The Echo of American Fair Use and Its Boundaries in the European Union and Italy: a Comparative Analysis in the Wake of the Fox News Victory Over Tveyes

• Publication year: 2019
• Author: Alessandra Tarissi De Jacobis*

THE ECHO OF AMERICAN FAIR USE AND ITS BOUNDARIES IN THE EUROPEAN UNION AND ITALY: A COMPARATIVE ANALYSIS IN THE WAKE OF THE FOX NEWS VICTORY OVER TVEYES

Alessandra Tarissi De Jacobis*

After a long copyright lawsuit that began in 2013, on January 18, 2019, Fox News informed the Second Circuit that it had reached a settlement agreement with TVEyes, pursuant to which TVEyes is no longer permitted to transmit copyrighted material from Fox News. TVEyes is a media monitoring service that records programming from over 1,400 television and radio stations and compiles the recorded programs into text-searchable databases. For a fee, TVEyes subscribers could not only search the database by keyword or date and time, but also watch, archive, download, and email the up to ten-minute-long clips.

In 2013, Fox News sued TVEyes for copyright infringement. While the District Court seemed to favor TVEyes' defense—holding that most of TVEyes' functions were protected by fair use—the Second Circuit reversed this decision and held that TVEyes' services did not constitute fair use because, even if the use was somewhat "transformative," the impact on Fox News's potential revenues was significant.¹ The Second Circuit held in Fox News Network, LLC v. TVEyes, Inc. that TVEyes' news monitoring functions, other than the archiving of video clips, do not constitute fair use of Fox News's broadcasts and thus infringe Fox News' copyright.² TVEyes sought to appeal this decision to the U.S. Supreme Court, but the Supreme Court denied TVEyes' petition for a writ of certiorari,³ leading the parties to settle. The settlement was reached almost one year after the Second Circuit's decision.

This case provides an opportunity to explore the boundaries of fair use and to compare the fair use doctrine, as developed in the U.S., with certain exceptions to and limitations on an author's exclusive rights under the laws of the European Union (EU) and Italy.

I. FAIR USE IN THE UNITED STATES

Fair use is a concept born and developed in the common law systems; in particular, pursuant to U.S. law, the fair use doctrine permits limited use of copyrighted material without the need to acquire authorization from the legitimate rightholder. Broadly speaking, fair use can be defined as the copying of copyrighted material for a limited and "transformative" purpose, hence causing minimal harm to the rightholder's legitimate markets.

Fair use is often used as a defense against a claim of copyright infringement. The U.S. Copyright Act requires courts to consider at least the following four factors when analyzing fair use claims:

1. "the purpose and character of the use";
2. "the nature of the copyrighted work";
3. "the amount and substantiality of the portion used"; and
4. "the effect of the use on the potential market for or value of the copyrighted work."⁴

But what is "transformative" use, and how has this concept been used in other recent U.S. cases to rule out copyright infringement?

"Transformative" use is also known as the "Fifth Factor." A work is "transformative" if it uses another work in completely new or unexpected ways. Sometimes, courts have found copies made as part of the production of new technologies to be transformative uses. For example, in the seminal case Authors Guild v. Google, Inc., the Second Circuit found fair use where Google Books enabled users to search databases of books to view short passages or "snippets" containing the user's desired keywords.⁵ In that case, the court noted that Google Books presented a unique set of facts that "test[ed] the boundaries of fair use,"⁶ while in Fox News, the court concluded that TVEyes "exceeded those bounds."⁷

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II. FAIR USE IN THE EUROPEAN UNION

Derogations to authors' exclusive rights are also permitted in EU copyright law, but with a less flexible regulatory framework. In fact, EU law (consistent with civil law systems, including that of Italy) lays down an exhaustive list of "free utilizations." In particular, Article 5 of the EU Copyright Directive, also known as the Information Society Directive (InfoSoc Directive), provides a catalogue of optional exceptions that each EU member state could transpose into its own national system.⁸ However, each exception must be applied in compliance with the strict "three-step test" specified under Article 5(5) of the InfoSoc Directive: that is, exceptions and limitations can only occur (1) "in certain special cases"; (2) "which do not conflict with a normal exploitation of the work or other subject-matter"; and (3) "do not unreasonably prejudice the legitimate interests of the rightholder."⁹

Article 5(3)(d) of the InfoSoc Directive allows quotations "for purposes such as criticism or review," provided that (1) "they relate to a work or other subject-matter which has already been lawfully made available to the public"; (2) "the source, including...