’s commercial

success in a transformative market; and (2) a copyright owner cannot show market harm by claiming

injury to markets the author is unlikely to enter or

authorize, such as for criticism of the original work.

This Court’s intervention is necessary to resolve this

conflict.

In addition, the decision below warrants review

because the question presented has exceptional importance. Televised news media—and Fox in particular—have outsized importance in today’s media landscape. Unlike print publications or written content

on the internet, television broadcasts are, by their

very nature, ephemeral. The harnessing of technological advances to allow analysts and critics to

quickly locate and research televised information is

crucial to the public good and consistent with longstanding First Amendment principles. To allow a

news organization to prevent meaningful research on

its content under the guise of nonexistent licensing

markets extinguishes this beneficial, and necessary,

opportunity for discourse that analyzes and critiques

the Nation’s news coverage. Proper application of the

fair use doctrine is the key First Amendment safeguard to protect the public from such abuses.

This case provides an ideal vehicle to correct the

Second Circuit’s misinterpretation of fair use and

ensure that news channels cannot wield copyright

law as a shield against becoming the subject of legitimate research and criticism. The petition should be

granted.

OPINIONS BELOW

The opinion of the U.S. Court of Appeals for the

Second Circuit is reported at 883 F.3d 169 and is reproduced at App. 1a-35a. The Second Circuit’s order

denying panel and en banc rehearing is reproduced

at App. 105a. The district court’s first summary

judgment opinion is available at 124 F. Supp. 3d 325

and is reproduced at App. 36a-72a. The district

court’s second summary judgment opinion is available at 2015 WL 7769374 and is reproduced at App.

73a-94a. The district court’s order setting the terms

of the injunction is available at 2015 WL 7769374

and is reproduced at App. 95a-99a. The district

court’s permanent injunction is available at 2015 WL

8148831 and is reproduced at App. 100a-104a.

JURISDICTION

The court of appeals denied panel and en banc

rehearing on May 14, 2018. App. 105a. On August 2,

2018, Justice Ginsburg extended the time for filing a

petition for a writ of certiorari to September 12, 2018.

This Court has jurisdiction under 28 U.S.C. 1254(1).

STATUTORY PROVISION INVOLVED

17 U.S.C. 107 states:

Notwithstanding the provisions of sections 106

and 106A, the fair use of a copyrighted work,

including such use by reproduction in copies or

phonorecords or by any other means specified

by that section, for purposes such as criticism,

comment, news reporting, teaching (including

multiple copies for classroom use), scholarship,

or research, is not an infringement of copyright. In determining whether the use made of

a work in any particular case is a fair use the

factors to be considered shall include—

(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.

The fact that a work is unpublished shall not

itself bar a finding of fair use if such finding is

made upon consideration of all the above factors.

STATEMENT OF THE CASE

A. Statutory Framework

“From the infancy of copyright protection, some

opportunity for fair use of copyrighted materials has

been thought necessary to fulfill copyright’s very

purpose, ‘[t]o promote the Progress of Science and

useful Arts ….’” Campbell v. Acuff-Rose Music, Inc.,

510 U.S. 569, 575 (1994) (quoting U.S. CONST. art. I,

§ 8, cl. 8; alteration in original). The import of robust

fair use protections is not academic; it carries

“constitutional significance as a guarantor to access

and use for First Amendment purposes.” Suntrust

Bank v. Houghton Mifflin Co., 268 F.3d 1257, 1260

n.3 (11th Cir. 2001); see also Golan v. Holder, 565

U.S. 302, 328 (2012) (describing fair use as a “buildin First Amendment accommodation[]”) (quoting

Eldred v. Ashcroft, 537 U.S. 186, 219 (2003)).

Section 107 of the Copyright Act of 1976 codified

the “common-law tradition” of fair use by listing four

nonexclusive factors that courts must consider in

determining whether a use is fair, and thus noninfringing.1 Campbell, 510 U.S. at 577. These factors

cannot “be treated in isolation,” but instead “[a]ll are

to be explored, and the results weighed together, in

light of the purposes of copyright.” Id. at 578; see

also id. at 577 (fair use analysis “‘permits [and requires] courts to avoid rigid application of the copyright statute when, on occasion, it would stifle the

very creativity which that law is designed to foster’”)

(quoting Stewart v. Abend, 495 U.S. 207, 236 (1990)

(alteration in original)). As a general matter, the

illustrative fair uses listed in the preamble of § 107—

which include “for purposes such as criticism,

These factors are:

(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.

17 U.S.C. 107.

comment, news reporting, teaching … scholarship, or

research”—are those “most commonly … found to be

fair uses,” id. at 578. But ultimately, “[t]he task is

not to be simplified with bright-line rules, for the

statute, like the doctrine it recognizes, calls for caseby-case analysis.” Id. at 577.

The first and fourth factors carry particular influence. The first factor is “the purpose and character of

the use, including whether such use is of a commercial nature or is for nonprofit educational purposes.”

17 U.S.C. 107(1). “The central purpose of this investigation” is to ask “whether and to what extent the

new work is ‘transformative,’” i.e., “adds something

new, with a further purpose or different character”

than the original. Campbell, 510 U.S. at 579 (quoting

Pierre N. Leval, Toward a Fair Use Standard, 103

HARV. L. REV. 1105, 1111 (1990)). This is “guided by

the examples given in the preamble to § 107.” Id. at

578. As this Court has recognized, “the goal of

transformative works .… and the more transformative the new work, the less will be the significance of

other factors, like commercialism, that may weigh

against a finding of fair use.” Id. at 579.

The fourth factor—“the effect of the use upon the

potential market for or value of the copyrighted

work,” 17 U.S.C. 107(4)—has been deemed “the single most important element of fair use,” Harper &

Row Publishers, Inc. v. Nation Enters., 471 U.S. 539,

566 (1985). Under this factor, where “the second use

is transformative, market substitution is at least less

certain, and market harm may not be so readily

inferred,” because such use more likely “serve[s] different market functions” than the original. Campbell,

510 U.S. at 591 (emphasis added). Moreover, not

every use that may have an effect on the original is a

cognizable market harm. As Campbell explained:

there is no protect[a]ble derivative market for

criticism. The market for potential derivative

uses includes only those that creators of original works would in general develop or license

others to develop. Yet the unlikelihood that

creators of imaginative works will license critical reviews or lampoons of their own productions removes such uses from the very notion

of a potential licensing market.

Id. at 592. In other words, a creator cannot stop a

parodist from using her work by claiming that it

interferes with her potential market for licensing

parodies; otherwise, a creator could use copyright

law to silence any critiques of a work.2

B. The Parties

1. TVEyes is a media-monitoring service that

enables online research and analysis of the content

aired on over 1,400 television and radio channels.

App. 4a, 37a. Using closed captions and speech-totext technology, TVEyes captures broadcast words

and images—twenty-four hours a day, seven days a

week—and creates a single, comprehensive textsearchable database of that content, resulting in the

capture of over 27,000 hours of television programming every day. App. 37a, 64a. By entering keywords

Even where a use ultimately is found not to be fair, “the

goals of the copyright law … are not always best served by

automatically granting injunctive relief.” Campbell, 510 U.S. at

578 n.10.

(such as a politician’s name or a news event), a subscriber can quickly see an index of every instance of

when, where, and how those words were mentioned

over the past 32 days (older content is deleted), and

can view a short clip of associated video to observe

the context of the use. App. 4a-5a. “Without a service

like TVEyes, the only way” for a subscriber to learn

whether and how a word or phrase was used on the

news, for example, “would be to have an individual

watch every station that broadcast news for twentyfour hours a day taking notes on each station’s

simultaneous coverage.” App. 37a-38a.

A subscription generally costs about $500 per

month. App. 5a. TVEyes is available only to professionals, such as government agencies and businesses,

and not to the general public. App. 40a. As of October

2013, TVEyes had over 2,200 subscribers, including:

the White House, over 100 members of Congress, the

Department of Defense, the U.S. Army, the Associated Press, MSNBC, Reuters, Bloomberg, ABC Television Group, CBS Television Network, the Association of Trial Lawyers, AARP, the American Red

Cross, political campaigns for Republican and Democratic candidates and organizations, and many

others. App. 40a-41a, 64a.

TVEyes expressly restricts subscribers’ use of the

service to internal research purposes only—a limitation reinforced through signed contracts, warnings,

reminders and technological limitations. App. 5a,

41a. Clips located on TVEyes begin to play 14

seconds before the selected keyword occurs, not at a

predesignated “beginning” of any story. App. 4a. The

average clip is played for 41 seconds, and 82% of

clips are played for one minute or less. App. 62a.

In addition to enabling subscribers to find and

view clips for internal research and analysis, TVEyes

also offers “ancillary functions” related to research—

such as the ability to archive or download clips for

later analysis, to email clips, and to search for clips

by date and time rather than keyword—all of which

likewise are restricted to use for internal research

and analysis only. App. 5a.3

As the district court concluded:

TVEyes subscribers use this service to comment on and criticize broadcast news channels.

Government bodies use it to monitor the accuracy of facts reported by the media so they can

make timely corrections when necessary. Political campaigns use it to monitor political advertising and appearances of candidates in

election years. Financial firms use it to track

and archive public statements made by their

employees for regulatory compliance. The

White House uses TVEyes to evaluate news

stories and give feedback to the press corps.

The United States Army uses TVEyes to track

media coverage of military operations in remote locations, to ensure national security and

the safety of American troops. Journalists use

TVEyes to research, report on, compare, and

criticize broadcast news coverage. Elected officials use TVEyes to confirm the accuracy of

information reported on the news and seek

timely corrections of misinformation. Clearly,

For a more detailed description of TVEyes’s service and

functions, see App. 37a-42a.

TVEyes provides substantial benefit to the

public.

App. 64a. For example, TVEyes allows journalists to

serve as a watchdog on how Fox covers particular

subjects, compare Fox’s coverage with those of other

channels, research the accuracy of the raw information, and critique the graphics used and the tone

of the coverage—information that cannot be conveyed through a raw transcript and that Fox may not

want to make available for criticism. App. 55a. In

short, “[w]ithout TVEyes, there is no other way to

sift through more than 27,000 hours of programming

broadcast on television daily, most of which is not

available online or anywhere else, to track and

discover information.” App. 64a.

2. Fox is an international news organization that

owns and operates two television channels, Fox

News Channel (“FNC”) and Fox Business Network

(“FBN”), which air news-related content. App. 42a.

Fox owns and operates a website on which only a

limited amount of content that aired on FNC or FBN

can be viewed. Specifically, just 16% of Fox broadcasts are made available on its website, Fox’s website

is restricted to “personal use,” the video segments

Fox makes available may be edited or “corrected”

versions of the originals, and website videos excludes

the “ticker” at the bottom of the screen during broadcasts. App. 43a-44a.

Fox also purports to offer licenses for use of some

of the video segments that aired on FNC or FBN.

However, among other provisions, licensees must

agree to a specific restriction prohibiting the use of

licensed clips “in a way that is derogatory or critical”

of Fox. App. 77a (emphases added).

C. The District Court Proceedings

In 2013 Fox brought claims against TVEyes for

aired on FNC or FBN (the “Works”). App. 45a & n.3.

The parties cross-moved for summary judgment on

TVEyes’s fair use defense. App. 46a. The district

court granted summary judgment to TVEyes that its

core viewing function is a fair use, ruling that

“recording content, putting it into a searchable database and, upon a keyword query, allowing users to

view short clips of the content up to 32 days from the

date of airing … constitutes fair use.” App. 81a.

Specifically, applying the four statutory factors, the

court found that: (1) the nature of the use favors

TVEyes because the use is transformative; (2) the

nature of the copyrighted work is neutral; (3) the

amount of use is neutral because the value of the

database requires it to be comprehensive; and (4) the

market effect favors TVEyes because Fox showed no

licenses lost to TVEyes, Fox’s licensing market is

very small, and any minimal impact on licensing is

outweighed by the substantial benefit TVEyes

provides to the public. App. 49a-65a.

Of particular relevance, the district court found

that “[n]o reasonable juror could find that people are

using TVEyes as a substitute for watching [Fox]

broadcasts on television,” App. 63a, and that any

potential lost revenue from the possible licensing of

clips was not only “de minimis,” but “any ‘cognizable

market harm’” is “substantially outweighed by the

important public benefit provided by TVEyes,” App.

63a-65a (quoting Campbell, 510 U.S. at 590 n.21).

The district court ultimately weighed all of the

factors together, concluding that “TVEyes’ service

copies television broadcasts but for an entirely

different purpose and function.” App. 65a. Moreover,

“TVEyes’ service provides social and public benefit

and thus serves an important public interest.” App.

66a. The court concluded that TVEyes’s copying of

Fox content and enabling subscribers to view

searched-for clips “constitutes fair use.” App. 66a.

The district court later ruled that certain ancillary TVEyes functions (archiving) are also fair use,

while other functions (emailing, downloading and

date/time-search) are not fair unless modified. App.

73a-94a. The court issued a permanent injunction

against the functions it held not a fair use. App. 95a99a (decision regarding terms of injunction); App.

100a-104a (permanent injunction).

D. The Second Circuit Decision

On cross-appeals under 28 U.S.C. 1292(a)(1), the

Second Circuit reversed, holding as a matter of law

that TVEyes’s use of Fox content to allow subscribers

to conduct internal research and analysis of what

had aired on FNC and FBN was not fair use.

On factor one (nature of the use), the panel

majority agreed with the district court (App. 7a-11a)

that TVEyes’s use is transformative, and thus

“favors TVEyes,” (App. 11a) because creating a comprehensive text-searchable database of all broadcast

content enables users “to isolate, from an ocean of

programming, material that is responsive to their

interests and needs” and to obtain “nearly instant

access” to material that would not otherwise be

practically retrievable (App. 9a).

The Second Circuit held that factor two (nature of

the work) was neutral (App. 11a-12a), and that factor

three (substantiality of use) favored Fox because

“TVEyes makes available virtually the entirety of the

Fox programming that TVEyes users want to see and

hear” (App. 12a-13a).4

Finally, the Second Circuit held that factor four

(market harm) favors Fox. App. 13a-15a. First, the

court asserted that “[t]he success of the TVEyes business model demonstrates that deep-pocketed consumers are willing to pay well for a service that

allows them to search for and view selected television clips,” and thus that there is “a plausibly exploitable market for such access to televised content.”

App. 15a. Second, the court presumed from this commercial success that TVEyes “displaces potential Fox

revenues” either by “depriving Fox of licensing

revenues from TVEyes or from similar entities” or by

usurping Fox’s own possible “wish to exploit the market for such a service rather than license it to

others.” App. 15a. The court of appeals made no reference to the anti-criticism restrictions that Fox expressly imposes on licensees or the public benefits

TVEyes’s service offers.

In assessing the third factor, the Second Circuit failed to

acknowledge that “the extent of permissible copying varies with

the purpose and character of the use.” Campbell, 510 U.S. 58687 (citing Sony Corp. of Am. v. Universal City Studios, Inc., 464

U.S. 417, 449-50 (1984) for proposition that “reproduction of entire work” can be consistent with fair use); see also App. 59a60a (“One cannot say that TVEyes copies more than is necessary to its transformative purpose for, if TVEyes were to copy

less, the reliability of its all-inclusive service would be compromised.”).

Balancing the four factors, the Second Circuit

concluded that “TVEyes’s service is not justifiable as

a fair use” (App. 16a), and reversed the district

court’s order “to the extent it held that TVEyes’s

product was a fair use” (App. 19a). The court ordered

the district court to enjoin TVEyes’s current service.

App. 19a.

The Second Circuit denied TVEyes’s petition for

panel and en banc rehearing. App. 105a.

REASONS FOR GRANTING THE WRIT

I. REVIEW IS WARRANTED BECAUSE THE

DECISION BELOW CONFLICTS WITH

DECISIONS OF THIS COURT AND THE

COURTS OF APPEALS

The decision below alters the balance between

presuming market harm from a subsequent user’s

commercial success and the author’s asserted desire

to exploit secondary markets. This approach not only

contradicts Campbell—and the faithful adherence to

Campbell by other courts of appeals—but also guts

the central premise of fair use, which is to allow

others to use copyrighted works when it serves the

interests of copyright and is in the public interest.

A. This Court Has Held That Market Harm

Cannot Be Presumed From A Transformative Use’s Commercial Success

The decision below conflicts with this Court’s

holding in Campbell that market harm cannot automatically be presumed from a defendant’s commercial success. In Campbell, this Court considered

whether a secondary use—a parody of Roy Orbison’s

rock ballad Oh, Pretty Woman—was a fair use. In

assessing market harm, this Court noted that the

Sixth Circuit had “resolved the fourth factor against

2 Live crew … by applying a presumption about the

effect of commercial use, a presumption which as

applied here we hold to be error.” 510 U.S. at 591.

Reversing the Sixth Circuit, this Court explained

that, while a non-transformative use may make

market substitution more likely,

when, on the contrary, the second use is transformative, market substitution is at least less

certain, and market harm may not be so readily inferred. Indeed, as to parody pure and

simple, it is more likely that the new work will

not affect the market for the original in a way

cognizable under this factor, that is, by acting

as a substitute for it. This is so because the

parody and the original usually serve different

market functions.

Id. (citations omitted).

The decision below, however, conflicts with that

directive by holding that “[t]he success of the TVEyes

business model demonstrates that deep-pocketed

consumers are willing to pay well for a service that

allows them to search for and view selected television clips, and that this market is worth millions of

dollars in the aggregate,” and concluding that,

“[s]ince 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.” App. 15a.

In other words, the Second Circuit departed from

Campbell by holding that mere business success es-

tablishes cognizable market harm as a matter of law,

even where the use serves transformative purposes

like research, commentary or criticism. There is no

dispute here that Fox’s programming and TVEyes’

service “serve different market functions.” 510 U.S.

at 591; see App. 57a (“[D]atabases that convert copyrighted works into a research tool to further learning

are transformative. TVEyes’ message, ‘this is what

they said’—is a very different message from [Fox

News’]—‘this is what you should [know or] believe.’”)

(quotations omitted; alterations in original).

Moreover, the decision below conflicts with those

of other courts of appeals by reasoning that a

defendant’s profit necessarily shows market harm.

Any such result would by definition resolve all fair

use cases against the defendant. After all, a copyright holder can always assert some effect on its

potential market by pointing out the fact that the

secondary user did not pay for the particular use in

question—a feature inherent of every fair use case.

See, e.g., Peter Letterese & Assocs., Inc. v. World Inst.

of Scientology Enters., 533 F.3d 1287, 1319 n.37

(11th Cir. 2008) (loss of licensing fee does not per se

establish market harm because “[i]f it did, circular

reasoning would resolve all fair use cases for the

plaintiff”) (quotations omitted). As Judge Leval has

elsewhere recognized: “By definition every fair use

involves some loss of royalty revenue because the

secondary user has not paid royalties.” Leval, 103

HARV. L. REV. at 1124; see also William F. Patry,

PATRY ON FAIR USE § 6:10 (2017) (summarizing

fallacy of this “circular[] argument”). “If, indeed,

commerciality carried presumptive force against a

finding of fairness, the presumption would swallow

nearly all of the illustrative uses listed in the pream-

ble paragraph of § 107, including news reporting,

comment, criticism, teaching, scholarship, and research, since these activities ‘are generally conducted

for profit in this country.’” Campbell, 510 U.S. at 584

(quoting Harper & Row, 471 U.S. at 592 (Brennan, J.,

dissenting)).

In short, the Second Circuit’s reasoning that

market harm can be established by virtue of a defendant’s economic success conflicts with this Court’s

precedent.

B. This Court Has Held That A Copyright

Holder May Not Preempt Exploitation Of

A Transformative Market

The decision below further conflicts with this

Court’s precedent that a copyright owner cannot use

criticism of or commentary on its works.

In particular, Campbell recognized a distinction

between remediable and “unremediable” injuries,

concluding that “there is no protectible derivative

market for criticism” because “the unlikelihood that

creators ... will license critical reviews ... of their own

productions removes such uses from the very notion

of a potential licensing market. 510 U.S. at 592

(emphasis added).

Courts of appeals agree that no cognizable market harm exists where the copyright owner is unlikely to agree to license such uses, such as for

critique. See, e.g., Mattel, Inc. v. Walking Mountain

Prods., 353 F.3d 792, 806 (9th Cir. 2003) (no cognizable market harm where it is unlikely that copyright

holder would grant license for criticism) (citing

Campbell); Suntrust Bank, 268 F.3d at 1283 (Marcus,

J., concurring) (copyright holder “may not use copyright to shield [works] from unwelcome comment, a

policy that would extend intellectual property protection into the precincts of censorship”) (quotations

omitted); Sundeman v. Seajay Soc’y, Inc., 142 F.3d

194, 207 (4th Cir. 1998) (“If there were a protectible

derivative market for critical works, copyright holders would only license to those who would render favorable comment. The copyright holder cannot control the dissemination of criticism.”).

The decision below, however, conflicts with

Campbell and its progeny in holding that TVEyes

“usurped” Fox’s market because “Fox itself might

wish to exploit the market for such a service rather

than license it to others.” App. 15a. As the record

demonstrates, it cannot be likely that Fox would ever

create a comprehensive research service that would

allow subscribers to search its content (much less all

networks’ content, as TVEyes enables) and compare,

analyze, and critique coverage of topics by keyword.

To the contrary, Fox’s licensing model expressly

prohibits use of Fox clips to criticize Fox, and severely

restricts the use of Fox’s website or licenses for

research and analysis concerning its broadcast

content. App. 43-44a, 77a.

Moreover, a major media company such as Fox

should not be permitted to unilaterally remove its

broadcasts from the available universe of content for

research and analysis. The purpose of and public

benefit from a comprehensive research database

such as TVEyes is to allow users to analyze and

compare immense amounts of information across

over a thousand channels, in a manner that other-

wise could not be accomplished by humans directly—

what led the Second Circuit to acknowledge that

TVEyes is a transformative service in the first place.

If a media company could remove itself from being

part of such a transformative research database,

then the very benefit of such a critical service would

be lost.

In permitting Fox dispositive control over a transformative research market through blanket assertion

of copyright, the decision below cannot be reconciled

with this Court’s precedent or the goals of fair use.

II. THE QUESTION PRESENTED IS EXCEPTIONALLY IMPORTANT

For the reasons set forth above, certiorari is warranted so that the Court may resolve the conflict

between the Second Circuit’s decision and Campbell

and confirm that the fair use defense prevents a

and criticism.

An equally important reason to grant the petition

is to ensure that copyright holders like Fox are not

empowered to impede the creation of new technologies such as digital databases that allow broadranging research, analysis and criticism. TVEyes, for

example, enables subscribers to conduct comparative

research on the video content of news broadcasts

across time and across networks. In this multimedia

age, information is not only read, but also seen and

heard, and the allowable tools that permit its full

analysis should reflect that reality.

Moreover, the Second Circuit’s holding endangers

new technologies important to political dialogue for

which the First Amendment plays a crucial role. Fox

is a player of outsized relevance to national political

debate. If the President tweets about an issue that

aired on Fox, then Fox itself has become the news

and an important subject for research, analysis and

criticism that is enabled by TVEyes’s comprehensive

database.5 But under the court of appeals’ marketharm ruling, Fox may withhold meaningful access to

research of its broadcast content or license it only on

prohibitive terms.

Examples abound of the feedback loop between Fox and the

President. See, e.g., Josh Feldman, MEDIAITE, “Trump Tweets

Out Quotes from Fox News Segments Slamming DOJ and

‘Police State” (Sept. 1, 2018) https://tinyurl.com/yckr6h3m;

Hunter Schwarz, CNN COVER/LINE, “Nearly a quarter of

Trump’s Instagram posts are reposts of Fox News content” (Aug.

22, 2018) https://tinyurl.com/yb5ex8u7; Julie Hirschfeld Davis,

NEW YORK TIMES, “In a Fox-Inspired Tweetstorm, Trump Offers

a Medley of Falsehoods and Misstatements” (July 3, 2018)

https://tinyurl.com/ya7yoh8g; Matthew Rozsa, SALON, “Trump’s

‘Spygate’ tweets perfectly illustrate his Fox News feedback loop”

(May 23, 2018) https://tinyurl.com/yak8obbf; Mehdi Hasan,

NEW STATESMAN, “How the right-wing Fox News became Donald

trump’s state propaganda channel” (May 19, 2018)

https://tinyurl.com/yclaz8ka; Ryan J. Reilly, HUFFPOST

“Trump’s Latest Pardon Shows The Best Way To Get One: Go

On Fox News” (Mar. 9, 2018) https://tinyurl.com/y7d78d7w;

Andrew Marantz, THE NEW YORKER, “How ‘Fox & Friends’

Rewrites

Trump’s

Reality”

(Jan.

15,

2018)

https://tinyurl.com/y943nezw; Matthew Gertz, POLITICO, “I’ve

Studied the Trump-Fox Feedback Loop for Months. It’s Crazier

Than You Think” (Jan. 5, 2018) https://tinyurl.com/ydzcrqrc;

Philip Bump, THE WASHINGTON POST, “The Fox News president”

(Oct. 16, 2017) https://tinyurl.com/y984w36h; Maxwell Tani,

BUSINESS INSIDER, “The timing once again suggests that Trump

tweets after watching Fox News segments” (Jan. 26, 2017)

https://tinyurl.com/yd2rb8b3.

As the district court explained:

Democracy works best when public discourse

is vibrant and debate thriving. But debate cannot thrive when the message itself (in this case,

the broadcast) disappears after airing into an

abyss. TVEyes’ service allows researchers to

study Fox News’ coverage of an issue and compare it to other news stations; it allows targets

of Fox News commentators to learn what is

said about them on the network and respond;

it allows other media networks to monitor

Fox’s coverage in order to criticize it. TVEyes

helps promote the free exchange of ideas ….

App. 86a-87a. To allow a major media company such

as Fox to remove itself at will from such a significant

aspect of public discourse cannot be reconciled with

the underlying First Amendment values that fair use

is intended to protect. Democracy can thrive only

where such discourse is examined in the sunlight.

This Court should grant review to determine whether a copyright holder may assert purported harm to

hypothetical licensing markets it would never reasonably enter to shield content from analysis and critique. See App. 86a (quoting Abrams v. United States,

250 U.S. 616, 630 (1919) (Holmes, J., dissenting)

(“the best test of truth is the power of the thought to

get itself accepted in the competition of the market”)).

CONCLUSION

The petition should be granted.

Respectfully submitted,

THOMAS C. RUBIN

QUINN EMANUEL URQUHART

& SULLIVAN, LLP

600 University Street

Suite 2800

Seattle, WA 98101

(206) 905-7000

KATHLEEN M. SULLIVAN

Counsel of Record

ANDREW H. SCHAPIRO

TODD ANTEN

JESSICA A. ROSE

QUINN EMANUEL URQUHART

& SULLIVAN, LLP

51 Madison Avenue

22nd Floor

New York, NY 10010

(212) 849-7000

kathleensullivan@

quinnemanuel.com

Counsel for Petitioner

September 12, 2018

APPENDIX

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

FOX NEWS NETWORK, LLC,

Plaintiff-Appellee-Cross-Appellant,

TVEYES, INC.,

Defendant-Appellant-Cross-Appellee.

Docket Nos. 15-3885(L), 15-3886(XAP)

August Term, 2016

Argued: March 7, 2017

Decided: February 27, 2018

OPINION

Before: NEWMAN, JACOBS, Circuit Judges, and

KAPLAN, District Judge.∗

JACOBS, Circuit Judge:

In this copyright infringement suit, defendant

TVEyes, Inc. (“TVEyes”) offers a service that enables

its clients to easily locate and view segments of

televised video programming that are responsive to

the clients’ interests. It does so by continuously recording vast quantities of television programming, compiling the recorded broadcasts into a database that is

text-searchable (based primarily on the closed-

Judge Lewis A. Kaplan, United States District Court for the

Southern District of New York, sitting by designation.

∗

captioned text copied from the broadcasts), and allowing its clients to search for and watch (up to) tenminute video clips that mention terms of interest to

the clients.1 Plaintiff Fox News Network, LLC (“Fox”),

which has sued TVEyes in the United States District

Court for the Southern District of New York, does not

challenge the creation of the text-searchable database

but alleges that TVEyes infringed Fox’s copyrights by

re-distributing Fox’s copied audiovisual content,

thereby enabling TVEyes’s clients to access that content without Fox’s permission. The principal question

on appeal is whether TVEyes’s enabling of its clients

to watch Fox’s programming is protected by the

doctrine of fair use. See 17 U.S.C. § 107.

The district court held that fewer than all of the

functions of TVEyes’s service constitute a fair use.

Specifically, the district court deemed a fair use the

functions enabling clients of TVEyes to search for

videos by term, to watch the resulting videos, and to

archive the videos on the TVEyes servers; but the

court held that certain other functions were not a fair

use, such as those enabling TVEyes’s clients to download videos to their computers, to freely e-mail videos

to others, or to watch videos after searching for them

by date, time, and channel (rather than by keyword).

The district court therefore dismissed Fox’s challenge

to important functions of TVEyes’s service, but also

held that TVEyes was liable to Fox for copyright

infringement on account of other functions of that

TVEyes also captures radio content. For simplicity, this

opinion will focus on only television broadcasts.

service. A permanent injunction limited various

aspects of TVEyes’s service.2

This appeal shares features with our decision in

Authors Guild v. Google, Inc., 804 F.3d 202 (2d Cir.

2015) (“Google Books”). That case held that Google’s

creation of a text-searchable database of millions of

books (including books under copyright) was a fair use

because Google’s service was “transformative” and

because integral features protected the rights of copyright holders. However, we cautioned that the case

“test[ed] the boundaries of fair use.” Google Books, 804

F.3d at 206. We conclude that defendant TVEyes has

exceeded those bounds.

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.

Accordingly, we reverse the order of the district

court to the extent it held that some of the challenged

TVEyes functions constituted a fair use. We affirm the

order to the extent that it denied TVEyes’s request for

additional relief. Furthermore, because the district

court’s issuance of an injunction was premised on the

Fox does not challenge on appeal the dismissal (on summary

judgment) of its claims alleging “hot news” misappropriation and

“direct competition” misappropriation.

incorrect conclusion that much of what TVEyes offered

was a fair use, we remand for the district court to

revise the injunction in light of this opinion.

TVEyes is a for-profit media company. It offers a

service that allows its clients to efficiently sort

through vast quantities of television content in order

to find clips that discuss items of interest to them. For

example, a client in marketing or public relations

interested in how a particular product is faring in the

media can use the TVEyes service to find, watch, and

share clips of recent television broadcasts that

mention that product.

The service works this way. TVEyes records

essentially all television broadcasts as they happen,

drawing from more than 1,400 channels, recording 24

hours a day, every day. By copying the closed-captioned text that accompanies the content it records

(and utilizing speech-to-text software when necessary), TVEyes creates a text-searchable transcript of

the words spoken in each video. The videos and transcripts are consolidated into a database. A client

inputs a search term and gets a list of video clips that

mention the term. A click on a thumbnail image of a

clip plays the video, beginning fourteen seconds before

the search term was spoken, and displays a segment

of the transcript with the search term highlighted. The

parties dispute the quality of the clips. Fox contends

that the clips are high definition; TVEyes contends

that the clips are grainier than the original broadcasts. The clips can be played for no more than ten

minutes, but a user can play an unlimited number of

clips. To prevent clients from watching entire programs, TVEyes (during the course of this litigation)

implemented a device that is claimed to prevent

clients from viewing consecutive segments. The

parties dispute whether this measure is effective.

TVEyes’s service has ancillary functions. A TVEyes

client may “archive” videos permanently on the

TVEyes servers and may download videos directly to

the client’s computer. These services are useful because TVEyes otherwise deletes captured content

after thirty-two days. Clients can also email the clips

for viewing by others, including those who are not

TVEyes clients. And clients can search for videos by

date, time, and channel (rather than by keyword). The

parties dispute whether clients can watch live broadcasts on TVEyes.

A TVEyes subscription costs approximately $500

per month, is available for business and professional

use, and is not offered to private consumers for personal use. Clients include journalists, government and

political organizations, law enforcement, the military,

for-profit companies, and non-profits.

TVEyes asserts that it restricts its clients’ use of its

content in various ways. For example, clients are

required to sign a contract that limits their use of clips

to “internal purposes only” and are warned upon

downloading a clip that it is to be used for only “internal review, analysis or research.” Fox contends that

these safeguards are ineffective and disputes the

assertion by TVEyes that its service is primarily used

for “internal” research and analysis.

Fox claims that at some point TVEyes unsuccessfully approached it to procure a license to use Fox programming. Fox demanded that TVEyes stop using its

programming; when TVEyes refused, litigation ensued. The lawsuit focuses on nineteen copyrighted Fox

broadcasts. The legal question is whether TVEyes has

a “fair use” defense to Fox’s copyright infringement

claims. 17 U.S.C. § 107.

The Copyright Act provides:

[T]he fair use of a copyrighted work … for

purposes such as criticism, comment, news

reporting, teaching …, scholarship, or research, is

not an infringement of copyright. In determining

whether the use made of a work in any particular

case is a fair use the factors to be considered shall

include—

(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.

Id.

In fair use litigation, courts undertake a “case-bycase analysis” in which each factor is considered, “and

the results [are] weighed together, in light of the

purposes of copyright.” Campbell v. Acuff-Rose Music,

Inc., 510 U.S. 569, 577-78 (1994). The factors are nonexclusive, but consideration of each is mandatory.3

Pace Judge Kaplan’s argument that our discussion of transformative use (which is integral to the first statutory factor)

should be omitted from the fair-use analysis—or be deemed dicta.

Whether the majority opinion’s discussion “may contribute to

Swatch Grp. Mgmt. Servs. Ltd. v. Bloomberg L.P., 756

F.3d 73, 81 (2d Cir. 2014). Some of the factors are more

important than others, with the fourth (market impact) being “the single most important element.” Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S.

539, 566 (1985). Fair use is an affirmative defense, so

TVEyes bears the burden of proving it. Am. Geophysical Union v. Texaco, Inc., 60 F.3d 913, 918 (2d Cir.

1994).

It is useful to analyze separately distinct functions

of the secondary use (i.e., the use by TVEyes of Fox’s

copyrighted material), considering whether each independent function is a fair use. See Google Books, 804

F.3d at 216-18. TVEyes has two core offerings: the

“Search function” and the “Watch function.” The

Search function allows clients to identify videos that

contain keywords of interest. The Watch function allows TVEyes clients to view up to ten-minute, unaltered video clips of copyrighted content. Fox does not

challenge the Search function on appeal. Fox’s challenge is to the Watch function, and we determine that

its inclusion renders TVEyes’s package of services unprotected by the fair use doctrine. That conclusion subsumes and obviates consideration of certain functions

that are subsidiary to the Watch function, such as

archiving, downloading, and emailing the video clips.

Turning to the Watch function, we next consider

each of the four factors listed in § 107.

In considering the first statutory factor—the

“purpose and character” of the secondary use, 17

confusion and uncertainty” (Concurring Op. at 2) is not for me to

say.

U.S.C. § 107(1)—the primary inquiry is whether the

use “communicates something new and different from

the original or [otherwise] expands its utility,” that is,

whether the use is “transformative.” Google Books, 804

F.3d at 214. To be transformative, a use must “do[ ]

something more than repackage or republish the original copyrighted work”; it must “‘add[ ] something new,

with a further purpose or different character, altering

the first with new expression, meaning or message

….’” Authors Guild, Inc. v. HathiTrust, 755 F.3d 87, 96

(2d Cir. 2014) (quoting Campbell, 510 U.S. at 579).

“Although … transformative use is not absolutely

necessary for a finding of fair use, … [transformative]

works … lie at the heart of the fair use doctrine,”

Campbell, 510 U.S. at 579, and “a use of copyrighted

material that ‘merely repackages or republishes the

original’ is unlikely to be deemed a fair use,” Infinity

Broad. Corp. v. Kirkwood, 150 F.3d 104, 108 (2d Cir.

1998) (quoting Pierre N. Leval, Toward a Fair Use

Standard, 103 Harv. L. Rev. 1105, 1111 (1990)).

Precedent is helpful. Both parties rely most heavily

on Google Books, which provides the starting point for

analysis.

In Google Books, a consortium of libraries collaborated to make digital copies of millions of books, many

of them under copyright. Google pooled these digital

copies into a text-searchable database. 804 F.3d at

207. Anyone could search the database free. When a

user entered a search term, Google returned a list of

books that included the term, and, for each responsive

book, Google provided a few “snippets” that contained

the term. Id.

We held that Google’s copying served a transformative purpose because it created a text-searchable

database that “communicate[d] something new and

different from the original.” Id. at 214. “[T]he result of

a word search is different in purpose, character,

expression, meaning, and message from the page (and

the book) from which it is drawn.” Id. at 217 (quoting

HathiTrust, 755 F.3d at 97).

We also held that the “snippet view” of unaltered,

copyrighted text “add[ed] important value to the basic

transformative search function” by allowing users to

verify that the list of books returned by the database

was responsive to the user’s search. Id. Thus, a user

searching for the term “Hindenburg” could infer from

snippets whether the book was referencing the

Weimar president or the exploded zeppelin. See id. at

217-18.

TVEyes’s copying of Fox’s content for use in the

Watch function is similarly transformative insofar as

it enables users to isolate, from an ocean of programming, material that is responsive to their interests and

needs, and to access that material with targeted precision. It enables nearly instant access to a subset of

material—and to information about the material—

that would otherwise be irretrievable, or else retrievable only through prohibitively inconvenient or inefficient means.

Sony Corporation of America vs. Universal City

Studios, Inc. is instructive. See 464 U.S. 417 (1984). In

Sony, a television customer, who (by virtue of owning

a television set) had acquired authorization to watch a

program when it was broadcast, recorded it in order to

watch it instead at a later, more convenient time. That

was held to be a fair use. While Sony was decided

before “transformative” became a term of art, the

apparent reasoning was that a secondary use may be

a fair use if it utilizes technology to achieve the

transformative purpose of improving the efficiency of

10a

delivering content without unreasonably encroaching

on the commercial entitlements of the rights holder.

The Watch function certainly qualifies as technology that achieves the transformative purpose of

enhancing efficiency: it enables TVEyes’s clients to

view all of the Fox programming that (over the prior

thirty-two days) discussed a particular topic of interest

to them, without having to monitor thirty-two days of

programming in order to catch each relevant discussion; and it eliminates the clients’ need even to view

entire programs, because the ten most relevant minutes are presented to them. Much like the television

customer in Sony, TVEyes clients can view the Fox

programming they want at a time and place that is

convenient to them, rather than at the time and place

of broadcast. For these reasons, TVEyes’s Watch

function is at least somewhat transformative.4

TVEyes argues that the Watch function is transformative

because it allows clients to conduct research and analysis of

television content by enabling them to view clips responsive to

their research needs. Research, TVEyes argues, is a purpose not

shared by users of the original content. This argument proves too

much.

That a secondary use can facilitate research does not itself

support a finding that the secondary use is transformative. See

American Geophysical Union v. Texaco, Inc., 60 F.3d 913 (2d Cir.

1994). In Texaco, a company was allowing each of its 400 to 500

scientists to photocopy journal articles pertinent to their

individual research projects, thus enabling three subscriptions to

service the needs of hundreds of scientists. Id. at 915-16. We

stated that if 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.” Id. at 924.

11a

The first statutory factor also implicates considerations distinct from whether the secondary use is

transformative. In particular, Fox argues that the

“commercial nature” of TVEyes’s copying (its sale of

access to Fox’s content) weighs against a finding of fair

use. 17 U.S.C. § 107(1).

The commercial nature of a secondary use weighs

against a finding of fair use. See Campbell, 510 U.S. at

585. And it does so especially when, as here, the

transformative character of the secondary use is

modest. See id. at 579 (“[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.” HathiTrust, 755

F.3d at 96 (quoting Campbell, 510 U.S. at 579); cf.

Kirkwood, 150 F.3d at 106 (service that transmits

unaltered radio broadcasts in real time over telephone

lines is not transformative); Video Pipeline, Inc. v.

Buena Vista Home Entm’t, Inc., 342 F.3d 191, 199-200

(3d Cir. 2003) (service that streams short previews of

movies without commentary is not transformative).

The clients of TVEyes use Fox’s news broadcasts for

the same purpose that authorized Fox viewers use

those broadcasts—the purpose of learning the information reported.

The first statutory factor therefore favors TVEyes,

albeit slightly.

The second statutory factor is “the nature of the

copyrighted work.” 17 U.S.C. § 107(2). This factor “has

12a

rarely played a significant role in the determination of

a fair use dispute,” and it plays no significant role

here. Google Books, 804 F.3d at 220.

TVEyes presses the argument that, since facts are

not copyrightable, the factual nature of Fox’s content

militates in favor of a finding of fair use. We have

rejected this argument: “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.” Id. at 220.

The third statutory factor is “the amount and

substantiality of the portion used in relation to the

copyrighted work as a whole.” 17 U.S.C. § 107(3). The

relevant consideration is the amount of copyrighted

material made available to the public rather than the

amount of material used by the copier. Google Books,

804 F.3d at 222.

This factor clearly favors Fox because TVEyes

makes available virtually the entirety of the Fox

programming that TVEyes users want to see and hear.

While “courts have rejected any categorical rule that a

copying of the entirety cannot be a fair use,” “a finding

of fair use is [less] likely … when the copying is

extensive, or encompasses the most important parts of

the original.” Id. at 221. In this respect, the TVEyes

Watch function is radically dissimilar to the service at

issue in Google Books.

Google’s snippet function was designed to ensure

that users could see only a very small piece of a book’s

contents. Each snippet was three lines of text, constituting approximately one-eighth of a page; a viewer

could see at most three snippets per book for any

searched term, and no more than one per page. Users

13a

were prevented from performing repeated searches to

find multiple snippets that could be compiled into a

coherent block of text. Approximately 22% of a book’s

text was “blacklist[ed]”: no snippet could be shown

from those pages. Id. at 222. And snippets were not

available at all for such books as dictionaries or cookbooks, in which a snippet might convey all the information that a searcher was likely to need. While the

snippets allowed a user to judge whether a book was

responsive to the user’s needs, they were abbreviated

to ensure that it would be nearly impossible for a user

to see a meaningful exposition of what the author

originally intended to convey to readers.

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.

Cf. Harper & Row Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 564-65 (1985) (finding no fair use

when the copying involved only about 300 words, but

the portion copied was “the heart of the book”).

TVEyes’s use of Fox’s content is therefore both “extensive” and inclusive of all that is “important” from the

copyrighted work. Google Books, 804 F.3d at 221.

The fourth statutory factor is “the effect of the

[secondary] use upon the potential market for or value

of the copyrighted work.” 17 U.S.C. § 107(4). This

factor is “undoubtedly the single most important

element of fair use.” Harper & Row Publishers, Inc. v.

Nation Enters., 471 U.S. 539, 566 (1985). It “focuses on

whether the copy brings to the marketplace a competing substitute for the original, or its derivative, so as

14a

to deprive the rights holder of significant revenues

because of the likelihood that potential purchasers

may opt to acquire the copy in preference to the

original.” Google Books, 804 F.3d at 223. Critically, it

requires consideration of “not only the … market harm

caused by the particular actions of the alleged

infringer,” but also the market harm that would result

from “unrestricted and widespread conduct of the

[same] sort.” Campbell, 510 U.S. at 590 (internal

quotation marks and alteration omitted).

TVEyes argues that its service poses little risk of

being a “competing substitute” for Fox’s offerings.

Google Books, 804 F.3d at 223. Fox argues that

TVEyes undercuts Fox’s ability to profit from licensing

searchable access to its copyrighted content to third

parties. Fox has much the stronger point.

“It is indisputable that, as a general matter, a copyright holder is entitled to demand a royalty for licensing others to use its copyrighted work, and that the

impact on potential licensing revenues is a proper subject for consideration in assessing the fourth factor.”

Bill Graham Archives v. Dorling Kindersley Ltd., 448

F.3d 605, 614 (2d Cir. 2006) (quoting Texaco, 60 F.3d

at 929). However, “not every effect on potential licensing revenues enters the analysis under the fourth

factor.” Texaco, 60 F.3d at 929. A copyright owner has

no right to demand that users take a license unless the

use that would be made is one that would otherwise

infringe an exclusive right. See Bill Graham Archives,

448 F.3d at 615. Even if a use does infringe an

exclusive right, “[o]nly an impact on potential licensing revenues for traditional, reasonable, or likely to be

developed markets should be legally cognizable when

evaluating a secondary use’s effect upon the potential

15a

market for or value of the copyrighted work.” Texaco,

60 F.3d at 930 (internal quotation marks omitted).

That limitation does not restrict our analysis here.

The success of the TVEyes business model demonstrates that deep-pocketed consumers are willing to

pay well for a service that allows them to search for

and view selected television clips, and that this market

is worth millions of dollars in the aggregate. Consequently, there is a plausibly exploitable market for

such access to televised content, and it is proper to

consider whether TVEyes displaces potential Fox

revenues when TVEyes allows its clients to watch

Fox’s copyrighted content without Fox’s permission.

Such displacement does occur. 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 copyrightholder.” Kirkwood, 150 F.3d at 110. 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.

In short, by selling access to Fox’s audiovisual

content without a license, TVEyes deprives Fox of

revenues to which Fox is entitled as the copyright

holder. Therefore, the fourth factor favors Fox.

16a

To ascertain whether TVEyes’s service is protected

as a fair use, the final step is to weigh the four

statutory factors together, along with any other

relevant considerations. The factors should not be

“treated in isolation, one from another”; rather, “[a]ll

are to be explored, and the results [are to be] weighed

together, in light of the purposes of copyright.”

Campbell, 510 U.S. at 577-78. While the factors are

not exclusive, in this case they provide sufficient

guidance. See Kirkwood, 150 F.3d at 111.

We conclude that TVEyes’s service is not justifiable

as a fair use. As to the first factor, TVEyes’s Watch

function is at least somewhat transformative in that it

renders convenient and efficient access to a subset of

content; however, because the function does little if

anything to change the content itself or the purpose

for which the content is used, its transformative character is modest at best. Accordingly—and because the

service at issue is commercial—the first factor favors

TVEyes only slightly. The second factor is neutral in

this case. The third factor strongly favors Fox because

the Watch function allows TVEyes’s clients to see and

hear virtually all of the Fox programming that they

wish. And the fourth factor favors Fox as well because

TVEyes has usurped a function for which Fox is

entitled to demand compensation under a licensing

agreement.

At bottom, TVEyes is unlawfully profiting off the

work of others by commercially re-distributing all of

that work that a viewer wishes to use, without

payment or license. Having weighed the required

factors, we conclude that the balance strongly favors

Fox and defeats the defense of fair use.

17a

III

TVEyes challenges the district court’s conclusion

that it is liable to Fox under a theory of direct copyright infringement.5 A direct infringer exercises “volitional conduct” to make the infringing copy. Cartoon

Network LP, LLLP v. CSC Holdings, Inc. (“Cablevision”), 536 F.3d 121, 131 (2d Cir. 2008). The conduct

at issue in Cablevision was non-volitional; however, it

bears no resemblance to what TVEyes does. The

Cablevision defendant provided a remote DVR service

similar to the recording capability of a DVR in a television viewer’s home. Unless the subscriber chose to

record a program, it remained on the defendant’s server for no more than .1 second. See id. at 124-25. By

contrast, TVEyes decides what audiovisual content to

record, copies that content, and retains it for thirtytwo days. And this copying, at least to the extent that

it is done to enable the Watch function, is an infringement. Volitional conduct that infringes is clear.

The district court issued a permanent injunction

prohibiting TVEyes from enabling its clients to

download clips of Fox’s programming or to search for

such clips by date and time; the court also imposed

restrictions on TVEyes’s enabling of its clients to email

clips or to post them to social media sites. We review

A party that has not committed direct copyright infringement

may still be liable under the doctrine of contributory infringement, which allows a defendant to be held liable for infringing

acts of third parties. See Sony, 464 U.S. at 435; Arista Records,

LLC v. Doe 3, 604 F.3d 110, 117-18 (2d Cir. 2010). Fox asserted

liability only on the ground of direct infringement, so we do not

consider contributory infringement.

18a

the issuance of a permanent injunction “for abuse of

discretion, which may be found where the Court, in

issuing the injunction, relied on … an error of law.”

S.C. Johnson & Son, Inc. v. Clorox Co., 241 F.3d 232,

237 (2d Cir. 2001) (quoting Knox v. Salinas, 193 F.3d

123, 128-29 (2d Cir. 1999) (per curiam)).

The district court’s injunction was shaped by an

error of law: the mistaken assumption that the Watch

function (and some features subsidiary to it) had fairuse protection. We therefore remand to the district

court to revise the injunction in accordance with this

opinion.

Because the product TVEyes currently offers

includes the infringing Watch function and its

subsidiary features (i.e., clients’ ability to archive,

download, and email clips, as well as to view clips after

conducting a date/time search6), the court should

enjoin TVEyes from offering that product. However,

because Fox does not dispute TVEyes’s right to offer

its Search function, the court’s injunction shall not bar

TVEyes from offering a product that includes that

function without making impermissible use of any

protected audiovisual content.7

There is no copyright infringement in the use of the date/time

search function to discover the particular program that was playing on a certain channel at a certain time. That information is a

historical fact, which is not copyrightable. See Arica Institute, Inc.

v. Palmer, 970 F.2d 1067, 1075 (2d Cir. 1992). However, enabling

a client to view a copied video located on the basis of a date/time

search can constitute infringement, and it is not a fair use.

Because Fox has not challenged the Search function on this

appeal, and the parties have therefore presented no arguments

about it, we express no views on it, neither upholding nor

rejecting it.

19a

CONCLUSION

The order of the district court is reversed to the

extent it held that TVEyes’s product was a fair use.

The order is affirmed to the extent it denied TVEyes’s

request for additional relief. We remand for the district court to revise the injunction to conform with this

opinion. Any further appeal will be assigned to this

panel.

KAPLAN, District Judge,∗ concurring:

I concur in the result as well as part I, the preamble

to part II, and parts II.B, III and IV of the majority

opinion. With great respect for my learned and distinguished colleagues, however, I do not join in their

characterization of TVEyes’ Watch function as

“somewhat transformative.” I decline for two reasons.

First, although the majority writes that it “is at least

somewhat transformative,” it holds that the Watch

function nevertheless is not a fair use of Fox’s

copyrighted material. Stated differently, it holds that

the other factors relevant to the fair use determination

carry the day in favor of Fox regardless of whether the

Watch function is or is not transformative. The

“somewhat transformative” characterization therefore

is entirely immaterial to the resolution of this case—

in a familiar phrase, it is obitur dictum.1 I would avoid

any such characterization even if I agreed with it.

Lewis A. Kaplan, United States District Judge for the

Southern District of New York, sitting by designation.

∗

Contrary to the majority’s suggestion, we are not obliged to

reach a definitive decision as to each of the fair use factors in

order to decide the fair use issue. Henley v. Devore, 733 F. Supp.

2d 1144, 1155 (C.D. Cal. 2010) (assuming but not deciding that

20a

Second, while I prefer not to state a view as to

whether the Watch function is transformative, I would

be remiss, given the majority’s opinion, if I did not

express my doubt that the majority’s view is correct.

To the contrary, were we compelled to reach the point,

I would be inclined to conclude that it is not.

I do not suggest that this or any appellate court

should “purge dictum from [its] opinions.”2 But there

are situations in which sound prudential reasons

counsel against making statements that are “superfluous to the court’s performance of its function.”3 I

submit that this is one of them.

1. “[T]he goal of copyright, to promote science and

the arts, is generally furthered by the creation of

transformative works. Such works thus lie at the heart

of the fair use doctrine[ ].”4 “[T]he more transformative

the new work, the less will be the significance of other

factors.”5 It therefore is not at all surprising that

attempts by alleged infringers to characterize their

uses of copyrighted works as “transformative” have

become a key battleground in copyright litigation,

particularly as technological advances provide evernew contexts in which the uncompensated use of

copyrighted works is very attractive. And the law

governing such controversies often is far from clear. As

secondary use was transformative, but nevertheless rejecting fair

use defense).

Pierre N. Leval, Judging Under the Constitution: Dicta About

Dicta, 81 N.Y.U. L. REV. 1249, 1282 (2006) (hereinafter “Dicta”).

Id. at 1257.

Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 579 (1994).

Id.

21a

noted commentators have observed, courts “appear to

label a use ‘not transformative’ as a shorthand for ‘not

fair,’ and correlatively ‘transformative’ for ‘fair.’ Such

a strategy empties the term of meaning.”6 Indeed, as

will appear, some of our own decisions on the issue are

at least in tension with one another.7

In these circumstances, a finding of transformative

use, while “not absolutely necessary for a finding of

fair use,”8 is “of crucial importance to the fair use

analysis.”9 And as the issue of fair use, in the words of

a distinguished panel of this Court that remain apt

despite intervening years, is “the most troublesome in

the whole law of copyright,” it is one that “ought not to

be resolved in cases where it may turn out to be moot,

unless the advantage is very plain.”10 The majority’s

unnecessary characterization of the Watch function as

“somewhat transformative” has no “advantage,” let

alone one that is “very plain.” Indeed, I fear it may

contribute to confusion and uncertainty regarding this

central concept in the law of fair use. Moreover, it

threatens to do so in circumstances in which there is

no realistic possibility of further appellate review.11

The determination of the transformative use issue

should be left for a case in which the question

necessarily is presented.

4 MELVILLE B. NIMMER AND DAVID NIMMER, NIMMER ON

See id. at 13-170.

Id. at 13-166.

Id. at 13-166 to 167.

Dellar v. Samuel Goldwyn, Inc., 104 F.2d 661, 662 (2d Cir.

1939) (per curiam) (L. Hand, A. Hand, Patterson, JJ).

Dicta, 81 N.Y.U. L. REV. at 1262.

22a

2. The advisability of expressing a view as to

whether the Watch function is “transformative” is

diminished further because this case passes judgment

on a technological innovation. New efficiency-enhancing content delivery technologies that will seek to

distribute copyrighted material owned by others

doubtless now or soon will exist. Indeed, the efficiency

enhancement that the Watch function allegedly provides appears to be, or to have become at least partly,

available from Internet-based television subscription

services to which Fox News presumably licenses its

content.12 Given (a) the rapid pace of technological

I understand that Internet-based cable subscription services

now available allow a subscriber to record cable shows, store

(some with limits on the amount that can be stored, some

without), and re-watch those shows within a certain time frame

(for example, within nine months of the recording). See Eric

Liston, How to Watch Fox News Without Cable—Your Top 5

Options, FLIXED (Dec. 6, 2017), https://flixed.io/watch-fox-newswithout-cable/. Someone who wanted to “monitor” Fox News

could DVR (i.e., direct video record) all Fox News shows using

these paid services. Upon using TVEyes’s Search function—the

transformative nature of which was not challenged—to identify

when a term was said in a broadcast, the user could click directly

to that portion of the broadcast and watch it immediately online

using their paid subscription service. It is unclear whether these

services as they currently exist would allow a user to monitor all

local broadcasts throughout the country, but they certainly

diminish the Watch function’s convenience value.

And technology will march on, perhaps soon eliminating

altogether the efficiency the majority claims renders the Watch

function transformative.

I recognize, of course, that there appears to be no discussion of

these services in the record. This is at least partially attributable

to the fact that the advent of some of these services post-dates

this litigation. But this demonstrates handily the point that

technology is rapidly evolving, which is all the more reason to

decline to pronounce a piece of technology transformative when

it is not necessary to do so.

23a

change, (b) the importance of the concept of transformative purpose in fair use jurisprudence, and (c) the fact

that it is unnecessary to address the question in this

case, I respectfully disagree with the majority’s decision to express a view as to whether the Watch

function is transformative.

In view of the majority’s expression of its opinion

that the Watch function is “somewhat transformative,” I feel compelled to express my own doubts

regarding that conclusion.

1. The majority’s opinion begins its analysis by

observing, correctly in my view, that “[i]t is useful to

analyze separately distinct functions of the secondary

use (i.e., the use by TVEyes of Tox’s copyrighted material), considering whether each independent function

is a fair use.”13 It then turns to the distinction between

the Search function and the Watch function. The

Search function “allows clients to identify videos that

contain keywords of interest”14—it “enables users to

isolate, from an ocean of programming, material that

is responsive to their interests.”15 The Watch function,

in contrast, “allows TVEyes clients to view up to tenminute, unaltered video clips of copyrighted content.”16 In short, the Search function, which is not

Op. at 10. See also Craft v. Kobler, 667 F .Supp. 120, 128

(S.D.N.Y. 1987) (Leval, J.) (“In assessing claims of fair use, we

must consider the number, size and importance of appropriated

passages, as well as their individual justifications.” (emphasis

added)); 4 WILLIAM N. PATRY, PATRY ON COPYRIGHT § 10.13, at 1047 to 10-49 (2012).

Op. at 10 (emphasis in original).

Id. at 12.

Id. at 10 (emphasis in original).

24a

challenged here, is simply a vehicle that locates Fox’s

copyrighted works among other works of interest—it

finds the desired species of fish in the majority’s

metaphorical sea. But the Watch function then catches

those fish and delivers them to the fishmonger’s stall

where TVEyes lays them unchanged (one might say

untransformed) on cracked ice for the inspection of its

patrons.

Metaphor aside, the majority then proceeds to test

the Watch function, ‘‘consider[ing] each of the four

[fair use] factors.”17 It describes our decision in Google

Books,18 noting that we there “held that the ‘snippet

view’ of unaltered, copyrighted text ‘add[ed] important

value to the basic transformative search function’ by

allowing users to verify that the list of books returned

by the database was responsive to the user’s search.”19

And it then goes on to say:

“TVEyes’s copying of Fox’s content for use in the

Watch function is similarly transformative

insofar as it enables users to isolate, from an

ocean of programming, material that is responsive to their interests and needs, and to access

that material with targeted precision. It enables nearly instant access to a subset of material—and to information about the material—

that would otherwise be irretrievable, or else

retrievable only through prohibitively inconvenient or inefficient means.”20

Id.

Authors Guild v. Google, Inc., 804 F.3d 202 (2d Cir. 2015)

(hereinafter “Google Books”).

Op. at 12.

Id. (emphasis added).

25a

But, as the majority itself wrote earlier, it is the

Search function that enables users to identify the

desired fish in the ocean, not the Watch function. What

the Watch function does is to enable instant access to

digital recordings of Fox’s content that have been

identified by the Search function. And the majority’s

justification for concluding that the Watch function is

“somewhat transformative” is that it “improvers] the

efficiency of delivering content.”21

2. I am inclined to reject the idea that enhancing the

efficiency with which copies of copyrighted material

are delivered to secondary issuers, in the context in

which the Watch function does so, is transformative.

The concept of transformation is a relatively recent

addition to copyright jurisprudence, but its antecedents have been around for a long time.

In 1841, Justice Story said that “no one can doubt

that a reviewer may fairly cite largely from the

original work, if his design be really and truly to use

the passages for the purposes of fair and reasonable

criticism,” but use that “supersede[s] the original

work” is not fair.22 Building on that idea, Judge Leval’s

landmark article, which later was adopted substantially by the Supreme Court in the Pretty Woman

case,23 said:

“I believe the answer to the question of

justification turns primarily on whether, and to

what extent, the challenged use is transformative. The use must be productive and must

employ the quoted matter in a different manner

Id.

Folsom v. Marsh, 9 F. Cas. 342, 344 (No. 4,901).

Campbell, 510 U.S. at 578-79.

26a

or for a different purpose from the original. A

quotation of copyrighted material that merely

repackages or republishes the original is

unlikely to pass the test; in Justice Story’s

words, it would merely ‘supersede the objects’

of the original. If on the other hand, the

secondary use adds value to the original—if the

quoted matters is used as raw material,

transformed in the creation of new information,

new aesthetics, new insights and understandings—this is the very type of activity that the

fair use doctrine intends to protect for the

enrichment of society.

Transformative uses may include criticizing the

quoted work, exposing the character of the

original author, proving a fact, or summarizing

an idea argued in the original in order to defend

or rebut it. They may also include parody,

symbolism, aesthetic declarations, and innumerable other uses.”24

Even on the majority’s view that TVEyes’ Watch

function substantially improves the efficiency with

which TVEyes customers can access Fox copyrighted

broadcasts of possible interest, it does no more than

repackage and deliver the original works. It adds no

new information, no new aesthetics, and no new

insights or understandings. I therefore doubt that it is

transformative. Indeed, I regard Infinity Broadcast

Corp. v. Kirkwood as having settled the question

whether a use is transformative simply because it is

more efficient or convenient than what preceded it.25

Pierre N. Leval, Toward a Standard of Fair Use, 103 HARV. L.

REV. 1105, 1111 (1990).

150 F.3d 104 (2d Cir. 1998).

27a

In that case, the defendant, Kirkwood, offered a

service through which a Kirkwood customer, regardless of its physical location, could dial a Kirkwood

device over a phone line, tune to the radio station of its

choice in any of the nation’s 10 largest radio markets,

and listen to the broadcast of its chosen station.

Kirkwood marketed the service to “radio stations,

advertisers, talent scouts, and others” for purposes

such as “auditioning on-air talent, verifying the

broadcast of commercials, and listing to a station’s

programming format and feel.”26 No doubt Kirkwood’s

service was convenient and efficiency-enhancing. It

enabled interested clients who, by reason of distance,

could not receive the radio stations of interest to them

to (a) access those stations through Kirkwood, (b)

listen to their broadcasts over telephone lines and (c)

do so for reasons that, at least in many cases, had

nothing to do with the purposes for which local

listeners tuned their radios to their stations of choice.

Nevertheless, this Court rejected Kirkwood’s fair use

defense, stating that there was a “total absence of

transformativeness” in Kirkwood’s retransmission of

the broadcasts.27 And the Watch function at issue here

is essentially indistinguishable in principle.

We rejected the argument that convenience of

accessing copyrighted material is a transformative

purpose in American Geophysical Union, el al. v.

Texaco28 as well. That involved photocopying of

scientific journal articles for use in laboratories.

Texaco there argued that “its conversion of the

individual [journal] articles through photocopying into

Id. at 106 (internal quotation marks omitted).

Id. at 109.

60 F.3d 913 (2d Cir. 1994).

28a

a form more easily used in a laboratory might constitute transformative use.”29 Notwithstanding the fact

that the photocopies often were more convenient or

efficient than, for example, buying, borrowing,

shelving and carrying about bound volumes of

journals, we wrote that “Texaco’s photocopying merely

transforms the material object embodying the intangible article that is the copyrighted original work.

Texaco’s making of copies cannot properly be regarded

as a transformative use of the copyrighted material.”30

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.31 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.32

Id.

Id. at 923 (citations omitted).

See A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1019

(9th Cir. 2001), as amended (Apr. 3, 2001), aff’d sub nom. A&M

Records, Inc. v. Napster, Inc., 284 F.3d 1091 (9th Cir. 2002).

See A&M Records, Inc., 239 F.3d at 1019 (cases holding spaceshifting or time-shifting to be fair use inapposite “because the

methods of shifting in [those] cases did not also simultaneously

involve distribution of the copyrighted material to the general

public”); Recording Indus. Ass’n of Am. v. Diamond Multimedia

Sys., Inc., 180 F.3d 1072, 1079 (9th Cir. 1999) (“The [device at

29a

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.

Nor does Google Books support the conclusion that

efficiency-enhancing delivery technology is transformative in the circumstances of this case. Google Books,

like this case, involved two features: a searchable

database and the display of “snippets” from the books

containing the search term.33 We held that copying the

books to enable the search function had the transformative purpose of “identifying books of interest to the

searcher.” That purpose was different than the purpose of the books themselves, which served to convey

their content to the reader, and it constituted fair

use.34 We held also that the snippets—“horizontal segment[s] comprising ordinarily an eighth of a page”—

“add[ed] importantly to the highly transformative

purpose of identifying books of interest to the searcher.”35 But Google Books does not resolve this case.

issue] merely makes copies in order to render portable, or ‘spaceshift,’ those files that already reside on a user’s hard drive. Such

copying is paradigmatic noncommercial personal use entirely

consistent with the purposes of the Act.” (citation omitted) );

UMG Recordings, Inc. v. MP3.Com, Inc., 92 F. Supp. 2d 349, 351

(S.D.N.Y. 2000) (considering the argument that space-shifting is

transformative to be “simply another way of saying that the unauthorized copies are being retransmitted in another medium—

an insufficient basis for any legitimate claim of transformation”).

804 F.3d at 206.

Id. at 217-18.

Id. at 209, 218.

30a

Google designed the snippet feature “in a manner

that substantially protects against its serving as an

effectively competing substitute for Plaintiffs’ books,”

employing safeguards such as “blacklisting” (making

permanently unavailable for snippet view one snippet

per page and one complete page out of every ten) and

showing no snippets at all from the sorts of books for

which a short snippet would represent all the content

a searcher wanted to see (such as dictionaries and

cookbooks).36 Here, on the other hand, the Watch

function shows ten minute clips, and parties can play

unlimited numbers of ten minute clips. Certainly a ten

minute clip in many, perhaps most, situations suffices

for a user to view an entire news segment. And in

situations in which that is not the case, the parties

dispute the effectiveness of a preventive measure

TVEyes introduced during the course of this litigation

to stop users from watching consecutive clips.37 Given

the posture of this case—review of a summary judgment decision adverse to Fox on this point—we must

view the facts presented by Fox as true and therefore

base our decision on the premise that users may access

all of Fox’s content by stringing clips together.38

Id. at 222-23.

Op. at 8.

Fair use is an affirmative defense to Fox’s infringement claim

and thus a matter as to which TVEyes bears the burden of proof.

Accordingly, in resisting a determination that TVEyes is entitled

to judgment on the basis of fair use, Fox is entitled to the view of

the evidence most favorable to it with respect TVEyes’ contention

that the Watch function is transformative, as it is on all other

aspects of that defense. FDIC v. Giammettei, 34 F.3d 51, 54 (2d

Cir. 1994) (“whatever evidence there is to support an essential

element of an affirmative defense will be construed in a light most

favorable to the non-moving defendant”) (emphasis in original);

Frankel v. ICD Holdings, S.A., 930 F. Supp. 54, 64-65 (S.D.N.Y.

31a

The facts here thus differ from Google Books quite

substantially. The snippet function considered there

delivered much less copyrighted content than the

Watch function at issue here. Nevertheless, we there

concluded that the snippet function only “adds” to the

transformative purpose of the Search function. Our

conclusion with respect to the Google Books snippet

feature therefore does not control the proper characterization of the Watch function at issue here.

Moreover, we cautioned in Google Books that the case

“test[ed] the boundaries of fair use.”39

3. Nor am I persuaded by the majority’s reliance on

Sony Corporation of America v. Universal City

Studios, Inc.40

Sony considered a claim that the manufacturer of

Betamax video recorders was liable for contributory

recorders facilitated copyright infringement by

consumers by virtue of the consumers’ recording of

copyrighted broadcasts to enable them to view the

programs at times more convenient to them.41 The

Court rejected the contributory infringement claim,

essentially on the bases that (a) substantial numbers

of copyright holders would not object to the consumers’

use of the Sony equipment for “time shifting,” and (b)

1996) (“one who relies upon an affirmative defense to defeat an

otherwise meritorious motion for summary judgment must adduce evidence which, viewed in the light most favorable to and

drawing all reasonable inferences in favor of the non-moving

party, would permit judgment for the non-moving party on the

basis of that defense”).

Google Books, 804 F.3d at 206.

464 U.S. 417 (1984).

Id. at 419.

32a

the plaintiffs had failed to prove any likelihood of

consequent economic harm.42

The majority here reads Sony as reasoning “that a

secondary use may be a fair use if it utilizes

transformative technology to improve the efficiency of

delivering content.”43 But Sony was decided before

Judge Leval’s article introduced the concept of transformative use or purpose into the copyright lexicon.44

I thus find what Sony teaches about transformative

purpose, if anything, to be less than perfectly clear. I

certainly do not find within Sony the idea that

efficiency-enhancing technology is transformative.

The efficiency enhancement at issue in Sony was

“time-shifting”—the use by a consumer of a Betamax

device to record a broadcast so that the consumer could

watch that show at a later, presumably more convenient, time.45 The Court asked whether time-shifting

was a substantial noninfringing use; the answer to

that question determined whether Sony could be liable

for contributory infringement.46 It was in that context

that the Court found that unauthorized time shifting—consumers recording copyrighted shows without

authorization to watch the shows once at a later

time—was “not necessarily infringing.”47

The Court’s discussion of time-shifting focused on

the non-commercial nature of in-home recording:

Id. at 456.

Op. at 12.

Id.

Sony, 464 U.S. at 423.

Id. at 442.

Id. at 447.

33a

“[R]espondents failed to demonstrate that time-shifting would cause any likelihood of nonminimal harm to

the potential market for, or the value of, their copyrighted works. The Betamax is, therefore, capable of

substantial noninfringing uses. Sony’s sale of such

equipment to the general public does not constitute

contributory infringement of respondent’s copyrights.”48

Perhaps the Court in Sony would have found

efficiency-enhancing technology to be transformative

for that reason alone had that argument been put to

it. But I see no indication of that in the opinion.

Rather, Sony turned on the question whether “timeshifting,” on the facts presented in that case, was a

commercial use that affected the broadcasters’ ability

to make a profit in the market. And the Court so concluded without considering, at least explicitly, whether the recordings served a purpose different from the

original broadcasts. In fact, the Court said that

“timeshifting merely enables a viewer to see such a

work which he had been invited to witness.”49 In other

words, time-shifting allows a user to do exactly that

which the user could have done with the original:

watch the show for whatever entertainment, informational or other purpose it serves. No new purpose had

been added. So I hesitate to conclude that Sony

mandates, or even suggests, the idea that efficiencyenhancing technology is transformative.

My hesitation in this regard is strengthened by this

Court’s subsequent treatment of Sony. No prior

opinion of this Court says, or even suggests, that Sony

stands for the proposition that time-shifting in

Id. at 455.

Id. at 449.

34a

particular, or efficiency-enhancing delivery technology

in general, is transformative. In Swatch Group

Management Services Ltd v. Bloomberg L.P., we

described Sony as a decision “finding a non-transformative use to be a fair use.”50 Infinity Broadcast Corp.

described Sony’s discussion of time-shifting as a

“determination] that time-shifting of television programs by consumers in their homes was a noncommercial use.”51 Indeed, as noted, we there held

that an efficiency promoting technology was not transformative and gave no sign that Sony was relevant to

that conclusion.

Similarly, Authors Guild, Inc. v. HathiTrust52 and

Google Books53 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.

In sum, Sony’s relevance to transformative use is, at

best, unclear. I decline to join in the majority’s novel

interpretation of Sony.

756 F.3d 73, 84 (2d Cir. 2014) (emphasis added).

150 F.3d at 109 n.3.

755 F.3d 87 (2d Cir. 2014).

804 F.3d at 202.

35a

III

For the foregoing reasons, I concur in the judgment

of this Court and in part I, the preamble to part II, and

parts II.B, III and IV of the majority opinion. I decline

to join in part II.A and its characterization of the

Watch function as “somewhat transformative.”

36a

APPENDIX B

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

[Filed Sept. 9, 2014]

FOX NEWS NETWORK,

ORDER AND OPINION

LLC,

DENYING IN PART AND

Plaintiff, GRANTING IN PART

CROSS MOTIONS FOR

-againstSUMMARY JUDGMENT

TVEYES, INC.,

Defendant. 13 Civ. 5315 (AKH)

ALVIN K. HELLERSTEIN, U.S.D.J.:

TVEyes, Inc. (“TVEyes”) 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. Subscribers, by use

of search terms, can then determine when, where, and

how those search terms have been used, and obtain

transcripts and video clips of the portions of the television show that used the search term. TVEyes serves a

world that is as much interested in what the television

commentators say, as in the news they report.

Fox News Network, LLC (“Fox News”) filed this

lawsuit to enjoin TVEyes from copying and distributing clips of Fox News programs, and for damages,

and bases its lawsuit on the Copyright Act, 17 U.S.C.

§ 101 et seq., and the New York law of unfair competition and misappropriation. TVEyes asserts the affirmative defense of fair use. 17 U.S.C. § 107. Both parties

have moved for summary judgment.

37a

For the reasons stated in this opinion, I find that

TVEyes’ use of Fox News’ content is fair use, with

exceptions noted in the discussion raising certain

questions of fact. Fox News’ request for an injunction

is denied.1

I. Factual Background

A. TVEyes

TVEyes is a media-monitoring service that enables

its subscribers to track when keywords or phrases of

interest are uttered on the television or radio. To do

this, TVEyes records the content of more than 1,400

television and radio stations, twenty-four hours a day,

seven days a week. Using closed captions and speechto-text technology, TVEyes records the entire content

of television and radio broadcasts and creates a

searchable database of that content. The database,

with services running from it, is the cornerstone of the

service TVEyes provides to its subscribers.

The database allows its subscribers, who include the

United States Army, the White House, numerous

members of the United States Congress, and local and

state police departments, to track the news coverage

of particular events. For example, police departments

use TVEyes to track television coverage of public

safety messages across different stations and locations, and to adjust outreach efforts accordingly.

Without a service like TVEyes, the only way for the

police department to know how every station is

The parties have asked for confidentiality with respect to

considerable materials in the briefs. To the extent that such

information is found in this opinion, confidentiality is terminated.

The interest of the public in the full basis of the fair use defense

outweighs any interest in confidentiality. See Hartford Courant

Co. v. Pellegrino, 380 F.3d 83 (2d Cir. 2004).

38a

constantly reporting the situation would be to have an

individual watch every station that broadcast news for

twenty-four hours a day taking notes on each station’s

simultaneous coverage.

An Internet search of a recent amber alert for a

missing child, for example, would not yield the same

results as would a TVEyes search result, because

using the internet search results would provide only

the segments of content that the television networks

made available to the Internet. TVEyes’ search

results, in contrast, will index, organize, and present

what was said on each of the 1,400 stations about the

amber alert reliably and authoritatively. Without

TVEyes, the police department could not monitor the

coverage of the event in order to ensure that the news

coverage is factually correct and that the public is

correctly informed.

Upon logging into its TVEyes account, the subscriber is taken to the Watch List Page. This page

monitors all of the subscriber’s desired keywords and

terms, and organizes search results by day, tabulating

the total number of times the keyword was mentioned

by all 1,400 television and radio stations each day over

a 32 day period. While on the Watch List Page, a user

can also run a “Google News” search, comparing the

mentions of the keyword or term on the internet with

the mentions of the keyword or term on the TVEyes

database. A subscriber can also create a custom time

range to tabulate the number of times a term has been

used in a certain time period, and the relative frequency of such use compared to other terms. Subscribers can set up email alerts for specific keywords or

terms, and receive responses one to five minutes after

the keyword or term is mentioned on any of the 1,400

television and radio stations TVEyes monitors.

39a

TVEyes’ responses to subscribers provides a thumbnail image of the show, a snippet of transcript, and a

short video clip beginning 14 seconds before the word

was used.

When a subscriber on the Watch List Page clicks on

the hyperlink showing the number of times the term

was mentioned on a particular day, the subscriber is

brought to the Results List Page. The Results List

Page displays each mention of the keyword or term in

reverse chronological order. Each individual result

includes a portion of transcript highlighting the keyword and a thumbnail image of the particular show

that used the term. When the user clicks the thumbnail image of the show, the video clip begins to play

automatically alongside the transcript on the Transcript Page, beginning 14 seconds before the keyword

is mentioned.

The Transcript Page shows users the following

information: the title of the program; the precise date

and time of the clip; a transcript of the video; the name

and location of the channel; market viewership of the

clip according to the Nielsen Ratings data; the publicity value of the clip according to data from the television research company, SQAD; and a web address to

the website for the channel that features the program

or for the program itself if such a web address exists.

TVEyes also provides website pages that organize

and present the relevant data graphically and pictorially. The Media Stats page organizes data associated

with the watch term, providing a graphic showing the

number of times the term has been mentioned over a

given time period. The Marketshare page displays a

“heatmap” graphic that shows the geographic locations where the term is most used, and the frequency

40a

of the mentions. The Broadcast Network page generates a pie chart depicting the breakdown of broadcast

stations on which the watch term was used. TVEyes

also features a Power Search tool that allows users to

run ad-hoc keyword search queries; clicking the

thumbnail image will bring the user to the clip’s

corresponding transcript page. Subscribers also can

organize searches according to dates and times, by

broadcast. The “Date and Time Search” feature

enables subscribers to play a video clip starting at a

specific time and date on a specific television station,

rather than entering a search term.

Subscribers can save, archive, edit, and download to

their personal computers an unlimited number of clips

generated by their searches. The clips, however, are

limited to ten minutes, and a majority of the clips are

shorter than two minutes. TVEyes enables subscribers

to email the clip from its website to anyone, whether

or not a TVEyes subscriber. If the user has downloaded the particular clip, the user can share the clip,

or a link to it, on any and all social media platforms

and by email. When a recipient clicks on the hyperlink,

the viewer is directed to TVEyes’ website, not to the

content owner’s website, and can watch the video

content in high-definition. Unless saved or downloaded, the clip’s availability is limited to the 32-day

term that the clip will remain on the website from the

time the clip first appeared on television. Thus

TVEyes facilitates publicity activities by subscribers

publicizing the content that TVEyes has captured

from the broadcasts of television and radio stations,

both copyrighted and non-copyrighted contents.

TVEyes is available only to businesses and not to

the general public. As of October 2013, TVEyes had

over 2,200 subscribers including the White House, 100

41a

current members of Congress, the Department of

Defense, the United States House Committee on the

Budget, the Associated Press, MSNBC, Reuters, the

United States Army and Marines, the American Red

Cross, AARP, Bloomberg, Cantor Fitzgerald, Goldman

Sachs, ABC Television Group, CBS Television Network, the Association of Trial Lawyers, and many

others.2

All TVEyes subscribers are required to sign a

contractual limitation in a User Agreement, limiting

use of downloaded clips to internal purposes. Whenever a subscriber seeks to download clips, TVEyes’

website gives notice that such material may be used

only for internal review, analysis, or research. Any

reproduction, publication, rebroadcasting, public

showing or public display is forbidden. TVEyes’ email

communications with subscribers contain similar

warnings. When TVEyes users ask how to obtain

rights to publicly post or disseminate clips, TVEyes

refers such inquiries to the broadcaster. TVEyes

recently added a feature that will block a user from

trying to play more than 25 minutes of sequential

content from a single station.

TVEyes is a for-profit company with revenue of more

than $8 million in 2013. Subscribers pay a monthly fee

of $500, much more than the cost of watching cable

television. TVEyes advertises in its marketing materials that its users can “watch live TV, 24/7;” “monitor

Breaking News;” and “download unlimited clips” of

television programming in high definition. It also

highlights that subscribers can play unlimited clips

One of the subscribers is Stroock & Stroock & Lavan, LLP, a

law firm of which I was a partner before being appointed a U.S.

District Judge in 1998.

42a

from television broadcasts, “email unlimited clips to

unlimited recipients” and “post an unlimited number

of clips” to social media and enjoy “unlimited storage

[of clips] on TVEyes servers,” and therefore is better

“than the traditional clipping services.” TVEyes also

advertises that subscribers can edit unlimited radio

and television clips and download edited clips to their

hard drive or to a compact disk. The TVEyes User

Manual states that its Media Snapshot feature “allows

you to watch live-streams of everything we are

recording. This is great for Crisis Communications,

monitoring Breaking News, as well as for Press

Conferences.” Fox News draws specific attention to

such live-streaming of its programs by TVEyes in its

claim of copyright infringement.

B. Fox News

Fox News is an international television news

organization headquartered in New York. Fox News

owns and operates two television news channels: Fox

News Channel (“FNC”) and Fox Business Network

(“FBN”). FNC delivers breaking news in a twenty-four

hour news cycle on all matters of interest, including

political and business news, and has been the most

watched news channel in the United States for the last

eleven years. FBN is a financial news channel that

provides real-time information and reports on financial and business news. FBN is distributed to over 70

million cable subscribers across the United States.

Both FNC and FBN air news and information twentyfour hours a day, seven days a week. Their primary

competitors are the cable television channels, MSNBC

and CNN.

FNC and FBN are in the business of reporting news

worldwide, and incur significant expenditures to cover

developing news stories of the day, every day. Their

43a

programs reflect creative endeavors, and considerable

time, effort, and expense in delivering news and

political commentary to the public. The news ticker

passing horizontally at the bottom of the television

screen provides real-time updates of breaking news

while regular programming airs.

Fox News also has a growing online and digital

presence on the Internet (as do its competitors,

MSNBC and CNN). Fox News makes live streams of

FNC and FBN programming available on the internet

through its TVEverywhere service, to viewers having

a cable or satellite subscription. Fox News also makes

certain segments of its shows available to the general

public on its websites, FoxNews.com and FoxBusiness.com. Fox News makes about 16% of its television

broadcast content available online, and is concerned

that a broader dissemination beyond that will result

in a weakening of its viewer-base or create a substitute

for viewing Fox News on television cable and satellite.

Fox News provides clips of segments of its programs

within an hour of airing, and with updates as needed.

The video clips do not show the exact content or images

that were aired on television—the news ticker on the

bottom of the screen is absent in the online clips, for

example. Furthermore, the online clips sometimes

feature “corrected” versions of news stories, amending

and correcting incorrect and outdated descriptions in

the original television version.

Visitors to Fox News’ websites are shown a pre-reel

advertisement, before watching news clips, a feature

that generates revenue for Fox News. Visitors to Fox

News’ websites can also copy and paste URLs of

specific clips to share on social media platforms. Fox

News also allows website visitors to search the video

clip content on its website, and provide keywords for

44a

that purpose. Fox News restricts the use of the video

clips provided on the websites, requiring that they are

to be used for “personal use only and [the content] may

not be used for commercial purposes.” Visitors to Fox

News’ websites are not permitted to download any of

the video clips.

Fox News licenses third party websites, including

Yahoo!, Hulu, and YouTube, to store and show video

clips of segments of its program on their websites,

thereby generating another stream of income by the

license fees Fox News charges. Fox News licensees

must covenant that they will not show the clips in a

way that is derogatory or critical of Fox News. In the

past three years, Fox News has made approximately

$1 million in revenue from licensing content to these

third party websites.

Fox News also distributes video clips through its

exclusive clip-licensing agent, ITN Source, Ltd. (“ITN

Source”). ITN Source distributes and licenses video

clips of Fox News’ content to companies and governmental organizations for use in a variety of ways,

including to post on a website or social media platform

or to create a digital archive. ITN Source maintains a

library of over 80,000 Fox News video clips which its

customers can search using keywords. Overall, Fox

News has made approximately $2 million in licensing

fees through ITN Source. ITN Source’s partner,

Executive Interviews, Ltd. (“Executive Interviews”)

also distributes Fox News’ content by marketing

copies of video clips to guests who have appeared on

Fox News’ channels. Executive Interviews’ clients

include multinational corporations, small boutique

and regional companies, nonprofit organizations, and

government entities.

45a

The vast majority of Fox News’ revenues is derived

from fees paid to Fox News by cable companies that

broadcast Fox News’ content. Unlike broadcast television which is aired free of charge, FNC and FBN, as

cable television stations, charge fees to cable providers

like, for example, Time Warner Cable, and they, in

turn, charge fees for use of cable to their subscribers.

Time Warner Cable and other cable and satellite

providers pay Fox News per-subscriber carriage fees—

the more subscribers, the bigger the carriage fee. Fees

and advertising revenues from commercial advertisers

and sponsors vary directly with the Nielsen Ratings of

the total number of viewers, and similar ratings of

traffic on Fox News websites.

Fox News filed this lawsuit because of concern that

TVEyes will divert viewers of its news and commentary programs and visits to its websites. Fox News

sues TVEyes for violations of the Copyright Act, 17

U.S.C. § 101 et seq., and under state law for misappropriation. Fox News also alleges that TVEyes’ use of

Fox News’ video content to create video clips that

TVEyes’ subscribers can play, save, edit, archive,

download, and share constitute copyright infringement. Specifically, Fox News alleges that TVEyes

copied and infringed 19 hour-long programs aired on

FNC and FBN between October 16, 2012 and July 3,

2013 aired on FNC and FBN.3 Fox News owns

shows. TVEyes asserts that its use of Fox News’

The 19 programs at issue in this suit are two episodes of On

the Record with Greta Van Sustren; three episodes of Special

Report with Bret Baier; three episodes of The Five; four episodes

of The O’Reilly Factor; two episodes of The Fox Report with

Shepard Smith; four episodes of Hannity; and one episode of

Special Report Investigates: Death & Deceit in Benghazi.

46a

content is a “fair use” protected by the Copyright Act.

See, 17 U.S.C. § 107. The parties have cross-moved for

summary judgment.

II. Discussion

A. Standard of Review

A motion for summary judgment shall be granted

where the pleadings and supporting materials show

that “there is no genuine dispute as to any material

fact and the movant is entitled to judgment as a

matter of law.” Fed.R.Civ.P. 56(a). The court must

“resolve all ambiguities, and credit all factual

inferences that could rationally be drawn, in favor of

the party opposing summary judgment.” Roe v. City of

Waterbury, 542 F.3d 31, 35 (2d Cir. 2008). The

assertion of the fair use affirmative defense raises a

mixed question of law and fact that can be resolved at

summary judgment if there are no genuine material

facts in dispute. Bill Graham Archives v. Dorling

Kindersley Ltd., 448 F.3d 605, 608 (2d Cir. 2006).

B. Copyright Infringement

The Copyright Act, 17 U.S.C. § 101 et seq., grants

authors “a limited monopoly over (and thus the

opportunity to profit from) the dissemination of their

original works of authorship.” Authors Guild, Inc. v.

Act also gives authors the exclusive right not only to

reproduce these works but also to create “derivative

works.”4 Id. To show copyright infringement, an

A derivative work is defined as one “based upon one or more

preexisting works, such as a translation, musical arrangement,

dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other

form in which a work may be recast, transformed, or adapted. A

work consisting of editorial revisions, annotations, elaborations,

47a

author must show ownership of a valid copyright and

unauthorized copying of the author’s copyrighted

work. Tufenkian Imp./Exp. Ventures, Inc. v. Einstein

Moomjy, Inc., 338 F.3d 127, 131 (2d Cir. 2003). Fox

News has shown, and TVEyes concedes, that Fox

News owns valid copyrights in the nineteen television

programs that form the subject of this lawsuit.5

TVEyes admits also that it copies, verbatim, each of

Fox News’ registered works. These concessions constitute copyright infringement unless TVEyes shows that

its use is fair use. UMG Recordings, Inc. v. MP3.Com,

Inc., 92 F. Supp. 2d 349, 350 (S.D.N.Y. 2000). Fox

News does not argue that TVEyes’ use of Fox News’

broadcasts for the purpose of creating an analytical

database is a fair use; Fox News takes issue with the

features of TVEyes’ database that provide TVEyes

subscribers with video clips of Fox News’ content.

C. Fair Use

As the Supreme Court explained, from “the infancy

of copyright protection, some opportunity for fair use

of copyrighted materials has been thought necessary

to fulfill copyright’s very purpose, ‘[t]o promote the

Progress of Science and useful Arts …’ U.S. Const.,

Art. I, 8, cl. 8.” Campbell v. Acuff-Rose Music, Inc., 510

U.S. 569 (1994). The Fair Use doctrine limits the

author’s monopoly over her work allowing the public

to make use of the copyrighted work without the

or other modifications which, as a whole, represent an original

work of authorship, is a ‘derivative work.’” 17 U.S.C. § 101.

Fox News owns copyrights only over the creative expression in

its television programs. Factual reports are not copyrightable

because facts cannot be original to an author. Compilations and

descriptions of facts, however, are copyrightable because the

presentation “can display originality.” Nihon Keizai Shimbun,

Inc. v. Comline Business Data, Inc., 166 F.3d 65, 70 (2d Cir. 1999).

48a

author’s permission in certain situations. 17 U.S.C. §

107. The preamble to the fair use section in the

the fair use of a copyrighted work … for

purposes such as criticism, comment, news

reporting, teaching (including multiple copies

for classroom use), scholarship, or research, is

not an infringement of copyright …

When the copied work is being used for one of the

purposes identified in the preamble, there is a strong

presumption in favor of fair use for the defendant.

NXIVM Corp. v. Ross Institute, 364 F.3d 471, 477 (2d

Cir. 2004). These examples of fair use are illustrative.

Campbell, 510 U.S at 577-78.

A court considering whether or not a challenged and

potentially infringing use of a copyrighted work is fair

use must consider the following nonexclusive

statutory factors:

(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.

17 U.S.C. § 107. The four factors should not “be treated

in isolation, one from another. All are to be explored,

and the results weighed together, in light of the

purposes of copyright.” Campbell, 510 U.S. at 578.

“The ultimate test of fair use is whether the copyright

law’s goal of promoting the Progress of Science and

49a

useful Arts would be better served by allowing the use

than by preventing it.” Bill Graham Archives v.

Dorling Kindersley Limited, 448 F.3d 605, 608 (2d Cir.

2006) (internal quotations and citations omitted). This

evaluation is an “open-ended and context-sensitive

inquiry,” Blanch v. Koons, 467 F.3d 244, 251 (2d Cir.

2006) that calls for “case-by-case analysis.” Campbell,

510 U.S. at 577. A proponent of the fair use doctrine

need not establish that each factor weighs in its favor

to prevail. NXIVM Corp. v. Ross Inst., 364 F.3d 471,

476-77 (2d Cir. 2004). Because fair use is an affirmative defense, the proponent carries the burden of proof

on issues in dispute. American Geophysical Union v.

Texaco, Inc., 60 F.3d 913, 918 (2d Cir. 1994).

i. The First Factor

The first factor directs courts to consider “the purpose and character of the use, including whether such

use is of a commercial nature or is for nonprofit

educational purposes.” 17 U.S.C. § 107(1). The “central

purpose of this investigation” requires evaluating

whether the new work “merely supersedes the objects

of the original creation” or “instead adds something

new, with a further purpose or different character,

altering the first with new expression, meaning or

message; it asks, in other words, whether and to what

extent the new work is transformative.” Campbell, 510

U.S. at 578-79 (internal citations and quotations omitted). Transformation “lies at the heart of the fair use

doctrine’s guarantee of breathing space within the

confines of copyright” and therefore “the more transformative the new work, the less will be the

significance of other facts, like commercialism, that

may weigh against a finding of fair use.” Id.

Transformation almost always occurs when the new

work “does something more than repackage or

50a

republish the original copyrighted work.” Authors

Guild, Inc. v. HathiTrust, 755 F.3d 87 (2d Cir. 2014)

(“A transformative work is one that serves a new and

different function from the original work and is not a

substitute for it.”). A use “can be transformative in

function or purpose without altering or actually

adding to the original work.” Swatch Group Mgmt.

Servs. v. Bloomberg LP, 2014 WL 2219162 (2d Cir.

May 30, 2014). Appreciating that this first factor

largely turns on whether or not TVEyes is deemed

transformative, both parties claim to have a controlling line of precedent in their favor.

TVEyes relies on a line of cases holding that

electronic libraries of books, created for the purpose of

allowing users to pinpoint which books use certain

keywords or terms, is transformative and therefore

constitutes fair use. In Authors Guild, Inc. v.

HathiTrust, 755 F.3d 87 (2d Cir. 2014), the Second

Circuit considered a copyright challenge to the Hathi

Trust Digital Library (“HDL”), an electronic repository

of scanned books. HDL contains over 10 million works.

The general public can search HDL for any particular

term. The search results will show the page numbers

on which the search term appears in each book in the

HDL, and the number of times the term appears. The

HDL does not display snippets of the text nor can the

individual view the actual page on which the term

appears.6 The Second Circuit found that HDL was

protected from copyright infringement because its

“creation of a full-text searchable database is a

quintessentially transformative use [and] the result of

Hathi Trust allows its member libraries to provide its patrons

that have a certified print disability (meaning, among other

things that they cannot physically hold a book) with access to the

full contents of the book in the digital library.

51a

a word search is different in purpose, character,

expression, meaning, and message from the page (and

the book) from which it is drawn” and therefore

qualified as fair use. Id. at 97.

In Authors Guild, Inc. v. Google, Inc., 954 F. Supp.

2d 282 (S.D.N.Y. 2013), Google defended its practice of

scanning more than 20 million books without

permission from the copyright holders as fair use.

Google’s digital library created an index of all the

words in each scanned book. Users can search for a

particular word or phrase to see in which of the 20

million books that word appears. Additionally,

because the books in Google Books are digitized, a user

can search a particular book to see how many times

that word or phrase appears in that book. Google

provides a “snippet view” of the page in which the

search word appears, dividing the page into eight

different snippets. The results for a particular

keyword only show three snippets on each page,

making it difficult for a user to read the entire page

without generating multiple searches for each page,

and repeating such multiple searches for each page in

a book. Furthermore, a user motivated to run enough

different searches to cumulatively view all eight

snippets on every page, still could not read the entire

book since one out of every ten pages of the digitized

book is blocked out and will not be shown no matter

what kind of serial searches are run by a user.

The Authors Guild sued Google for copyright

infringement. Google asserted a fair use defense,

claiming that its creation of an online digital library

was transformative. The district court agreed, ruling

that Google Books’ copying created a “highly

transformative” database of the words in books:

52a

Google books digitizes books and transforms

expressive text into a comprehensive word

index that helps readers, scholars, researchers,

and others find books. … The use of book text

to facilitate search through the display of

snippets is transformative. … Similarly, Google

Books is also transformative in the sense that

it has transformed the book text into data for

purposes of substantive research, including

data mining and text mining in new areas,

thereby opening up new fields of research.

Words in books are being used in a way they

have not been used before. Google Books has

created something new in the use of book text—

the frequency of words and trends in their

usage provide substantive information.

Id. at 291. The district court considered it important

that the research database had become an important

tool for librarians and cite-checkers, and thus served a

different purpose and function than did the book itself.

Google Books was thus not a replacement of the hard

copies of books, but added value by creating new

information. Id. The district court considered that it

was unlikely that someone would expend the time and

effort to “input countless searches to try and get

enough snippets to comprise an entire book,” and that

a user probably would need a hard copy of the book to

generate the search terms necessary to read the entire

book. See, also, Perfect 10, Inc. v. Amazon.com, Inc.,

508 F.3d 1146 (9th Cir. 2007) (internet search engine’s

display of thumbnail versions of plaintiff’s photographs constituted fair use because they were put “to

a use fundamentally different than the use intended

by Perfect 10”); Kelly v. Arriba Soft Corporation, 336

F.3d 811 (9th Cir. 2003) (same).

53a

Fox News objects to TVEyes copying its content and

disseminating it to TVEyes’ subscribers. Fox News

argues that excerpts, circulations, and summaries of

copyrighted content are not transformative and not a

fair use. See Nihon Keizai Shimbun, Inc. v. Comline

Business Data, Inc., 166 F.3d 65 (2d Cir. 1999) (ruling

that abstracts and rough translations of Japanese

copyrighted content was not transformative).

In Infinity Broadcast Corp. v. Kirkwood, 150 F.3d

104 (2d Cir. 1998), defendant created a dial-up service

that allowed its subscribers to call a telephone number

to listen to live radio broadcasts. By telephoning the

number, subscribers could listen to the radio broadcast through the phone. The Second Circuit held that

defendant’s telephone service was not fair use.

Because the derivative broadcast merely repackaged

or republished the original, there was a “total absence

of transformativeness in [defendant’s] act of retransmission” which prevented a fair use finding. Id. at 109.

In Associated Press v. Meltwater U.S. Holdings, Inc.,

931 F. Supp. 2d 537 (S.D.N.Y. 2013), the defendants

created a news monitoring service for news articles

that appeared on the internet. The service featured a

searchable database that allowed users to see the

number of times, and where, keywords were used. The

defendant used an automated computer program that

crawled the Internet for news, and extracted and

downloaded all content responsive to search terms,

customized by users. The extracted content was then

placed in a queue for indexing. Users could search the

database for keywords or terms and find out how many

times, when, and where they were used. The court

ruled that this use was not transformative because it

“uses its computer programs to automatically capture

and republish designated segments of text from news

54a

articles, without adding any commentary or insight in

its New Reports.” Id. at 552. The district court

acknowledged that the “purpose of search engines is to

allow users to sift through the deluge of data available

through the Internet and to direct them to the original

source. That would appear to be a transformative

purpose.” Id. at 556.

However, the district court noted that Meltwater

chose “not to offer evidence that Meltwater News

customers actually use[d] its service to improve their

access to the underlying news stories that are

excerpted in its news feed,” and without such proof,

Meltwater failed to prove its fair use defense. Id. at

554. Meltwater failed to show that its service was

actually used by subscribers for research or to transform the original news story into a factum or datum

that told a broader story about the overall news

reporting industry. See, also, Authors Guild, Inc. v.

HathiTrust, 755 F.3d 87, 97 (holding that a word

search of books which “does not add into circulation

any new, human-readable copies of any books,” but

just creates a word search, constitutes fair use); Los

Angeles News Service v. Reuters, 149 F.3d 987 (9th Cir.

1998) (holding that copying plaintiff’s video recording

of the Rodney King riots and selling it to other news

stations for the very same purpose was not fair use);

Los Angeles News Service v. Tullo, 973 F.2d 791 (9th

Cir. 1992) (holding that copying plaintiff’s video

recordings of news events and selling them to news

outlets for same purpose was not fair use). In the cases

cited by Fox News, save for Meltwater, defendants

were copying the plaintiff’s work and then selling it for

the very same purpose as plaintiff. That is quintessential copyright infringement and thus these cases do

not shed much light on the more nuanced issue before

55a

me today, and especially not on the question of transformation.

TVEyes distinguishes itself from those cases by the

different character of its database. Print is fixed in

form, and regularly available from publishing sources

and archives. A service that provides clipping of news

articles and columns provides essentially the same

service as could be provided by the content provider

itself. TVEyes, however, is not a clipping service for

print. TVEyes’ search results show the combination of

visual images and text in a medium that raises the

commentator to have the qualities of news itself. The

focus of certain programs and talk shows on President

Obama’s recent golf vacation, for example, was as

much the news as the beheading of an American

reporter. The actual images and sounds depicted on

television are as important as the news information

itself—the tone of voice, arch of an eyebrow, or upturn

of a lip can color the entire story, powerfully modifying

the content. The service provided by TVEyes, indexing

and collecting visual and audio images, allows subscribers to categorize, not only content in the response

to key search words, but also “information [that] may

be just as valuable to [subscribers] as the [content],

since a speaker’s demeanor, tone, and cadence can

often elucidate his or her true beliefs far beyond what

a stale transcript or summary can show.” The Swatch

Group Management Ltd. v. Bloomberg L.P., 2014 WL

2219162, at *8 (2d Cir. 2014). Unlike the indexing and

excerpting of news articles, where the printed word

conveys the same meaning no matter the forum or

medium in which it is viewed, the service provided by

TVEyes is transformative. By indexing and excerpting

all content appearing in television, every hour of the

day and every day of the week, month, and year,

TVEyes provides a service that no content provider

56a

provides. Subscribers to TVEyes gain access, not only

to the news that is presented, but to the presentations

themselves, as colored, processed, and criticized by

commentators, and as abridged, modified, and

enlarged by news broadcasts.

There also is a second relevant distinction that

makes the district judge’s opinion in Meltwater less

helpful to deciding the disposition here. Meltwater

aggregated content already available to the individual

user who was willing to perform enough searches and

cull enough results on the Internet. The service

provided simply “crawled” the Internet, gathering

extant content. TVEyes, however, creates a database

of otherwise unavailable content. TVEyes is the only

service that creates a database of everything that

television channels broadcast, twenty-four hours a

day, seven days a week. The Internet does not and

cannot house the entirety of this content because Fox

News, for example, does not provide all of its content

online. Thus, without TVEyes, this information cannot

otherwise be gathered and searched. That, in and of

itself, makes TVEyes’ purpose transformative and

different in kind from Meltwater’s, which simply

amalgamated extant content that a dedicated

researcher could piece together with enough time,

effort, and Internet searches. These differences

further reduce the persuasive value of the district

court opinion in Meltwater.

Fox News argues that the clips that TVEyes

provides are of the very content that is protected by its

service of monitoring and reporting on all the news

and opinions presented by all television and radio

stations. Without these excerpted video clips, TVEyes’

users could not receive the full spectrum of

57a

information identified by an index, for the excerpt

discloses, not only what was said, but also how it was

said, with subtext body language, tone of voice, and

facial expression—all crucial aspects of the presentation of, and commentary on, the news.

Fox News argues that a TVEyes’ subscriber could

watch sequential ten minute clips of content end to

end, and thus watch and hear all of Fox News’

programs in their entirety just two to five minutes

after they air. Fox News makes an unrealistic point,

for cost and trouble would make such copying

impractical and timely. In any event, the case before

me must be decided on its own merits. “The task is not

to be simplified with bright-line rules, for the statute,

like the doctrine it recognizes, calls for case-by-case

analysis.” Campbell, 510 U.S. at 577.

I find that TVEyes’ search engine together with its

display of result clips is transformative, and “serves a

new and different function from the original work and

is not a substitute for it.” HathiTrust, 2014 WL

2576342, at *6. In making this finding, I am guided by

the Second Circuit’s determination that databases

that convert copyrighted works into a research tool to

further learning are transformative. TVEyes’

message, “‘this is what they said’—is a very different

message from [Fox News’]—‘this is what you should

[know or] believe.’” Swatch, 2014 WL 2219162, at *8.

TVEyes’ evidence, that its subscribers use the service

for research, criticism, and comment, is undisputed

and shows fair use as explicitly identified in the

preamble of the statute. 17 U.S.C. § 107.

The issue of fair use is affected by the issue of

profits. Clearly, TVEyes is a for-profit company, and

enjoys revenue and income from the service it

provides. However, the consideration of profits is just

58a

one factor, among many others. “[T]he more transformative the new work, the less will be the significance of other factors, like commercialism, that may

weigh against a finding of fair use.” Campbell, 510

U.S. at 579; Swatch, 756 F.3d at 90-91. If “commerciality carried presumptive force against a finding

of fairness, the presumption would swallow nearly all

of the illustrative uses listed in the preamble paragraph of § 107, including news reporting, comment,

criticism, teaching, scholarship, and research, since

these activities are generally conducted for profit in

this country.” Campbell, 510 U.S. at 584. Thus I find

that the first factor weighs in favor of TVEyes’ fair use

defense.

ii. The Second Factor

The second statutory factor in the fair use analysis

requires consideration of “the nature of the copyrighted work.” 17 U.S.C. § 107(2). This factor considers

the “value of the materials used,” and calls for “the

recognition that some works are closer to the core of

intended copyright protection than others, with the

consequence that fair use is more difficult to establish

when the former works are copied.” Campbell, 510

U.S. at 586. The nature of Fox News’ programming

and its copyrightable content is not disputed. The

news itself is not subject to copyright protection, but

the creative expression and artistic license necessarily

exercised in deciding how to portray, film, direct,

stage, sequence, and communicate this information is

subject to copyright protection. Nevertheless, there is

“greater leeway” for a determination of fair use when

the work is factual or largely informational. Cariou v.

Prince, 714 F.3d 694, 709-10 (2d Cir. 2013). In these

cases, the scope for fair use is greater. Swatch, 2014

WL 2219162, at *13. Additionally, where the creative

59a

aspect of the work is transformed, as is the case here,

the second factor has limited value. Authors Guild,

Inc. v. HathiTrust, 755 F.3d 87 (2d Cir. 2014). I find

that the second factor, the nature of the copyrighted

work, does not weigh for or against a finding of fair

use.

iii. The Third Factor

The third factor requires that I consider “the

amount and substantiality of the portion used in

relation to the copyrighted work as a whole.” 17 U.S.C.

§ 107(3). Here, there is no question that TVEyes copies

all of Fox News’ content—that is the essence of

TVEyes’ business model. The third factor does not,

however, counsel a simple, crude quantitative comparison. It asks rather “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.” Authors Guild, Inc. v. HathiTrust, 755 F.3d 87

(2d Cir. 2014). Thus, where copying the entire work is

necessary to accomplish the transformative function

or purpose, as is the case, here, this factor, like the

second factor, bows to the importance and priority of

the first factor’s finding of transformative use. “[T]he

crux of the inquiry is whether no more was taken than

necessary. For some purposes, it may be necessary to

copy the entire copyrighted work, in which case Factor

Three does not weigh against a finding of fair use.” Id.

Here TVEyes copies all of Fox News’ television

content (and other stations’ contents) in its entirety, a

service no one, including Fox News itself provides. The

value of TVEyes’ database depends on its all-inclusive

nature, copying everything that television and radio

stations broadcast. One cannot say that TVEyes copies

more than is necessary to its transformative purpose

60a

for, if TVEyes were to copy less, the reliability of its

all-inclusive service would be compromised. I find that

the third factor, the extent of the copying, weighs

neither in favor or against a fair use finding, since “the

extent of permissible copying varies with the purpose

and character of the use,” Campbell, 510 U.S. at 58687, and TVEyes’ service requires complete copying

twenty-four hours a day, seven days a week.

iv. The Fourth Factor

The fourth factor considers “the effect of the use

upon the potential market for or value of the

copyrighted work.” 17 U.S.C. § 107(4).

It requires courts to consider not only the extent of market harm caused by the particular

actions of the alleged infringer, but also whether unrestricted and widespread conduct of the

sort engaged in by the defendant … would

result in a substantially adverse impact on the

potential market … The enquiry must take

account not only of harm to the original but also

harm to the market for derivative works.

Campbell, 510 U.S. at 590 (internal citations and

quotations omitted). Crucially, this factor “is concerned with only one type of economic injury to a

secondary use serves as a substitute for the original

work.” HathiTrust, 2014 WL 2576342, at *9. Thus any

economic harm caused by transformative uses does

not factor into this analysis, “because such uses, by

definition do not serve as substitutes for the original

work.” Id. This factor also requires a “balancing of the

benefit the public will derive if the use is permitted

and the personal gain the copyright owner will receive

61a

if the use is denied.” Bill Graham, 448 F.3d at 610

(internal quotations omitted).

a. Economic Injury

The Fair Use doctrine does not permit users to

excessively damage the market for the original

by providing the public with a substitute for the

original work. Thus, a book review may fairly

quote a copyrighted book for the purposes of fair

and reasonable criticism, but the review may

not quote extensively from the heart of a

forthcoming memoir in a manner that usurps

the right of first publication and serves as a

substitute for purchasing the memoir.

Authors Guild, Inc. v. HathiTrust, 755 F.3d 87, 95-96

(2d Cir. 2014) (internal citations and quotations

omitted). “Market harm is a matter of degree, and the

importance of this factor will vary, not only with the

amount of harm, but also with the relative strength of

the showing on other factors.” Campbell, 510 U.S. at

590 n.21.

Fox News bases its suit on 19 individual, hour-long

programs that it aired between October 16, 2012 and

July 3, 2013. Fox News argues that TVEyes’ service

decreases the per-subscriber carriage fees that advertisers and cable and satellite providers are willing to

pay Fox News. Fox News alleges that people will

watch copies of content on TVEyes, and not FNC and

FBN, thereby depressing Fox News’ viewership

ratings. Fox News’ allegations assume that TVEyes’

users actually use TVEyes as a substitute for Fox

News’ channels. Fox News’ assumption is speculation,

not fact. Indeed, the facts are contrary to Fox News’

speculation.

62a

First, none of the shows on which Fox News’ suit is

based remain available to TVEyes subscribers;

TVEyes erases content every 32 days. Second, in the

32 days that these programs were available to TVEyes’

subscribers, only 560 clips were played, with an

average length of play of 53.4 seconds and the full

range of play being 11.5 seconds to 362 seconds. Of the

560 clips played, 85.5% of the clips that were played

were played for less than one minute; 76% were played

for less than 30 seconds; and 51% were played for less

than 10 seconds. One program was not excerpted at

all. The long term TVEyes statistics are consistent

with the specific statistics of the 19 programs. From

2003 to 2014, only 5.6% of all TVEyes users have ever

seen any Fox News content on TVEyes. Between

March 31, 2003 and December 31, 2013, in only three

instances did a TVEyes subscriber access 30 minutes

or more of any sequential content on FNC, and no

TVEyes subscriber ever accessed any sequential

content on FBN. Not one of the works in suit was ever

accessed to watch clips sequentially. The record does

not support Fox News’ allegations. Fox News fails in

its proof that TVEyes caused, or is likely to cause, any

adverse effect to Fox News’ revenues or income from

advertisers or cable or satellite providers.

In a typical month, fewer than 1% of TVEyes’ users

play a video clip that resulted from a keyword search

of its watch terms. TVEyes subscribers play video

clips, on average, for 41 seconds, while the median

play duration is 12 seconds. 95% of all video clips

played on TVEyes are three minutes or shorter; 91%

are two minutes or shorter; and 82% are a minute or

shorter. Fewer than .08% of clips are ever played for

the maximum clip time of ten minutes. Most clips

respond to a search using keywords, fewer than 5.5%

of all plays originate from a Date and Time Search.

63a

There is no basis for Fox News’ alleged concern that

TVEyes’ subscribers are likely to watch ten minute

clips sequentially in order to use TVEyes as a

substitute for viewing Fox News’ programming on

television.

No reasonable juror could find that people are using

TVEyes as a substitute for watching Fox News broadcasts on television. There is no history of any such use,

and there is no realistic danger of any potential harm

to the overall market of television watching from an

“unrestricted and widespread conduct of the sort

engaged in by defendant.” Campbell, 510 U.S. at 590

(internal citations and quotations omitted). Fox News

has not shown that TVEyes poses a risk to it of reduced

returns on advertising rates or revenues because of

alleged diversions of television viewers.

Fox News also argues that TVEyes impairs the

derivative market for video clips of copyrighted

content with syndication partners like YouTube, and

with Fox News’ exclusive licensing agent, ITN Source

and Executive Interviews. Why, Fox News asks,

should TVEyes subscribers purchase clips from Fox

News’ licensing agents if they can be procured as part

of their TVEyes subscription? However, Fox News is

unable to provide the identity of the customers

Executive Interviews allegedly lost. Fox News’ entire

revenue from this derivative source, between July 1,

2012 and June 30, 2013, is $212,145.00 from syndication partners and $246,875.00 from the licensing of

clips, a very small fraction of its overall revenue. In

light of this very small possible impact, any, “cognizable market harm” that can occur is likely to be

outweighed by the public benefit arising from TVEyes’

services. See Campbell, 510 U.S. at 590, n. 21.

64a

b. Public Benefit

The fourth factor requires a balance between the

“benefit the public will derive if the use is permitted,

and the personal gain the copyright owner will receive

if the use is denied.” Bill Graham, 448 F.3d at 610

(internal quotations omitted). TVEyes argues that its

service provides an immense benefit to the public

interest because it assembles from scratch a library of

television broadcast content that otherwise would not

exist and renders it easily and efficiently textsearchable. Without TVEyes, there is no other way to

sift through more than 27,000 hours of programming

broadcast on television daily, most of which is not

available online or anywhere else, to track and

discover information.

TVEyes subscribers use this service to comment on

and criticize broadcast news channels. Government

bodies use it to monitor the accuracy of facts reported

by the media so they can make timely corrections

when necessary. Political campaigns use it to monitor

political advertising and appearances of candidates in

election years. Financial firms use it to track and

archive public statements made by their employees for

regulatory compliance. The White House uses TVEyes

to evaluate news stories and give feedback to the press

corps. The United States Army uses TVEyes to track

media coverage of military operations in remote

locations, to ensure national security and the safety of

American troops. Journalists use TVEyes to research,

report on, compare, and criticize broadcast news

coverage. Elected officials use TVEyes to confirm the

accuracy of information reported on the news and seek

timely corrections of misinformation. Clearly, TVEyes

provides substantial benefit to the public.

65a

I therefore conclude that this factor does not weigh

against a finding of fair use, especially when the de

minimis nature of any possible competition is

considered in comparison to the substantial public

service TVEyes provides. Subject to possible exceptions from the downloading and sharing of clips via

social media, as discussed below, I find that the small

possible market harm to Fox News is substantially

outweighed by the important public benefit provided

by TVEyes.

v. The Balance of the Factors

Ultimately, “the various non-exclusive statutory

factors are to be weighed together, along with any

other relevant considerations, in light of the purposes

of the copyright laws.” Google Inc., 954 F. Supp. 2d at

293. TVEyes’ service copies television broadcasts but

for an entirely different purpose and function. TVEyes

is not “trying to scoop” Fox News’ broadcasts or to

“supplant the copyright holder’s commercially valuable right of first publication” Swatch, 2014 WL

2219162, at *7. TVEyes captures and indexes broadcasts that otherwise would be largely unavailable once

they aired.

Users access the clips and snippets for an altogether

different purpose—to evaluate and criticize broadcast

journalism, to track and correct misinformation, to

evaluate commercial advertising, to evaluate national

security risks, and to track compliance with financial

market regulations. As TVEyes points out,

“monitoring television is simply not the same as

watching it.” As the Second Circuit explained in

Swatch Group Mgmt. Servs. Ltd. v. Bloomberg LP,

66a

In the context of news reporting and analogous

activities, moreover, the need to convey information to the public accurately may in some

instances make it desirable and consonant with

reproduce an original work without alteration.

Courts often find such uses transformative by

emphasizing the altered purpose or context of

the work, as evidenced by surrounding commentary or criticism.

2014 WL 2219162, at *8. TVEyes’ service provides

social and public benefit and thus serves an important

public interest.

I therefore find that TVEyes’ copying of Fox News’

broadcast content for indexing and clipping services to

its subscribers constitutes fair use. However, I do not

decide the issue of fair use for the full extent of

TVEyes’ service, TVEyes provides features that allow

subscribers to save, archive, download, email, and

share clips of Fox News’ television programs. The

parties have not presented sufficient evidence showing

that these features either are integral to the

transformative purpose of indexing and providing

clips and snippets of transcript to subscribers, or

threatening to Fox News’ derivative businesses.

Similarly, neither party is entitled to summary

judgment on the issue of whether the date and time

search function, allowing its subscribers to search for

television clips by date and time instead of by keyword

or term, is integral to the transformative purpose of

TVEyes and its defense of fair use. While the evidence

shows that this feature does not pose any threat of

market harm to Fox News, the record fails to show

that it is crucial or integral to TVEyes’ transformative

67a

purpose. The factual record should be developed

further before I can decide this issue.

D. Hot News Misappropriation Claim

Fox News also pleads a hot news misappropriation

claim, alleging that TVEyes stole “hot news” from Fox

News in violation of state tort law. In International

News Service v. Associated Press, 248 U.S. 215 (1918),

the case that created the concept of hot news misappropriation, plaintiff and defendant were in exactly

the same business of gathering news worldwide and

distributing it to its members, various news reporting

outlets. The Associated Press (“AP”) sued the International News Service (“INS”) because the INS had

engaged in a practice of “scooping” AP news stories.

They did this by lifting AP news stories from AP

bulletins and repackaging them as INS news stories

and selling them to news outlets before the AP could.

The Supreme Court ruled that this kind of “reaping

what one has not sown” was tortious where the parties

were “in the keenest of competition between

themselves in the distribution of the news throughout

the United States.” Id. at 231.

To prevail on a hot news misappropriation claim,

Fox News must show that: (1) it generates or collects

information at some expense; (2) the value of information is highly time sensitive; (3) defendant’s use of

information constitutes free-riding on plaintiff’s costly

efforts to generate or collect it; (4) defendant’s use of

information is in direct competition with a product or

service offered by plaintiff; and (5) the ability of other

parties to free-ride on efforts of plaintiff would so

reduce the incentive to produce the product or service

that its existence or quality would be substantially

threatened. The National Basketball Ass’n v.

Motorola, Inc., 105 F.3d 841, 852 (2d Cir. 1997).

68a

Before addressing the merits of this claim, however,

I must determine whether or not this state law claim

is preempted by the federal Copyright Act. “All legal

or equitable rights that are equivalent to any of the

exclusive rights” of the Copyright Act “are governed

exclusively by” the Copyright Act. 17 U.S.C. § 301(a).

State law hot news misappropriation claims are preempted by the Copyright Act if the “claim seeks to

vindicate legal or equitable rights that are equivalent

to one of the bundle of exclusive rights already

protected by the Copyright Act; and the work in

question is of the type of works protected by the

both of these conditions are met, as is clearly the case

here, the court then applies the “extra element test” to

determine whether the claim should survive because

of some extra element in the tort bringing it outside

the realm of copyright.

This test asks whether “an extra element [is]

required instead of or in addition to the acts of

reproduction, performance, distribution or display, in

order to constitute a state-created cause of action,”

such that the claim is qualitatively different from a

F.3d at 850. Here, Fox News argues that the “extra

element” is the fact that TVEyes stole its “hot news”

and thereby “free-rides” on Fox News’ hard work and

labor in the same way the INS free-rode on the AP’s

labor. In making this argument, Fox News ignores the

actual definition of free-riding provided by the

Supreme Court in INS. For the purposes of this tort

and its preemption test, the term “free-riding” means

“taking material that has been acquired by complainant as the result of organization and the expenditure

of labor, skill, and money, and which is salable by

69a

complainant for money, and … appropriating it and

selling it as the [defendant’s] own …” Barclays

Capital, Inc. v. Theflyonthewall.com, Inc., 650 F.3d

876, 895 (2d Cir. 2011), quoting International News

Service v. Associated Press, 248 U.S. 215, 239 (1918).

The Supreme Court defined free-riding as passing off

someone else’s work as one’s own. Here, TVEyes is not

passing off Fox News’ content as its own.

In Barclays Capital, the Second Circuit ruled that

the hot news misappropriation claim was preempted

by the Copyright Act, and that the “extra element” test

premised on “free-riding” was not shown. In that case,

the plaintiff researched and analyzed the financial

markets in order to generate daily reports that provided recommendations to clients about firms in which

to invest, and stock in which to trade. The defendants

obtained information about firm recommendations

and posted them on its website before firms made

them available to the general public and before exchanges for trading in those shares opened for the day.

The Second Circuit held that the hot news misappropriation claim was preempted by the Copyright Act,

and that defendants were not “free-riding,” but were

“collating and disseminating factual information—the

facts that Firms and others in the securities business

would have made recommendations with respect to

the value of and the wisdom of purchasing or selling

securities—and attributing the information to its

source.” Barclays Capital, Inc., 650 F.3d at 902.

Fox News’ hot news misappropriation claim is

preempted by the Copyright Act for the very same

reasons. As in Barclays, “[i]t is not the identity of Fly

and its reputation as a financial analyst that carries

the authority and weight sufficient to affect the

70a

market. It is Fly’s accurate attribution of the Recommendation to the creator that gives this news its

value.” Id. Similarly, TVEyes is not a valuable service

because its subscribers credit it as a reliable news

outlet, it is valuable because it reports what the news

outlets and commentators are saying and therefore

does not “scoop” or free-ride on the news services.

Thus, the hot news misappropriation claim is

preempted by the Copyright Act because if fails the

extra element test.

E. Misappropriation

Lastly, Fox News brings a state law misappropriation claim based on the equitable doctrine that

recognizes that “a person shall not be allowed to enrich

himself unjustly at the expense of another.” Georgia

Malone and Company, Inc. v. Rieder, 19 N.Y.3d 511,

516 (2012). Such a claim must be “grounded in either

deception or appropriation of the exclusive property of

the plaintiff.” H.L. Hayden Co. of New York, Inc. v.

Siemens Medical Systems, Inc., 879 F.2d 1005, 1025

(2d Cir. 1989). Here again, I must first determine if

this claim is preempted by the Copyright Act. It is, and

for straightforward reasons that echo the analysis

above. Fox News goes to great length to argue that

TVEyes acted in bad faith and that TVEyes’ “bad

faith” constitutes the extra element to take Fox News’

claim outside the Copyright Act. Under this analysis,

however, elements of a tort that address the mens rea

or intent of the tortfeasor cannot constitute an “extra

element” for purposes of evading preemption. An

action will not be saved from preemption by

elements such as awareness or intent, which

alter the action’s scope but not its nature …

Following this ‘extra element’ test, we have

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held that unfair competition and misappropriation claims grounded solely in the copying of a

plaintiff’s protected expression are preempted

by section 301.

Computer Associates Intern. v. Altai, Inc., 982 F.2d

693, 717 (2d Cir. 1992) (internal citations and quotations omitted).

Thus, the misappropriation claim also is preempted

by the Copyright Act. “The broad misappropriation

doctrine relied upon … is therefore equivalent to the

exclusive rights in copyright law … Indeed because the

copying, such unfairness may be seen as supporting a

finding that the Act preempts the tort.” Barclays

Capital, Inc., 650 F.3d at 895. See also Walker v. Time

Life Films, Inc., 784 F.2d 44, 53 (2d Cir. 1986)

(“Walker’s cause of action for unfair competition is

preempted by the federal copyright laws to the extent

it seeks protection against copyright of Walker’s book”

dismissing common law unfair competition claim as

arising out of defendant’s alleged copyright); Levine v.

Landy, 832 F. Supp. 2d 176, 191 (N.D.N.Y. 2011)

(plaintiff’s claim is “essentially a copyright infringement claim with the added allegation that after

unlawfully copying, distributing, and/or publishing

the photographs, defendants stamped their own name

or copyright on the works, rather than

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