Fox News Appears to Have Edge in Showdown That Could Curtail Sharing of Clips

Trump on Fox News - Screengrab - H 2017

Trump on Fox News - Screengrab - H 2017

It's no secret that President Donald Trump is an avid watcher of cable news, particularly Fox News. In recent months, journalists have tracked back some of his tweeted commentary on subjects including immigration in Sweden and dissension in his administration to what he's seen on cable news. By doing so, journalists can discuss how colleagues are treating a given topic while examining whether the leader of the nation is being swayed by faulty information.

Now imagine for a moment that the only Fox News clips being disseminated are from those who agree not to criticize the cable news network. Then again, contemplate an environment where networks like Fox News, CNN or MSNBC have to cut staff because monetizing televised journalism becomes too difficult.

On Tuesday, the 2nd U.S. Circuit Court of Appeals was presented with both scenarios at a hearing scheduled to last about 30 minutes, but that stretched past two hours. At the hearing, regarding a lawsuit that Fox News filed against the media monitoring service TVEyes, a panel of three 2nd Circuit judges were clearly uncomfortable with the decision looming, but in a particularly engaging hearing, appeared to slightly favor the argument that TVEyes had given its subscribers the ability to do too much with Fox News' copyrighted programming. In heading in that direction, the federal appellate circuit seems primed to draw bright red lines around a decision two years earlier that gave Google a pass for digitizing tens of millions of books.

Most folks probably have not heard of TVEyes, but it's a service that allows researchers to locate what's being said about a given topic, individual or corporation on some 1,400 television and radio stations. Among its subscribers are prominent news organizations, Fortune 500 companies and officials in government all the way up to the White House. Even many journalists may not be fully aware of its influence. Research firms like Media Matters as well as some top PR firms use TVEyes to spot the more salacious elements of cable news. Often, what's found ends up being pitched to journalists before clips go viral.

In September 2014, at the district court level, a federal judge agreed with TVEyes that the indexing and excerpting of cable news programming is a transformative use of copyrighted material, and as one example, spoke of how police departments could track public safety issues in the media and adjust outreach efforts accordingly. But that same judge in August 2015 ruled that TVEyes had gone too far in letting its subscribers search, download and share clips. The judge issued an injunction that restricted the sharing of clips through email and on social media, but the injunction was stayed to allow an appeal where TVEyes argues the district judge is in error while Fox News contends that if anything, the injunction should be even more broad.

The appeal has attracted the attention of Google, Microsoft, and other tech companies and research institutes who are supporting TVEyes. Meanwhile, CNN is among the television entities that have prioritized the bottom line over their journalism function and are standing behind Fox News.

At Tuesday's hearing, Kathleen Sullivan at Quinn Emanuel went first on behalf of TVEyes.

"I’m saying from TVEyes’ perspective our business model is to enable users to perform the transformative functions of research, commentary, and criticism," she said, also arguing for the proposition that parsing what's integral to TVEyes misses the fact the service at large solves a problem and is hardly a market substitute to having a cable box.

Right away, after suggesting that TVEyes is "analogous" to Google Books, she ran into skepticism from the three judges who seemed bothered by the fact that users could watch up to 10 minutes of a Fox News show on the TVEyes service after searching by topic or by date and time. Circuit Judge Dennis Jacobs noted that most stories on cable news don't even last 10 minutes, while judge Lewis Kaplan suggested that if Google had provided searchers an entire book instead of just a snippet in its digitization project, the outcome of that case would have turned out differently. Potentially even worse for TVEyes, the company seems to have drawn a panel of judges who don't entirely agree with the Google Books holding even with the snippet limitation. A couple of the judges made the point that a user of Google Books can exploit it to read an entire haiku or a dictionary entry. Not all copyrighted materials are book-length. 

Sullivan tried to rebut these points by talking up the limitations of the service — it's allegedly hard to watch an entire Fox News show using TVEyes, and she said the company has terminated service for those like the National Review who have shared too many clips on social media. She also touted the statistic that the average length that someone watches something on TVEyes is just 53 seconds. She argued that actual use was "highly probative" of it being used for research purposes.

The judges, though, kept hammering her on the amount of Fox News that users are permitted to watch.

"I don't doubt that it's useful," said Kaplan. "Just as if the person who got the snippet in Google Books would have liked to see the whole page. That would have been useful... Why would it have been transformative...?"

Representing Fox News, Dale Cendali at Kirkland & Ellis actually agreed that TVEyes is analogous to Google Books, but argued that because TVEyes is delivering much more than what Google allowed, it's out of bounds. She said that although TVEyes was copying and using its closed captioning transcriptions, Fox News wasn't making an issue of this. According to her, TVEyes had crossed the line by providing video and audio. Calling this a "crucial case to the future of television journalism," she asserted that if others could take advantage of a search "loophole," it would "open the floodgates" to others robbing the business of needed revenue. 

"It's their burden to prove the absence of usurpation," she said. "They can't meet that burden... So if everybody — Google is one of their amici— if everybody were to offer a service... what would be the effect on the market?"

While maybe sympathetic to such argument, the judges did express some hesitation upon word that Fox News maintained only a limited clip licensing program, charged as much as $800 for a one-minute clip, and that just 17 percent of its show content was appearing on its website. And that's without search capability.

Judge Jon Newman talked of how someone could go to a library to find an entire book. In contrast, he remarked that television is more "ephemeral," with much of the content going into an "abyss." He also asked whether there was truly a market for what he characterized as "used news."

Cendali rejected the idea of ephemerality, arguing that anyone can DVR anything and that TV Everywhere allows at least some on-demand access for those who are conducting research. As for licensing clips, she said that Fox News should be able to charge corporate executives and others as much as the network wanted. "That's capitalism," she exclaimed, later stressing the necessary commercial side of journalism by adding, "Search is great, but search is great only if there's something to find." 

The attorney also admitted that Fox News includes a non-disparagement clause in its contract with licensees, but told the judges that Fox News "has never put in in play," meaning in any kind of enforcement proceeding.

To that, Judge Kaplan smartly noted that while TVEyes is focusing on what its customers actually do, Fox News is concerned with what might happen, but not with respect to the licensing. "Here, you want to focus on what the contract actually says," he observed to laughs.

The three judges now find themselves in a bit of a predicament. They seem to be leaning toward affirming the lower court's ruling that TVEyes had given customers too much, but they also are conscious, as Newman put it, of the "legitimate important interest in reporting how the news story is reported," including visual cues and the tone of the television personality.

At several points, the judges almost wished that the two sides could come to agreement on something workable — by mandating that TVEyes subscribers pay for cable television, for example, or by stamping Fox News clips with the words, "review purposes only." (At one point, there was a nod to the notion that the White House probably is already a cable subscriber.)

Kaplan mused about a scenario where TVEyes could trot out a second version of its service upon remand, before quickly adding, "But I'm not sure our job is to restructure." 

In response, Cendali said the two sides had been litigating the battle for years without resolution. She added, "We need a decision whether TVEyes is fair use or not."