Since February 27, 2018, when a panel of the Second Circuit Court of Appeals handed down a reversal in Fox News Network, LLC v. TVEyes, Inc. (Docket Nos. 15‐3885/86), there has been some speculation about how the decision may signal a “transformation of ‘transformative use’” in fair use jurisprudence. But while the outcome of the decision may or may not be sound, its peculiar method of decision is not. The panel majority’s strong views about the equities skewed its analytic approach – yielding an outlier opinion rather than a reliable precedent.
Confined to its holding and its facts, TVEyes tells us nothing we didn’t already know about how fair use defenses for new information tools will fare in the future. Not only was the defendant’s service arguably aimed at the core intended audience for Fox’s programming; it was, by the same token, inappropriate for most new scholarly, artistic, or other value-added uses. Thus understood, the holding has no appreciable bearing on archival services like the Vanderbilt Television News Archive or the UCLA Library Broadcast NewsScape project. That’s not because they are non-commercial (a secondary consideration in contemporary fair use analysis) but because they have a truly transformative purpose, in the sense that the term generally is understood both in and out of the Second Circuit.
TVEyes’ uncomfortable relationship to precedent
The TVEyes majority’s departures from mainstream fair use principles weren’t necessary to its result. As the Second Circuit put it in Authors Guild v. HathiTrust, a substitutional use is the antithesis of a transformative one, which “serves the new and different function from the original work and is not a substitute for it.” 755 F.3d 87, 96 (2014). In TVEyes, a more straightforward route to the same outcome, based on the facts that the majority opinion chooses to emphasize, would have been by way of noting that the TVEyes download feature, which made only recent broadcast content available, was effectively substitutional in nature. It arguably offered information consumers what Fox itself already provides (i.e. the ability to follow current news developments). Thus, the panel could have portrayed it as the sort of non-transformative use that posed a potential threat to Fox’s legitimate copyright monopoly.
Instead of following this well-beaten path, the TVEyes panel took a circuitous new (or perhaps ancient) one to its unsurprising destination. Along the way, it gets basic fair use doctrine wrong (and sometimes just backwards), while manipulating important precedents to justify the doctrinal deviations. The majority’s approach to assessing transformativeness goes off the rails definitively with the eccentric finding that TVEyes services are “somewhat transformative.” This is a category previously unknown to fair use jurisprudence, and the improvisation it represents is anything but benign. Since 1994, the inquiry into tranformativeness has been a binary one, based on an objective assessment of functional difference (or similarity); in turn, the determination that a use qualifies has been given significant weight in the overall analysis. Examples of uses found to be transformative but nevertheless unfair are rare; they are confined almost entirely to situations in which the defendant’s legitimate purpose can’t justify the amount of copyrighted material it has taken. By contrast, TVEyes proposes a sliding scale according to which some transformative uses would be given more consideration than others, based on subjective judicial judgments about their relative social value. To normalize this exotic approach would effectively narrow the use rights of the public and subvert the constitutional goals of copyright itself.
In justification of this departure from fair use precedent, Judge Jacobs’ majority opinion goes on to mangle the 1984 decision in Sony Corp. v. Universal Studios, asserting that (in effect) the Supreme Court effectively decided that video recorders’ time-shifting function was somewhat transformative because it promoted efficiency of information use – even though the Court sadly lacked the vocabulary to express that conclusion. This tendentious interpretation of Sony could hardly be further from the historical truth. Although the “transformative use” was not yet a part of the copyright vocabulary, a closely related one, “productive use,” was very much in play. But its application to the facts had been rejected by the Ninth Circuit, and the Supreme Court majority didn’t choose to revisit the issue. Instead, it found a different, narrower way to its conclusion, relying on the private (and, yes, non-commercial) nature of some end uses enabled by off-the-air taping to conclude that they were fair. (Although there is much of value in Judge Kaplan’s TVEyes concurrence, it doesn’t emphasize that the Sony majority actually considered and declined to follow the line of reasoning attributed to it by Judge Jacobs.)
The TVEyes majority’s trivialization of transformativeness enables this seductive but circular central syllogism (at 16-17 of the opinion as posted):
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 effectively depriving Fox of licensing revenues.
Along the way, the majority leans heavily on a creaky 20-year-old Second Circuit precedent, Infinity Broadcasting Corp. v. Kirkwood, 150 F.3d 104 (1998), while playing fast-and-loose with several more recent (and significant) ones, distorting or ignoring them as necessary. The outstanding example of the former is Bill Graham Archives v. Dorling Kindersley, from 2014, on which the majority opinion first relies for the self-evident proposition that lost licensing revenues sometimes may be relevant to the fourth statutory fair use fact. It then proceeds to further characterize BGA as establishing that (in Judge Jacobs’ words), “[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. From this description, Bill Graham Archives could easily be misapprehended as supporting a general equation between lost potential licensing revenues and relevant market harm – on which the majority’s opinion depends.
But here is what Bill Graham Archives actually says at p. 615:
[A] copyright holder cannot prevent others from entering fair use markets merely “by developing or licensing a market for parody, news reporting, educational or other transformative uses of its own creative work.” Castle Rock [v. Carol Publishing Group], 150 F.3d [132 (2014)] at 146 n.11. “[C]opyright owners may not preempt exploitation of transformative markets . . ..” Id. Moreover, a publisher’s willingness to pay license fees for reproduction of images does not establish that the publisher may not, in the alternative, make fair use of those images. Campbell [v. Acuff-Rose], 510 U.S. [569 (1994)] at 585 n.18 . . .. Since DK’s use of BGA’s images falls within a transformative market, BGA does not suffer market harm due to the loss of license fees.
Where transformative use is concerned, the Bill Graham Archives opinion specifically rejects the core logic on which the TVEyes opinion relies.
Fair use and ultimate purpose
In the latter category (of overlooked precedents) is HathiTrust itself, from 2014. In contrast to Kirkwood, this recent Second Circuit decision demonstrates that the focus in deciding whether an information service is transformative must be on the various uses to which it may be put. There, for example, the fair use status of the defendant library consortium’s alleged infringing conduct could be assessed only in light of how end users would employ the resulting database. In getting to the decision that copying millions of books had been fair and noninfringing, it was crucial the scans would be employed to launch a new search tool for researchers – itself a transformative use – and also provide blind readers with a new source of accessible texts. (As already noted, the TVEyes court could have followed this approach by inquiring into who subscribed to the defendant’s service and why: Were they merely news consumers, or did they have legitimate research objectives? But it did not.)
Another recent Second Circuit fair use decision that concentrates attention on end uses enabled by an information service is provided by 2015’s Authors Guild v. Google, Inc., in the discussion of how potential search and text mining applications help to justify concluding that the service itself constitutes fair use, at 804 F.3d 202, 217:
As with HathiTrust . . . the purpose of Google’s copying of the original copyrighted books is to make available significant information about those books, permitting a searcher to identify those that contain a word or term of interest, as well as those that do not include reference to it. . . . We have no doubt that the purpose of this copying is the sort of transformative purpose described in Campbell as strongly favoring satisfaction of the first factor.
Although the TVEyes opinion cites the Google decision in passing, it overlooks this important demonstration how contemporary fair use analysis looks to ends as well as means.
It’s ironic that Judge Jacob’s own 1994 dissent in American Geophysical Union v. Texaco, actually pioneered the approach to fair use analysis that the TVEyes majority abjures. There, he examined the motives and practices of employed scientists, typified by company scientist Donald H. Chickering II, whose work benefitted from the company’s photocopying policies:
Often, a researcher needs to know what others have thought and done in order to steer clear of repetition and dead ends, to evaluate theories and hypotheses for possible theoretical development or commercial application, to give credit to others, and much else. None of this requires a scientist to enter a laboratory. In any event, to describe Dr. Chickering’s file as “archival,” as the majority does, is a misnomer: an archive is ordinarily a bulk of documents accumulated by a bureaucratic process and serving as a resource for public or institutional reference. By contrast, Dr. Chickering’s personal file contains articles available for reference to assist the memory, curiosity and ongoing inquiries of a single researcher. As such, it is part of a transformative process of scientific research that has a long history.
60 F.3d 913, 133 (2d Cir.) Twenty-four years later, copyright jurisprudence has embraced this forward-looking approach to fair use analysis, while general adoption of the TVEyes approach would represent a return to the discredited past.
Petition for Rehearing
On March 16, TVEyes filed a petition for rehearing en banc with the Second Circuit, stating (at p. 2) that the “holding conflicts with prior decisions rejecting the notion that market harm may be presumed from a copyright defendant’s commercial success. It also conflicts with prior decisions holding that a copyright holder may not preempt the exploitation of a transformative market that it is not reasonably likely to enter.” This seems like the right remedy where such a high-profile “misleading case” is concerned.
