Beware of Social Media Terms of Service!
Remember Instagram-gate, that period of about 6 months back in 2020 when a federal judge in New York dismissed a photographer's copyright infringement lawsuit based on the defendant's argument that Instagram's TOS granted an implied sublicense to freely share any content on a public profile, photographers started freaking out and making their accounts private, Instagram then clarified through an Ars Technica article that in fact it does not grant users a sublicenses to embedded other users' content, and then the federal judge reconsidered and reversed the dismissal such that all was right in the world again? Well, the Second Circuit just gave us a reason to revisit what we thought was settled... and it's not great news for content owners.
Richardson v. Townsquare Media, Inc.
In Richardson v. Townsquare Media, Inc., the court delivered one of the clearest appellate explanations to date of how YouTube's Terms of Service can — in the right circumstances — operate as a copyright license. It also revived a chunk of the case the district court had tossed, so this is a "more than half survives" decision, not a clean win for either side.
The Facts:
Plaintiff Delray Richardson, a professional videographer, owns the copyright in two videos.
The first is a grainy, 42-second clip of basketball legend Michael Jordan breaking up a fight. Years later, the footage resurfaced when someone reposted it on X and speculated that the pugilists were a well-known hip-hop performer and a YouTube personality. Townsquare Media embedded the X post (Jordan video and all) in an article and used a still from the video as the headline image.
The second is a three-minute interview with rapper Grandmaster Melle Mel, recorded by Richardson and an entity called The Art of Dialogue. In 2023, The Art of Dialogue posted it to YouTube under the headline "Eminem Being White Is The Reason He's A Top 5 Rapper Of All Time. If He Were Black, He'd Be Average!" Townsquare embedded the video in two articles the following week — one about the controversy, one about 50 Cent's spirited defense of Eminem — and used video stills as headline images for both.
Richardson sued for copyright infringement based on the embeds and the screenshots. The district court granted judgment on the pleadings for Townsquare across the board. The Second Circuit reversed in part and affirmed in part, leaving more than half of the case alive on remand.
## Server test? Hard pass.
The Second Circuit conspicuously did not resolve whether embedding implicates the copyright owner's exclusive reproduction, display, or performance rights at all.
YouTube's Terms, as a permission machine
The Second Circuit found that YouTube's Terms of Service and platform policies expressly authorized Townsquare's embed of the Melle Mel interview. Specifically:
The Uploader Grants YouTube a Broad License: "By providing Content to the Service, you grant to YouTube a worldwide, non-exclusive, royalty-free, sublicensable and transferable license to use that Content (including to reproduce, distribute, prepare derivative works, display and perform it) in connection with the Service and YouTube's (and its successors' and Affiliates') business…"
YouTube In Turn Gives Users Rights: These include the right to "show YouTube videos through the embeddable YouTube player.".
Each Uploader Also Grants Every Other Users Rights: "You also grant each other user of the Service a worldwide, non-exclusive, royalty-free license to access your Content through the Service, and to use that Content, including to reproduce, distribute, prepare derivative works, display, and perform it, only as enabled by a feature of the Service (such as video playback or embeds).".
Read together, the court said, the Terms are "clear": when The Art of Dialogue uploaded the interview, it licensed YouTube and every downstream user (Townsquare included) to embed it. Richardson did not allege that The Art of Dialogue posted the video without his authorization, so the license stood. And a copyright owner who grants a nonexclusive license cannot sue the licensee for infringement. End of that claim.
Richardson's Arguments Failed
Richardson tried two escape hatches. Neither worked.
The "API Terms favor me" argument: He argued that a clause in YouTube's API Terms — which prohibits embed users from infringing third-party rights — *implied* that Townsquare had to secure permission directly from the copyright owner. The Second Circuit was unmoved: reading the API Terms that way would gut YouTube's express embed license, a result disfavored under California contract law (which governs the Terms)..
The "policy violation" argument: He also argued that Townsquare ran afoul of specific YouTube platform policies — including a prohibition on using the embed functionality for commercial purposes. The court drew the well-worn distinction between *conditions* (which limit the scope of a license, and whose breach is actionable as copyright infringement) and *covenants* (which are merely contractual promises enforceable only under state law). The obligations Richardson pointed to were covenants. Even if Townsquare breached them, that would be YouTube's problem to litigate — not Richardson's — and breach would not retroactively transform an authorized embed into copyright infringement. The license stood.
Except Where They Didn't
As noted above, the case was not a complete loss for Richardson, who succeeded in getting the district court reversed as to the Jordan video. And that win was not nothing. In fact, it helped clarify two discrete issues:
De minimis use: The district court dismissed Richardson's claims over the screenshots, reasoning that a single frame is a fraction of an audiovisual work and therefore too trivial to count. But the de minimis analysis is more about observability, focus, and prominence than how much was taken in the abstract. Because the screenshots were deliberately chosen as headline images, placed front and center, and used to signal what each article was about, this was not de minimis use. Indeed, the Copyright Act itself extends the public-display right to "individual images of a motion picture or other audiovisual work." 17 U.S.C. § 106(5).
Fair Use: The Second Circuit also revived the Jordan video claim on fair use grounds, holding that the doctrine could not carry the day at the pleading stage on this record. A quick tour of the four factors. (17 U.S.C. § 107.)
Purpose and character of the use. The court was skeptical that wrapping a 42-second video in only a "modicum" of commentary added up to anything transformative. The reporting, the court observed, "at times appears more focused on the mere existence and presentation of the video itself," with a headline inviting readers to "watch" the video — treating the clip as the main event rather than the subject of meaningful new analysis. The verdict, dryly delivered: "there is a difference between gesturing towards a transformative message and actually communicating that message." Ouch.
Nature of the copyrighted work. The Court found this factor weighed in favor of fair use because the video was "largely factual" and, in the court's view, did not involve meaningful creative choices. "That Richardson was fortunate to be in the right place at the right time to record Jordan's unexpected intervention does not make the work creative." (I know some photographers who may have feelings about that framing.)
Amount and substantiality used. Against fair use. Townsquare embedded the whole video. The court was unpersuaded that the entirety was necessary — quoting or paraphrasing the post, using only a still or a short clip, or linking out instead of embedding were all options on the table.
Effect on the market for the work. Against fair use. If readers can watch the entire Jordan video for free on XXL, they have no reason to seek it out (or pay for it) from Richardson. Substitution risk: substantial.
Final Takeaways
More than half the case lives on, with further proceedings to come on remand. So what should you take away from this case? My thoughts:
Read the platform Terms, line by line. The license analysis here is a master class in how a well-drafted ToS can resolve infringement claims before they get out of the gate. It also shows what can sink that defense — a missing link in the chain of title (the X-posted Jordan video), an unauthorized upload, a *condition* (rather than a covenant) dressed up as a policy.
De minimis is not a length test. "It was only one frame" is not the answer when the frame is the part everyone is supposed to look at.
News-pegging is not the same as transforming. Embedding an entire work and adding a few sentences of context is going to be a hard sell on fair use, especially when the headline is "watch this."
Comments