Fox Paid $60k For Video Footage Of Madoff On A Yacht... And Still Gets Sued For Copyright Infringement

from the fair-use-anyone? dept

Wed, Sep 16th 2009 7:30am — Mike Masnick

JJ sends in the news that Fox News apparently paid some guy $60,000 for some video footage he took of Bernie Madoff on a yacht in 2003 for use on Fox News and Fox Business, and the guy is now suing Fox for more. Specifically, the guy licensed the work for 45 days for $10,000. After that period ended and Fox was still using the video, the guy sent a cease & desist, and Fox paid him another $50,000 for a bit over another month. Once that ended, Fox was still using the video, and the guy sued, demanding at least another $500,000. First of all... $60,000 for the use of a single video of Bernie Madoff on a yacht for ~90 days of usage? Damn.

But, separate from that, I would think that, even though it licensed the video originally, Fox could make a decent fair use argument, claiming that the video was for reporting purposes. On top of that, the guy is demanding to know how much ad revenue Fox brought in from certain advertisers, as if the video alone drove the ad revenue. Still, it seems odd that Fox would license video for news purposes for a limited time only. Does anyone really think it's still possible to put video online for just a limited time?

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Filed Under: bernie madoff, copyright, fair use, news reporting

36 Comments

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Dark Helmet (profile), 16 Sep 2009 @ 7:34am

Yeah but...
"I would think that, even though it licensed the video originally, Fox could make a decent fair use argument, claiming that the video was for reporting purposes."

That might make sense, but I would imagine that the licensee's(sp?) exhibit A and B would be payment agreement 1 and 2.

Hard for Fox to license twice and THEN claim fair use, no?
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ChurchHatesTucker (profile), 16 Sep 2009 @ 7:42am

That's the point
"Does anyone really think it's still possible to put video online for just a limited time?"

No, of course not. More people to sue!
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Anonymous Coward, 16 Sep 2009 @ 8:06am

A fairly stupid argument. Once they paid a licence fee, they have established that the video is copyright. Attempting to then call it fair use is laughable.
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Yosi, 16 Sep 2009 @ 8:16am

Fair use? WTF?
What kind of "fair use" are you talking about? Fox approached the guy and tells him "give us the video", and guy answers, "that would be $xxx for Y days".

Since Fox agrees, it should be using this video for Y days. Anything else is contract violation, isn't it?

Or you mean they should just break into guy's house in a first place, since they need it "for reporting", which is "fair use"?!
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ChurchHatesTucker (profile), 16 Sep 2009 @ 8:17am

Re:
"A fairly stupid argument. Once they paid a licence fee, they have established that the video is copyright. Attempting to then call it fair use is laughable."

Unless they waived their fair use rights at the time, your argument is... what's the word? It'll come to me...
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Yosi, 16 Sep 2009 @ 8:18am

Limited time
>> Does anyone really think it's still possible to put video online for just a limited time?

I think Techdirt's server support this new feature called "deletion"? I'm guessing that Fox's server can do it too.
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:Lobo Santo (profile), 16 Sep 2009 @ 8:20am

Re:
"A fairly stupid argument. Once they paid a licence(sic) fee, they have established that the video is copyright(sic) . Attempting to then call it fair use is laughable."

Ah, an exemplary bit of reasoning about how they've "dug their own hole"; or "made their own bed."

Yes, quite; exactly the point.

Now if only the phrasing and diction of the preceding statement were laudable.... Oh well. C'est la vie.
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Anonymous Coward, 16 Sep 2009 @ 8:21am

advertisers
"as if the video alone drove the ad revenue"

Well, I'm pretty sure that when a station gets a big scoop they reach out to their best advertisers to get them to pay more to have their ads be shown during that segment. I don't know if this video and the use Fox made of it rises to the level of scoop-ness where this would happen, but it's a legitimate question to ask if you're going to shakedown Fox.
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Cyanid Pontifex (profile), 16 Sep 2009 @ 8:25am

Re: Limited time
That's assuming that the video stay so on Fox. If it gets out onto the wider internet, there's no stopping it.
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Ima Fish (profile), 16 Sep 2009 @ 8:27am

I'm of the opinion that videos and photographs of people, events, objects that are not themselves copyrightable, cannot be copyrightable.

It just seems ludicrous that I can videotape someone else doing same random act and then claim a copyright on it. How does me videotaping my neighbor mowing his law "promotes the Progress of Science and useful Arts"?!
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Another AC, 16 Sep 2009 @ 8:34am

Well...
If you neighbor is a naked milf, it could be quite useful as an "Art" form
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Ima Fish (profile), 16 Sep 2009 @ 8:41am

Re: Well...
Other than one hand surfing, I don't see how porn could be considered a "useful art."
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Lucretious, 16 Sep 2009 @ 8:43am

what business is it of the guy to know what they made in ad revenue? Fox licensed the vid on a flat rate/time basis.

Talk about greedy. I'd be ecstatic to be paid five figures for a couple of minutes of video footage.
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Chronno S. Trigger (profile), 16 Sep 2009 @ 8:46am

60Gs, Damn
I need to get a video of Madoff in a boat. I'd sell it to Fox for $60,000.
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Joe Szilagyi (profile), 16 Sep 2009 @ 8:47am

Nothing stupid about it; it's basic contract law
Fox, the wonderfully adept journalists they are, are totally, inexplicably, 100% at fault in this scenario. They agreed to a rather stupid contract, and are now getting hammered over it.

Nothing immoral, unethical, or 'bad' about it.
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Pangolin (profile), 16 Sep 2009 @ 8:48am

On the Ball but off base
He should be suing for breach of contract and not copyright infringement - though copyright may be an EASIER avenue to the cash.

On the ball because he's actively pursuing his contract and the obligations of it. It may appear to be STUPID on Fox's part but that doesn't make this guy a fool by any means nor does it negate his rights.

Go for it.

Show how insanely stupid current copyright ENFORCEMENT is and let's slay this dragon.
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Designerfx (profile), 16 Sep 2009 @ 8:52am

Re: Re:
logical, is I think the word.

Basically, they are screwed because they paid for licensing, the AC is correct.
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Joe Szilagyi (profile), 16 Sep 2009 @ 8:54am

Re: Nothing stupid about it; it's basic contract law
From the complaint/legal documents as posted on Scribd:

13. Stadt immediately forwarded Fox a "Cease and Desist Letter".
14. After receipt of the "Cease and Desist Letter", Fox acknowledged its continued use of the Video in breach of the License Agreement.
15-16. Fox re-ups a legal agreement to pay Stadt for use of his video for x days, etc., pays him again.
17. Fox again uses the video beyond the paid-for, legally agreed upon window, etc.
18+: Lawsuit ahoy.

If this is true, this is super cut-and-dried. It sounds like super basic breach of contract stuff, here.
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Lucretious, 16 Sep 2009 @ 9:04am

Re: Re: Nothing stupid about it; it's basic contract law
I agree that Fox breached the agreement but to demand Fox cough up the ad revenue numbers for that segment is overstepping IMO. The guy set a sort of precedent when he accepted the second flat rate payment, no?
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Joe Szilagyi (profile), 16 Sep 2009 @ 9:13am

Re: Re: Re: Nothing stupid about it; it's basic contract law
The plaintiff going after the ad revenues generated or believed to be generated by his video is probably all just standard discovery. Maybe the guy figures he's entitled to another $50,000 for the out of contract usage. Maybe the lawyer's thinking $75,000. But what if Fox did pull in +$600,000 or +$6,000,000 because of the video? Doubtful, but who knows?

I can see why they're asking for that info, to set a target for damages. That's not exactly out of the ordinary, either.
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Boost, 16 Sep 2009 @ 9:25am

Re:
Just because it's intelectual property doesn't mean that it's valuable or art. Perhaps you should read more.
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Comboman, 16 Sep 2009 @ 9:30am

Exclusive rights.
As per item 10 of the linked document, the contract was for Exclusive rights, i.e. not just the right for Fox to show the video but also the promise that the owner would not grant others (CNN, MSNBC, etc) the right to show the video (during the term of the contract). Fox could probably claim that the contract was ONLY for exclusivity and that after the contract expired, they could continue to show the clip through fair use (but so could others) and that the extra payments were to extend the exclusivity agreement.
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ChurchHatesTucker (profile), 16 Sep 2009 @ 9:34am

Re: Re: Re:
"Basically, they are screwed because they paid for licensing, the AC is correct."

How so? Paying does not equal to admission of legitimacy.
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Brad C, 16 Sep 2009 @ 9:39am

I don't think anyone really considers what fox does as "news" so fair use doesn't really apply
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PRMan, 16 Sep 2009 @ 9:58am

We should be applauding the guy...
...for doing to big media what they do to the user.

Heck, he should have put DRM on it when he delivered it to them...

Maybe he should get the police to raid Fox studios and take all their computer equipment, just in case it's infringing...
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Anonymous Coward, 16 Sep 2009 @ 10:05am

The ad rev could come from using the video in a teaser clip, right before the commercial break. This way the viewer sticks around for a couple of commericals before seeing the rest of the clip. Commonly done, and if Fox did it with this video then I see a vaild argument for the owner to sue for ad rev.
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Anonymous Coward, 16 Sep 2009 @ 10:12am

Re: Well...
Whose neighbor? Where? I need an address!
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Amaress, 16 Sep 2009 @ 10:14am

Re:
That's because you don't understand news.

On the first day they released the video, they may have done this, but probably not since. News like this (not news in general, don't get exicted) is only profitable on TV (I'm not talking about the internet...) for the first day or two after it breaks, then people get pissed off about seeing it. It doesn't float around on TV on the same program for very long before it's considered dead.

I would doubt at all if Fox had any revenue to show for it ON TV, after the first couple days.

My guess is it's an internet thing.
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Anonymous Coward, 16 Sep 2009 @ 10:18am

That funniest part of this story is Fox ""News"".
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Anonymous Coward, 16 Sep 2009 @ 10:24am

Fox fuxed up
(Hah, see what I did with the subject header there? I am *hilarious*, yes indeed)

Regardless of whether or not it's ethical or reasonable to charge for the footage in the first place, Fox agreed to said charge, and a rather silly contract. Then they breached the contract in a fairly forgivable way (probably easy for someone to forget they'd only loaned rather than bought the footage) and the guy reacted fairly reasonably, all considered (he didn't immediately sue, he just said "hey, wait a minute") and got paid again for another short term license, which fox agreed to *again*.

And then they go and mess up again, so the guy sues. It might be greedy, petty and ethically dubious, but he's well within his legal rights. It's fox's fault for agreeing to such a stupid contract, twice, and then breaching the contract. Twice.

Plus can anyone here honestly say that, given the chance, they *wouldn't* squeeze fox news for all the money you could? I would.
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Anonymous Coward, 16 Sep 2009 @ 10:54am

Re: Well...
rofl
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teresa smith, 16 Sep 2009 @ 11:09am

Fox
Fox deserves whatever Fox gets. They don't play fair so they can't expect others to play fairly. Sue away, mystery man!
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Anonymous Coward, 16 Sep 2009 @ 1:28pm

Well, hopefully if big media stations get hit by huge intellectual property fees and perhaps even fines (especially Fox, who is probably pro intellectual property and claims to be pro free market at the same time) maybe they'll open their minds to the problems of intellectual property and stop being so pro intellectual property after all.
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diabolic (profile), 16 Sep 2009 @ 5:44pm

"$60,000 for the use of a single video of Bernie Madoff on a yacht for ~90 days of usage? Damn."

Yep that's a lot of cash, too much for a video. At the same time that is apparently what the market is willing to pay, capitalism at work. This video is a perfect example of the limited monopoly that copyright should be but is not. Basically no one cares about the video, this guy will never license it again (not that he'll need to), the value of the monopoly is transient but the copyright is not. Nonetheless I'm sure this dude will pursue and have taken down any copies available on the net. Copyright lasts way too long.
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Bri, 17 Sep 2009 @ 12:17pm

Fair Use
Fair use for the sake of reporting the news should only apply to news organizations that actually have a legal duty to report the truth. Since there are none that do, fair use goes out the window.
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JC Dill, 17 Sep 2009 @ 2:53pm

Confusion about fair use
There is no "fair use" right for a commercial entity such as a news station to use someone else's copyright protected works without license or payment. News stations pay to license photos and videos produced by others every day. This is why news stations and networks (and newspapers, and magazines, etc.) hire videographers, photographers, writers, graphic designers, etc. - so that the copyright-protected works these people produce belong to the station (work for hire).

The "fair use" exception the news media has is to use an *excerpt* of the works for the purpose of commenting on the work itself (not what it portrays) such as an excerpt of a book in a book review, and excerpt of a movie in a movie review, a copy of a photo when talking about a photo gallery exhibition. Parody and satire also fall into this category - they can copy a work to parody it.

If I take a photo of a famous personality and exhibit it in a gallery exhibition the news media can use a copy of that photo (without paying, without licensing it) for the purposes of discussing the exhibition and that is fair use. However, if they want to use a copy of that photo for the purposes of talking about the celebrity they need to negotiate with me or my agent to license it. That's what Faux did for the Madoff video, and they have absolutely no "fair use" right to use the video (as news about Madoff) outside the terms of their license contract.

There is also apparently some confusion due to how model releases work. The news media has a "fair use" exemption to a person's right to control their own image and name, but only for the purpose of news reporting. If Fox wanted to use that video to advertise yacht sales (a commercial use) and the copyright owner licensed them to use it in that way, Madoff would have a right to block that use as (presumably) he hasn't signed a model release authorizing his image to be used in that way. However Madoff has no such rights when it comes to the news media using the video as news about Madoff. This right to control one's own image is separate from copyright. I can take a photo of a celebrity and then license it with a creative commons license that allows anyone to use it for free without paying or negotiating a license with me (the copyright holder), but the celebrity's rights to control their image will still apply.
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