Russian State-Sponsored TV Network's Attempt to Dismiss Copyright Lawsuit On Fair Use Grounds Denied

Gunnar Larson g at
Sat Feb 18 09:26:38 PST 2023

March 18, 2022

TV-Novosti, a non-profit operating the Russian state-controlled RT(formerly
Russia Today) television networks and 38 associated RT YouTube channels,
has been sued for copyright infringement by Business Casual, an American
media company that creates documentary content, based on its use of
translated clips of Business Casual's documentaries in its own videos
posted to YouTube.

Business Casual creates short original historical documentaries which it
posts to its YouTube channel. Its documentaries frequently feature
photographs of historical figures, using a process called “parallax” which
“transforms century-old low-resolution photographs into dramatically
restored high-resolution photographs” and “turn[s] two-dimensional images
into three-dimensional models . . . simulating a depth-of-field. This
optical illusion provides Business Casual’s videos with an immersive
three-dimensional look and feel.”

The lawsuit relates to two of Business Casual’s documentaries—“How
Rockefeller Built His Trillion Dollar Oil Empire” and “J.P. Morgan
Documentary: How One Man Financed America”—clips of which Business Casual
alleges TV-Novosti incorporated into three separate videos on its
"RT-Arabic" YouTube channel, including portions featuring parallax-enhanced
images, altering the brightness and saturation of the copied content and
replacing Business Casual's watermark with TV-Novosti's own in order to
hide from YouTube's algorithms.

TV-Novosti moved to dismiss the copyright claims, arguing that it's use of
the clips is protected as fair use. However, after considering each of the
four statutory factors, Judge Koeltl of the Southern District of New York
denied TV-Novosti's motion, holding that while three of the four factors
weighed against finding fair use, "[t]he fourth factor, which the Supreme
Court has described as 'the single most important element of fair use,'
cannot be determined without further factual development."

Specifically, regarding the first factor, concerning the transformation of
the use, Judge Koeltl found that while TV-Novosti's videos take portions of
the plaintiff’s videos, re-arrange them, and add new commentary to them,
TV-Novosti had not made any meaningful changes to the visual clips
themselves, and "[m]erely overlaying new audio does not effect a sufficient
transformation . . . to find fair use as a matter of law." The Court
further noted that TV-Novosti had "not changed the purpose of the
parallax-enhanced images," i.e., to provide visual illustration for the
overlain audio commentary, but had instead "simply lifted the copyrighted
depictions . .. for the purpose of illustrating [TV-Novosti's] own video."
In addition, the Court found that the fact that TV-Novosti could have
sought to pay for the clips, but didn't, and tried to hide its use of the
excerpts from YouTube's algorithms, also weighed against a finding a fair
use under the first factor.

Regarding the second factor, concerning the nature of the copyrighted work,
the Court initially noted that factual material such as that at issue,
"cuts less closely to the core of copyright." Nevertheless, the Court held
that the fact that source material for Business Casual's videos was in the
public domain weighed against finding fair use, because TV Novosti could
have simply used public domain photos of the historical figures, rather
than the modified clips, to create its videos.

Regarding the third factor, concerning the amount of use in relation to the
copyrighted work as a whole, the Court noted that while only "small
portions of the entire copyrighted works were used"—excerpts of 7 seconds,
1 minute and 28 seconds, and 8 minutes and 50 seconds in length—the
portions were "not so trivial as to warrant dismissal under the de minimis

Lastly, regarding the fourth factor, concerning the effect of the use on
the potential market for or value of the copyrighted work, the Court noted
that this factor “ask[s] not whether the second work would *damage* the
market for the first (by, for example, devaluing it through parody or
criticism), but whether it *usurps* the market for the first by offering a
competing substitute.” With this framing, the Court thus found that while
one the one hand, TV-Novosti's "videos are alternative ways of learning
about the lives of J.P. Morgan and John D. Rockefeller," on the other hand,
they "have a broader focus and are in a different language, meaning that
they cater to a different audience." These differences, the Court held,
were significant enough to preclude the Court from "determining the effect
of [TV-Novosti's] videos on the market for [Business Casual's] videos at
this time."

The Court's recognition of the weight of the fourth factor in determining
fair use means that there may still be hope for TV-Novosti—time (and fact
discovery) will tell. For now, the takeaway may very well be that parties
seeking to raise a fair use defense should take care to emphasize any
characteristics of their use that distinguish not just their work, but its
target audience, including the scope of the work and the language (if any)
which communicates it.


*Business Casual Holdings, LLC v. TV-Novosti*, No. 21-CV-2007 (JGK), 2022
WL 784049 (S.D.N.Y. Mar. 14, 2022)
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