In 2014, when District Court Judge Alvin Hellerstein of the Southern District of New York upheld TVEyes, Inc.’s (“TVEyes”) monitoring service as “fair use” in the face of a copyright infringement claim brought by Fox New Network LLC (“Fox News”),[1] the decision was seen as yet another step in the federal courts’ limitations of the rights of copyright owners under the “transformative use” approach to fair use developed by the Supreme Court in Campbell v. Acuff Rose.[2] TVEyes is a media-monitoring subscription service that “records the entire content of television and radio broadcasts and creates a searchable database of that content.” The service allows subscribers to search keywords or phrases to determine and review an aggregation of instances of the search term appearing in the media. Subscribers include businesses and governmental agencies such as the White House, United States Army, and local and state police departments; the service is not available to members of the general public. Clips are limited to 10 minutes in length, and a majority of the clips are two minutes or less; users are required to agree to use the clips for internal purposes only. 

Fox News sued for copyright infringement, contending, among other things, that TVEyes’ commercialization of Fox News’s copyrighted works could not be considered fair use because it interfered with Fox News’s efforts to commercialize its broadcasts through its own competing clip service. Critical to Judge Hellerstein’s fair use decision was his determination that TVEyes’ monitoring service was not infringing because it did not duplicate or usurp the value of Fox News’s original broadcasts.  As the District Court explained:

“While Fox aims to report the news, TVEyes aims to monitor what the media reports as news, the latter having qualities of news in its own right. For example, the 2012 attack on the U.S. Embassy in Benghazi was important news, but so was Fox News’s intense focus on the story. TVEyes was unique in providing such a reliable ‘database of everything that television channels broadcast, twenty-four hours a day, seven days a week.’”[3]

In short, TVEyes’ monitoring core service was transformative because it was a service “that no other content provider provides.” [4]

However, having found that the core of the service was “transformative,” the court left open the question whether certain of the features that TVEyes offered subscribers were equally transformative. The court identified the following features for which it required further development of the evidentiary record before determining whether they qualified for fair use protection: the feature that allows TVEyes’ customers to search by date and time, and the features that allow clips to be archived, downloaded, emailed, and shared via social media, which TVEyes claimed were integral to the services it provided to its customers.

Last week, Judge Hellerstein issued the court’s Permanent Injunction and Final Order, thus bringing to a close this part of the proceedings. Consistent with the initial opinion the court issued in August 2015,[5] the court ruled that the feature allowing subscribers to “archive” particular clips on the subscriber’s “Media Center” (an interface residing on TVEyes’ servers) was fair use because subscribers needed some ability to archive the clips, which were replaced every 32 days, and the Media Center resided on TVEyes’ servers. By contrast, the court ruled that the features allowing subscribers to download clips to their own computers or search the TVEyes database by date and time were not fair use because those features were not transformative and competed directly with Fox News’s competing service.

Finally, the court imposed a detailed set of restrictions and limitations on subscribers’ ability to share their clips with recipients outside the subscriber’s organization: Subscribers can only share clips with no more than five recipients outside the subscriber’s organization and provided that TVEyes include (1) a feature requiring the recipient of the email containing the clip to authenticate the recipient’s email address; (2) a screen showing that the subscriber received clear notification that the material the subscriber is sending is copyrighted by Fox and TVEyes does not have a license from Fox; (3) a screen showing that the recipient received clear notification from the sender that the material being sent is copyrighted by Fox and TVEyes does not have a license from Fox; and (4) a feature that will block the email from being shared through social media.

A number of questions arise from Judge Hellerstein’s Order and Permanent Injunction. Of course, there is the question regarding whether the line drawn by Judge Hellerstein was correct in terms of segregating transformative from “non-transformative” features that TVEyes can offer its subscribers. But also, why does fair use permit a TVEyes subscriber to share his or her clips with five recipients outside the subscriber’s organization? Why not more or fewer? Will TVEyes have to bring each new feature before the court for approval or risk being held in contempt? Will each new change in technology require an adjustment of the court’s injunction? The only thing that appears clear is that each side got some of what they wanted but by no means everything.

More fundamentally, the question arises whether courts or the marketplace should determine the types of features that services like TVEyes can offer. As the court acknowledged, the features that it found not to be fair use were ones that subscribers would find “convenient,” but “convenience alone is not a ground for finding fair use.”[6] But will subscribers still want to pay for a TVEyes service limited to its purely transformative features with other convenient features removed? Indeed, by allowing TVEyes to compete with Fox News’s clip service while limiting the features TVEyes can offer, has the court made it more or less difficult for consumers to get what they may really want, namely, a single service that collects all radio and television content and that offers both transformative and non-transformative features? Would the Progress of Science and useful Arts instead be better served had the Court not found TVEyes service to be protected by the fair use doctrine and thus allowed this space to be developed by the copyright owners of the underlying works? As they say in television, “stay tuned,” as these and other questions will undoubtedly be addressed, if not answered, as the federal courts’ fair use decisions regarding transformative services and products appear to require ever-greater judicial control and oversight.