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Copyright Blocks a News-Monitoring Technology
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For those who want comprehensive access to recent televised news on any topic—be it bombings in Syria, protests in Turkey, tornados in the Midwest, or indictments of Trump campaign officials—TVEyes has been the "go to" news-monitoring service. Its system stores programming from 1,400 broadcast outlets on a 24/7 basis for 32-day periods, transcribes their contents, and indexes the transcripts to enable keyword searching. In response to customers' search queries, TVEyes' system generated lists of relevant video clips in reverse chronological order, which when clicked on, would play program segments containing the keywords, starting 14 seconds before the keywords to provide context and lasting no more than 10 minutes. Among TVEyes' 2,200 subscribers have been the White House, the U.S. Department of Defense, 100 members of Congress, Goldman Sachs, Bloomberg, Reuters, and two major broadcast networks.
In response to Fox News Networks' copyright infringement lawsuit, TVEyes raised a fair use defense. Although a trial court upheld this defense as to the system's most salient features, the Second Circuit Court of Appeals in February 2018 ruled Fox was right: the challenged uses were unfair. The court's opinion has significant implications for developers of technology-intensive services intended to offer similar features.
Search- Versus Watch-Related Functions
Fox did not challenge the extensive copying TVEyes did of its programs in creating its full-text searchable database. This is probably because this copying was so similar to Google's scanning of 20 million books to index their contents for a full-text searchable database that the Second Circuit had ruled was fair use in its Authors Guild v. Google decision. The court also regarded Google's serving up "snippets" of book contents in response to user search queries as fair use.
Fox's lawsuit focused on numerous watch-related services. TVEyes not only copied news programs in responding to search queries, but also allowed customers to set up "watch lists" for future relevant news, to archive video clips on TVEyes' servers, to share video clips with third parties, and even to download clips and transcripts to customers' computers. (To bolster its fair use argument, TVEyes contractually required its clients to limit their uses of the clips and transcripts to internal purposes.)
TVEyes' Fair Use Argument
When assessing whether a challenged use is fair or infringing, U.S. copyright law directs courts to take into account four factors: the purpose of the defendant's use, the nature of the copyrighted work, the amount and substantiality of the taking, and harm to actual or potential markets for the protected works.
TVEyes argued that its uses of Fox news programs were "transformative" because they were for a different purpose than Fox's uses. (That is, TVEyes was using Fox contents for information-locating purposes, whereas Fox was providing news for its customers to consume.) It pointed to the Second Circuit's Google decision holding that copying 20 million books for Google's Book Search project was transformative because it had a different purpose. Transformative uses are more likely than non-transformative (that is, consumptive) uses to be fair. Moreover, TVEyes was enabling its customers to do research and news analysis, both of which are favored uses under the fair use provision of U.S. copyright law.
TVEyes argued that the factual nature of Fox news programs tipped the nature-of-the-use factor in favor of fair use. After all, numerous cases have found that fact-intensive works enjoy a narrower scope of copyright protection and a broader scope of fair use.
While the amount of copying in TVEyes was unquestionably extensive, so was the quantity of copying in the Google case. Yet, the Second Circuit ruled that Google's copying of 20 million books to index their contents was reasonable in light of its transformative purpose, and so TVEyes could credibly say its use was similarly reasonable.
TVEyes argued that Fox had not suffered harm because the video clips its customers made (85% of which lasted less than one minute) were not substitutes for Fox programs. Second Circuit cases have held that copyright owners are not entitled to control all transformative use markets. Only if the challenged use would supplant demand for the original should a use be deemed unfair. People have not stopped watching Fox news due to TVEyes' service.
Fox's Arguments Against Fair Use
Fox disputed TVEyes' assertion that its purpose in using Fox programs was transformative. The Fox video clips TVEyes was serving up to its customers had exactly the same content as when the programs were initially televised. The non-transformative nature of the use cut against fair use, as did the commercial nature of TVEyes' enterprise.
Fox also challenged TVEyes' nature-of-the-work theory because its system was copying and displaying creative expression from the Fox programs. It was not just extracting facts or assertions about facts from the programs.
The amount of TVEyes' copying for its watch-related functions was, moreover, more extensive than Google's. To avoid undercutting copyright markets, Google showed no more than three small snippets of text from books in response to search requests. It had, moreover, technologically restricted access to expressive contents beyond what was necessary to assess the relevance of information. TVEyes, by contrast, allowed customers to watch as many video clips as they wanted and to watch up to 10 minutes per clip.
Fox's main harm argument was that TVEyes was usurping a valuable licensing market opportunity for Fox. To show this was not just a hypothetical market, Fox offered evidence of revenues it had derived from licensing of other video-clipping services.
Amicus Curiae Interest
The high-profile nature of the TVEyes case was evident from the 13 amicus curiae (friend of the court) briefs filed with the Second Circuit. Seven were in support of TVEyes, and six in support of Fox. (Amicus briefs are typically filed by firms or individuals whose arguments supplement or complement arguments made by the litigants, often explaining the amici's perspective on the policy implications or consequences of the court's decision.)
Among the TVEyes-side amicus briefs were those filed by Google, the Computer & Communications Industry Association, the Electronic Frontier Foundation, and several library associations. The Fox-side amicus briefs included ones by journalist and photographer organizations, the National Association of Broadcasters, CNN, and the National Cable & Telecommunications Association.
Second Circuit Ruling
Rather than doing a fair use analysis on a feature-by-feature basis, as the trial court had done, the Second Circuit divided the TVEyes uses of Fox contents into two categories: the search-related features, which Fox had not challenged, and the watch-related features, to which Fox objected. The court's opinion was measured in its analysis of each fair use factor, but ultimately concluded TVEyes was not a fair user.
Although one judge on the three-judge panel agreed with Fox that TVEyes' use was non-transformative, the majority decided that the watch-related features were "modestly transformative" because TVEyes' service had a different purpose than Fox's broadcasts. TVEyes' copying of Fox contents was, as in Google, transformative "insofar as it enables users to isolate, from an ocean of programming, material that is responsive to their interests and needs to access that material with targeted precision." Without a service such as TVEyes, that information would be "irretrievable or else retrievable only through prohibitively inconvenient or inefficient means."
The most interesting part of the TVEyes opinion was its characterization of improved efficiency in content delivery as indicative of the firm's transformative purpose. It likened this to the time-shift copying at issue in the Supreme Court's 1984 decision in Sony v. Universal, which challenged Sony's sale of videotape recording equipment to enable customers to make copies of television programs. Like Sony, TVEyes enabled its clients to find and watch specific content of interest to them without having to watch it at the time when it was initially broadcast. Yet, the commercial nature of TVEyes' service somewhat undercut the transformativeness argument.
As in many fair use cases, the nature-of-the-work factor was given very little attention and played an insignificant role in the TVEyes fair use ruling.
The amount-used factor favored Fox "because TVEyes makes available virtually the entirety of the Fox programming that TVEyes users want to see and hear." TVEyes enabled its users to make far greater use of Fox's copyrighted content than the three snippets per book that Google was serving up in response to user search queries. Insofar as TVEyes allowed users to watch and make copies of up to 10 minutes of Fox news, that would often convey "the entirety of the message conveyed by Fox to [its] authorized users." News segments are often shorter than 10 minutes.
The court's opinion was measured in its analysis of each fair use factor, but ultimately concluded TVEyes was not a fair user.
What seems to have undermined the fair-use defense more than anything else was the perceived harm to an existent licensing market for video clips. The court thought Fox had a legitimate interest in controlling that market. Moreover, "[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 this market is worth millions of dollars in the aggregate." Because TVEyes clearly valued Fox content and was charging its customers substantial sums for access to it, it ought to be willing to license the content instead of getting it for free.
With the amount-used and harm factors cutting against fair use, the nature-of-the-work factor being neutral, and the purpose factor weighing only slightly in favor of TVEyes, the court concluded that Fox should prevail on summary judgment (that is, without having to go to trial). It directed the lower court to issue an injunction against the watch-related functions of TVEyes' system.
Conclusion
TVEyes has discontinued use of Fox programs for now; it remains to be seen whether it can reach a licensing agreement with Fox that would allow it to continue to offer comprehensive coverage of breaking news. If the litigants cannot reach a deal, one key value of the TVEyes system—its comprehensiveness—will be undermined. After Fox's win, other broadcasters may insist that TVEyes get a license from them as well. In order to maintain comprehensiveness, TVEyes will have to overcome holdup problems with broadcasters who realize they have this news-monitoring service over a barrel, so to speak. One possibility, which TVEyes is probably exploring, is whether allowing clients to watch shorter and/or fewer segments might get it back under the fair use roof.
The concurring opinion raised an alarm about the likely development of other technology services that, like TVEyes, would aim to improve the efficiency of delivery of copyrighted content. The judge objected to calling those types of services "transformative" because this might encourage technology developers to create scaled-down TVEyes-like services. Although his skeptical view did not prevail in the TVEyes case, it signals some caution for technology developers who aim to achieve a similar purpose to the TVEyes system.
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