Fox News Network sued TVEyes, Inc. for copyright infringement for its service which copies broadcasts from over 1,400 TV and radio stations 24/7 – including Fox networks – and distributes the content to subscribers, who may then download, watch, or share video clips. The District Court held that the function in TVEyes’ service that enabled subscribers to search for videos and clips using keywords (“Search Function”) and the functions that allowed subscribers to watch, archive, and share relevant clips with others (“Watch Function”) were both allowed under the fair use exception. The District Court held that the functions that allowed TVEyes subscribers to download and freely email clips or to watch clips obtained by using search functions other than by keywords were not fair use. Fox appealed part of the District Court ruling to the Second Circuit Court of Appeals. Specifically, Fox appealed the Watch Function, arguing that it was not fair use. Fox did not appeal the Search Function part of the ruling.
The Second Circuit Court of Appeals reversed the finding of fair use on the Watch Functions and remanded the case to the District Court to revise the injunction in light of its fair use ruling. It weighed most of the fair use factors against TVEyes, and noted that the fourth fair use factor regarding potential market harm was the “single most important element of fair use.”