Swatch Group Management Services Ltd. v. Bloomberg L.P.
756 F.3d 73
| 2d Cir. | 2014Background
- Swatch Group (a Swiss public company) held a recorded, invite-only earnings conference call for ~132 analysts shortly after publishing its earnings; an operator warned the call "must not be recorded for publication or broadcast."
- Swatch (its U.S. subsidiary) obtained U.S. copyright registration for a sound recording limited to Swatch executives’ statements.
- Bloomberg (a paid financial-research service) acquired an unauthorized audio recording and transcript and made both available to Bloomberg Professional subscribers within minutes.
- Swatch sued for copyright infringement; district court initially denied dismissal, then sua sponte granted summary judgment for Bloomberg on fair use; Swatch appealed.
- Bloomberg cross-appealed arguing the recording was not copyrightable; Swatch moved to dismiss the cross-appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Bloomberg’s copying and distribution of the audio recording is fair use | Swatch: decision premature—needs discovery on Bloomberg’s purpose, state of mind, and subscriber use; use is commercial and nontransformative | Bloomberg: disseminated newsworthy financial information to investors; purpose favors fair use even if commercial; faithful reproduction necessary to convey tone/demeanor | Court: Fair use — purpose (news/public interest), thin copyright, prior public dissemination to analysts, minimal market harm; fair use affirmed |
| Whether the recording’s (statutory) publication status disfavors fair use | Swatch: recording was unpublished under 17 U.S.C. §101, so factor should weigh against fair use | Bloomberg: despite statutory unpublished status, prior wide dissemination to analysts means the author had effectively published; factor weighs for fair use | Court: Although statutorily unpublished, prior dissemination to >100 analysts makes the work effectively published for fair-use analysis; factor favors fair use |
| Whether copying the entire recording (verbatim) defeats fair use | Swatch: copying the whole work and commercial use weigh against fair use; discovery needed on subscriber listening habits | Bloomberg: reproducing entire audio necessary to convey speaker tone/nuance; some full copying can be fair | Court: Amount factor is neutral — full copying was reasonably necessary to convey the informational value of the audio |
| Whether Bloomberg may appeal ruling on copyrightability | Swatch: Bloomberg lacks appellate standing because judgment favored Bloomberg; later dismissal of counterclaims was not appealed | Bloomberg: seeks a ruling that the work is uncopyrightable | Held: Cross-appeal dismissed — Bloomberg not aggrieved by judgment and did not timely appeal the later dismissal of counterclaims |
Key Cases Cited
- Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994) (sets out transformative-use inquiry for fair use)
- Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539 (1985) (news reporting does not automatically justify copying unpublished, market-harming excerpts)
- Blanch v. Koons, 467 F.3d 244 (2d Cir. 2006) (fair-use is an open-ended, context-sensitive inquiry)
- Bill Graham Archives v. Dorling Kindersley Ltd., 448 F.3d 605 (2d Cir. 2006) (exact reproductions can be transformative based on new context/purpose)
- Nihon Keizai Shimbun, Inc. v. Comline Business Data, Inc., 166 F.3d 65 (2d Cir. 1999) (rejecting fair use where defendant supplanted plaintiff’s market for factual reporting)
- Wainwright Securities, Inc. v. Wall Street Transcript Corp., 558 F.2d 91 (2d Cir. 1977) (defendant’s republication of factual reports not fair use when it displaced plaintiff’s market)
- Financial Information, Inc. v. Moody’s Investors Serv., Inc., 751 F.2d 501 (2d Cir. 1984) (newsworthiness alone does not create a public-function defense to copying)
- Consumers Union of U.S., Inc. v. Gen. Signal Corp., 724 F.2d 1044 (2d Cir. 1983) (exact quotation may be necessary to report an evaluation; purpose can justify copying)
- A.V. ex rel. Vanderhye v. iParadigms, LLC, 562 F.3d 630 (4th Cir. 2009) (copying an entire work can be fair if necessary for the secondary use’s purpose)
- Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146 (9th Cir. 2007) (thumbnail reproductions were transformative as part of a search/reference tool)
- Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417 (1984) (nontransformative uses can sometimes be fair use)
- Barclays Capital Inc. v. Theflyonthewall.com, Inc., 650 F.3d 876 (2d Cir. 2011) (a firm’s ability to make market-moving news does not grant control over who republishes it)