[1]https://www.lexology.com/library/detail.aspx?g=ff9f1af5-cc8a-473a-82
   2b-8890c6c8c514
   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 doctrine."

   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)

References

   1. https://www.lexology.com/library/detail.aspx?g=ff9f1af5-cc8a-473a-822b-8890c6c8c514