While fair use has recently evolved in a way that has been, for the most part, increasingly hospitable to commentators, critics and appropriation artists, it remains an area in which there are few bright line rules. Understandably, then, whenever there is a fair-use case involving a new and innovative use by an artist or critic, creators and lawyers alike must examine that decision carefully. Unfortunately, the recent case of Equals Three v. Jukin Media, one of the first fair-use cases involving multiple viral videos, has been publicized but frequently misconstrued. Here, I attempt to correct the record and explain why this case is actually quite favorable to fair use of viral videos, even if that conclusion has frequently gotten lost in the translation of a case that saw more than its fair share of unusual procedural moves.
Start with the viral videos and their uses. Declaratory judgment plaintiff Equals Three Media produces regular YouTube-only comedy programs that use short viral videos—think people tripping and cats snuggling—as jumping off points for a series of jokes, often connected around a particular theme. Defendant Jukin Media is a new kind of content company that scours the internet for viral videos, licenses them from the owners, and then produces compilation shows of its own and also seeks additional licensing opportunities for the videos in its library.
Equals Three used Jukin-controlled viral videos in at least 18 of its comedy show programs but did not obtain licenses; instead, Equals Three claimed it made fair uses of the videos by commenting on and transforming them. After Jukin sent Equals Three a letter stating its view that the uses were infringing, Equals Three sued Jukin in the Central District of California to obtain a declaration that its videos did not infringe Jukin’s copyrights.
But Equals Three’s litigation tactics were unusual for a copyright case. In particular, while Jukin swiftly moved for a grant of summary judgment that Equals Three’s uses were not fair uses, Equals Three did not make the opposite request and ask the court to declare that its uses were permitted under the fair-use doctrine. Because of this procedural quirk, the court’s lone substantive opinion, issued on Oct. 13, 2015, essentially found that Equals Three’s uses were fair for 17 of the 18 videos—but the court did not enter judgment in Equals Three’s favor because Equals Three did not ask for summary judgment on that issue.
The court’s opinion, though, still provides an important analysis explaining why creative, comedic and original uses of viral videos will often be considered fair uses. On the first fair-use factor, addressing the purpose and character of the use, the court found the uses in all but one episode were “highly transformative” because the show had used the videos in creative ways, made jokes and comments about them, and altered them substantially, including through voiceover and creative editing. Finding this type of use to be transformative provides important guidance not only to other YouTube program creators like Equals Three but also to the many people and programs who regularly use viral videos as the raw materials for everything from stand-up comedy routines that use viral videos to late-night television satire.
Importantly, Equals Three’s transformative use of the viral videos overshadowed the other three fair-use factors. The court gave only “slight weight” to the second factor, the nature of the copyrighted work, because that factor was “not particularly important where the new work is highly transformative.” On the third factor, the amount used of the copyrighted work, the court again sided with Equals Three because transformative users are permitted to take even the “arguable heart” of videos if they do “not show more than is reasonably necessary” of the videos. And on the final factor, market harm, the court found there was only “hypothetical” evidence of harm and, therefore, said the factor was neutral.
Adding these together, the court concluded that the factors “weigh[ed] in favor of fair use” for all but one episode. Although that conclusion would typically have resulted in a judgment in favor of Equals Three, because Equals Three failed to bring a motion asking the court to find in its favor on that issue, the fair-use issue was left to be tried before a jury. Still, that fact should not overshadow the actual legal takeaway of the court’s careful opinion, which strongly favors fair use.
The second misunderstanding around this case surrounds the outcome of the jury trial on infringement. The parties settled before the jury announced its verdict. As a matter of law, then, there was no verdict, and the summary judgment opinion finding that the factors weighed in favor of fair use for most videos should have been the last word. But, unusually, several websites reported that one anonymous juror said that the jury would have found the uses were infringing on all of the videos. This muddied the waters and may have caused many people to think that Jukin had essentially prevailed.
That’s not the case. Even if this anonymous juror is reporting accurate information about what verdict the jury would have reached, the statement is both legally meaningless—the case was settled and dismissed before a verdict was entered—and of no precedential value anyway. Moreover, the case never should have gone before the jury in the first place, as the judge had earlier found that the overwhelming majority of the videos were fair uses.
Luckily, the rules of evidence and precedent will ensure that the court’s summary judgment opinion finding mostly in favor of fair use provides the lasting legal legacy of this dispute. Indeed, producing original content that comments on and transforms viral videos was found to be—and should be—a fair use. In that sense, the legal reasoning of the court in Equals Three, then, in some ways picks up where the Seventh Circuit left off in Brownmark Films, LLC v. Comedy Partners, 682 F.3d 687, 693 (7th Cir. 2012), which had held that a “South Park” parody of a viral video was a clear fair use, in part because the “underlying purpose and character of [South Park’s] work was to comment on and critique the social phenomenon that is the ‘viral video.’” With more and more content creators using viral videos creatively, hopefully the actual legal reasoning in Equals Three, Brownmark, and other cases will cut through the media noise and provide a strong foundation for fair use in this context.
Jason Harrow is an associate in DWT’s Los Angeles office. He focuses his practice on litigation and counseling on copyright, defamation, and First Amendment-related matters. He is also an experienced appellate advocate and has argued 14 appeals in the state and federal appellate courts.