The Whole Thing: Big Fair Use Win for Journalists in Swatch Case

by Patricia Aufderheide

scales_of_justiceJournalists won big in a court case settled Jan. 27, affirming journalists’ fair use right to repurpose 100% of unauthorized copyrighted content, in some cases, because it serves the public good.  The decision reinforces the position journalists made clear in the Set of Principles in Fair Use for Journalism.

When Bloomberg distributed an unadorned recording of a Swatch Group call with analysts without Swatch’s permission shortly after the call happened, Swatch sued for copyright infringement. A district court sided with Bloomberg and called Bloomberg’s use a fair use under copyright, so Swatch appealed. The appeals court went further than the district court in affirming journalists’ fair use rights in this kind of situation.

One big reason it was fair use was the purpose of the re-use. Bloomberg, the court said, had the goal “simply to deliver newsworthy financial information to American investors and analysts. That kind of activity, whose protection lies at the core of the First Amendment, would be crippled if the news media and similar organizations were limited to authorized sources of information.”

Is just publishing the whole thing transformative?

The court put a close focus on the key concept of transformativeness, the feature that most obviously adds value to existing work to justify fair use. Could simply publishing 100% of the conference call be transformative? Yes, said the court, because the entire original material provided more useful information than any summary or transcript could have:

“In the context of news reporting and analogous activities, moreover, the need to convey information to the public accurately may in some instances make it desirable and consonant with copyright law for a defendant to faithfully reproduce an original work rather than transform it…Here, Bloomberg provided no additional commentary or analysis of Swatch Group’s earnings call. But by disseminating not just a written transcript or article but an actual sound recording, Bloomberg was able to convey with precision not only what Swatch Group’s executives said, but also how they said it. This latter type of information may be just as valuable to investors and analysts as the former, since a speaker’s demeanor, tone, and cadence can often elucidate his or her true beliefs far beyond what a stale transcript or summary can show…the fact that Bloomberg did not transform Swatch’s work through additional commentary or analysis does not preclude a finding that the ‘purpose and character’ of Bloomberg’s use favors fair use…The recording has independent informational value over and above the value of a written transcript or article, regardless of how many Bloomberg subscribers took advantage of that value in this instance.”

How about the market effect?

How about the “effect on the market,” the final fair use factor and one that often puzzles users? Did Bloomberg’s use impair Swatch’s market for its information? No, said the court, because Bloomberg added value by publishing information of utility and value to the financial-news public. The court cited an earlier case, which invoked the basic point of copyright policy: “While ‘[t]he immediate effect of our copyright law is to secure a fair return for an ‘author’s’ creative labor,’ the ‘ultimate aim is, by this incentive, to stimulate creativity for the general public good.’”

Journalism adds value.

This court case underlines what journalists know: making information public matters; it is an act of creating culture and it changes the culture it enters. The Set of Principles in Fair Use for Journalism asserts, “Fair use protects journalists’ free speech rights from within the structure of copyright. Those rights fuel journalists’ mission to inform the public…Journalists play a key part in shaping the way members of a society understand the actions and motives of others—and sometimes of themselves.”

The Swatch brouhaha ultimately made clear that reproducing the whole thing, without commentary or discussion, can add value, inform the public and perform the function of journalism, and be an unambiguous fair use.


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