883 F.3d 169 (2nd Cir. 2018), 15-3885(L), Fox News Network, LLC v. Tveyes, Inc.

Docket Nº:15-3885(L), 15-3886(XAP)
Citation:883 F.3d 169
Opinion Judge:JACOBS, Circuit Judge:
Party Name:FOX NEWS NETWORK, LLC, Plaintiff-Appellee-Cross-Appellant, v. TVEYES, INC., Defendant-Appellant-Cross-Appellee.
Judge Panel:Before: NEWMAN, JACOBS, Circuit Judges, and KAPLAN, District Judge. Kaplan, District Judge, concurring:
Case Date:February 27, 2018
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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883 F.3d 169 (2nd Cir. 2018)

FOX NEWS NETWORK, LLC, Plaintiff-Appellee-Cross-Appellant,

v.

TVEYES, INC., Defendant-Appellant-Cross-Appellee.

Nos. 15-3885(L), 15-3886(XAP)

United States Court of Appeals, Second Circuit

February 27, 2018

Argued: March 7, 2017

Page 170

[Copyrighted Material Omitted]

Page 171

[Copyrighted Material Omitted]

Page 172

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.

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.

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. 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 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.

Before: NEWMAN, JACOBS, Circuit Judges, and KAPLAN, District Judge.[*]

OPINION

JACOBS, Circuit Judge:

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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

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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 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.

TVEyess re-distribution of Foxs audiovisual content serves a transformative purpose in that it enables TVEyess clients to isolate from the vast corpus of Foxs content the...

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