Supreme Court Denies TVEyes v. Fox News, Leaves Intact 2d Circuit Ruling on Market Harm of Transformative Uses

By Steve Brachmann
December 31, 2018

On December 3rd, the U.S. Supreme Court denied a petition for writ of certiorari in TVEyes, Inc. v. Fox News Network, LLC, declining the opportunity to decide what would have been the Court’s first case on fair use in a copyright context in 20 years. Denying the petition, the Supreme Court declined to answer whether a transformative use of a copyrighted work causes a cognizable market harm under 17 U.S.C. § 107(4) if it is used in connection with a commercially successful business that the author is unlikely to enter or authorize.

This case stems from a copyright infringement case filed by Fox News back in 2013 against TVEyes, arguing that TVEyes’ subscription-based media-monitoring service, which allows government agencies and businesses to search for keywords across 27,000 hours of daily captured television programming, infringed on Fox News’ copyright covering 19 hour-long episodes. On summary judgment, the district court granted TVEyes’ motion that its core viewing function is a fair use when applying the four statutory factors in Section 107, finding that Fox News lost no licenses to TVEyes and that any minimal impact to Fox News’ licensing was outweighed by TVEyes’ public benefit. The Second Circuit reversed the district court, however, applying the same fair use factors and finding that they weighed in Fox News’ favor, holding that TVEyes’ commercial success displaced potential revenues for Fox News.

In its petition for writ filed this September, TVEyes argued that the decision of the Second Circuit conflicted with precedent set by both the Supreme Court and the other Circuit Courts of Appeal. Citing to Campbell v. Acuff-Rose Music, Inc. (1994), TVEyes argued that the Supreme Court had previously held that market harm cannot be presumed from a transformative use’s market success. Further, reasoning that a defendant’s profit necessarily shows market harm conflicts with the other courts of appeals in that such a holding would resolve all fair use cases against a defendant given that every case of fair use involves some form of lost royalty revenue.

TVEyes also argued that Supreme Court precedent has held that a copyright owner may not preempt the exploitation of a transformative market, again citing to Campbell to support this argument. Other cases out of the courts of appeals, including Mattel v. Walking Mountain Productions (Ninth Circuit, 2003) and SunTrust Bank v. Houghton Mifflin Company (Eleventh Circuit, 2001), have recognized that no market harm exists where the copyright owner is unlikely to agree to license for uses such as critique. TVEyes’ service enables critiquing uses whereas Fox News’ licensing agreements expressly prohibit critiques of its content.

Fox News filed a brief in opposition of granting certiorari in late October where it argued that the Supreme Court should deny certiorari in large part because TVEyes didn’t identify a circuit split, one of the traditional criteria for granting certiorari. Fox News argued that case law concerning the fourth fair use factor, upon which TVEyes’ argument focuses, is well-settled and that numerous cases decided in the courts of appeals regarding services like the one operated by TVEyes didn’t constitute a fair use. Fox News also argued that the opinion below was entirely consistent with Supreme Court precedent in that the Second Circuit’s opinion didn’t presume market harm and that TVEyes didn’t itself criticize or comment on Fox News programming and this it misinterpreted the Court’s ruling in Campbell. Finally, rebutting TVEyes’ contentions that the case had broad First Amendment implications, Fox News argued that TVEyes’ subscription service wasn’t essential to the world of media criticism because it was only available to professionals and businesses, not the general public, and if TVEyes’ platform continued unabated, it would have harmed the ability of Fox News and other copyright owners in the television journalism sector to develop new digital services and generate revenue on copyrighted content.

In early November, TVEyes had submitted a reply brief in which it argued that Fox News had failed to dispel the conflict caused by the Second Circuit’s decision, especially regarding cases on commercial success in transformative markets as well as preempting transformative markets, treading over much of the same ground that it walked on in the petition for writ. TVEyes had also argued that Fox News made incorrect factual assertions regarding the lack of use of the TVEyes platform to produce media critiques. TVEyes also argued that Fox News downplayed the importance of the question presented by the case in light of the network’s “outsized role in the political life of the United States” as evidenced in events such as Sean Hannity’s recent appearance with President Trump at a campaign event leading up to the midterm elections.

The Author

Steve Brachmann

Steve Brachmann is a writer located in Buffalo, New York. He has worked professionally as a freelancer for more than a decade. He has become a regular contributor to IPWatchdog.com, writing about technology, innovation and is the primary author of the Companies We Follow series. His work has been published by The Buffalo News, The Hamburg Sun, USAToday.com, Chron.com, Motley Fool and OpenLettersMonthly.com. Steve also provides website copy and documents for various business clients.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

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  1. LazyCubicleMonkey January 18, 2019 10:56 pm

    Terrible ruling. If one did want to get obviously fair-use related clips for snippets for shows like ‘The Daily Show’, how would they go about it? Would they need to record Fox News 24/7 themselves to find the obviously hypocritical snippets that Fox uses misinform & poison the public’s opinion? And right-wing shows attempting to criticize CNN & MSNBC would need to record them 24/7 as well. And if either one created some automated service to do that, they wouldn’t be able to re-sell such a service due to that being TVEYES exact business model?

    Finally, if they only provided the relevant clip to the requesting party (which itself would be used in a fair-use way), I’m still unclear which exact aspect of that is copyright infringement? What if they only provided a time at which the relevant keywords were said and the requesting party used that time to index the clip from the recording they made, would that be acceptable?

    Also, it seems like district court issued a summary judgement. Is the Second Circuit’s reversal only apply to the summary judgement, therefore kicking the case back to district court for a full trial? Or since the facts are not in dispute (I’m assuming), the Second Circuit’s ruling is final (since the appeal to the Supreme Court failed)?

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