Important Win for Rights Holders in TVEyes v. Fox

In Monday’s post (and quite a few others) I stated that certain parties have worked very hard to distort the character of the fair use doctrine until it no longer has any boundaries or meaning, and simply nullifies copyright’s protections. For the last two years, every time I’ve made that accusation, the case foremost in mind has been TVEyes v. Fox News. But yesterday, on Day Two of Fair Use Week, the Second Circuit Court of Appeals handed down an opinion that draws some freshly sharp lines around the traditional limits of fair use in an age when tech ventures consistently try to describe mass copyright infringement as innovation. Rights holders of every flavor should feel relieved by this decision, especially as it upholds the conditional and narrow finding of fair use in the Google Books case.

The court rejected all  the defenses presented by TVEyes, but the most significant part of this story involves the relatively novel doctrine of “transformativeness,” which is weighed when considering the first of the four fair use factors, and has split into two main interpretations. The first interpretation, applied in Campbell (1994), describes the transformation of one expressive work into a new expressive work (i.e. the kind of fair use most creators care about). The second interpretation, most prominently applied in Google Books (2016), describes a much more broad transformation of a useful technology, which necessitates copying protected works in order to function. (See today’s Copyhype post on transformativeness.)

The latter interpretation has made rights holders rather anxious as several tech companies have tried to assert that the “transformative” doctrine—and especially the holding in Google Books—provides a rationale for just about any new tech venture to commit mass infringement on the grounds that the novelty of the enterprise alone can be described as “transformative.” TVEyes, which stored, organized, and made available nearly all of Fox’s programming to its institutional and corporate customers (see a more detailed discussion here), relied substantially on this interpretation of “transformativeness” in its defense. But yesterday, the same court that wrote the opinion in Google Books made a clear distinction between that case and this one, holding that the TVEyes model is not a fair use.

The majority of the panel held that TVEyes’s “Watch” function, which enabled viewing whole programs in 10-minute segments, was “slightly transformative,” but so modest as to be outweighed by the rest of the fair use analysis. In particular, the third and fourth factors were short work for the court because TVEyes made nearly all of Fox’s content available (weighing against them under the third factor) and “usurped a market that properly belongs to the copyright-holder” (weighing against them under the fourth factor) by creating a means of distribution that a creator has the exclusive right to develop for itself.

Interestingly, Judge Lewis A. Kaplan wrote a concurring opinion, dissenting solely on the majority’s analysis of “transformativeness,” holding that the consideration itself was not necessary; that a finding of “slightly transformative” adds further ambiguity to an already ambiguous doctrine; and that, if he were to consider the matter, he sees no evidence that TVEyes is the least bit “transformative” under a fair use analysis. In fact, Kaplan’s opinion may prove especially significant in drawing a distinction between Google Books and other tech ventures hoping to exploit the ambiguity of “transformativeness.” Kaplan writes…

“The facts here…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.’”

TVEyes may appeal this ruling since it does put an end to their business model; but it’s hard to imagine the Supreme Court granting cert, unless it were exclusively to further clarify the “transformativeness” doctrine. There doesn’t appear to be anything else for the Court to resolve. And given the rationales applied by the Second Circuit here—especially drawing such clear distinctions between its own precedent opinion and this one—it seems like a big stretch for TVEyes to expect an appeal to go their way, even if the Supreme Court did hear the case.

Rights holders should be very pleased with this outcome, as should anyone who believes that legal systems have contours. Fair use is an important exception to copyright’s exclusive protections. But it is simply common-sense to conclude that every tech company that develops another method for exploiting someone else’s work—TVEyes, ReDigi, VidAngel, etc.—cannot call itself “transformative” and get away with it. One can show great ingenuity in hacking, embezzlement, or counterfeiting, too, but that doesn’t make these enterprises legal. Thankfully, the Second Circuit agrees.

© 2018, David Newhoff. All rights reserved.

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