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15‐3885(L)
Fox News Network, LLC v. TVEyes, Inc.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
August Term, 2016
(Argued: March 7, 2017 Decided: February 27, 2018)
Docket Nos. 15‐3885(L), 15‐3886(XAP)
‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐x
FOX NEWS NETWORK, LLC,
Plaintiff‐Appellee‐Cross‐Appellant,
‐ v.‐
TVEYES, INC.,
Defendant‐Appellant‐Cross‐Appellee.
‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐x
Before: NEWMAN, JACOBS, Circuit Judges, and KAPLAN, District
Judge.*
Judge Lewis A. Kaplan, United States District Court for the Southern
*
District of New York, sitting by designation.
1
Defendant TVEyes, Inc. (“TVEyes”) is a media company that continuously
records the audiovisual content of more than 1,400 television and radio channels,
imports that content into a database, and enables its clients, for $500 per month, to
view, archive, download, and email to others ten‐minute clips. TVEyes also
copies the closed‐captioned text of the content it imports, allowing its clients to
search for the clips that they want by keyword, as well as by date and time.
Plaintiff Fox News Network, LLC (“Fox”) sued TVEyes for copyright
infringement in the United States District Court for the Southern District of New
York. The principal question on appeal is whether TVEyes’s enabling of its
clients to watch Fox’s programming is protected by the fair use doctrine.
TVEyes’s re‐distribution of Fox’s content serves a transformative purpose
insofar as 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 to TVEyes’s clients virtually all of Fox’s copyrighted content that the
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 that it
found fair use. Our holding does not encompass the copying of Fox’s
closed‐captioned text into a text‐searchable database, which Fox does not
challenge on appeal. We affirm the district court’s order to the extent that it
denied TVEyes’s request for additional relief. We also remand for entry of a
revised injunction.
Judge Kaplan concurs in a separate opinion.
KATHLEEN M. SULLIVAN (Thomas C.
Rubin, Todd Anten, and Jessica A. Rose on
the brief), Quinn Emanuel Urquhart &
Sullivan, LLP, New York, NY, for
Defendant‐Appellant‐Cross‐Appellee
TVEyes, Inc.
DALE M. CENDALI (Joshua L. Simmons
on the brief), Kirkland & Ellis LLP, New
York, NY, for
Plaintiff‐Appellee‐Cross‐Appellant Fox
News Network, LLC.
Brian M. Willen (Lauren Gallo White and
Stephen N. Gikow on the brief), Wilson
Sonsini Goodrich & Rosati, P.C., New York,
NY, for amicus curiae Google, Inc.
Brianna L. Schofield (Law Students Tomasz
Barczyk and J. William Binkley on the
brief), Samuelson Law, Technology &
Public Policy Clinic, UC Berkeley School of
Law, Berkeley, CA;** Lila Bailey, Law Office
of Lila Bailey, San Francisco, CA, for amici
curiae Internet Archive; American Library
Association; Association of College and
Research Libraries; Association of Research
Libraries; Society of American Archivists, in
support of TVEyes, Inc.
Corynne McSherry (Kit Walsh on the brief),
Electronic Frontier Foundation, San
Francisco, CA; Aaron Williamson,
Technology Law & Policy Clinic, N.Y.U.
School of Law, New York, NY, for amici
curiae Electronic Frontier Foundation;
Public Knowledge, in support of TVEyes,
Inc.
** All law students appearing for amici do so pursuant to Local Rule 46.1(e).
3
Matt Schruers (Ali Sternburg on the brief),
Computer & Communications Industry
Association, Washington, DC; Jonathan
Band, Jonathan Band PLLC, Washington,
DC, for amicus curiae Computer &
Communications Industry Association, in
support of TVEyes, Inc.
Phillip R. Malone (Jeffrey T. Pearlman and
Law Student Brian P. Quinn on the brief),
Juelsgaard Intellectual Property and
Innovation Clinic, Mills Legal Clinic at
Stanford Law School, Stanford, CA, for
amici curiae Media Critics, in support of
TVEyes, Inc.
Rebecca Tushnet, Washington, DC; Michael
Scott Leavy, Maplewood, NJ; Christopher
Jon Sprigman, New York, NY, for amici
curiae Professors of Intellectual Property
Law, in support of TVEyes, Inc.
Rick Kaplan (Benjamin F.P. Ivins on the
brief), National Association of Broadcasters,
Washington, DC; Joseph R. Palmore (Paul
Goldstein and James R. Sigel on the brief),
Morrison & Foerster LLP, Washington, DC,
for amicus curiae National Association of
Broadcasters, in support of Fox News
Network, LLC.
Barry I. Slotnick (Jonathan N. Strauss on the
brief), Loeb & Loeb LLP, New York, NY,
for amicus curiae Copyright Alliance, in
support of Fox News Network, LLC.
4
Eleanor M. Lackman (Nancy E. Wolff, Scott
J. Sholder, and Brittany L. Kaplan on the
brief), Cowan DeBaets Abrahams &
Sheppard LLP, New York, NY, for amici
curiae American Photographic Artists;
American Society of Media Photographers,
Digital Media Licensing Association,
National Press Photographers Association;
Professional Photographers of America, in
support of Fox News Network, LLC.
David L. Leichtman (Sherli Furst on the
brief), Robins Kaplan LLP, New York, NY,
for amici curiae American Society of
Journalists and Authors, Inc.; Jonathan
Taplin; Mary T. Rogus; Joe Bergantino;
David C. Hazinski; Mitchell T. Bard; Patrick
Meirick, in support of Fox News Network,
LLC.
Michael S. Schooler, National Cable &
Telecommunications Association,
Washington, DC, for amicus curiae National
Cable & Telecommunications Association, in
support of Fox News Network, LLC.
Linda Steinman (Elizabeth A. McNamara
and Alison Schary on the brief), Davis
Wright Tremaine LLP, New York, NY, for
amici curiae Cable News Network, Inc.;
Gray Television Group, Inc.; Hearst
Television, Inc.; ITV America, in support of
Fox News Network, LLC.
Sandra Aistars, Arts and Entertainment
Advocacy Clinic, George Mason University
5
School of Law, Arlington, VA; Jennifer Allen
Sands Atkins, Cloudigy Law PLLC, McLean,
VA, for amici curiae Intellectual Property
Scholars, in support of Fox News Network,
LLC.
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‐captioned text copied from the broadcasts), and allowing
its clients to search for and watch (up to) ten‐minute 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
1
TVEyes also captures radio content. For simplicity, this opinion will focus
on only television broadcasts.
6
Fox for copyright infringement on account of other functions of that 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 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.
I
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
2
Fox does not challenge on appeal the dismissal (on summary judgment) of
its claims alleging “hot news” misappropriation and “direct competition”
misappropriation.
7
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
8
“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.
II
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.
9
Id.
In fair use litigation, courts undertake a “case‐by‐case 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 non‐exclusive, but consideration of each is mandatory.3
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.
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 confusion and uncertainty” (Concurring Op. at 3) is not for me to say.
10
A
In considering the first statutory factor‐‐the “purpose and character” of the
secondary use, 17 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).
11
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 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
12
them, rather than at the time and place of broadcast. For these reasons, TVEyes’s
Watch function is at least somewhat transformative.4
* * *
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
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.
13
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.
B
The second statutory factor is “the nature of the copyrighted work.” 17
U.S.C. § 107(2). This factor “has 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.
C
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.
14
Googleʹs 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
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.
D
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 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
15
“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
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
16
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 copyright‐holder.” 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.
E
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
17
payment or license. Having weighed the required factors, we conclude that the
balance strongly favors Fox and defeats the defense of fair use.
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 thirty‐two
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.
IV
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 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)).
5
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.
18
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
fair‐use 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
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.
6
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.
7
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.
19
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.
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
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
*
Lewis A. Kaplan, United States District Judge for the Southern District of
New York, sitting by designation.
1
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 secondary use was transformative, but nevertheless rejecting
fair use defense).
2
Pierre N. Leval Judging Under the Constitution: Dicta About Dicta, 81 N.Y.U. L.
REV. 1249, 1282 (2006) (hereinafter “Dicta”).
3
Id. at 1257.
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 ever-new contexts in which the
uncompensated use of copyrighted works is very attractive. And the law governing
such controversies often is far from clear. As 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 finding8 of transformative use, while “not
absolutely necessary for a finding of fair use,” 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 resolved10in cases where it
may turn out to be moot, unless the advantage is very plain.” 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
Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 579 (1994).
5
Id.
6
4 MELVILLE B. NIMMER AND DAVID NIMMER, NIMMER ON COPYRIGHT §
13.05, at 13-169 (2017).
7
See id. at 13-170.
8
Id. at 13-166.
9
Id. at 13-166 to 167.
10
Deller v. Samuel Goldwyn, Inc., 104 F.2d 661, 662 (2d Cir. 1939) (per
curiam) (L. Hand, A. Hand, Patterson, JJ).
11
Dicta, 81 N.Y.U. L. Rev. at 1262.
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 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.
12
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-news-without-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-date 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.
3
II
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 Fox’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
ten-minute, unaltered video clips of copyrighted content.”16 In short, the Search
function, which is not 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
17
to “test the Watch function,
considering each of the four [fair use] factors.” 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
13
Op. at 13:9-11. 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 10-47 to 10-49 (2012).
14
Op. at 13:13-14 (emphasis in original).
15
Id. at 16:7-9.
16
Id. at13:14-15 (emphasis in original).
17
Id. at 14:4-5.
18
Authors Guild v. Google, Inc., 804 F.3d 202 (2d Cir. 2015) (hereinafter “Google
Books”).
4
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
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
“improve[s] 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 22reasonable criticism,” but use that
“supersede[s] the original work” is not fair. 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 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
19
Op. at 16:1-4.
20
Id. at 16:7-13 (emphasis added).
21
Id. at 16:14-17:14.
22
Folsom v. Marsh, 9 F. Cas. 342, 344 (No. 4,901).
23
Campbell, 510 U.S. at 578-79.
5
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
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.
24
Pierre N. Leval, Toward a Standard of Fair Use, 103 HARV. L. REV. 1105,
1111 (1990).
25
150 F.3d 104 (2d Cir. 1998).
26
Id. at 106 (internal quotation marks omitted).
27
Id. at 109.
6
We rejected the argument that convenience of accessing copyrighted
material is a transformative purpose in American Geophysical Union, et 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 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 30cannot
properly be regarded as a transformative use of the copyrighted material.”
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
28
60 F.3d 913 (2d Cir. 1994).
29
Id.
30
Id. at 923 (citations omitted).
31
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).
32
See A&M Records, Inc., 239 F.3d at 1019 (cases holding space-shifting 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 issue] merely makes copies in order to render portable,
or ‘space-shift,’ 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
7
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.
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
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”).
33
804 F.3d at 206.
34
Id. at 217-18.
35
Id. at 209, 218.
36
Id. at 222-23.
8
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
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
37
Op. at 10:13-16.
38
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. 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”).
39
Google Books, 804 F.3d at 206.
40
464 U.S. 417 (1984).
9
Sony considered a claim that the manufacturer of Betamax video
recorders was liable for contributory copyright infringement because its sale of the
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) 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: “[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
41
Id. at 419.
42
Id. at 456.
43
Op. at 17:1-3.
44
Op. at 17:1-3.
45
Sony, 464 U.S. at 423.
46
Id. at 442.
47
Id. at 447.
10
noninfringing uses. Sony's sale of such equipment to the general48public does not
constitute contributory infringement of respondent's copyrights.”
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 “time-shifting,” 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 efficiency-enhancing 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 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 “determin[ation] that time-shifting 51of television
programs by consumers in their homes was a non-commercial use.” 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
48
Id. at 455.
49
Id. at 449.
50
756 F.3d 73, 84 (2d Cir. 2014) (emphasis added).
51
150 F.3d at 109 n.3.
52
755 F.3d 87 (2d Cir. 2014).
53
804 F.3d at 202.
11
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.
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.”
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