Fox News Suffers Major Legal Defeat to TVEyes

Bill O'Reilly at Desk - H 2014
Fox News

 Bill O'Reilly - H 2014

On Tuesday, a New York federal judge issued a significant "fair use" ruling, and in the process, handed Fox News a major legal loss in its attempts to protect its news shows from exploitation.

The lawsuit concerns TVEyes, which might not be widely known, but is used by MSNBC, ABC, CBS, Reuters and Bloomberg to monitor what is being said on Fox News and more than 1,400 other television and radio stations. Besides use by media organization, TVEyes' clients also include the White House, 100 members of Congress, the Department of Defense, the American Red Cross, AARP, Goldman Sachs, the Association of Trial Lawyers and many others.

These customers create customized search terms and are able to get access to transcripts and video clips. Fox News has warned that such a service — because it also allows those who pay a flat fee of $500 a month to watch live streams — will erode its ratings and "decimate" its business.

There was even more at stake.

As anyone who watches MSNBC knows, Fox News clips are often shown widely in the media. In this lawsuit, Fox News expressed concern that TVEyes competes with its own authorized clip service, which has deals with Yahoo, Hulu and YouTube. What's revealed in today's ruling is that Fox News licensees must agree they will not show clips in a way that is derogatory or critical of Fox News.

With that backdrop, U.S. District Judge Alvin Hellerstein had to examine TVEyes and figure out whether it was a copyright-infringing machine (somewhat but not exactly analogous to what the Supreme Court had to say about Aereo) or whether it served some form of purpose that put it outside the realm of a copyright holder's exclusive rights. Hellerstein takes the latter view, determining that it's closer to Google's efforts to digitize books than Meltwater's efforts to scrape online news stories.

The judge uses police departments as an example of how TVEyes is used.

"Police departments use TVEyes to track television coverage of public safety messages across different stations and locations, and to adjust outreach efforts accordingly," he writes. "Without a service like TVEyes, the only way for the police department to know how every station is constantly reporting the situation would be to have an individual watch every station that broadcast news for twenty-four hours a day taking notes on each station's simultaneous coverage. … Without TVEyes, the police department could not monitor the coverage of the event in order to ensure that the news coverage is factually correct and that the public is correctly informed."

And so, when it comes time for the judge to analyze the first factor of fair use — the purpose and character of the use — the judge credits TVEyes with adding something new rather than merely repackaging the original copyrighted works.

"Unlike the indexing and excerpting of news articles, where the printed word conveys the same meaning no matter the forum or medium in which it is viewed, the service provided by TVEyes is transformative," says the summary judgment ruling. "By indexing and excerpting all content appearing in television, every hour of the day and every day of the week, month, and year, TVEyes provides a service that no content provider provides. Subscribers to TVEyes gain access, not only to the news that is presented, but to the presentations themselves, as colored, processed, and criticized by commentators, and as abridged, modified, and enlarged by news broadcasts."

The judge credits TVEyes as being the only service to do this. Not even the Internet as a whole qualifies as a substitute because Fox News doesn't provide all of its content online.

"That, in and of itself, makes TVEyes' purpose transformative and different in kind from Meltwater's, which simply amalgamated extant content that a dedicated researcher could piece together with enough time, effort, and Internet searches," writes the judge.

On one of the other factors in the fair use analysis — the effect of the use upon the potential market for the copyrighted work — Judge Hellerstein says that Fox News has failed to show that TVEyes is threatening its revenues from advertisers or cable and satellite providers. He adds there's "no basis" for concluding that people are using the media monitoring service as a substitute for watching Fox News and even ridicules the cable news network for alleging harm from lost clip licensing revenue. According to the ruling, Fox makes $212,145 from syndication partners and $246,875 from the licensing of clips — "a very small fraction of its overall revenue," the judge notes.

"I find that the small possible market harm to Fox News is substantially outweighed by the important public benefit provided by TVEyes," concludes the judge.

TVEyes wasn't completely victorious. The judge wants more evidence to be presented on the service's feature of letting subscribers download, archive, email and share clips via social media. He's also not ready to rule on the service's allowance of searches by date and time instead of keywords.

But overall, this is a landmark court ruling in favor of TVEyes, which has also prevailed on Tuesday in its arguments that Fox News' hot news misappropriation claim are preempted by federal copyright law. We'll continue to monitor this dispute to see if Fox News appeals today's ruling.

A status conference has been set for Oct. 3 to discuss the remaining claims. In a statement in the wake of the ruling, a Fox News spokesperson is emphasizing that at least a portion of the lawsuit remains live: 

"The Court only rules that a specific portion of TVEyes’ service — its keyword search function — was fair use. The Court expressly said that it required more information to decide whether TVEyes’ other features — including allowing video clips to be archived, downloaded, emailed, and shared via social media — were fair use. To find those features to be fair use would be unprecedented as TVEyes copies and distributes content, as opposed to helping its users find it. Such a ruling would be inconsistent with the Second Circuit’s decision in HathiTrust and Judge Chin’s district court decision in Google Books, as well as the long line of media clipping service cases in the Second Circuit and other circuits that found similar features not to constitute fair use." 

Twitter: @eriqgardner