Intellectual Property

The Eyes Have Had It: How The Second Circuit Addressed Its Copyright Fair Use Problem

Is transformative use really fair use under the Copyright Act?

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For ages now, the Second Circuit has been criticized for the head-scratcher of a fair use victory it handed down in a case between photographer Patrick Cariou and “appropriation artist” Richard Prince. Cariou lost a case before the Second Circuit despite undisputed facts establishing that Prince had sourced and copied a number of Cariou’s original photographs from Cariou’s book, “Yes, Rasta,” and then added a couple of paint splotches and cut-outs to create “new” works that were sold for millions of dollars. Moneybags Prince maligned Cariou’s photographs in court, never sought Cariou’s consent to use his work, and never paid Cariou a dime in licensing fees. On these facts, the Second Circuit somehow found fair use, and allowed Prince to enjoy the fruits of his copying, millions and millions of dollars worth of fruit.

One of the more off-base elements of this decision was the Second Circuit’s conjuring and application of the “transformative” fair use factor, which supposedly looks to how the unauthorized use “transforms” the original work. If this factor seems amorphous and out-of-place in a field of law that is well-delineated by the Copyright Act, that is because it is appears nowhere in the Copyright Act’s express list of fair use factors. Indeed, 17 U.S. Code § 107 lays out the four fair use defense and the relevant factors, and “transformation” is not among them. While the first factor looks to “the purpose and character of the use,” that factor is supposed to address issues such as “whether such use is of a commercial nature or is for nonprofit educational purposes.” How courts have found this language to support the “transformation” movement is hard to fathom.

Judge Frank H. Easterbrook of the Seventh Circuit, among others, disagreed with the ruling on this basis, stating that relying almost exclusively on the created-from-whole cloth “transformative” factor was error, and that, when addressing a fair use defense, it was “best to stick with the statutory list.”

His Honor went on to note that a “transformative” work is not non-infringing, but instead violates the author’s “derivative work” right, which is expressly protected by 17 U.S.C. § 106(2). Others followed with similar critiques. But, the Second Circuit doubled down on the importance of the “transformative” factor when it, relying on Cariou, issued the not-quite-as-bad-but-still-not-good Authors Guild v. Google, Inc. decision, which deprived authors of the ability to stop Google from posting their books online because posting exact copies was — you guessed it — “transformative” in some way. Even at the Second Circuit, the Google court noted that Google’s case against the authors “test[ed] the boundaries of fair use.”

The Google case was decided back in 2015, which was a world apart from the one we all now inhabit. At that time, Google and its tech brethren were basically untouchable in the courts of law and public opinion, and all tech-centric decisions seemed to go Google’s way, even when they were battling a weary crew of ink-stained authors over who could profit from the author’s work. But, times they have a-changed, and Google and its ilk have been exposed as more evil than anyone ever could have imagined, and cases are now, for the first time, going against the company. We saw this in the Federal Court’s recent decision in Oracle v. Google, which addressed the fair use defense and properly acknowledged the importance of the effect of the infringing use on the market for the original, and downplayed the less-important “transformative” factor.

Both Cariou and Google courts did the opposite, downplaying the importance of the market effect and other fair use factors set forth in the Copyright Act, and emphasizing the court-created “transformative” element. These courts also failed to acknowledge that fair use, per the statute, applies not to commercial uses but to “purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, [and] research.” The “purpose” of the use, which the statute notes should be in line with the foregoing for a use to be fair, was almost wholly ignored until the Federal Circuit acknowledged its importance in the recent Google decision referenced above.

Five years after Cariou, the Second Circuit appears to be walking back that case’s analysis as well as that in Google Books and in doing so has restored a semblance of balance to their fair use jurisprudence. It recently issued a decision in a case entitled Fox News Network, LLC v. TVEyes, Inc. that moves the fair use boundary to a more fair and reasonable locus of demarcation.

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The defendant in that case, TVEyes “records all of the content on more than 1,400 television and radio stations” and then makes it available to those who pay TVEyes a fee. This would appear to be a case of copyright infringement, but the district court, constrained by the Google Books decision, was forced to apply the ginned-up “transformative” factor and on that basis found that at least certain portions of TVEyes’ service had “transformed” the material it copied from the television and radio in a manner that was enough to permit the unauthorized reproduction.

The Second Circuit reversed, finding TVEyes’ entire service violated the Copyright Act and that fair use provided no safe harbor. It saw through TVEyes’ claims of transformation and noted that the company was “unlawfully profiting off the work of others by commercially re-distributing all of that work that a viewer wishes to use, without payment or license.” Notably, the analysis looked to the market effect (a factor expressly stated in the Copyright Act) and placed less emphasis on the transformation of the use (which is not). The service was found not to be fair use and, though there is currently pending a request for a rehearing en banc, for the time being at least, the Eyes have had it.

Scott Alan Burroughs, Esq. practices with Doniger / Burroughs, an art law firm based in Venice, California. He represents artists and content creators of all stripes and writes and speaks regularly on copyright issues. He can be reached at scott@copyrightLA.com, and you can follow his law firm on Instagram: @veniceartlaw.

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