Addressing copyright fair use in the wake of the Supreme Court’s recent guidance in Warhol, the US Court of Appeals for the Tenth Circuit partially reversed the district court’s grant of summary judgment in favor of the defendants. The Tenth Circuit held that the first fair use factor (the purpose and character of the use) weighed in favor of the plaintiffs and remanded for further consideration of the accused infringing work’s effect on the potential market for the copyrighted work. Whyte Monkee Productions, LLC; Timothy Sepi v. Netflix, Inc.; Royal Goode Productions, LLC, Case No. 22-6068 (10th Cir. Mar. 27, 2024) (Holmes, C.J.; Hartz, Carson, JJ.)
In 2020, Netflix and Royal Goode Productions (the defendants) released the popular multipart documentary Tiger King: Murder, Mayhem and Madness. Tiger King included eight videos filmed by Timothy Sepi (the plaintiff), seven of which were filmed while Sepi was employed by the zoological park featured in the docuseries. The eighth video, a 24-minute recording of the funeral of Travis Maldonado (who was the husband of Joe Exotic, aka the Tiger King) was filmed by Sepi after his employment ended. After the release of Tiger King, the plaintiffs registered the copyrights for the eight videos and sued the defendants for copyright infringement.
The district court granted summary judgment in favor of the defendants, holding that Sepi did not own the copyright for the seven videos he filmed during his employment because they were “works made for hire” and that the defendant’s use of the eighth video was permissible fair use. The plaintiffs appealed.
On appeal, the plaintiffs argued that the district court erred in holding that seven of the videos were works made for hire because Sepi’s scope of employment “did not extend to cinematography and film editing conducted on his own time.” The plaintiffs also argued that the district court incorrectly assessed each of the fair use factors in connection with the eighth video.
The Tenth Circuit swiftly affirmed the grant of summary judgment on the first seven videos, noting that the plaintiffs’ argument regarding the scope of Sepi’s employment was a new theory on appeal and therefore had been waived. Nonetheless, the Court reversed the grant of summary judgment in favor of the defendants with respect to the eighth video, stating that the district court erred in concluding that the first and fourth fair use factors weighed in favor of the defendants.
As set forth in the Copyright Act, there are four nonexclusive factors to consider in assessing whether the use of a copyrighted work is protected fair use:
- The purpose and character of the use
- The nature of the copyrighted work
- The amount and substantiality of the portion used
- The effect of the use on the potential market for or value of the copyrighted work.
Important here, the Tenth Circuit noted that all four factors should be weighed together “in light of the aim of copyright, which is ‘to promote the progress of science and the arts, without diminishing the incentive to create.’”
The Tenth Circuit concluded that the first factor “strongly weighs in [p]laintiffs’ favor in light of the Supreme Court’s recent guidance in Warhol.” This factor considers the purpose and character of the use, “including whether such use is of a commercial nature or is for nonprofit educational purposes,” and asks “whether and to what extent the new work is transformative.” In Warhol, the Supreme Court provided further clarification on transformative use, stating that “when commentary has no critical bearing on the substance or style of the original composition, . . . the claim to fairness in borrowing from another’s work diminishes accordingly (if it does not vanish), and other factors, like the extent of its commerciality, loom larger.” Because the defendants used the funeral video to comment on Joe Exotic (as opposed to Sepi’s original work), the “claim to fairness” is diminished and the commercial nature of the defendants’ use “loom[s] larger.” This conclusion, taken together with the obvious commercial nature of the Tiger King docuseries, led the Court to find that the first factor weighed in favor of the plaintiffs.
The Tenth Circuit agreed with the district court’s finding that factors two and three weighed in favor of the defendants. Because the funeral video “is indisputably factual” and “Mr. Sepi’s creative vision . . . was extremely limited,” the second factor (nature of the copyrighted work) weighed in the defendant’s favor. Moreover, the Court noted that only 5% of the funeral video was used in the Tiger King docuseries and “only as much as was necessary for their intended use.” Therefore, the Court found that the third factor also weighed in favor of fair use.
However, the Tenth Circuit concluded that the factual record was insufficient to decide the fourth fair use factor. Because fair use is an affirmative defense, the evidentiary burden lies with the defendant. Here, the defendants “did not submit any affidavits or other evidence on the question of market harm to the original (i.e., the market for the [f]uneral [v]ideo itself) or to the market for derivative works (i.e., the market for other works, like Tiger King, which may incorporate portions of the original [f]uneral [v]ideo).” The Court conceded that Sepi’s admission that he had not commercially exploited his work likely weighed in the defendants’ favor, but nonetheless noted that the district court did not properly consider the defendants’ burden of proof and relied on an “inadequate factual record.” Accordingly, the Court remanded “with instructions to the district court to afford [d]efendants an opportunity to fill the evidentiary hole and to then reweigh the results of all four factors.”
