Tag Archives: Inc.

Federal Court Explains the Bounds of Fair Use by a News Organization, Ruling That Esquire’s Use of Photo of Trump at Private Wedding Is Not Fair

by Nancy Wolff, DMLA Counsel

The decision in Otto v. Hearst Communications, Inc., No. 1:17-cv-04712 (S.D.N.Y. 2018) provides a helpful guide to what is does not qualify as fair use in the context of a news story. Fair use is a limitation on a copyright owners exclusive rights and permits the use of a work without consent. It is codified in the current Copyright Act, and the statute provides examples of what can be considered fair use. Because “news reporting” is an example, it is all too common that popular news websites rely on fair use rather than licensing a photo, asserting that the use is news reporting. But is it?

Most likely not. In Otto v. Hearst Communications, Inc., Judge Gregory H. Woods dealt with this issue directly and found that Esquire.com’s use of a photo of Donald Trump at a private wedding in an article about him crashing the wedding was not fair use. The instructive decision, which analyzed the copyright infringement claim and individual components of the fair use defense, provides a clear example of what is not considered fair use in the context of a news story.

In June 2017, Jonathan Otto, a weddinggoer, snapped a photo of Trump, who happened to appear at a wedding held at his golf club in New Jersey. The amateur photographer texted the photo to a friend, only to discover the next morning that his photo had unexpectedly gone viral—first on Instagram, and then splashed across the pages of several online media outlets.

Seeking to protect his rights, Otto, retained counsel and filed for copyright registration. He then enforced his copyright by suing several of the media outlets, including Hearst Communications, Inc., the parent company of Esquire, who had copied and published Otto’s photo, for copyright infringement. In response, Esquire did not dispute that it had copied the photo but asserted a fair use defense arguing that it had used the photo of Trump for news purposes. However, the Court did not buy this argument.

The Court analyzed each of the four fair use factors in detail and explained why, taken together, the factors did not weigh in favor of a finding of fair use. Specifically, he wrote: “Stealing a copyrighted photograph to illustrate a news article, without adding new understanding or meaning to the work, does not transform its purpose—regardless of whether that photograph was created for commercial or personal use.”

While Esquire’s status as a news publication may be important for the fair use inquiry, that fact alone does not make Esquire, or any other media organization, immune from liability under intellectual property laws. Below is an overview of Judge Woods’ analysis and findings on each of the elements of fair use:

Purpose and Character of the Work. First, the Court discussed the purpose and character of Otto’s photo—arguably the most important fair use factor. The judge noted that Hearst’s argument that the use is fair because the photo was created for personal use, and Esquire used it for news, was unpersuasive. While “news reporting” is specifically identified as a potential method of fair use in the statute, courts analyzing this factor still look to the transformativeness of the use of the copyrighted work. For example, did Esquire’s use of the photo in a post describing Trump crashing the wedding add a new meaning or message? Esquire argued that its use did because the article “added commentary regarding the President’s availability for photos at the wedding and broader trend in the President’s behavior.” However, the Court disagreed, concluding that Esquire used the image solely for illustrative purposes—to depict the President’s presence at a private wedding—and did not add anything new to the image.

Nature of the Copyrighted Work. Second, the Court examined the nature of the copyrighted work, such as whether it is expressive or creative versus factual or informational, and whether the work is published or not. While photographs can vary widely on this spectrum, the Court agreed with Esquire’s argument that the image is more factual, because the photo was taken spontaneously to document an event, and Otto did not direct or pose the subjects. As for the publication status of the photo, the parties did not dispute that the image had already been published and disseminated widely before Esquire’s use. Although a copyright owner’s right of first publication is important, the Court found that Esquire’s article did not threaten this right. Consequently, this factor—while far from the most important in the fair use analysis—weighed in favor of fair use.

Amount and Substantiality of the Portion Used. Next, the Court evaluated just how much of Otto’s photograph Esquire used. For its article, Esquire used a slightly cropped version of Otto’s photo, but otherwise did not edit it. As one would assume, the more of a copyrighted work that is taken, the less likely the use is to be fair; however, courts also take the purpose of the use into account, looking back at the first fair use factor. Because it was clear that Esquire used the entirety of the photo and did so without adding new meaning or otherwise transforming the work, the Court found that this factor weighed against fair use.

Effect of the Use on the Potential Market. Finally, the Court considered the effect of Esquire’s use of the photo upon the potential market for or value of the photo. Where the copyright holder has no intention of entering the market, or the inability to do so, courts often find this factor weighs in favor of fair use. However, that is not the case here. Because Otto had acted quickly to protect his rights and was seeking to license the photo, such as to publications like TMZ, the Court found that it was clear that Otto was attempting to enter the market. Esquire’s unauthorized publishing of the same photo destroys the potential market and harm’s Otto’s ability to license the work. As such, the fourth factor also weighed against fair use.

Weighing the four factors together, the Court found that it was evident that Hearst’s use of the image was not fair. “The fact that Hearst’s commercial use did not transform the Photograph’s purpose or add new meaning to the image; the fact that Hearst used the work in its entirety; and the potential harm to any financial opportunities Otto might reasonably pursue for use of the photo, outweigh the fact that the image is factual and published,” Judge Woods concluded.

While any fair use analysis is an inherently fact-driven inquiry, this case is helpful to explain the point that a photo that merely illustrates a newsworthy article, without adding more, is not fair use. If the photo was the news story itself, the result might have been different. This case confirms that images to illustrate articles should be licensed and not just taken

Fox News Network, LLC v. TVEyes, Inc.: Second Circuit Rejects Fair Use Defense

By: Scott J. Sholder

A panel of the U.S. Court of Appeals for the Second Circuit today issued its much-anticipated opinion in the TVEyes appeal, reversing the decision of the U.S. District Court for the Southern District of New York, and holding that TVEyes’ copying, storage, and re-distribution for viewing, downloading, and sharing, of massive amounts of copyrighted TV content was not fair use.

TVEyes is a for-profit media company offering a service that allows its clients to “sort through vast quantities of television content in order to find clips that discuss items of interest to them.” TVEyes records 1,400 channels’ worth of TV broadcasts, 24 hours a day, and makes the copied content searchable by also copying the closed-captioned text that accompanies the videos. Clients can search for videos based on keywords and play unlimited video clips, each up to ten minutes in duration, and may archive, download, and share clips by e-mail. Clients pay $500 per month for these services.

The District Court held that the searching, archiving, and watching functions offered by TVEyes constituted fair use, but that the downloading and e-mailing functions did not. Fox only challenged the “watch” function (and its ancillary functions like downloading, archiving, and sharing), but not the search function.

At the outset of its opinion, the Court of Appeals noted the similarities between this case and Authors Guild v. Google, Inc., in which the court held that mass copying of books for purposes of limited text searching was fair use, but it explained that Authors Guild “test[ed] the boundaries of fair use,” and that TVEyes “has exceeded those bounds.” In sum, the court held that TVEyes’ re-distribution of copyrighted content was only modestly transformative under the first fair use factor, but that other fair use factors outweighed any transformative purpose. Despite myriad recent case law holding that transformative use is the most important fair use factor, the TVEyes court seemed to hearken back to a slightly earlier era of fair use and reiterated that the fourth factor – market harm – is “the single most important element.”

The court held that TVEyes’ copying could be considered transformative in that “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.” Similar to the Sony “Betamax” case, the court noted that TVEyes’ watch function was also akin to time- and place-shifting, and “certainly qualifies as technology that achieves the transformative purpose of enhancing efficiency,” and so was “at least somewhat transformative.” However, the transformative character of the use was not enough to outweigh the commercial nature of the services offered because TVEyes “essentially republishes that content unaltered from its original form, with no ‘new expression, meaning or message.’”

The court found the second factor – the nature of the copyrighted works – inconsequential, but placed significant weight on the third factor, which analyses the amount of the copyrighted works made available to the public. This factor weighed in favor of Fox because, unlike in Authors Guild where Google Books made available only snippets, “TVEyes makes available virtually the entirety of the Fox programming that TVEyes users want to see and hear,” and given the brevity of most news reports, at very least copied and distributed “the entirety of the message conveyed by Fox to authorized viewers of the original” content.

Turning to the fourth factor, the Second Circuit agreed with Fox that “TVEyes undercuts Fox’s ability to profit from licensing searchable access to its copyrighted content to third parties.” Consumers were clearly willing to pay for such a service, and TVEyes therefore “deprives Fox of revenue that properly belongs to the copyright holder,” effectively usurping the market for Fox to offer similar aggregation, searching, and licensing services for its own content. This usurpation, combined with the amount of content offered and the modest transformativeness overshadowed by TVEyes’ commercial use of Fox’s content, defeated TVEyes’ fair use defense. The court remanded with instruction to the District Court to amend its permanent injunction accordingly.

Judge Kaplan of the Southern District of New York, sitting by designation, filed a separate concurring opinion to express his disagreement with the majority’s finding that TVEyes’ uses were at all transformative. He opined that the “somewhat transformative” designation was irrelevant given that the other fair use factors outweighed the transformative use, and that issuing such dicta would serve only to confuse the already complicated question of what constitutes transformative purpose. Nonetheless, Judge Kaplan expressed his own views on why TVEyes’ use of Fox’s content was not transformative, including that the mere “enhancing the efficiency with which copies of copyrighted material are delivered to secondary issuers” was not transformative because TVEyes simply repackaged and delivered the original content with no news aesthetics, insights, or understandings.

The Second Circuit’s decision is significant in that it further defines the outer boundaries of fair use by providing a concrete example of what falls outside the doctrine, which is helpful given the arguably expansive implications of the Authors Guild decision, and by distinguishing a facially similar service from the Google Books project it deemed fair use in that case. It also signals a potential shift in focus back to the “market harm” factor of fair use, and away from a strict focus on transformative purpose, but at the same time adds to the growing sense of confusion about what may be considered transformative, or in this case, “somewhat transformative.”

Cowan, DeBaets, Abrahams & Sheppard LLP drafted an amicus brief in this case on behalf of American Photographic Artists, American Society of Media Photographers, Digital Media Licensing Association, National Press Photographers Association, and Professional Photographers of America, in support of Fox News Network.

COURT PERMITS COPYRIGHT CLAIM TO PROCEED DESPITE REGISTRATION ERROR

Cowan DeBaets Abrahams & Sheppard, LLP by Mikaela Gross and Nancy Wolff

For many copyright owners, especially those attempting to register works of visual arts, determining whether a work is published or unpublished for registration purposes is one of the more challenging issues and an impediment to registration. The District Court of the Southern District of New York, in Archie MD, Inc. v. Elsevier, Inc., (No. 16-CV-6614 (JSR), 2017 WL 3601180 (S.D.N.Y. Aug. 20, 2017)) recently clarified the standard by which a copyright registration may be considered valid despite containing inaccurate information.

In 2005, Archie MD, Inc. entered into an Animation License Agreement (“ALA”) with the publisher Elsevier, Inc., under which Elsevier would license Archie’s library of 3-D medical animations for use in its various publications. About two weeks after entering into the ALA, and after Archie had delivered the works to Elsevier, Archie submitted a single copyright registration application for a group of unpublished works. This registration included the work at issue in this case, an animation entitled “Cell Differentiation.” The Copyright Office eventually registered the group of works on August 15, 2005.

In 2014, Archie gave Elsevier notice that it did not intend to renew the ALA, and the ALA expired on July 1, 2015. Archie subsequently file a copyright infringement action against Elsevier, alleging that after the expiration date, Elsevier continued to use hundreds previously licensed animations under the ALA and created unauthorized derivative works.

Both parties filed motions for summary judgment, and the SDNY granted defendant Elsevier’s motion as to all but two of Elsevier’s new animations, on the grounds that Elsevier’s continued use of previously licensed animations did not constitute unauthorized use under the ALA and most of the new animations by Elsevier were not substantially similar to Archie’s animations. As to the remaining claims based on the “Cell Differentiation” animation, Elsevier contended that Archie’s copyright registration in unpublished works was invalid because the work was in fact published, and as a result, the court should dismiss Archie’s claim in its entirety. The court denied Elsevier’s motion for summary judgement as to “Cell Differentiation” on the basis that although the registration for “Cell Differentiation” contained an inaccuracy (namely that the work was unpublished, when it in fact was), this was not fatal to the registration under 17 U.S.C. § 411(b)(1).

Section 411(b)(1) of the U.S. Copyright Act explains that a certificate of registration issued by the Copyright Office satisfies the registration prerequisite for filing a copyright infringement action regardless of the existence of inaccurate information in the certificate “unless— (A) the inaccurate information was included on the application for copyright registration with knowledge that it was inaccurate; and (B) the inaccuracy of the information, if known, would have caused the Register of Copyrights to refuse registration.” To determine whether Archie’s registration failed to satisfy this prerequisite, the court had to answer two questions: first, whether or not “Cell Differentiation” was published or unpublished, and second, if it was published, whether this inaccuracy on the certificate of registration was fatal to the registration’s validity.

As to the first question, the court held that “Cell Differentiation” was in fact published when Archie licensed and delivered the file to Elsevier. Reasoning that Archie’s delivery of the “Cell Differentiation” digital file pursuant to worldwide license to, among other things, distribute “Cell Differentiation” to the public, satisfies the Copyright Act’s definition of publication under 17 U.S.C. § 101 because it constitutes an “offering to distribute copies . . . to a group of persons for purposes of further distribution.” That Elsevier had not yet made any further distributions of “Cell Differentiation” at the time the copyright registration application was filed was irrelevant, because the licensing and delivery of the files was itself an offering.

Because the certificate of registration listed “Cell Differentiation” as unpublished, the court turned to the statute to answer the second question. If an applicant knew its application contained inaccurate information, and if the Register of Copyrights would have refused registration had she known of this inaccurate information, then a subsequent registration certificate is invalid for purposes of filing a copyright infringement action. 17 U.S.C. § 411(b)(2) requires that when an inaccuracy on a certification of registration is discovered, a court must ask the Register of Copyrights “whether the inaccurate information, if known, would have caused the Register of Copyrights to refuse registration.” The Register advised the court that she would have denied the application had she known of the inaccuracy in labeling “Cell Differentiation” unpublished. The key issue was whether Archie knew of the inaccuracy. Because the question of whether licensing a work constitutes publication was “an unsettled legal question at the time” Archie filed its copyright registration application in 2005, the court reasoned that Archie did not know of the inaccuracy. As a result Archi was able to proceed on its copyright claim for the work “Cell Differentiation”.

Publication remains a thorn in copyright owner’s side. While the plaintiff in this case was not considered to have knowledge that its works were published at the time of registration, those filing registrations after the later cases clarifying what is published will no longer have the benefit of this uncertainty. Because the Copyright Office would deny registration of an application with inaccurate information as to the works’ publication status, it is highly recommended that creators register works of visual art before any licensing agreements are signed or files are delivered for further distribution. Otherwise, published works, if photographs, can be registered by the photographer under a group registration of photographs application, but published and unpublished works are still required to be filed separately. Until this requirement is revised, visual artists will continue to face impediments to successful and effortless copyright registration.