The U.S. Court of Appeals for the Second Circuit sided with Fox News Channel on Tuesday in its copyright infringement case against the media monitoring company TVEyes.
The ruling, made by Judge Dennis Jacobs of District Court for the Southern District of New York, along with Judges Lewis A. Kaplan and Jon O. Newman, stated that “TVEyes has failed to show that the product it offers to its clients can be justified as fair use.”
“In a sweeping victory for Fox News, the Second Circuit held on appeal that TVEyes’ use of FOX News’ video clips was not a fair use," the network's outside lead counsel Dale Cendali of Kirkland & Ellis LLP said in a statement.
In an opinion by Judge Jacobs, the court reversed the portions of the District Court summary judgment decisions that had found fair use. The District Court was directed to issue an injunction prohibiting TVEyes from offering Fox News’ audio visual content. The service is frequently used by politicians, media members, investment banks and trial lawyers.
Cendali said the ruling is a “significant win in the field of fair use law” because “transformativeness has become the litmus test of fair use for some courts,” pointing to the Harry Potter Lexicon case as an example.
“Even where a use may be modestly transformative, it is critical for a court to evaluate all of the fair use factors,” Cendali said. “In evaluating the remaining fair use factors, the Second Circuit held that TVEyes’ distribution of Fox’s audiovisual content would ultimately be harmful to the media company’s business because it is being deprived of various forms of licensing revenue.”
J. Michael Keyes, a partner at the international law firm Dorsey & Whitney, specializes in an intellectual property, trademarks, copyrights, unfair competition and false advertising. He said the decision would have far-reaching impacts, but the major takeaway is that a clear hierarchy emerged in fair use logic.
Keyes told Fox News: “The ‘market harm’ factor is the most important consideration when it comes to fair use. And if the defendant’s use is generating a substantial amount of revenue to defendant, then the court will likely find that the plaintiff has suffered a ‘market’ harm -- even if plaintiff doesn’t necessarily use its copyrighted content in the same manner as the defendant. This is an important, if not the most important, consideration in the context of fair use."
Cendali said “the Second Circuit was very clear that TVEyes cannot offer any of Fox’s audiovisual content” whether by viewing, downloading, sharing or archiving.
“Interestingly, Judge Kaplan, sitting by designation, offered a concurring opinion in which he similarly found that TVEyes’ use of Fox’s audiovisual content was not fair use but disagreed with the idea that TVEyes’ model is even modestly transformative. We cannot emphasize enough the practical effect this win should have for content holders of all stripes in not being deprived of the benefit of monetizing content by those standing on fair use grounds," Cendali said.