This case is about what can happen when an advertiser (here, a Chevy dealer) modifies and then shares on Facebook a viral video (showing a Chevy truck surviving a massive tornado): the dealer gets sued for copyright infringement by the owner of the video.

The video in question depicted a red Chevrolet Silverado pickup truck driving through a high-intensity tornado. (This could be the video.) The defendant – a Chevy dealer in Corsicana, Texas – just couldn’t resist: it shared the video on Facebook accompanied by audio from an old Chevrolet commercial and a caption that read: “Like a Rock! Watch the red Silverado drive out of this Tornado earlier this week in Elgin, Texas." [“Like a Rock” – for anyone who has been living under one (or is too young to remember) – was a tagline used by Chevrolet until the early 2000s.] The copyright in the video was ultimately assigned to the plaintiff, an agency that specializes in rights management for professional content creators. The plaintiff sued the dealer for copyright infringement.

The defendant moved under Rule 12(b)(6) to dismiss the case on fair use grounds. District Judge Sidney A. Fitzwater (N.D. Texas) denied the motion.

With respect to the first statutory factor (purpose and character of the use), the court was persuaded that the the commercial nature of the defendant's use of the video weighed against a finding of fair use:

“Despite [defendants’s] attempts to characterize its use of the Video as purely parody and news reporting, it is clear from the allegations in the amended complaint that [the defendant] ‘stands to profit from exploitation’ of the Video without ‘paying the customary price’ for using it for such commercial purposes. Moreover, that [defendant’s] use of the Video may have mixed purposes does not undermine the commercial nature of the Facebook post. The Video included audio from a Chevrolet advertisement, and the caption quoted a Chevrolet tag line. The allegations of the amended complaint enable the court to draw the reasonable inference that this use by a car dealership that sells Chevrolet vehicles is clearly commercial.” (Cleaned up.)

The second factor (the nature of the copyrighted work) weighed in favor of the defendant, since the video was a factual portrayal of a real event that has been widely disseminated on the Internet.

The third factor (the amount and substantiality of the portion used) “strongly” went to the plaintiff, since the defendant used a qualitatively and quantitatively significant portion of the original video.

And the fourth factor (effect on the market) also weighed against fair use since, from the facts alleged in the amended complaint, the court could draw the reasonable inference that widespread use of the video would undermine the plaintiff’s licensing business. Moreover, the “ease with which others could similarly reproduce the Video and include a caption alluding to the quality of Chevrolet vehicles supports the conclusion that [defendant’s] use harms the market for the Video.” To the extent that there were factual issues in dispute, “any doubts about which way this factor cuts must be resolved via additional discovery regarding facts such as [plaintiff’s] fee structure and the reach of [defendant’s] post.”

With three of the factors weighing against fair use, the court denied the motion to dismiss.

Some additional thoughts:

• It appears that the dealer copied and modified the video (by adding audio from a Chevy ad) prior to posting it on Facebook. Would the results here have been different had the dealer instead used the functionality available from Facebook to embed a link to the videographer’s Facebook posting of the original (unmodified) video? In that instance, would the dealer have been able to argue that sharing the video was authorized (licensed) pursuant to Facebook’s terms of use? See this post. And would the so-called “server test” have provided a defense, at least in the Ninth Circuit? See this post. 
• I suspect that the dealer was excited by the video because it purported to show the capabilities of the Chevy truck under the most extreme of conditions. However, if consumers were to take away from the video that the car always would perform in a tornado (or in similarly extreme conditions) as depicted in the video, and if the dealer were unable to substantiate that the car could, in fact, typically perform as shown, then could the dealer potentially be subject to a claim that the video constituted a false and misleading demonstration? 
• According to the opinion, the dealer modified the video by incorporating audio from an old Chevy commercial, but it doesn’t provide any details. If the dealer used audio from an old commercial like this one – which includes a voiceover actor as well as Bob Seger singing “Like a Rock" – could the voiceover actor and Bob Seger allege right of publicity violations? Could the label that owns the sound recording, and the owner of the composition (presumably Seger, who wrote the song, or his publisher), bring copyright claims?

So many questions! Toto, I've a feeling we're not in Kansas anymore.

Viral DRM, LLC v. Frank Kent Country, LLC, No. 3:23-CV-0250-D, 2023 WL 5284844 (N.D. Tex. August 16, 2023)