12-2412-cv (L)
`Swatch Group v. Bloomberg
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`UNITED STATES COURT OF APPEALS
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`FOR THE SECOND CIRCUIT
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`_______________
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` August Term, 2013
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`(Argued: October 21, 2013
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`Decided: January 27, 2014)
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`Docket Nos. 12-2412-cv, 12-2645-cv
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`_______________
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`THE SWATCH GROUP MANAGEMENT SERVICES LTD.,
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`Plaintiff-Counter-Defendant-Appellant-Cross-Appellee,
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`—v.—
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`BLOOMBERG L.P.,
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`Defendant-Counter-Claimant-Appellee-Cross-Appellant.
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` _______________
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`B e f o r e :
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`KATZMANN, Chief Judge, KEARSE, and WESLEY, Circuit Judges.
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`_______________
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`Appeal and cross-appeal from a judgment of the United States District
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`Court for the Southern District of New York (Hellerstein, J.), granting summary
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`Swatch Group v. Bloomberg
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`UNITED STATES COURT OF APPEALS
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`FOR THE SECOND CIRCUIT
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`_______________
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` August Term, 2013
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`(Argued: October 21, 2013
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`Decided: January 27, 2014)
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`Docket Nos. 12-2412-cv, 12-2645-cv
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`_______________
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`THE SWATCH GROUP MANAGEMENT SERVICES LTD.,
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`Plaintiff-Counter-Defendant-Appellant-Cross-Appellee,
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`—v.—
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`BLOOMBERG L.P.,
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`Defendant-Counter-Claimant-Appellee-Cross-Appellant.
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` _______________
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`B e f o r e :
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`KATZMANN, Chief Judge, KEARSE, and WESLEY, Circuit Judges.
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`_______________
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`Appeal and cross-appeal from a judgment of the United States District
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`Court for the Southern District of New York (Hellerstein, J.), granting summary
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`judgment to the defendant as to the plaintiff’s claim of copyright infringement on
`the ground that the defendant had engaged in fair use. The plaintiff claims that
`the defendant, a financial news and data reporting service, infringed the
`plaintiff’s copyright in a sound recording of a foreign public company’s earnings
`call with invited investment analysts by obtaining a copy of the recording
`without authorization and making it available to the defendant’s paying
`subscribers. We hold, upon consideration of the relevant factors, see 17 U.S.C.
`§ 107, that the defendant’s use qualifies as fair use. We further grant the
`plaintiff’s motion to dismiss the defendant’s cross-appeal because the defendant
`lacks appellate standing and we lack appellate jurisdiction.
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`For the reasons stated below, the defendant’s cross-appeal is DISMISSED,
`and the judgment of the district court is AFFIRMED.
`_______________
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`JOSHUA PAUL (Jess M. Collen, Kristen Mogavero, on the brief),
`COLLEN IP, Ossining, NY, for
`Plaintiff-Counter-Defendant-Appellant-Cross-Appellee.
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`JOHN M. DIMATTEO (Thomas H. Golden, Amina Jafri, on the brief),
`Willkie Farr & Gallagher LLP, New York, NY, for
`Defendant-Counter-Claimant-Appellee-Cross-Appellant.
`_______________
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`KATZMANN, Chief Judge:
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`This case concerns the scope of copyright protection afforded to a sound
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`recording of a conference call convened by The Swatch Group Ltd. (“Swatch
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`Group”), a foreign public company, to discuss the company’s recently released
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`earnings report with invited investment analysts. In particular, we must
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`2
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`determine whether Defendant-Appellee Bloomberg L.P. (“Bloomberg”), a
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`financial news and data reporting service that obtained a copy of that sound
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`recording without authorization and disseminated it to paying subscribers, may
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`avoid liability for copyright infringement based on the affirmative defense of
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`“fair use.” 17 U.S.C. § 107. We also must determine whether we have jurisdiction
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`to hear Bloomberg’s cross-appeal on the issue of whether the sound recording of
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`the conference call is copyrightable in the first instance.
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`Plaintiff-Appellant The Swatch Group Management Services Ltd.
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`(“Swatch”), a subsidiary of Swatch Group, appeals from a judgment of the
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`United States District Court for the Southern District of New York (Hellerstein,
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`J.), which sua sponte granted summary judgment to Bloomberg on Swatch’s claim
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`of copyright infringement on the ground of fair use. On appeal, Swatch argues
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`that the district court’s ruling was premature because Swatch had not yet had the
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`opportunity to take discovery on three issues: (1) whether Bloomberg obtained
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`and disseminated the sound recording for the purpose of “news reporting” or for
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`some other business purpose; (2) Bloomberg’s state of mind when it obtained and
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`disseminated the recording; and (3) whether Bloomberg subscribers actually
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`3
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`listen to sound recordings of earnings calls, or instead glean information about
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`such calls by reading written transcripts or articles. Swatch also contends that the
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`district court erroneously concluded that Swatch had published the sound
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`recording before Bloomberg disseminated it. More broadly, Swatch argues that
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`the district court erred in how it evaluated and balanced the various
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`considerations relevant to fair use. For the reasons set forth below, we agree with
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`the district court and hold that, upon consideration of the relevant factors and
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`resolving all factual disputes in favor of Swatch, Bloomberg has engaged in fair
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`use.
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`In addition, Bloomberg cross-appeals from the same judgment of the
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`district court, urging us to hold that Swatch’s sound recording is not protected by
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`the copyright laws in the first place. Swatch has moved to dismiss the
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`cross-appeal on the grounds that Bloomberg lacks appellate standing and we lack
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`appellate jurisdiction. That motion is granted. Because the judgment designated
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`in Bloomberg’s notice of appeal was entered in Bloomberg’s favor, Bloomberg is
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`not “aggrieved by the judicial action from which it appeals,” Great Am. Audio
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`Corp. v. Metacom, Inc., 938 F.2d 16, 19 (2d Cir. 1991), and therefore lacks standing.
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`4
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`Similarly, although the district court later dismissed as moot Bloomberg’s
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`counterclaim for a declaration that Swatch’s copyright is invalid, Bloomberg
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`never filed an additional notice of appeal identifying that subsequent order as the
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`subject of an appeal, and thus we have no jurisdiction to review it.
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`Accordingly, we affirm the judgment of the district court, and we dismiss
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`the cross-appeal.
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`I.
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`Factual Background
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`BACKGROUND
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`The following facts are drawn from the record before the district court and
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`are undisputed unless otherwise noted.
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`On February 8, 2011, Swatch Group released its 2010 earnings report, a
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`seven-page compilation of financial figures and textual narrative about the
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`company’s financial performance during the prior year. Because Swatch Group is
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`incorporated in Switzerland and its shares are publicly traded on the Swiss stock
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`exchange, Swatch Group is governed by Swiss securities law and the listing rules
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`of the Swiss exchange. In accordance with those rules, Swatch Group filed its
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`earnings report with the exchange before trading opened for the day, and
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`5
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`simultaneously posted the report in four languages (English, German, French,
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`and Italian) on the Investor Relations section of its website.
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`After it released this information to the public, Swatch Group held a
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`conference call with an invited group of financial analysts, as is its custom. Swiss
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`law permits public companies to hold this kind of earnings call with a limited
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`group of analysts, provided that the company does not disclose non-public,
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`significantly price-sensitive facts during the call. Here, Swatch Group did not
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`reveal any significantly price-sensitive facts during the call that had not already
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`been revealed in its previously released report. In advance of the call, Swatch
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`Group sent invitations to all 333 financial analysts who were registered with
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`Swatch Group’s Investor Relations Department. Swatch Group held the call at 2
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`p.m. local Swiss time, several hours after it had released the earnings report, in
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`order to allow European, American, and Asian analysts to participate. In the end,
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`approximately 132 analysts joined the call. For Swatch Group’s part, its Chief
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`Executive Officer, Chief Financial Officer, and three other senior executives
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`participated in the call from the company’s offices in Switzerland.
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`6
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`At Swatch Group’s request, an audio conferencing vendor recorded the
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`entire earnings call as it was in progress. At the beginning of the call, an operator
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`affiliated with the vendor welcomed the analysts to the call and told them, “This
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`call must not be recorded for publication or broadcast.” J.A. 22. Swatch Group’s
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`executives then provided commentary about the company’s financial
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`performance and answered questions posed by fifteen of the analysts. The entire
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`call lasted 132 minutes; Swatch Group executives spoke for approximately 106 of
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`those minutes.
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`Neither Bloomberg nor any other press organization was invited to the
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`earnings call. Nevertheless, within several minutes after the call ended,
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`Bloomberg obtained a sound recording and written transcript of the call and
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`made them both available online, without alteration or editorial commentary, to
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`subscribers to its online financial research service known as Bloomberg
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`Professional. According to Bloomberg’s promotional materials, Bloomberg
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`Professional provides “[a] massive data stream” with “rich content” that is
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`“unparalleled in scope and depth” and is “delivered to your desktop in real
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`time,” as well as “access to all the news, analytics, communications, charts,
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`7
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`liquidity, functionalities and execution services that you need to put knowledge
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`into action.” Id. 640.
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`On February 10, 2011, after Swatch Group learned that the recording and
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`transcript had been made available on Bloomberg terminals, Swatch Group sent
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`Bloomberg a cease-and-desist letter demanding that they be removed. Bloomberg
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`refused. On February 14, 2011, Swatch then filed its initial complaint against
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`Bloomberg in this action claiming infringement of its copyright in the sound
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`recording of the earnings call. In an agreement signed by representatives of
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`Swatch Group and Swatch on February 14 and 15, 2011, Swatch Group assigned
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`its interest in the copyright to its subsidiary Swatch.
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`Two weeks later, on March 2, 2011, Swatch filed an application with the
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`U.S. Copyright Office to register a copyright in a sound recording of the earnings
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`call. The Copyright Office and Swatch then exchanged a series of emails over the
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`scope of the claimed copyright. After Swatch narrowed the copyright to cover
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`only the statements made by Swatch Group executives, and not the statements
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`made by the operator or the questions posed by the analysts, the Copyright
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`Office issued a registration on April 27, 2011.
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`8
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`II.
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`Procedural History
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`As stated, Swatch filed its initial complaint in this action on February 14,
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`2011. Swatch then twice amended its complaint; the operative pleading thus is
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`the Second Amended Complaint, filed on May 10, 2011. The Second Amended
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`Complaint alleges that, by recording the earnings call and making the recording
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`available to the public, Bloomberg infringed Swatch’s exclusive rights “to
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`reproduce the copyrighted work” and “to distribute copies or phonorecords of
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`the work to the public.” 17 U.S.C. § 106(1), (3). Swatch does not challenge
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`Bloomberg’s preparation or distribution of the written transcript of the earnings
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`call.1
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`On May 20, 2011, Bloomberg moved under Rule 12(b)(6) to dismiss the
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`Second Amended Complaint for failure to state a claim, arguing inter alia that the
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`earnings call was not copyrightable in the first place and that Bloomberg’s
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`copying and dissemination of the call was fair use. The district court denied that
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`motion in an order entered on August 30, 2011. Swatch Grp. Mgmt. Servs. Ltd. v.
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`1 Swatch has disclaimed any such challenge in light of 17 U.S.C. § 114(b), under which a
`copyright owner’s right to prepare derivative works based on a sound recording “is
`limited to the right to prepare a derivative work in which the actual sounds fixed in the
`sound recording are rearranged, remixed, or otherwise altered in sequence or quality.”
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`9
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`Bloomberg L.P. (“Swatch I”), 808 F. Supp. 2d 634 (S.D.N.Y. 2011). The district court
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`found that the recording was copyrightable, id. at 638–39, and declined to
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`address the “fact-intensive” questions implicated by Bloomberg’s fair use defense
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`on a motion to dismiss, id. at 641.
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`At an in-court conference held two weeks later on September 16, 2011,
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`however, the district court informed the parties of its belief that it could resolve
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`the case through a motion for judgment on the pleadings, and directed Swatch to
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`file such a motion. Swatch moved as directed on October 21, 2011, and
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`Bloomberg opposed. The district court held oral argument on December 12, 2011,
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`at which it denied Swatch’s motion and explained that, in the court’s view,
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`“defendant’s use qualifies as fair use.” J.A. 581. Later that day, the district court
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`issued a summary order stating that it had “preliminarily granted judgment to
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`Defendant on the basis that if Defendant’s alleged actions constitute
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`infringement, they are protected as fair use.” Id. 584. The order directed Swatch
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`to submit “a brief regarding the existence of any triable issues of material fact
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`with respect to Defendant’s fair use affirmative defense.” Id. Swatch did so,
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`pointing out that it had taken no discovery in the action.
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`10
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`In an opinion and order entered on May 17, 2012, the district court sua
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`sponte granted summary judgment to Bloomberg, finding that Bloomberg’s
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`copying and dissemination of the recording qualify as fair use. Swatch Grp. Mgmt.
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`Servs. Ltd. v. Bloomberg L.P. (“Swatch II”), 861 F. Supp. 2d 336 (S.D.N.Y. 2012). On
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`May 18, 2012, the clerk of the district court entered judgment “in favor of
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`defendant.” J.A. 7.
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`On June 14, 2012, Swatch filed a timely notice of appeal from that
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`judgment. On June 28, 2012, Bloomberg filed a notice of cross-appeal from the
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`same judgment, and on July 24, 2012, Swatch moved to dismiss the cross-appeal.
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`On August 27, 2012, after the parties had filed a stipulation of dismissal without
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`prejudice to reinstatement under Local Rule 42.1, the district court issued an
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`order dismissing as moot all of Bloomberg’s counterclaims, including the
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`counterclaim for a declaration that Swatch’s copyright is invalid. On November
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`13, 2012, upon receipt of a letter from Swatch, the Clerk reinstated the appeal.
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`Finally, on January 14, 2013, the motions panel of this Court referred Swatch’s
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`motion to dismiss the cross-appeal to the merits panel.
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`11
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`DISCUSSION
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`We review a district court’s grant of summary judgment de novo, resolving
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`all ambiguities and drawing all reasonable inferences against the moving party.
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`See Garanti Finansal Kiralama A.S. v. Aqua Marine & Trading Inc., 697 F.3d 59, 63–64
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`(2d Cir. 2012). Summary judgment is appropriate only where the record shows
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`“that there is no genuine dispute as to any material fact and that the movant is
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`entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). Under Federal Rule
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`of Civil Procedure 56(f), district courts have discretion to grant summary
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`judgment sua sponte “[a]fter giving notice and a reasonable time to respond” and
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`“after identifying for the parties material facts that may not be genuinely in
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`dispute.” Fed. R. Civ. P. 56(f), (f)(3); see also Celotex Corp. v. Catrett, 477 U.S. 317,
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`326 (1986) (“[D]istrict courts are widely acknowledged to possess the power to
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`enter summary judgments sua sponte, so long as the losing party was on notice
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`that [it] had to come forward with all of [its] evidence.”). Before granting
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`summary judgment sua sponte, however, a district court “must assure itself that
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`following the procedures set out in Rule 56[(a)–(e)] would not alter the outcome.”
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`Ramsey v. Coughlin, 94 F.3d 71, 74 (2d Cir. 1996). In other words, “[d]iscovery
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`12
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`must either have been completed, or it must be clear that further discovery
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`would be of no benefit,” such that “the record . . . reflect[s] the losing party's
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`inability to enhance the evidence supporting its position and the winning party's
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`entitlement to judgment.” Id.2
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`I.
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`Fair Use
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`The Copyright Act of 1976 grants copyright holders a bundle of exclusive
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`rights, including the rights to “reproduce, perform publicly, display publicly,
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`prepare derivative works of, and distribute copies of” the copyrighted work.
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`Arista Records LLC v. Doe 3, 604 F.3d 110, 117 (2d Cir. 2010) (citing 17 U.S.C.
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`§ 106). Because copyright law recognizes the need for “breathing space,” Campbell
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`v. Acuff-Rose Music, Inc., 510 U.S. 569, 579 (1994), however, a defendant who
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`otherwise would have violated one or more of these exclusive rights may avoid
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`liability if he can establish that he made “fair use” of the copyrighted material.
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`Though of common-law origin, the doctrine of fair use is now codified at 17
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`2 Although Ramsey was decided before Rule 56 was amended in 2010 to provide express
`procedures governing the grant of summary judgment independent of a motion, its
`statements regarding the care a district court must take before sua sponte granting
`summary judgment remain good law. See Fed. R. Civ. P. 56, advisory comm. notes (2010
`Amendments) (“Subdivision (f) brings into Rule 56 text a number of related procedures
`that have grown up in practice.”).
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`13
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`U.S.C. § 107, which provides that “the fair use of a copyrighted work . . . for
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`purposes such as criticism, comment, news reporting, teaching (including
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`multiple copies for classroom use), scholarship, or research, is not an
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`infringement of copyright.”
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`To evaluate whether a particular use qualifies as “fair use,” we must
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`engage in “an open-ended and context-sensitive inquiry.” Blanch v. Koons, 467
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`F.3d 244, 251 (2d Cir. 2006). The Copyright Act directs that, in determining
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`whether a particular use is fair, “the factors to be considered shall include”:
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`the purpose and character of the use, including whether such
`(1)
`use is of a commercial nature or is for nonprofit educational
`purposes;
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`(2)
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`the nature of the copyrighted work;
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`the amount and substantiality of the portion used in relation
`(3)
`to the copyrighted work as a whole; and
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`the effect of the use upon the potential market for or value of
`(4)
`the copyrighted work.
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`17 U.S.C. § 107. Though mandatory, these four factors are non-exclusive.
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`Moreover, “[a]lthough defendants bear the burden of proving that their use was
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`fair, they need not establish that each of the factors set forth in § 107 weighs in
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`their favor.” NXIVM Corp. v. Ross Inst., 364 F.3d 471, 476–77 (2d Cir. 2004)
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`14
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`(internal citation omitted). Rather, “[a]ll [factors] are to be explored, and the
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`results weighed together, in light of the purposes of copyright.” Campbell, 510
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`U.S. at 578. “The ultimate test of fair use is whether the copyright law’s goal of
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`promoting the Progress of Science and useful Arts would be better served by
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`allowing the use than by preventing it.” Bill Graham Archives v. Dorling Kindersley
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`Ltd., 448 F.3d 605, 608 (2d Cir. 2006) (quoting Castle Rock Entm’t, Inc. v. Carol
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`Publi’g Grp., 150 F.3d 132, 141 (2d Cir. 1998)) (ellipsis omitted).
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`The determination of fair use is a mixed question of fact and law. Harper &
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`Row Publishers, Inc. v. Nation Enters., 471 U.S. 539, 560 (1985). While we have
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`reversed district courts that too hastily resolved factual questions relevant to fair
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`use on summary judgment, see, e.g., Ringgold v. Black Entm’nt Television, Inc., 126
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`F.3d 70, 81 (2d Cir. 1997), “this [C]ourt has on a number of occasions resolved fair
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`use determinations at the summary judgment stage where there are no genuine
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`issues of material fact.” Blanch, 467 F.3d at 250 (quoting Castle Rock Entm’t, 150
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`F.3d at 137) (ellipsis omitted).
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`15
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`A.
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`Purpose and Character of Use
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`We turn first to “the purpose and character of the use.” 17 U.S.C. § 107(1).
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`This statutory factor encompasses within it a number of distinct considerations,
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`including “whether [the] use is of a commercial nature or is for nonprofit
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`educational purposes,” id.; whether the use is “transformative” or “merely
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`supersedes the objects of the original creation,” Campbell, 510 U.S. at 579
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`(quotation marks and brackets omitted); whether the defendant acted in good
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`faith, see NXIVM, 364 F.3d at 478; and whether the defendant engaged in “news
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`reporting” or another activity illustratively listed in § 107 as indicative of fair use,
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`see Harper & Row, 471 U.S. at 561. Below, the district court found that this factor as
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`a whole favored fair use because “[Bloomberg]’s work as a prominent gatherer
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`and publisher of business and financial information serves an important public
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`interest, for the public is served by the full, timely and accurate dissemination of
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`business and financial news.” Swatch II, 861 F. Supp. 2d at 340.
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`Swatch argues that this conclusion was error for several reasons. First,
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`Swatch contends that the district court improperly accepted Bloomberg’s
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`unsubstantiated claim that it had engaged in “news reporting.” Swatch notes that
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`Bloomberg itself has characterized its Bloomberg Professional service as
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`delivering both financial “news” and “data,” and argues that the district court
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`erred in denying Swatch the chance to develop facts in discovery to show that the
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`sound recording at issue here is the latter and not the former. Similarly, Swatch
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`argues that the district court improperly denied Swatch the chance to develop
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`facts relevant to Bloomberg’s state of mind. Swatch acknowledges that the
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`district court “credited [Swatch]’s allegations that [Bloomberg] was not
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`authorized to access the Earnings Call and that [Bloomberg]’s publication of the
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`Infringing Work violated [Swatch Group’s] directive,” Swatch II, 861 F. Supp. 2d
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`at 343, but argues that Swatch should have been able to take discovery into
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`whether Bloomberg knew at the time that obtaining and publishing the recording
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`violated Swatch Group’s directive. Swatch also argues that it should have been
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`permitted to take discovery into whether Bloomberg Professional subscribers
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`actually choose to access information about earnings calls by listening to
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`recordings, or instead by reading written transcripts or articles. More broadly,
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`Swatch argues that the district court gave insufficient weight to the fact that
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`17
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`Bloomberg’s use was commercial and did not transform the underlying
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`recording.
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`We find these arguments unpersuasive and hold that the first statutory
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`factor favors fair use here. To begin with, whether one describes Bloomberg’s
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`activities as “news reporting,” “data delivery,” or any other turn of phrase, there
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`can be no doubt that Bloomberg’s purpose in obtaining and disseminating the
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`recording at issue was to make important financial information about Swatch
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`Group available to American investors and analysts. That kind of information is
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`of critical importance to American securities markets. Indeed, as Bloomberg
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`points out, the Securities and Exchange Commission (“SEC”) has mandated that
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`when American companies disclose this kind of material nonpublic information,
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`they must make it available to the public immediately. See Regulation FD, 17
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`C.F.R. § 243.100. At a minimum, a use of copyrighted material that serves this
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`public purpose is very closely analogous to “news reporting,” which is indicative
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`of fair use. See Harper & Row, 471 U.S. at 561 (“News reporting is one of the
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`examples enumerated in § 107 to ‘give some idea of the sort of activities the
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`courts might regard as fair use under the circumstances.’” (quoting S. Rep. No.
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`18
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`94-473, at 61 (1975)). We agree with the district court, moreover, that this
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`important public purpose underlying Bloomberg’s use overcomes the
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`countervailing weight we would otherwise give to Bloomberg’s clandestine
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`methods and the commercial, nontransformative nature of its use.3
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`Seizing on Bloomberg’s citation to Regulation FD, Swatch protests that in
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`crafting that regulation, the SEC expressly exempted “foreign private issuer[s]”
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`like Swatch Group that are “incorporated or organized under the laws of [a]
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`foreign country.” 17 C.F.R. §§ 243.101(b), 230.405. In fact, as initially proposed,
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`Regulation FD would have applied to such issuers, see Selective Disclosure and
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`Insider Trading, 64 Fed. Reg. 72,590, 72,597 (Dec. 28, 1999), but the SEC
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`ultimately “determined to exempt foreign private issuers . . . as it has in the past
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`exempted them from certain U.S. reporting requirements such as Forms 10-Q and
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`8-K,” Selective Disclosure and Insider Trading, 65 Fed. Reg. 51,716, 51,724 (Aug.
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`24, 2000). Swatch thus argues that giving weight to a public interest in the
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`3 We have held that where “the allegedly infringing work fits the description of uses
`described in § 107,” there is “a strong presumption that factor one favors the
`defendant.” NXIVM, 364 F.3d at 477 (quoting Wright v. Warner Books, Inc., 953 F.2d 731,
`736 (2d Cir. 1991)). Resolving all factual disputes in Swatch’s favor, we assume here that
`Bloomberg’s use falls outside of the core notion of “news reporting” Congress
`envisioned when it enacted § 107. We therefore will not apply the presumption.
`
`
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`19
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`
`
`
`dissemination of important financial information in this case would in effect
`
`erase foreign issuers’ exemption from Regulation FD and set up organizations
`
`like Bloomberg as private enforcers of U.S. public disclosure rules.
`
`
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`This argument, however, misapprehends the limited relevance of
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`Regulation FD to this case. The regulation merely provides additional support for
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`a proposition that would be clear in any event: American investors and analysts
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`have an interest in obtaining important financial information about companies
`
`whose securities are traded in American markets. The fact that the SEC has
`
`chosen not to require foreign issuers to follow certain disclosure rules imposed
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`on domestic issuers in no way implies that information about foreign issuers is
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`irrelevant to American markets. Indeed, Swatch Group recognized as much by
`
`scheduling its earnings call at a time when American analysts would be able to
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`attend. Accordingly, contrary to Swatch’s suggestion, nothing in our decision
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`today subjects Swatch Group or any other foreign issuer to the requirements of
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`Regulation FD. Nor do we hold that a foreign issuer’s failure to follow Regulation
`
`FD prevents it from enforcing its copyrights in the United States. We merely hold
`
`that where a financial research service obtains and disseminates important
`
`
`
`20
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`
`
`
`financial information about a foreign company in order to make that information
`
`available to American investors and analysts, that purpose supports a finding of
`
`fair use.
`
`
`
`Swatch stands on firmer ground when it stresses the commercial nature of
`
`Bloomberg’s use. Section 107 expressly directs courts to consider whether the use
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`“is of a commercial nature or is for nonprofit educational purposes,” 17 U.S.C.
`
`§ 107(1), and we have held that “[t]he greater the private economic rewards
`
`reaped by the secondary user (to the exclusion of broader public benefits), the
`
`more likely the first factor will favor the copyright holder and the less likely the
`
`use will be considered fair.” Am. Geophysical Union v. Texaco Inc., 60 F.3d 913, 922
`
`(2d Cir. 1994). It is undisputed here that Bloomberg is a commercial enterprise
`
`and that Bloomberg Professional is a subscription service available to paying
`
`users. At the same time, we have recognized that “[a]lmost all newspapers, books
`
`and magazines are published by commercial enterprises that seek a profit,”
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`Consumers Union of U.S., Inc. v. Gen. Signal Corp., 724 F.2d 1044, 1049 (2d Cir.
`
`1983), and have discounted this consideration where “the link between [the
`
`defendant]’s commercial gain and its copying is . . . attenuated” such that it
`
`
`
`21
`
`
`
`
`would be misleading to characterize the use as “commercial exploitation.” Am.
`
`Geophysical Union, 60 F.3d at 922. Here, Swatch does not contest that Bloomberg
`
`Professional is a multifaceted research service, of which disseminating sound
`
`recordings of earnings calls is but one small part. Moreover, it would strain
`
`credulity to suggest that providing access to Swatch Group’s earnings call more
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`than trivially affected the value of that service. So while we will not ignore the
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`commercial nature of Bloomberg’s use, we assign it somewhat reduced weight.
`
`
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`Bloomberg’s lack of good faith likewise merits relatively little weight in
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`this case. “[W]hile the good or bad faith of a defendant generally should be
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`considered, it generally contributes little to fair use analysis.” NXIVM, 364 F.3d at
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`479 n.2 (citing Campbell, 510 U.S. at 585 n. 18). Bloomberg does not dispute that it
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`obtained the recording of the earnings call in violation of Swatch Group’s express
`
`directive that the call “must not be recorded for publication or broadcast,” J.A.
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`22, and, resolving all factual disputes in Swatch’s favor, we must assume
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`Bloomberg was fully aware that its use was contrary to Swatch Group’s
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`instructions. But Bloomberg’s overriding purpose here was not to “scoop[]”
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`Swatch or “supplant the copyright holder’s commercially valuable right of first
`
`
`
`22
`
`
`
`
`publication,” Harper & Row, 471 U.S. at 562, but rather simply to deliver
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`newsworthy financial information to American investors and analysts. That kind
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`of activity, whose protection lies at the core of the First Amendment, would be
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`crippled if the news media and similar organizations were limited to authorized
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`sources of information. See generally New York Times Co. v. United States, 403 U.S.
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`713 (1971).
`
`
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`Fair use must also take account of the transformativeness of the use—that
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`is, the degree to which “the new work merely supersedes the objects of the
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`original creation, or instead adds something new, with a further purpose or
`
`different character, altering the first with new expression, meaning, or message.”
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`Campbell, 510 U.S. at 579 (internal citations, quotation marks and alterations
`
`omitted). While a transformative use generally is more likely to qualify as fair
`
`use, “transformative use is not absolutely necessary for a finding of fair use,” id.,
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`and indeed, some core examples of fair use can involve no transformation
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`whatsoever. See 17 U.S.C. § 107 (listing “multiple copies for classroom use”
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`among illustrative examples of fair use).
`
`
`
`23
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`
`
`
`
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`In the context of news reporting and analogous activities, moreover, the
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`need to convey information to the public accurately may in some instances make
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`it desirable and consonant with copyright law for a defendant to faithfully
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`reproduce an original work rather than transform it. In such cases, courts often
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`find transformation by emphasizing the altered purpose or context of the work,
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`as evidenced by surrounding commentary or criticism. See, e.g., Bill Graham
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`Archives, 448 F.3d at 609–610; Nunez v. Caribbean Int'l News Corp., 235 F.3d 18,
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`22–23 (1st Cir. 2000). Here, Bloomberg provided no additional commentary or
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`analysis of Swatch Group’s earnings call. But by disseminating not just a written
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`transcript or article but an actual sound recording, Bloomberg was able to convey
`
`with precision not only what Swatch Group’s executives said, but also how they
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`said it. This latter type of information may be just as valuable to investors and
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`analysts as the former, since a speaker’s demeanor, tone, and cadence can often
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`elucidate his or her true beliefs far beyond what a stale transcript or summary
`
`can show. As courts have long recognized in the context of witness testimony, “’a
`
`cold transcript contains only the dead body of the evidence, without its spirit,’”
`
`and “cannot reveal . . . ‘[the speaker’s] hesitation, his doubts, his variations of
`
`
`
`24
`
`
`
`
`language, his confidence or precipitancy, his calmness or consideration.’” Zhou
`
`Yun Zhang v. INS, 386 F.3d 66, 73–74 (2d Cir. 2004) (quoting Regina v. Bertrand,
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`L.R. [1867] 1 L.R.P.C. 520, 535), overruled on other grounds by Shi Liang Lin v. U.S.
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`Dep't of Justice, 494 F.3d 296, 305 (2d Cir. 2007).
`
`
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`To be sure, “[t]he promise of copyright would be an empty one if it could
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`be avoided merely by dubbing the infringement a fair use ‘news report.’” Harper
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`& Row, 471 U.S. at 557. But here, in light of the independent informational value
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`inherent in a faithful recording of the earnings call, the fact that Bloomberg did
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`not transform Swatch’s work through additional commentary or analysis does
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`not preclude a finding that the “purpose and character” of Bloomberg’s use
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`favors fair use.
`
`
`
`Our decisions in Nihon Keizai Shimbun, Inc. v. Comline Business Data, Inc.,
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`166 F.3d 65 (2d Cir. 1999), Wainwright Securities, Inc. v. Wall Street Transcript Corp.,
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`558 F.2d 91 (2d Cir. 1977), and Financial Information
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