TVEyes Loss Means Television News Revenue Is Less Under Threat

(Bloomberg) -- Television news companies can spend less time worrying about losing revenue to tech firms repackaging their shows.

That's the major takeaway after an appeals court in New York ruled that a "search engine for broadcast" can't use material from traditional media companies free from federal copyright provisions. These start-up companies "have to be extra cautious about the way they take and re-purpose content," said Darren Heitner, an entertainment lawyer, who isn't involved in the case.

Fox News Network LLC won the ruling Tuesday in a suit against TVEyes Inc., which records television content and makes it searchable via a subscription service that costs about $500 per month. The appeals court overturned a district court that found the content service, which is used by government agencies and news media organizations, didn't trigger copyright protections and qualified as fair use.

"Because that re-distribution makes available to TVEyes' clients virtually all of Fox's copyrighted content that the clients wish to see and hear, TVEyes has failed to show that the product it offers to its clients can be justified as fair use," the three-judge panel of the federal appeals court said.

Dale Cendali, a lawyer for Fox News, called the ruling a "sweeping victory." The court found "there is a difference between finding content, that might sometimes be fair use, and actually delivering that content to the detriment of the copyright holder," she said in a statement.

TVEyes said in a statement that it is "disappointed by the decision," but "we continue to believe that TVEyes offers an irreplaceable public service to its customers." The company said it is evaluating legal options.

Companies could be in legal trouble based on the ruling if they're generating a "substantial amount of revenue" from repackaged material, said J. Michael Keyes, an intellectual property lawyer who isn't involved in the case. “There is a clear hierarchy emerging in the fair-use calculus: The ‘market harm' factor is the most important consideration when it comes to fair use."

The case is Fox News Network LLC v. TVEyes Inc., 15-3885, U.S. Court of Appeals for the Second Circuit (Manhattan).

To contact the reporter on this story: Christie Smythe in Brooklyn at csmythe1@bloomberg.net.

To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Paul Cox, Joe Schneider

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