12‐2412 (L)
Swatch Group v. Bloomberg
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
_______________
August Term, 2013
(Argued: October 21, 2013 Decided: January 27, 2014
Amended: May 30, 2014)
Docket Nos. 12‐2412‐cv, 12‐2645‐cv
_______________
THE SWATCH GROUP MANAGEMENT SERVICES LTD.,
Plaintiff‐Counter‐Defendant‐Appellant‐Cross‐Appellee,
—v.—
BLOOMBERG L.P.,
Defendant‐Counter‐Claimant‐Appellee‐Cross‐Appellant.
_______________
Before:
KATZMANN, Chief Judge, KEARSE and WESLEY, Circuit Judges.
_______________
Appeal and cross‐appeal from a judgment of the United States District
Court for the Southern District of New York (Hellerstein, J.), granting summary
judgment to the defendant as to the plaintiff’s claim of copyright infringement on
the ground that the defendant had engaged in fair use. The plaintiff claims that
the defendant, a financial news and data reporting service, infringed the
plaintiff’s copyright in a sound recording of a foreign public company’s earnings
call with invited investment analysts by obtaining a copy of the recording
without authorization and making it available to the defendant’s paying
subscribers. We hold, upon consideration of the relevant factors, see 17 U.S.C.
§ 107, that the defendant’s use qualifies as fair use. We further grant the
plaintiff’s motion to dismiss the defendant’s cross‐appeal because the defendant
lacks appellate standing and we lack appellate jurisdiction.
For the reasons stated below, the defendant’s cross‐appeal is DISMISSED,
and the judgment of the district court is AFFIRMED.
_______________
JOSHUA PAUL (Jess M. Collen, Kristen Mogavero, on the brief),
COLLEN IP, Ossining, NY, for Plaintiff‐Counter‐Defendant‐
Appellant‐Cross‐Appellee.
JOHN M. DIMATTEO (Thomas H. Golden, Amina Jafri, on the brief),
Willkie Farr & Gallagher LLP, New York, NY, for Defendant‐
Counter‐Claimant‐Appellee‐Cross‐Appellant.
_______________
KATZMANN, Chief Judge:
This case concerns the scope of copyright protection afforded to a sound
recording of a conference call convened by The Swatch Group Ltd. (“Swatch
Group”), a foreign public company, to discuss the company’s recently released
2
earnings report with invited investment analysts. In particular, we must
determine whether Defendant‐Appellee Bloomberg L.P. (“Bloomberg”), a
financial news and data reporting service that obtained a copy of that sound
recording without authorization and disseminated it to paying subscribers, may
avoid liability for copyright infringement based on the affirmative defense of
“fair use.” 17 U.S.C. § 107. We also must determine whether we have jurisdiction
to hear Bloomberg’s cross‐appeal on the issue of whether the sound recording of
the conference call is copyrightable in the first instance.
Plaintiff‐Appellant The Swatch Group Management Services Ltd.
(“Swatch”), a subsidiary of Swatch Group, appeals from a judgment of the
United States District Court for the Southern District of New York (Hellerstein,
J.), which sua sponte granted summary judgment to Bloomberg on Swatch’s claim
of copyright infringement on the ground of fair use. On appeal, Swatch argues
that the district court’s ruling was premature because Swatch had not yet had the
opportunity to take discovery on three issues: (1) whether Bloomberg obtained
and disseminated the sound recording for the purpose of “news reporting” or for
some other business purpose; (2) Bloomberg’s state of mind when it obtained
3
and disseminated the recording; and (3) whether Bloomberg subscribers actually
listen to sound recordings of earnings calls, or instead glean information about
such calls by reading written transcripts or articles. Swatch also contends that the
district court erroneously concluded that Swatch had published the sound
recording before Bloomberg disseminated it. More broadly, Swatch argues that
the district court erred in how it evaluated and balanced the various
considerations relevant to fair use. For the reasons set forth below, we agree with
the district court and hold that, upon consideration of the relevant factors and
resolving all factual disputes in favor of Swatch, Bloomberg has engaged in fair
use.
In addition, Bloomberg cross‐appeals from the same judgment of the
district court, urging us to hold that Swatch’s sound recording is not protected
by the copyright laws in the first place. Swatch has moved to dismiss the cross‐
appeal on the grounds that Bloomberg lacks appellate standing and we lack
appellate jurisdiction. That motion is granted. Because the judgment designated
in Bloomberg’s notice of appeal was entered in Bloomberg’s favor, Bloomberg is
not “aggrieved by the judicial action from which it appeals,” Great Am. Audio
4
Corp. v. Metacom, Inc., 938 F.2d 16, 19 (2d Cir. 1991), and therefore lacks standing.
Similarly, although the district court later dismissed as moot Bloomberg’s
counterclaim for a declaration that Swatch’s copyright is invalid, Bloomberg
never filed an additional notice of appeal identifying that subsequent order as
the subject of an appeal, and thus we have no jurisdiction to review it.
Accordingly, we affirm the judgment of the district court, and we dismiss
the cross‐appeal.
BACKGROUND
I. Factual Background
The following facts are drawn from the record before the district court and
are undisputed unless otherwise noted.
On February 8, 2011, Swatch Group released its 2010 earnings report, a
seven‐page compilation of financial figures and textual narrative about the
company’s financial performance during the prior year. Because Swatch Group is
incorporated in Switzerland and its shares are publicly traded on the Swiss stock
exchange, Swatch Group is governed by Swiss securities law and the listing rules
of the Swiss exchange. In accordance with those rules, Swatch Group filed its
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earnings report with the exchange before trading opened for the day, and
simultaneously posted the report in four languages (English, German, French,
and Italian) on the Investor Relations section of its website.
After it released this information to the public, Swatch Group held a
conference call with an invited group of financial analysts, as is its custom. Swiss
law permits public companies to hold this kind of earnings call with a limited
group of analysts, provided that the company does not disclose non‐public,
significantly price‐sensitive facts during the call. Before the call, Swatch Group
sent invitations to all 333 financial analysts who had registered in advance with
Swatch Group’s Investor Relations Department. In accordance with its practice,
Swatch Group did not invite members of the press. Swatch Group held the call at
2 p.m. local Swiss time, several hours after it had released the earnings report, in
order to allow European, American, and Asian analysts to participate. In the end,
approximately 132 analysts joined the call. For Swatch Group’s part, its Chief
Executive Officer, Chief Financial Officer, and three other senior executives
participated in the call from the company’s offices in Switzerland.
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At Swatch Group’s request, an audio conferencing vendor recorded the
entire earnings call as it was in progress. At the beginning of the call, an operator
affiliated with the vendor welcomed the analysts to the call and told them, “This
call must not be recorded for publication or broadcast.” J.A. 22. Swatch Group’s
executives then provided commentary about the company’s financial
performance and answered questions posed by fifteen of the analysts. The entire
call lasted 132 minutes; Swatch Group executives spoke for approximately 106 of
those minutes.
Neither Bloomberg nor any other press organization was invited to the
earnings call. Nevertheless, within several minutes after the call ended,
Bloomberg obtained a sound recording and written transcript of the call and
made them both available online, without alteration or editorial commentary, to
subscribers to its online financial research service known as Bloomberg
Professional. According to Bloomberg’s promotional materials, Bloomberg
Professional provides “[a] massive data stream” with “rich content” that is
“unparalleled in scope and depth” and is “delivered to your desktop in real
time,” as well as “access to all the news, analytics, communications, charts,
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liquidity, functionalities and execution services that you need to put knowledge
into action.” Id. 640.
On February 10, 2011, after Swatch Group learned that the recording and
transcript had been made available on Bloomberg terminals, Swatch Group sent
Bloomberg a cease‐and‐desist letter demanding that they be removed.
Bloomberg refused. On February 14, 2011, Swatch then filed its initial complaint
against Bloomberg in this action claiming infringement of its copyright in the
sound recording of the earnings call. In an agreement signed by representatives
of Swatch Group and Swatch on February 14 and 15, 2011, Swatch Group
assigned its interest in the copyright to its subsidiary Swatch.
Two weeks later, on March 2, 2011, Swatch filed an application with the
U.S. Copyright Office to register a copyright in a sound recording of the earnings
call. The Copyright Office and Swatch then exchanged a series of emails over the
scope of the claimed copyright. After Swatch narrowed the copyright to cover
only the statements made by Swatch Group executives, and not the statements
made by the operator or the questions posed by the analysts, the Copyright
Office issued a registration on April 27, 2011.
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II. Procedural History
As stated, Swatch filed its initial complaint in this action on February 14,
2011. Swatch then twice amended its complaint; the operative pleading thus is
the Second Amended Complaint, filed on May 10, 2011. The Second Amended
Complaint alleges that, by recording the earnings call and making the recording
available to the public, Bloomberg infringed Swatch’s exclusive rights “to
reproduce the copyrighted work” and “to distribute copies or phonorecords of
the work to the public.” 17 U.S.C. § 106(1), (3). Swatch does not challenge
Bloomberg’s preparation or distribution of the written transcript of the earnings
call.1
On May 20, 2011, Bloomberg moved under Rule 12(b)(6) to dismiss the
Second Amended Complaint for failure to state a claim, arguing inter alia that the
earnings call was not copyrightable in the first place and that Bloomberg’s
copying and dissemination of the call was fair use. The district court denied that
motion in an order entered on August 30, 2011. Swatch Grp. Mgmt. Servs. Ltd. v.
1 Swatch has disclaimed any such challenge in light of 17 U.S.C. § 114(b), under which a
copyright owner’s right to prepare derivative works based on a sound recording “is
limited to the right to prepare a derivative work in which the actual sounds fixed in the
sound recording are rearranged, remixed, or otherwise altered in sequence or quality.”
9
Bloomberg L.P. (“Swatch I”), 808 F. Supp. 2d 634 (S.D.N.Y. 2011). The district court
found that the recording was copyrightable, id. at 638–39, and declined to
address the “fact‐intensive” questions implicated by Bloomberg’s fair use
defense on a motion to dismiss, id. at 641.
At an in‐court conference held two weeks later on September 16, 2011,
however, the district court informed the parties of its belief that it could resolve
the case through a motion for judgment on the pleadings, and directed Swatch to
file such a motion. Swatch moved as directed on October 21, 2011, and
Bloomberg opposed. The district court held oral argument on December 12, 2011,
at which it denied Swatch’s motion and explained that, in the court’s view,
“defendant’s use qualifies as fair use.” J.A. 581. Later that day, the district court
issued a summary order stating that it had “preliminarily granted judgment to
Defendant on the basis that if Defendant’s alleged actions constitute
infringement, they are protected as fair use.” Id. 584. The order directed Swatch
to submit “a brief regarding the existence of any triable issues of material fact
with respect to Defendant’s fair use affirmative defense.” Id. Swatch did so,
pointing out that it had taken no discovery in the action.
10
In an opinion and order entered on May 17, 2012, the district court sua
sponte granted summary judgment to Bloomberg, finding that Bloomberg’s
copying and dissemination of the recording qualify as fair use. Swatch Grp.
Mgmt. Servs. Ltd. v. Bloomberg L.P. (“Swatch II”), 861 F. Supp. 2d 336 (S.D.N.Y.
2012). On May 18, 2012, the clerk of the district court entered judgment “in favor
of defendant.” J.A. 7.
On June 14, 2012, Swatch filed a timely notice of appeal from that
judgment. On June 28, 2012, Bloomberg filed a notice of cross‐appeal from the
same judgment, and on July 24, 2012, Swatch moved to dismiss the cross‐appeal.
On August 27, 2012, after the parties had filed a stipulation of dismissal without
prejudice to reinstatement under Local Rule 42.1, the district court issued an
order dismissing as moot all of Bloomberg’s counterclaims, including a
counterclaim seeking a declaration that Swatch’s copyright is invalid. On
November 13, 2012, upon receipt of a letter from Swatch, the Clerk reinstated the
appeal. Finally, on January 14, 2013, the motions panel of this Court referred
Swatch’s motion to dismiss the cross‐appeal to the merits panel.
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DISCUSSION
We review a district court’s grant of summary judgment de novo, resolving
all ambiguities and drawing all reasonable inferences against the moving party.
See Garanti Finansal Kiralama A.S. v. Aqua Marine & Trading Inc., 697 F.3d 59, 63–64
(2d Cir. 2012). Summary judgment is appropriate only where the record shows
“that there is no genuine dispute as to any material fact and that the movant is
entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). Under Federal Rule
of Civil Procedure 56(f), district courts have discretion to grant summary
judgment sua sponte “[a]fter giving notice and a reasonable time to respond” and
“after identifying for the parties material facts that may not be genuinely in
dispute.” Fed. R. Civ. P. 56(f), (f)(3); see also Celotex Corp. v. Catrett, 477 U.S. 317,
326 (1986) (“[D]istrict courts are widely acknowledged to possess the power to
enter summary judgments sua sponte, so long as the losing party was on notice
that [it] had to come forward with all of [its] evidence.”). Before granting
summary judgment sua sponte, however, a district court “must assure itself that
following the procedures set out in Rule 56[(a)–(e)] would not alter the
outcome.” Ramsey v. Coughlin, 94 F.3d 71, 74 (2d Cir. 1996). In other words,
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“[d]iscovery must either have been completed, or it must be clear that further
discovery would be of no benefit,” such that “the record . . . reflect[s] the losing
partyʹs inability to enhance the evidence supporting its position and the winning
partyʹs entitlement to judgment.” Id.2
I. Fair Use
The Copyright Act of 1976 grants copyright holders a bundle of exclusive
rights, including the rights to “reproduce, perform publicly, display publicly,
prepare derivative works of, and distribute copies of” the copyrighted work.
Arista Records LLC v. Doe 3, 604 F.3d 110, 117 (2d Cir. 2010) (citing 17 U.S.C.
§ 106). Because copyright law recognizes the need for “breathing space,”
Campbell v. Acuff‐Rose Music, Inc., 510 U.S. 569, 579 (1994), however, a defendant
who otherwise would have violated one or more of these exclusive rights may
avoid liability if he can establish that he made “fair use” of the copyrighted
material. Though of common‐law origin, the doctrine of fair use is now
2 Although Ramsey was decided before Rule 56 was amended in 2010 to provide express
procedures governing the grant of summary judgment independent of a motion, its
statements regarding the care a district court must take before sua sponte granting
summary judgment remain good law. See Fed. R. Civ. P. 56, advisory comm. notes (2010
Amendments) (“Subdivision (f) brings into Rule 56 text a number of related procedures
that have grown up in practice.”).
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recognized at 17 U.S.C. § 107, which provides that “the fair use of a copyrighted
work . . . for purposes such as criticism, comment, news reporting, teaching
(including multiple copies for classroom use), scholarship, or research, is not an
infringement of copyright.”
To evaluate whether a particular use qualifies as “fair use,” we must
engage in “an open‐ended and context‐sensitive inquiry.” Blanch v. Koons, 467
F.3d 244, 251 (2d Cir. 2006). The Copyright Act directs that, in determining
whether a particular use is fair, “the factors to be considered shall include”:
(1) the purpose and character of the use, including whether such
use is of a commercial nature or is for nonprofit educational
purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in relation
to the copyrighted work as a whole; and
(4) the effect of the use upon the potential market for or value of
the copyrighted work.
17 U.S.C. § 107. Though mandatory, these four factors are non‐exclusive.
Moreover, “[a]lthough defendants bear the burden of proving that their use was
fair, they need not establish that each of the factors set forth in § 107 weighs in
their favor.” NXIVM Corp. v. Ross Inst., 364 F.3d 471, 476–77 (2d Cir. 2004)
14
(internal citation omitted). Rather, “[a]ll [factors] are to be explored, and the
results weighed together, in light of the purposes of copyright.” Campbell, 510
U.S. at 578.
The determination of fair use is a mixed question of fact and law. See
Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539, 560 (1985). While we
have reversed district courts that too hastily resolved factual questions relevant
to fair use on summary judgment, see, e.g., Ringgold v. Black Entm’nt Television,
Inc., 126 F.3d 70, 81 (2d Cir. 1997), “this [C]ourt has on a number of occasions
resolved fair use determinations at the summary judgment stage where there are
no genuine issues of material fact.” Blanch, 467 F.3d at 250 (quoting Castle Rock
Entm’t, Inc. v. Carol Publ’g Grp., 150 F.3d 132, 137 (2d Cir. 1998)) (ellipsis omitted).
A. Purpose and Character of Use
We turn first to “the purpose and character of the use.” 17 U.S.C. § 107(1).
Below, the district court found that this factor favored fair use because
“[Bloomberg]’s work as a prominent gatherer and publisher of business and
financial information serves an important public interest, for the public is served
15
by the full, timely and accurate dissemination of business and financial news.”
Swatch II, 861 F. Supp. 2d at 340.
Swatch argues that this conclusion was error for several reasons. First,
Swatch contends that the district court improperly accepted Bloomberg’s
unsubstantiated claim that it had engaged in “news reporting.” Swatch notes
that Bloomberg itself has characterized its Bloomberg Professional service as
delivering both financial “news” and “data,” and argues that the district court
erred in denying Swatch the chance to develop facts in discovery to show that
the sound recording at issue here is the latter and not the former. Similarly,
Swatch argues that the district court improperly denied Swatch the chance to
develop facts relevant to Bloomberg’s state of mind. Swatch acknowledges that
the district court “credited [Swatch]’s allegations that [Bloomberg] was not
authorized to access the Earnings Call and that [Bloomberg]’s publication of the
Infringing Work violated [Swatch Group’s] directive,” Swatch II, 861 F. Supp. 2d
at 343, but argues that Swatch should have been able to take discovery into
whether Bloomberg knew at the time that obtaining and publishing the recording
violated Swatch Group’s directive. Swatch also argues that it should have been
16
permitted to take discovery into whether Bloomberg Professional subscribers
actually choose to access information about earnings calls by listening to
recordings, or instead choose to read written transcripts or articles. More
broadly, Swatch argues that the district court gave insufficient weight to the fact
that Bloomberg’s use was commercial and did not transform the underlying
recording.
We find these arguments unpersuasive and hold that the first statutory
factor favors fair use here. To begin with, whether one describes Bloomberg’s
activities as “news reporting,” “data delivery,” or any other turn of phrase, there
can be no doubt that Bloomberg’s purpose in obtaining and disseminating the
recording at issue was to make important financial information about Swatch
Group available to investors and analysts. That kind of information is of critical
importance to securities markets. Indeed, as Bloomberg points out, the Securities
and Exchange Commission (“SEC”) has mandated that when American
companies disclose this kind of material nonpublic information, they must make
it available to the public immediately. See Regulation FD, 17 C.F.R. § 243.100. At
a minimum, such public dissemination of financial information serves this public
17
purpose in the nature of news reporting. See Harper & Row, 471 U.S. at 561
(“News reporting is one of the examples enumerated in § 107 to ‘give some idea
of the sort of activities the courts might regard as fair use under the
circumstances.’” (quoting S. Rep. No. 94‐473, at 61 (1975)).
Seizing on Bloomberg’s citation to Regulation FD, Swatch protests that in
crafting that regulation, the SEC expressly exempted “foreign private issuer[s]”
like Swatch Group that are “incorporated or organized under the laws of [a]
foreign country.” 17 C.F.R. §§ 243.101(b), 230.405. In fact, as initially proposed,
Regulation FD would have applied to such issuers, see Selective Disclosure and
Insider Trading, 64 Fed. Reg. 72,590, 72,597 (Dec. 28, 1999), but the SEC
ultimately “determined to exempt foreign private issuers . . . as it has in the past
exempted them from certain U.S. reporting requirements such as Forms 10‐Q
and 8‐K,” Selective Disclosure and Insider Trading, 65 Fed. Reg. 51,716, 51,724
(Aug. 24, 2000). Swatch thus argues that giving weight to a public interest in the
dissemination of important financial information in this case would in effect
erase foreign issuers’ exemption from Regulation FD and set up organizations
like Bloomberg as private enforcers of U.S. public disclosure rules.
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This argument, however, misattributes to Regulation FD a role in the law
of copyright. That regulation is relevant here only insofar as it provides
additional support for a proposition that would be clear in any event: Investors
and analysts have an interest in obtaining important financial information about
companies whose securities are traded in American and other markets. The fact
that the SEC has chosen not to require foreign issuers to follow certain disclosure
rules imposed on domestic issuers in no way implies that information about
foreign issuers is irrelevant. Accordingly, contrary to Swatch’s suggestion,
nothing in our decision today subjects Swatch Group or any other foreign issuer
to the requirements of Regulation FD. Nor do we hold that a foreign issuer’s
failure to follow Regulation FD prevents it from enforcing its copyrights in the
United States. We merely hold that where a financial research service obtains and
disseminates important financial information about a foreign company in order
to make that information available to investors and analysts, that purpose lends
support to a finding of fair use.
Swatch also stresses the commercial nature of Bloomberg’s use. Section 107
expressly directs courts to consider whether the use “is of a commercial nature or
19
is for nonprofit educational purposes,” 17 U.S.C. § 107(1), and we have said that
“[t]he greater the private economic rewards reaped by the secondary user (to the
exclusion of broader public benefits), the more likely the first factor will favor the
copyright holder and the less likely the use will be considered fair.” Am.
Geophysical Union v. Texaco Inc., 60 F.3d 913, 922 (2d Cir. 1994). It is undisputed
here that Bloomberg is a commercial enterprise and that Bloomberg Professional
is a subscription service available to paying users. At the same time, we have
recognized that “[a]lmost all newspapers, books and magazines are published by
commercial enterprises that seek a profit,” Consumers Union of U.S., Inc. v. Gen.
Signal Corp., 724 F.2d 1044, 1049 (2d Cir. 1983), and have discounted this
consideration where “the link between [the defendant]’s commercial gain and its
copying is . . . attenuated” such that it would be misleading to characterize the
use as “commercial exploitation.” Am. Geophysical Union, 60 F.3d at 922; see also
Campbell, 510 U.S. at 594 (holding that “[i]t was error for the Court of Appeals to
conclude that the commercial nature of [a secondary work] rendered it
presumptively unfair”).
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Here, Swatch does not contest that Bloomberg Professional is a
multifaceted research service, of which disseminating sound recordings of
earnings calls is but one small part. Moreover, it would strain credulity to
suggest that providing access to Swatch Group’s earnings call more than trivially
affected the value of that service. So while we will not ignore the commercial
nature of Bloomberg’s use, we assign it relatively little weight.
Swatch also contends that Bloomberg acted in bad faith and that this
should count against it. Regardless of what role good or bad faith plays in fair
use analysis, see Blanch, 467 F.3d at 255–56, we need not tarry over it here. Even
assuming that Bloomberg was fully aware that its use was contrary to Swatch
Group’s instructions, Bloomberg’s overriding purpose here was not to “scoop[]”
Swatch or “supplant the copyright holder’s commercially valuable right of first
publication,” Harper & Row, 471 U.S. at 562, but rather simply to deliver
newsworthy financial information to 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 sources of
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information that authorize disclosure. See generally New York Times Co. v. United
States, 403 U.S. 713 (1971).
The Supreme Court has also instructed courts analyzing the first fair use
factor to consider the transformativeness of the use—that is, whether “the new
work merely supersedes the objects of the original creation, or instead adds
something new, with a further purpose or different character, altering the first
with new expression, meaning, or message.” Campbell, 510 U.S. at 579 (internal
citations, quotation marks, and alterations omitted). While a transformative use
generally is more likely to qualify as fair use, “transformative use is not
absolutely necessary for a finding of fair use.” Id.; see also Sony Corp. of Am. v.
Universal City Studios, Inc., 464 U.S. 417 (1984) (finding a non‐transformative use
to be a fair use).
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 without alteration. Courts often find such uses
transformative by emphasizing the altered purpose or context of the work, as
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evidenced by surrounding commentary or criticism. See, e.g., Bill Graham Archives
v. Dorling Kindersley Ltd., 448 F.3d 605, 609–610 (2d Cir. 2006); Nunez v. Caribbean
Intʹl News Corp., 235 F.3d 18, 22–23 (1st Cir. 2000). 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 the raw data of
the Swatch Group executives’ words, but also more subtle indications of
meaning inferable from their hesitation, emphasis, tone of voice, and other such
aspects of their delivery. 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. As courts have long recognized in the context
of witness testimony, “’a cold transcript contains only the dead body of the
evidence, without its spirit,’” and “cannot reveal . . . ‘[the speaker’s] hesitation,
his doubts, his variations of language, his confidence or precipitancy, his
calmness or consideration.’” Zhou Yun Zhang v. INS, 386 F.3d 66, 73–74 (2d Cir.
2004) (quoting Regina v. Bertrand, L.R. [1867] 1 L.R.P.C. 520, 535), overruled on
23
other grounds by Shi Liang Lin v. U.S. Depʹt of Justice, 494 F.3d 296, 305 (2d Cir.
2007).
Furthermore, a secondary work “can be transformative in function or
purpose without altering or actually adding to the original work.” A.V. ex rel.
Vanderhye v. iParadigms, LLC, 562 F.3d 630, 639 (4th Cir. 2009) (holding that
making an exact digital copy of a student’s thesis for the purpose of determining
whether it included plagiarism is a fair use); see also Perfect 10, Inc. v. Amazon.com,
Inc., 508 F.3d 1146, 1165 (9th Cir. 2007) (holding that a search engine’s publication
of low‐resolution, thumbnail copies of copyrighted images was “highly
transformative” because the thumbnails were “incorporate[ed] . . . into a new
work, namely, an electronic reference tool”). Here, notwithstanding that the data
disseminated by Bloomberg was identical to what Swatch Group had
disseminated, the two works had different messages and purposes. To begin
with, while Swatch Group purported to convey true answers to the analysts’
questions and to justify the propriety and reliability of its published earnings
statement, Bloomberg made no representation one way or another as to whether
the answers given by Swatch Group executives were true or reliable. Nor did
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Bloomberg purport to support the propriety or reliability of Swatch Group’s
earnings statement. Bloomberg was simply revealing the newsworthy
information of what Swatch Group executives had said. Bloomberg’s message—
“This is what they said”—is a very different message from Swatch Group’s—
“This is what you should believe.”
Moreover, Swatch Group intended to exclude members of the press and to
restrict the information supplied by its executives to a relatively small group of
analysts who had identified themselves to the company in advance. Bloomberg’s
objective in rebroadcasting the call, by contrast, was to make this information
public, defeating Swatch Group’s effort to restrict access. Bloomberg’s purpose,
in other words, was to publish this factual information to an audience from
which Swatch Group’s purpose was to withhold it. These differences give
Bloomberg’s use at least an arguably transformative character.
In any event, regardless of how transformative the use is, we conclude that
the first fair use factor, focusing on the purpose and character of the secondary
use, favors fair use. We of course recognize that a news reporting purpose by no
means guarantees a finding of fair use. See Harper & Row, 471 U.S. at 557. After
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all, “[t]he promise of copyright would be an empty one if it could be avoided
merely by dubbing the infringement a fair use ‘news report.’” Id. A news
organization thus may not freely copy creative expression solely because the
expression itself is newsworthy. Nevertheless, we agree with the district court’s
conclusion that, under the unusual circumstances of this case, the purpose and
character of Bloomberg’s unaltered dissemination of Swatch Group’s expression
weighs in favor of fair use, for two reasons.
First, as noted above, by disseminating a full, unadulterated recording of
the earnings call, Bloomberg was able to convey valuable factual information that
would have been impaired if Bloomberg had undertaken to alter the speech of
the Swatch Group executives by interjecting its own interpretations. As we
explained in a fair use case involving verbatim copying of a written work,
“[w]here an evaluation or description is being made, copying the exact words
may be the only valid way precisely to report the evaluation.” Consumers Union,
724 F.2d at 1049–50; see also Harper & Row, 471 U.S. at 563 (noting that direct
copying may in some instances be “necessary adequately to convey the facts”).
So too here, copying the exact spoken performance of Swatch Group’s executives
26
was reasonably necessary to convey their full meaning. Bloomberg’s faithful
reproduction thus served “the interest of accuracy, not piracy.” Consumers Union,
724 F.2d at 1049.
Second, Bloomberg’s use did no harm to the legitimate copyright interests
of the original author. Importantly, Swatch has admitted that it “did not seek to
profit from the publication of the February 8, 2011 Earnings Call in audio or
written format.” J.A. 294. The copyright‐protected aspects of the earnings call—
that is, the manner by which the facts were expressed—thus were of no value to
Swatch or Swatch Group except insofar as they served to convey important
information to the analysts in attendance. But Bloomberg’s copying of the Swatch
Group executives’ words, as needed to communicate factual information about
the company’s earnings report, in no way diminished Swatch Group’s ability to
communicate with analysts, and thus caused no harm to Swatch’s copyright
interests. In this way, the case at bar stands in stark contrast to a case like Harper
& Row, where a magazine disseminated an unpublished excerpt of President
Ford’s memoirs. See Harper & Row, 471 U.S. at 542. This kind of gun‐jumping,
which scooped the publication of the copyrighted work and, in doing so, did
27
considerable harm to the value of the original author’s copyright, is not present
here.
Our prior decisions in Nihon Keizai Shimbun, Inc. v. Comline Business Data,
Inc., 166 F.3d 65 (2d Cir. 1999), Wainwright Securities, Inc. v. Wall Street Transcript
Corp., 558 F.2d 91 (2d Cir. 1977), and Financial Information, Inc. v. Moodyʹs Investors
Service, Inc. (“FII”), 751 F.2d 501 (2d Cir. 1984), on which Swatch relies, are not to
the contrary. In those cases, we rejected fair use arguments pressed by
defendants who purported to be serving the public by providing access to
important financial information. In Nihon and Wainwright, we stressed that the
defendants had not supplemented or otherwise transformed the plaintiffs’
works. Instead, they had simply translated Japanese business articles into
English, Nihon, 166 F.3d at 69, or recounted the critical conclusions from research
reports about major industrial and financial corporations, Wainwright, 558 F.2d at
93 & n.1. In FII, we rejected a fair use defense by a ratings agency that had copied
information about municipal bond redemptions compiled by a competing
financial publisher. FII, 751 F.2d at 502–03. Criticizing the district court’s
conclusion that the defendant’s use served a “public function,” we stated that to
28
so hold “would, it seems to us, state a rule that whenever there is a market for
information, the paid delivery of goods to that market rises to a public function.”
Id. at 509. We rejected such a rule, finding that it would “distort” proper fair use
analysis. Id.
In all three of those cases, however, the defendants attempted to use the
banner of newsworthiness to supersede the core objects of original works whose
production critically depended upon copyright protection. Finding fair use in
those cases would have severely impeded the ability of news and research
organizations to obtain payment for their expression, imperiling the economic
foundation of vital industries. But unlike the arguments we rejected in Nihon,
Wainwright, and FII, our decision today does not rest upon the newsworthiness
of the original expression alone. To the contrary, we also place great weight on
the absence of harm to the original author’s legitimate copyright interests.
Swatch’s reliance on our prior cases is thus misplaced.
The discovery Swatch seeks would not alter our analysis. With respect to
the request for discovery into whether Bloomberg delivered “news” or “data” to
its subscribers, such a distinction raises a semantic rather than factual dispute. It
29
is undisputed that Bloomberg gave subscribers access to the full, unaltered
sound recording of Swatch Group’s earnings call as part of its paid financial
research service. That is sufficient for present purposes. There is likewise no need
for further discovery into Bloomberg’s good or bad faith, since resolving that
issue in Swatch’s favor would not affect the outcome of our analysis. We also see
no need to resolve how many of Bloomberg’s subscribers chose to listen to the
sound recording in question rather than read a written transcript or article. As
we have explained, because the sound recording conveys information that a
transcript or article cannot, the recording has independent value, regardless of
how many Bloomberg subscribers chose to avail themselves of that independent
value in this instance.
This first factor accordingly favors fair use.
B. Nature of the Copyrighted Work
The second statutory fair use factor concerns “the nature of the
copyrighted work.” 17 U.S.C. § 107(2). This factor accounts for the fact that
“some works are closer to the core of intended copyright protection than others,
with the consequence that fair use is more difficult to establish when the former
30
works are copied.” Campbell, 510 U.S. at 586. As relevant here, this factor requires
us to consider the extent of Swatch’s copyright in the recording—the “thickness”
or “thinness” of Swatch’s exclusive rights—as well as whether or not the
recording had been published at the time of Bloomberg’s use. See id. (citing
cases). The district court determined that this factor favored fair use because
Swatch’s copyright was “at best . . . ‘thin’” and because “the first publication of
Swatch Group’s expression occurred prior to [Bloomberg]’s publication of the
Infringing Work.” Swatch II, 861 F. Supp. 2d at 341.
Swatch argues that the district court erred in concluding that the recording
had been published. Swatch points out that the Copyright Act contemplates two
methods of publishing an audio recording: “the distribution of . . . phonorecords
of a work to the public by sale or other transfer of ownership, or by rental, lease,
or lending,” or “offering to distribute . . . phonorecords to a group of persons for
purposes of further distribution, public performance, or public display.” 17
U.S.C. § 101 (defining “publication”). “Phonorecords,” in turn, are defined as
“material objects in which sounds . . . are fixed . . . and from which the sounds
can be perceived, reproduced, or otherwise communicated.” Id. Applying these
31
definitions, Swatch contends that the sound recording of the earnings call has
never been published. Simply put, Swatch has never, before or after Bloomberg’s
use, “distribut[ed]” a CD or other “material object” embodying the spoken
commentary on the earnings call “to the public,” nor has it ever “offer[ed] to
distribute” a phonorecord of the call to any “group of persons for purposes of
further distribution, public performance, or public display.”
Swatch is unquestionably correct that the earnings call is unpublished
under the definition of “publication” set forth in § 101. But that technical
definition does not control our analysis of this aspect of the second fair use
factor. While we will consider the statutory definition, we also will not blind
ourselves to the fact that Swatch Group invited over three hundred investment
analysts from around the globe to the earnings call, out of which over a hundred
actually attended. Thus, even though the sound recording remains statutorily
unpublished, it is clear that Swatch was not deprived of the ability to “control the
first public appearance of [its] expression,” including “when, where, and in what
form” it appeared. Harper & Row, 471 U.S. at 564.
32
Swatch insists that because the definitions in § 101 by their terms apply for
all purposes under the Copyright Act “[e]xcept as otherwise provided in this
title,” 17 U.S.C. § 101, the statutory definition of “publication” must control. Not
so. While in general, “[s]tatutory definitions control the meaning of statutory
words,” Burgess v. United States, 553 U.S. 124, 129 (2008) (quoting Lawson v.
Suwanee Fruit & S.S. Co., 336 U.S. 198, 201 (1949)), in this case, no variant of the
word “publish” appears in the text of the second fair use factor in § 107. Whether
or not a work was published thus enters into our analysis of this factor as a
judicial gloss on “the nature of the copyrighted work.” That gloss, of course, is
firmly grounded in fair use’s common law origins and the legislative history of
the 1976 Copyright Act. See Harper & Row, 471 U.S. at 552–54.
To the extent the text of § 107 mentions publication, it is only in a closing
proviso cautioning that “[t]he fact that a work is unpublished shall not itself bar
a finding of fair use if such finding is made upon consideration of all the above
factors.” Congress added this proviso to § 107 in 1992, see Pub. L. No. 102‐492,
106 Stat. 3145 (1992), to clarify, in response to certain decisions of this Court, that
there is no “per se rule barring any fair use of unpublished works.” H.R. Rep.
33
No. 102‐836, at 4, 9 (1992) (discussing New Era Publications International, ApS v.
Henry Holt & Co., Inc., 873 F.2d 576 (2d Cir. 1989), and Salinger v. Random House,
Inc., 811 F.2d 90 (2d Cir. 1987)). This proviso in no way limits our consideration
of a work’s publication status to the statutory definition of “publication” in § 101.
To the contrary, the proviso directs that if we find a work to be “unpublished,”
however that term is understood, our analysis of the four statutory factors,
including “the nature of the copyrighted work,” cannot end there.
Limiting our consideration of a work’s publication status to the statutory
definition, moreover, would obscure the different purposes served by the
statutory definition and the judicial gloss on “the nature of the copyrighted
work” in the context of fair use. The statutory concept of “publication” serves
numerous purposes, such as triggering the requirement to deposit a copy with
the Library of Congress, see 17 U.S.C. § 407, measuring the copyright term for
certain categories of works, see id. § 302(c)–(e), setting the circumstances under
which works by foreign authors are protected, see id. § 104(b), and determining
the legal effect of registration, see id. §§ 410(c), 412. See also 1 Nimmer on
Copyright § 4.01 (explaining the significance of publication). Publication as a
34
judicial gloss on “the nature of the copyrighted work,” by contrast, aims to take
account of “the author’s right to control the first public appearance of his
expression,” Harper & Row, 471 U.S. at 564, which in turn forms part of our
“open‐ended and context‐sensitive inquiry” into whether allowing the use in
question would serve the goals of copyright, Blanch, 467 F.3d at 251.
This is not the first time that we have found that the second statutory
factor favors fair use even though the work in question was technically
unpublished under the statutory definition, see Diamond v. Am‐Law Pub. Corp.,
745 F.2d 142, 144, 148 (2d Cir. 1984), and courts in fact commonly look past the
statutory definition when considering this issue, see, e.g., Rotbart v. J.R. OʹDwyer
Co., Inc., No. 94 Civ. 2091 (JSM), 1995 WL 46625, at *4 (S.D.N.Y. Feb. 7, 1995)
(finding that an unfixed, undisseminated talk, delivered publicly, had been “de
facto published” for purposes of fair use); see also 4 Nimmer on Copyright § 13.05
[A][2][b][ii] (“If the author does not seek confidentiality, fair use is not
necessarily precluded even as to an unpublished work.”).3 We accordingly agree
3 Indeed, in discussing the relevance of publication to fair use in Harper & Row, the
Supreme Court indicated that “even substantial quotations might qualify as fair use in a
review of a published work or a news account of a speech that had been delivered to
the public or disseminated to the press.” 471 U.S. at 564. Like the conference call at issue
35
with the district court that although the sound recording is statutorily
unpublished, because Swatch Group publicly disseminated the spoken
performance embodied in the recording before Bloomberg’s use, the publication
status of the work favors fair use.
Swatch does not challenge the district court’s determination that Swatch’s
copyright in the earnings call is “at best . . . ‘thin,’” Swatch II, 861 F. Supp. 2d at
341, nor could it. It is well established that “the scope of fair use is greater with
respect to factual than non‐factual works.” New Era Publ’ns, 904 F.2d at 157.
Moreover,
[e]ven within the field of fact works, there are gradations as to the
relative proportion of fact and fancy. One may move from sparsely
embellished maps and directories to elegantly written biography.
The extent to which one must permit expressive language to be
copied, in order to assure dissemination of the underlying facts, will
thus vary from case to case.
Harper & Row, 471 U.S. at 563 (quoting Robert A. Gorman, Fact or Fancy? The
Implications for Copyright, 29 J. Copyright Soc’y 560, 561 (1982)).
There can be no doubt as to the manifestly factual character of the earnings
call in this case. The entire copyrighted portion of the call consists of Swatch
here, a publicly delivered speech would not, by the mere fact of its public delivery, be
“publi[shed]” under § 101.
36
Group executives explaining the company’s financial performance and outlook
to a group of investment analysts. And while we assume without deciding in this
appeal that the call contained sufficient original expression—in the form of the
executives’ tone, cadence, accents, and particular choice of words—to be
copyrightable, the purpose of the call was not in any sense to showcase those
forms of expression. Rather, the call’s sole purpose was to convey financial
information about the company to investors and analysts.4
In light of the thinness of Swatch’s copyright, as well as Swatch Group’s
prior dissemination of its executives’ expression, we find that the second
statutory factor favors fair use.
4 Even the portions of the call Swatch quotes as demonstrating the originality of the
executives’ statements are overwhelmingly factual in nature. Swatch points to the
following passage, for example:
So we’re not looking desperately for someone else, but I can tell you that
there are many companies out there who would like to benefit from the
products, the[] know how, the management capabilities of Swatch Group.
And you should ask the other companies out there, even big players, if
they would not think that—being part of The Swatch Group, they will do
much better. Look at the results and margins and what they are doing,
look at the regional trends, I think you would find many of them.
Appellant’s Br. 9 (quoting J.A. 153 at 37:25–38:43).
37
C. Amount and Substantiality of the Portion Used
We turn now to “the amount and substantiality of the portion used in
relation to the copyrighted work as a whole.” 17 U.S.C. § 107(3). This factor asks
whether “the quantity and value of the materials used are reasonable in relation
to the purpose of the copying.” Campbell, 510 U.S. at 586 (internal citations and
quotation marks omitted). In general, “the more of a copyrighted work that is
taken, the less likely the use is to be fair.” Infinity Broad. Corp. v. Kirkwood, 150
F.3d 104, 109 (2d Cir. 1998). It is undisputed here that Bloomberg used the entire
work. The district court acknowledged that “this generally weighs against fair
use,” but found that the public interest in the information contained in the
recording “is better served by the dissemination of that information in its
entirety, including the incidents of oral speech that do not translate onto the page
but color the purely factual content.” Swatch II, 861 F. Supp. 2d at 342.
Swatch argues that the district court improperly resolved this factor in
Bloomberg’s favor because, as it also argued with respect to the first fair use
factor, there are genuine disputes of material fact regarding whether Bloomberg
38
subscribers glean information about earnings calls by listening to audio
recordings or instead by reading a written transcript or article.
We are unpersuaded. As an initial matter, we do not understand the
district court to have affirmatively weighed the third statutory fair use factor in
Bloomberg’s favor. Such a holding would have been novel, as “[n]either our
court nor any of our sister circuits has ever ruled that the copying of an entire
work favors fair use.” Bill Graham Archives, 448 F.3d at 613. Rather, we believe that
the district court found this factor neutral, refusing to weigh it in Swatch’s favor
despite Bloomberg’s use of the entire recording because of the public interest in
the information embodied in the recording. That holding is entirely consistent
with our case law. As we have recognized, a number of courts “have concluded
that such copying does not necessarily weigh against fair use because copying
the entirety of a work is sometimes necessary to make a fair use.” Id. (citing
cases); see also A.V. ex rel. Vanderhye, 562 F.3d at 642, 645 (finding copying of an
entire work to be fair use); Perfect 10, 508 F.3d at 1167–68 (same).
For the reasons already explained in our discussion of the first fair use
factor, we agree with the district court that Bloomberg’s use of the entire
39
recording was reasonable in light of its purpose of disseminating important
financial information to investors and analysts. 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. Like the district court, we accordingly weigh this factor in neither
party’s favor.
D. Effect upon the Market for or Value of the Original
The final fair use factor considers “the effect of the use upon the potential
market for or value of the copyrighted work.” 17 U.S.C. § 107(4). In Harper &
Row, the Supreme Court described this factor as “undoubtedly the single most
important element of fair use.” 471 U.S. at 566. This factor “requires courts to
consider not only the extent of market harm caused by the particular actions of
the alleged infringer, but also whether unrestricted and widespread conduct of
the sort engaged in by the defendant would result in a substantially adverse
impact on the potential market for the original.” Campbell, 510 U.S. at 590
(quotation marks and alterations omitted). We have described this factor as
“requir[ing] a balancing of ‘the benefit the public will derive if the use is
40
permitted and the personal gain the copyright owner will receive if the use is
denied.’” Bill Graham Archives, 448 F.3d at 613 (quoting MCA, Inc. v. Wilson, 677
F.2d 180, 183 (2d Cir. 1981)).
The district court weighed this factor in favor of fair use, noting that “the
relevant market effect is that which stems from [Bloomberg]ʹs use of the original
expression of Swatch Groupʹs senior officers.” Swatch II, 861 F. Supp. 2d at 342.
The district court found “[n]othing in the record [that] suggests any possible
market effect stemming from [Bloomberg]’s use.” Id. We agree, especially in view
of the obvious and furthermore conceded fact that Swatch had no interest in the
exploitation of the copyright‐protected aspects of the call.
Swatch argues that the district court’s analysis was erroneous because it
again assumed that affording investors and analysts access to the recording, as
opposed to a written transcript or article, served the public interest. As we have
already explained, we see nothing mistaken in that finding.
Swatch also contends that it was improperly denied the opportunity to
take discovery into the existence of a market for audio recordings of earnings
calls conducted by foreign companies that, like Swatch Group, are exempt from
41
Regulation FD. Swatch has admitted that it acquired the recording without
intending to profit from publishing and selling it. Any discovery thus would
concern a potential market, as yet untapped by Swatch, for recordings of exempt
earnings calls.
While the loss of a potential yet untapped market can be cognizable under
the fourth fair use factor, the potential market here is defined so narrowly that it
begins to partake of circular reasoning. As the Nimmer treatise has observed, “it
is a given in every fair use case that plaintiff suffers a loss of a potential market if
that potential is defined as the theoretical market for licensing the very use at
bar.” 4 Nimmer on Copyright § 13.05[A][4]. To guard against this “vice of
circular reasoning,” our case law limits our consideration to a use’s “impact on
potential licensing revenues for traditional, reasonable, or likely to be developed
markets.” Am. Geophysical Union, 60 F.3d at 930–31. The hypothesized market for
audio recordings of earnings calls convened by foreign companies that are
exempt from Regulation FD cannot meet this standard.
Moreover, to the extent that a financial news or research organization
might be willing to pay to obtain such recordings, we must bear in mind that
42
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.” Fogerty v. Fantasy, Inc., 510 U.S. 517, 526–
27 (1994) (quoting Twentieth Century Music Corp. v. Aiken, 422 U.S. 151, 156
(1975)). Here, the possibility of receiving licensing royalties played no role in
stimulating the creation of the earnings call. Indeed, Swatch affirmatively argues
that it does not know whether there is a potential market for this kind of
recording, and cannot know without obtaining discovery from Bloomberg.
Moreover, as we previously noted in relation to the first statutory fair use factor,
the context of the earnings call makes perfectly plain that its purpose was to
enable Swatch Group executives to disseminate financial information about the
company to particular analysts in a way that they believed would be
advantageous. It is that calculation of advantageousness, and not the possibility
of receiving royalties, that induces Swatch Group and other similarly situated
companies to hold earnings calls. Cf. New York Mercantile Exch., Inc. v.
IntercontinentalExchange, Inc., 497 F.3d 109, 118 (2d Cir. 2007).
43
Put differently, the “value” of the copyrighted expression for Swatch
Group in this case lay not in its capacity to generate licensing royalties, but rather
in its capacity to convey important information about the company to the
investment analysts in attendance. Bloomberg’s use in no way diminishes that
value. At most, Bloomberg’s use had the effect of depriving Swatch Group of the
ability to know and control precisely who heard the call. But whatever
cognizable interest Swatch Group has in maintaining that ability, it merits little
weight here. As we recently observed in a related context, “a [f]irmʹs ability to
make news—by issuing a [report] that is likely to affect the market price of a
security—does not give rise to a right for it to control who breaks that news and
how.” Barclays Capital Inc. v. Theflyonthewall.com, Inc., 650 F.3d 876, 907 (2d Cir.
2011).
We accordingly agree with the district court that the fourth statutory factor
weighs in favor of fair use.
E. Balance of Factors
Balancing the four statutory factors together, we conclude that “the
copyright law’s goal of promoting the Progress of Science and useful Arts would
44
be better served by allowing [Bloomberg’s] use than by preventing it.” Bill
Graham Archives, 448 F.3d at 608 (quoting Castle Rock, 150 F.3d at 141). Although
Bloomberg copied the recording without changing it, Bloomberg’s use served the
important public purpose of disseminating important financial information,
without harm to the copyright interests of the author. Furthermore, although the
recording remains technically unpublished under § 101, Swatch Group
controlled the first dissemination of its executives’ expression to the public, and
Swatch’s copyright is thin at best. Indeed, the whole purpose of the conference
call was to convey financial information about Swatch Group to analysts and
investors around the world. And while Bloomberg used the recording in its
entirety, doing so was reasonably necessary in light of Bloomberg’s purpose.
Finally, we are confident that this type of use will neither significantly impair the
value of earnings calls to foreign companies that convene and record them, nor
appreciably alter the incentives for the creation of original expression. In sum,
under the particular circumstances of this case, Bloomberg’s use is fair use.
45
II. Bloomberg’s Cross‐Appeal
Having resolved Swatch’s main appeal on the ground of fair use without
reaching the issue of copyrightability, we must address Swatch’s motion to
dismiss Bloomberg’s cross‐appeal. That motion is granted, for two reasons.
First, it is axiomatic that “[i]n order to have standing to appeal, a party
must be aggrieved by the judicial action from which it appeals.” Great Am. Audio
Corp., 938 F.2d at 19. Here, the May 18, 2012 judgment identified in Bloomberg’s
notice of appeal as the subject of the cross‐appeal provides simply: “[f]or the
reasons stated in the Court’s Opinion and Order dated May 17, 2012, judgment is
hereby entered in favor of [Bloomberg].” Special App. 13. The May 17, 2012
Opinion and Order, in turn, had explained that “since [Bloomberg]’s use
qualifies as fair use, [Bloomberg] has not infringed, and [Swatch]’s Second
Amended Complaint should be dismissed.” Swatch II, 861 F. Supp. 2d at 343.
Bloomberg argues that it is aggrieved by the May 18, 2012 judgment
because it seeks a decision not only as to whether its use was fair use, but also as
to whether Swatch’s recording was validly copyrightable in the first place. To the
extent Bloomberg contends that Swatch’s complaint should be dismissed on the
46
ground of copyright invalidity in addition to or instead of the ground of fair use,
Bloomberg “is not urging that we alter the judgment in any way, but rather that
we alter the reasons underlying it.” Allstate Ins. Co. v. A.A. McNamara & Sons, Inc.,
1 F.3d 133, 137 (2d Cir. 1993). While Bloomberg “is entitled to urge that we affirm
the district court’s decision on any basis submitted to that court and supported
by the record,” id. (quoting Great Am. Audio Corp., 938 F.2d at 19), it is not
aggrieved by the district court’s dismissal of Swatch’s complaint on the ground
of fair use, and therefore “is not entitled to cross‐appeal,” id.
Second, to the extent that Bloomberg challenges the district court’s
dismissal of its counterclaim seeking a declaration that Swatch’s copyright is
invalid, that ruling of the district court is not properly before us. Federal Rule of
Appellate Procedure 3(c)(1)(B) provides that a notice of appeal “must . . .
designate the judgment, order, or part thereof being appealed.” This requirement
is “jurisdictional in nature.” Gonzales v. Thaler, 132 S. Ct. 641, 652 (2012) (quoting
Smith v. Barry, 502 U.S. 244, 248 (1992)). Bloomberg’s notice of cross‐appeal, filed
on June 28, 2012, designates only the district court’s May 18, 2012 judgment,
which did not resolve Bloomberg’s counterclaim. As the May 17, 2012 Opinion
47
and Order incorporated into the judgment makes plain, the district court simply
dismissed Swatch’s complaint on the ground of fair use, “assum[ing], without
deciding, . . . that [Swatch]’s copyright is valid.” Swatch II, 861 F. Supp. 2d at 338.
It was not until August 27, 2012, that the district court issued an order dismissing
Bloomberg’s counterclaims as moot. Bloomberg never filed any additional or
supplemental notice of appeal designating that subsequent order as the subject of
a cross‐appeal. While “we construe notices of appeal liberally, taking the parties’
intentions into account,” Shrader v. CSX Transp., Inc., 70 F.3d 255, 256 (2d Cir.
1995), we cannot reasonably read Bloomberg’s notice of cross‐appeal to
contemplate review of an order that did not issue until nearly two months
afterwards. While Bloomberg may be aggrieved by the dismissal of its
declaratory counterclaim, which arguably would have enlarged Bloomberg’s
rights, we have no jurisdiction to review it in the absence of a proper cross‐
appeal. See Intʹl Ore & Fertilizer Corp. v. SGS Control Servs., Inc., 38 F.3d 1279, 1286
(2d Cir. 1994).
Bloomberg’s cross‐appeal accordingly is dismissed for lack of standing and
lack of jurisdiction.
48
CONCLUSION
For the foregoing reasons, Bloomberg’s cross‐appeal is DISMISSED, and
the district court’s judgment is AFFIRMED.
49