Key Points

  • Second Circuit vacated dismissal of claims over full republication of a viral Michael Jordan video and use of screenshots as headline art, remanding for further proceedings.
  • The panel held fair use cannot be established at the pleading stage where a defendant republishes an entire work that could substitute for the original.
  • The de minimis doctrine does not shield prominent, recognizable use of screenshots even when only a single frame from a longer video is copied.
  • The court affirmed dismissal of claims tied to a YouTube-embedded video, finding YouTube's Terms of Service granted an unambiguous sublicense covering the embedding.

The Second Circuit on Thursday revived part of a copyright infringement suit against Townsquare Media, Inc., holding that a district court erred in dismissing claims on the pleadings that the company's hip-hop news site, XXL, infringed a videographer's rights by republishing an entire viral video and using recognizable screenshots as headline art.

Writing for the panel, Judge Gerard E. Lynch found that the district court "incorrectly determined, at the pleading stage, that Townsquare's use of the Jordan Video was fair," because Townsquare republished the entire video captured by plaintiff Delray Richardson, potentially giving readers a substitute for the original.

The dispute centers on a 2015 video Richardson recorded of basketball legend Michael Jordan breaking up a fight, which went viral in 2023 after a social media account speculated about who was involved. Townsquare republished the full video by embedding a third party's social media post in an article about the controversy, and used a screenshot from the video as the article's headline background. Townsquare separately embedded a YouTube interview Richardson conducted with rapper Melle Mel in two articles, again using screenshots as headline art.

The district court had granted Townsquare judgment on the pleadings across the board, ruling the Jordan Video use was fair, the screenshots were de minimis, and the Melle Mel Video was licensed through YouTube's Terms of Service. The Second Circuit agreed only on the last point.

On fair use, the panel walked through the statutory factors and found that even crediting some transformative value to Townsquare's brief commentary, the company's decision to republish the entire clip cut decisively against dismissal at this stage. The court rejected Townsquare's argument that full republication was necessary, writing that "Townsquare could have, for example, republished the text of the post along with a portion of the video" rather than reproducing the footage in full.

"Because Townsquare republished the entire video, it potentially provided consumers with a substitute work that obviated the need to seek out (and pay for) the video from Richardson, precluding a finding of fair use on the pleadings alone."

The panel placed particular weight on the fourth fair-use factor, market effect, which it called the most important consideration. The court found it plausible that viewers who could watch the full video embedded in Townsquare's article would have no reason to seek it out from Richardson directly, and that the district court had improperly resolved that factual question in Townsquare's favor at the pleading stage.

The court was equally skeptical of the district court's de minimis ruling on the screenshots, which cover a legal doctrine distinct from fair use and instead asks whether a plaintiff has even alleged actionable copying. The panel explained that the doctrine turns not merely on the quantity of a work used but on how observable and recognizable that use is to an average viewer.

"The doctrine does not apply in a case like this, where the original work is wholly recognizable in the secondary work."

The panel noted that Townsquare included the screenshots to signal to readers the subject matter of each article, placing them prominently as headline backgrounds -- the opposite of the incidental, background use that has supported de minimis findings in other cases involving posters or photographs glimpsed briefly on screen.

The court affirmed dismissal of the claim over the Melle Mel Video, agreeing that YouTube's Terms of Service granted Townsquare a valid sublicense to embed content uploaded to the platform, and that Richardson had not disputed the terms' applicability or accuracy. The panel rejected Richardson's argument that a separate API provision requiring users not to infringe third-party rights created an independent licensing condition, finding that reading would render the platform's embedding license meaningless.

The case returns to the district court for further proceedings on the Jordan Video and screenshot claims, giving Richardson the opportunity to develop a factual record on market effects and the necessity of full-length republication that the appellate panel found could not be resolved as a matter of law on the pleadings alone.