Fox News wins appeals ruling over media monitoring company

NEW YORK (AP) — A media monitoring company is cheating Fox News out of revenue by failing to pay for some content it resells, a federal appeals court said Tuesday in a decision closely watched in the news broadcasting industry.

The 2nd U.S. Circuit Court of Appeals ruled against TVEyes Inc., a Fairfield, Connecticut-based company distributing television clips and snippets of transcripts to its customers.

“The success of the TVEyes business model demonstrates that deep-pocketed consumers are willing to pay well for a service that allows them to search for and view selected television clips, and that this market is worth millions of dollars in the aggregate,” the appeals court said.

It said TVEyes was depriving Fox of licensing revenues and it should be left up to Fox whether it wants to create a similar service itself or license it to others.

“At bottom, TVEyes is unlawfully profiting off the work of others by commercially redistributing all of that work that a viewer wishes to use, without payment or license,” the 2nd Circuit said.

Attorney Dale Cendali, who represented Fox News, called it “a significant win in the field of fair use law.”

“We cannot emphasize enough the practical effect this win should have for content holders of all stripes,” Cendali said.

Attorneys for TVEyes did not immediately respond to a request for comment.

The appeals court said the company, which enables customers for about $500 monthly to sift through large quantities of television clips to find what interests them, was unlawfully profiting off the work of others because its product was only modestly transformative, not enough to be considered fair use of the television content.

However, the appeals court noted that Fox News did not challenge the media monitoring company’s creation of a text-searchable database. The company’s clients include journalists, government and political organizations, law enforcement, the military, for-profit companies and nonprofits, the court said.