Fox News Suffers Major Fair Use Defeat to TVEyes

By Joseph Perry | September 15, 2014

On Tuesday, a New York federal district court ruled that TVEyes’ use of Fox News’ video clips is a fair use according to the federal Copyright Act.

Who is TVEyes?

You may not have heard of TVEyes, Inc. before, but you’ve probably heard of some of its subscribers: the White House, 100 members of Congress, the United States Army, MSNBC, ABC, CBS, and the Associated Press.

So your two next questions may logically be: 1) who is TVEyes? and 2) why do portions of the federal government and the country’s major media outlets care about it? The answer is that TVEyes is a for-profit 24/7 media-monitoring service that monitors and records more than 1,400 television and radio broadcasts and transforms the broadcasts into searchable databases. The searchable databases allow TVEyes’ subscribers,like the White House, to see how different television and radio stations from across the country are reporting a particular event.

How Does TVEyes Work?

You may also be wondering how TVEyes is able to record thousands of broadcasts at once, and how subscribers are able to use its database.  According to a New York federal court opinion published on Tuesday, September 9, TVEyes uses closed captioning and speech-to-text technology to record television and radio broadcasts, and then the company creates a database of the recorded content.  Subscribers log onto a Watch List Page, which monitors keywords, tabulates the total number of times a keyword was mentioned by all 1,400 television and radio broadcasts, and organizes keyword search results by day for a 32-day period. From the Watch List Page, subscribers can click on the Results List Page, which shows the number of times a keyword was used on a particular day.  Each result on the Results List Page contains transcripts of the television and radio broadcasts that mention the keyword as well as thumbnail images of that television or radio broadcast that said the keyword. The subscriber can then click the thumbnail image, and a video clip of the broadcast will play alongside a transcript on the Transcript Page, which contains a wealth of information such as the name and location of the broadcast channel, Nielsen Ratings data about the clip, and the publicity value of the clip.

TVEyes also provides the following notable features and pages:

• A Media Stats page that graphically illustrates the number of times a keyword has been used over a period of time;
• A Marketshare page that contains a “heatmap” indicating the geographical locations that use the keyword the most;
• A Broadcast Network page which depicts in a pie chart the breakdown of which broadcast stations use the keyword;
• A Date and Time Search that lets subscribers play a video clip that aired on a specific date and time on a specific television station; and,
• A Media Snapshot featurethat allows subscribers to watch live streams of everything that TVEyes records.

Moreover, subscribers can save, archive, edit, and download an unlimited number of clips, and email clips to anyone, regardless if he or she is a TVEyes subscriber. Once a recipient clicks on the e-mailed clip, he or she is directed to TVEyes’ website and not the content owner’s website (i.e., Fox News’ website).

Copyright Infringement Lawsuit

Fox News sued TVEyes because it believed that TVEyes would divert its viewers to TVEyes’ website. Fox News claimed that TVEyes committed copyright infringement because TVEyes used Fox’ News copyrighted video clips to create content on TVEyes’ website, which its subscribers can play, save, edit, archive, download, and share. Specifically, Fox News alleged that TVEyes copied and infringed 19 one-hour programs on the Fox News Channel and the Fox Business Network, such as two episodes of On the Record with Greta Van Susteren, 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.

Fair Use Defense

Whenever a plaintiff sues a defendant for copyright infringement, the defendant has certain defenses in the arsenal.  One of those defenses is fair use, which is a doctrine that allows the public to use a copyrighted work without an author’s permission in certain situations.  In this case, TVEyes argued that the features on its database constituted fair use.

The fair use statute, which is listed under 17 U.S.C. 107 in the federal Copyright Act, says that if a defendant uses a copyrighted work for the purposes of criticism, comment, news reporting, teaching, scholarship, or research, there is a strong presumption that the defendant’s use of the work is fair use.  Nevertheless, a court must consider the four factors listed therein:

1. The purpose and character of the work.
2. The nature of the work;.
3. The amount and substantiality of the copyrighted work that the defendant used.
4. The effect the defendant’s use has on the potential market or value of the copyrighted work.

Each factor, however, must be viewed in isolation, and the court uses a balancing test.  No one factor brings about a resolution. Let’s see how the court analyzed the four factors.

Factor 1:  The Purpose and Character of the Work

The court noted that the main reason for looking at the purpose and character of a defendant’s work is to see if it adds something new to the original copyrighted work and is not merely a substitute for the original work. The court’s investigation of whether a work adds something new is referred to as “transformative” use. TVEyes argued that its features providing subscribers with Fox News’ video clips is transformative, but Fox News argued that TVEyes’ copying and disseminating of its copyrighted excerpts, circulations, and summaries is not fair use.

The court held that TVEyes’ features that provide its subscribers with Fox News’ video clips was transformative because the database converted Fox’s copyrighted works into a research tool. Moreover, TVEyes’ subscribers use TVEyes for research, criticism, and comment. Finally, although TVEyes is a for-profit company, and commercialism can sometimes weigh against a finding of fair use, the more transformative a work is, the less significance is placed on commercialism.  Since TVEyes’ work was transformative, factor one favored TV Eyes.

Factor 2:  The Nature of the Work

This factor considers the nature of the copyrighted work because some types of work are closer to the kinds of works that copyright law intends to protect. For example, the type of work at issue in this case (i.e., the news) is not copyrightable because the news contains facts. Facts are not copyrightable because society wants everyone to be able to freely disseminate facts in order to find the truth; however, the creativity in deciding how to portray, film, direct, sequence, communicate the news is copyrightable

Nevertheless, courts may favor fair use for a work that is factual or informational.  Wwhere the work is transformative, however, the second factor has limited value.  Thus, the court said that the second factor does not weigh for or against a finding of fair use in this case.

Factor 3:  The Amount and Substantiality of the Copyrighted Work the Defendant Used

TVEyes concedes that it copied all of Fox News’ content. This factor, however, does not just employ a quantative comparison between the original copyrighted work and the defendant’s work, it also asks whether the defendant copied no more than was necessary for any valid purpose stated in the first factor (i.e., transformative use). Since TVEyes’ business model depends on copying all of Fox News’ content, the court said that TVEyes did not take more than what was necessary to obtain its transformative use; however, like the second factor, the court held that the third factor weighed neither for or against a finding of fair use.

Factor 4:  The Effect of the Defendant’s Use on the Potential Market or Value of the Copyrighted Work

This factor considers the economic injury that the defendant’s work causes and the benefit the public generates from use of the defendant’s work, if any.

• Economic Injury: This part of factor four determines whether the defendant’s use would have an adverse impact on the potential market of the original copyrighted work. Fox News argued that TVEyes’ services decreased its ratings of the 19 individual, hour-long programs it aired between October 2012 and July 2013, and thus diminished the amount of per-subscriber carriage fees that advertisers and cable and satellite providers paid Fox News because TVEyes’ subscribers watched TVEyes’ copies rather than the Fox News Channel or the Fox Business Network.

The court stated, however, that the 19 shows were no longer available for TVEyes’ subscribers, and TVEyes erases its content every 32 days.  Moreover, during the 32-day period in which these programs were available, only 560 video clips played, and 85 percent of those played were less than a minute long. In addition, between 2003-2014, only 5.6 percent of all TVEyes users saw any Fox News content on TVEyes.  In only three instances between March 2003 and December 2014 did TVEyes subscribers access 30 minutes or more of Fox News Channel’s content, and no subscriber accessed any Fox Business Network content. Furthermore, 95 percent of all video clips played on TVEyes are three minutes or shorter. Thus, the court said there was no basis that TVEyes’ subscribers would likely watch ten minute clips sequentially in order to use TVEyes as a substitute for Fox news.

Fox also argued that TVEyes impairs the derivative work market for syndiciation partners like YouTube and Fox News’ exclusive licensing agent, ITN Source and Executive Interviews.  However, Fox could not point out the alleged customers that Executive Interviews lost.  Moreover, Fox’s revenue from syndication partners and licensing clips is a small fraction of Fox News’ overall revenue (i.e., north of $212,000 and $246,000 respectively) and would likely be outweighed by the public’s benefit of using TVEyes’ services.

• Public Benefit: TVEyes argued that it provides a tremendous public benefit because it creates a library of television broadcast content and makes it easy and efficiently text-searchable. It also argued that without TVEyes there would be no way to search 27,000 hours of daily television broadcast programming, most of which isn’t available online or anywhere else.

Moreover, TVEyes argued that subscribers use its service to comment and criticize broadcast news; government bodies use it to assess factually-reported accuracies; political campaigns use it to monitor political advertisement and campaign appearances during elections; financial firms use it to monitor and archive employees’ public statements for regulatory compliance; the White House uses it to evaluate news and to provide the press with feedback; the United States Army uses it to track media coverage about worldwide military operations to ensure national security and troop safety; journalists use it to research, report, compare, and criticize broadcast news coverage; and elected officials use it to conform informational accuracies reported on the news and to correct misinformation.

Thus, after analyzing the economic injury and public benefit factors, the court held that factor four favored a finding of fair use because the public benefit of TVEyes outweighed its minimal possibility of competition to Fox News.

Balance of Four Factors

Since TVEyes captures and indexes broadcasts that would otherwise not be there — and journalists, the White House, the United States Army, financial firms, elected officials, and political campaigns use TVEyes for purposes like criticizing news, correcting misinformation, assessing commercial advertising, evaluating national security risks, and tracking financial regulatory compliance — the court held that copying Fox News’ content for indexing and clipping services for TVEyes’ subscribers was fair use.

Limited Fair Use

The court held that it did not have to decide fair use for the full extent of TVEyes’ services because no sufficient evidence was presented about whether features that allow TVEyes’ users to save, archive, download, email, and share clips of Fox news’ broadcast content were integral to the transformative purpose of indexing and providing Fox News clips or whether they threatened Fox News’ derivative businesses.  Moreover, neither party was entitled to summary judgment on whether the date and time search function because the record failed to show whether the date and time search function was integral to the transformative purpose of TV Eyes’ service. The court said the factual record regarding the date and time search function should be developed further.

What’s Next?

The court scheduled the next court date for October 3, 2014, which will determine the remaining issues stated about in the “Limited Fair Use” case. We will have to wait and see how the court handles those issues.