Case 1:24-cv-01210-DLC Document 29 Filed 08/19/24 Page 1 of 27
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`Plaintiff,
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`24cv1210 (DLC)
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`OPINION AND
`ORDER
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
`--------------------------------------- X
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`GEORGE SANTOS,
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`-v-
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`JAMES C. KIMMEL, AMERICAN BROADCASTING
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`COMPANIES, INC
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`Defendants.
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`--------------------------------------- X
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`APPEARANCES:
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`For plaintiff:
`Andrew Mancilla
`Robert Fantone
`Mancilla & Fantone, LLP
`260 Madison Avenue, 22nd Fl
`New York, New York 10016
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`Joseph W. Murphy
`185 Great Neck Road, Ste 461
`Great Neck, New York 11021
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`For defendants:
`Nathan Siegel
`Eric Feder
`Davis Wright Tremaine LLP
`1301 K St NW , Ste 500
`Washington, DC 20005
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`Raphael Holoszyc-Pimentel
`Davis Wright Tremaine LLP
`1251 Avenue of the Americas, 21st Fl
`New York, NY 10020
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`DENISE COTE, District Judge:
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`George Santos brings this action against James C. Kimmel,
`American Broadcasting Companies, Inc. (“ABC”) and the Walt
`Disney Company (“Disney”) for copyright infringement and related
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`Plaintiff,
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`24cv1210 (DLC)
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`OPINION AND
`ORDER
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
`--------------------------------------- X
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`
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`GEORGE SANTOS,
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`-v-
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`JAMES C. KIMMEL, AMERICAN BROADCASTING
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`COMPANIES, INC
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`Defendants.
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`:
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`--------------------------------------- X
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`APPEARANCES:
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`For plaintiff:
`Andrew Mancilla
`Robert Fantone
`Mancilla & Fantone, LLP
`260 Madison Avenue, 22nd Fl
`New York, New York 10016
`
`Joseph W. Murphy
`185 Great Neck Road, Ste 461
`Great Neck, New York 11021
`
`For defendants:
`Nathan Siegel
`Eric Feder
`Davis Wright Tremaine LLP
`1301 K St NW , Ste 500
`Washington, DC 20005
`
`Raphael Holoszyc-Pimentel
`Davis Wright Tremaine LLP
`1251 Avenue of the Americas, 21st Fl
`New York, NY 10020
`
`DENISE COTE, District Judge:
`
`George Santos brings this action against James C. Kimmel,
`American Broadcasting Companies, Inc. (“ABC”) and the Walt
`Disney Company (“Disney”) for copyright infringement and related
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`
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`Case 1:24-cv-01210-DLC Document 29 Filed 08/19/24 Page 2 of 27
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`state law claims. The defendants have moved to dismiss the
`amended complaint (“FAC”) pursuant to Rule 12(b)(6), Fed. R.
`Civ. P., principally relying on the fair use defense. For the
`following reasons, the motion is granted.
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`Background
`The following facts are taken from the FAC, incorporated
`exhibits, and documents of which a court may take judicial
`notice. For the purposes of deciding this motion, the
`complaint’s factual allegations are accepted as true, and all
`reasonable inferences are drawn in the plaintiff’s favor.
`George Santos is a public figure and former member of the
`United States House of Representatives. In May 2023, Santos was
`indicted on federal charges of, inter alia, wire fraud in
`connection with a fraudulent political scheme, money laundering,
`and theft of public funds. He was expelled from Congress on
`December 1, 2023.
`ABC is a commercial broadcast television network. Kimmel
`is the executive producer and host of ABC’s late-night talk show
`Jimmy Kimmel Live! (“JKL”). Disney is the parent company of
`ABC.
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`Shortly after his expulsion from Congress, Santos created
`an account on www.cameo.com (“Cameo”), a website that allows
`fans (“Users”) to request personalized video messages from
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`public figures and celebrities (“Talent”). Santos’s Cameo
`account drew media attention as early as December 4, 2023. On
`December 6 and 7, defendants created multiple Cameo accounts
`using fake names, and submitted at least fourteen requests for
`Cameo videos from Santos using these accounts. Santos created
`fourteen videos in response. This litigation relates to
`defendants’ public use of five videos on JKL.
`By creating accounts on Cameo, Talent and Users agree to be
`bound by Cameo’s Terms of Service, which are incorporated by
`reference in the FAC. The Terms of Service provide that by
`creating an account, the account holder agrees “not to create a
`Site account using a false identity or providing false
`information.” Under the Terms of Service, Users may request
`personalized videos from Talent and obtain a license to use
`those videos.
`Cameo offers two types of licenses: personal use licenses
`and commercial use licenses. A personal use license grants the
`User a license
`solely for your own personal, non-commercial, and non-
`promotional purposes, subject to these Terms: a non-
`exclusive, royalty-free, fully paid, worldwide,
`sublicensable, revocable license to use, reproduce,
`distribute, and publicly display that CAMEO Video, in
`any and all media (for example, on social media
`platforms), whether now known or hereafter invented or
`devised.
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`A commercial license grants “an exclusive (except as to the
`license granted to Cameo), royalty-free, fully paid, worldwide,
`sublicensable, irrevocable license to use, reproduce,
`distribute, and publicly display” the video on a variety of
`media for reasonable promotional purposes. A commercial license
`“specifically exclude[es], in all cases, television.”
`Each video created by Talent is owned by the creator, but
`uploading a video grants Cameo “a non-exclusive, royalty-free,
`fully paid, unlimited, universal, sublicensable (through
`multiple tiers of sublicenses), perpetual, and irrevocable
`license in any and all manner and media” in that video. Each of
`the defendants’ requested videos were subject to the personal
`use license restrictions.
`Defendants’ Cameo requests included the following:
`- “George please congratulate my friend Gary Fortuna
`for winning the Clearwater Florida Beef Eating
`Contest. He ate almost 6 pounds of loose ground
`beef in under 30 minutes -- which was a new record!
`He’s not feeling great right now but the doctor
`thinks he will be released from the hospital soon.
`Please wish him a speedy recovery!”
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`- “George please congratulate my mom Brenda on the
`successful cloning of her beloved schnauzer Adolf.
`She and Doctor Haunschnaffer went through a lot of
`dogs in the trial runs but they finally got it to
`stick. Tell her to give Adolf a big belly rub for
`me!”
`- “George can you please congratulate my legally blind
`niece Julia on passing her driving test. They said
`she couldn’t do it -- even shouldn’t, but she’s
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`taught herself to be able to drive safely using her
`other senses. She’s not a quitter! That said, the
`day after she got her license, she got in a really
`bad car accident so if you could also wish her a
`speedy recovery that would be amazing. She’s in a
`bodycast and is very bummed out -- but with help
`from Jesus and President Trump, soon she will be
`back on the road!”
`- “Hey George. My friend Heath just came out as a
`Furry and I’d love for you to tell him that his
`friends and family all accept him. His ‘fursona’ is
`a platypus mixed with a beaver. He calls it a beav-
`a-pus. Can you say we all love you Beav-a-pus? He
`also just got the go ahead from Arby’s corporate to
`go to work in the outfit so we’re all so happy for
`him to be himself at work and at home. Could you
`also do a loud ‘Yiff yiff yiff!’? That’s the sound a
`Beav-a-pus makes as a Beav-a-pus. Thank you so
`much.”
`Starting on December 7, Kimmel introduced a segment on JKL
`called “Will Santos Say It?”, which he introduced by stating
`that “disgraced former Congressman George Santos . . . has a new
`gig making videos on Cameo for $400 a pop.” Kimmel stated that
`this was “a dilemma because on the one hand you don’t want to
`give your money to a guy like George Santos but on the other,
`pretty good chance he had your credit card information already.”
`Kimmel stated that he sent Santos a number of “ridiculous
`requests . . . . I didn’t say they were from me I just wrote
`them and sent them to find out ‘Will Santos Say It.’” Kimmel
`then introduced three of the videos, each time asking his
`audience “Will Santos Say It?” before playing the video in full.
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`Defendants ran the segment again on December 11. Before
`showing the videos, Kimmel remarked that “every time [President
`Donald Trump] gets indicted he rakes in the cash but George
`Santos [is] not doing too badly himself.” Kimmel stated
`I sent [Santos] a bunch of crazy video requests
`because I wanted to see what he would read and what he
`wouldn’t read, and I showed some of them on the air on
`Thursday . . . and now he’s demanding . . . to be paid
`a commercial rate. Could you imagine if I get sued by
`George Santos for fraud?
`He then showed two more of the videos. Defendants posted
`both segments on various social media, including Youtube. On
`December 12, Santos sent defendants a demand letter requesting
`them to cease showing the videos and remove the content from
`social media. Defendants did refrain from posting the remaining
`videos, but did not remove content they had previously published
`on social media platforms and the defendants’ website. Santos
`has registered each of the videos shown on JKL (the “Videos”)
`with the Register of Copyrights pursuant to 17 U.S.C. § 411(a).
`Santos filed the initial complaint in this action on
`February 17, 2024, alleging copyright infringement, fraudulent
`inducement, breach of contract, and unjust enrichment.
`Following a conference on April 18, an Order of the same date
`set a deadline for the initial motion to dismiss and the filing
`of any amended complaint in response to that motion. The Order
`provided that it was unlikely that plaintiff would have a
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`further opportunity to amend. The defendants moved to dismiss
`the initial complaint on April 29. Santos filed the FAC on May
`24, adding an additional claim for breach of implied contract,
`and defendants renewed their motion on June 7. Defendants’
`motion was fully submitted on July 3.
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`Discussion
`To survive a motion to dismiss brought under Rule 12(b)(6),
`“a complaint must contain sufficient factual matter, accepted as
`true, to state a claim to relief that is plausible on its face.”
`Doe v. Franklin Square Union Free School Dist., 100 F.4th 86, 94
`(2d Cir. 2024) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678
`(2009)). “A claim has facial plausibility when the plaintiff
`pleads factual content that allows the court to draw the
`reasonable inference that the defendant is liable for the
`misconduct alleged.” Vengalattore v. Cornell Univ., 36 F.4th
`87, 102 (2d Cir. 2022) (quoting Ashcroft, 556 U.S. at 678). “In
`determining if a claim is sufficiently plausible to withstand
`dismissal, a court “must accept as true all allegations in the
`complaint and draw all reasonable inferences in favor of the
`non-moving party.” Doe, 100 F.4th at 94 (citation omitted).
`When assessing the pleadings on a motion to dismiss, a court
`may review only a narrow universe of materials, which
`includes facts stated on the face of the complaint,
`documents appended to the complaint or incorporated in
`the complaint by reference, matters of which judicial
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`notice may be taken, as well as documents not
`expressly incorporated by reference in the complaint
`that are nevertheless integral to the complaint.
`Clark v. Hanley, 89 F.4th 78, 93 (2d Cir. 2023) (citation
`omitted).
`Defendants argue that the FAC fails to state a claim for
`copyright infringement because the complaint clearly establishes
`that their inclusion of the Videos on JKL constituted fair use.
`Fair use is an affirmative defense, and is thus most frequently
`resolved at summary judgment. An affirmative defense may be
`raised by a pre-answer motion to dismiss, however, “if the
`defense appears on the face of the complaint.” Whiteside v.
`Hover-Davis, Inc., 995 F.3d 315, 319 (2d Cir. 2021) (citation
`omitted). The Second Circuit has specifically acknowledged “the
`possibility of fair use being so clearly established by a
`complaint as to support dismissal of a copyright infringement
`claim.” TCA Television Corp. v. McCollum, 839 F.3d 168, 178 (2d
`Cir. 2016).
`A.
`Copyright Infringement
`Exercising its constitutional power, Congress has granted
`an author of original work that is fixed in a tangible medium of
`expression the exclusive right to produce the work. See Google
`LLC v. Oracle America, Inc., 593 U.S. 1, 16-17 (2021). The
`purpose of the Copyright Act “is to secure a fair return for an
`author's creative labor,” and “the ultimate aim is, by this
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`incentive, to stimulate artistic creativity for the general
`public good.” Twentieth Cent. Music Corp. v. Aiken, 422 U.S.
`151, 156 (1974) (citation omitted).
`Section 501 of the Copyright Act provides that “[a]nyone
`who violates any of the exclusive rights of the copyright owner
`as provided by sections 106 through 122 [of the Copyright Act] .
`. . is an infringer of the copyright or right of the author.”
`17 U.S.C. § 501(a). Under § 106, those rights include
`reproduction, public performance, public display, creation of
`derivative works, and distribution. 17 U.S.C. § 106. The
`various provisions of the Copyright Act reflect “a balance of
`competing claims upon the public interest: Creative work is to
`be encouraged and rewarded, but private motivation must
`ultimately serve the cause of promoting broad public
`availability of literature, music, and the other arts.” Andy
`Warhol Found. for Visual Arts, Inc. v. Goldsmith, 598 U.S. 508,
`526 (2023) (citation omitted).
`“A claim of direct copyright infringement requires proof
`that (1) the plaintiff had a valid copyright in the work, and
`(2) the defendant infringed the copyright by violating one of
`the exclusive rights that 17 U.S.C. § 106 bestows upon the
`copyright holder.” Smith v. Barnesandnoble.com, LLC, 839 F.3d
`163, 166 (2d Cir. 2016). The defendants do not dispute that
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`Santos has a valid copyright in each of the Videos. They argue,
`however, that the use of the videos constitutes fair use and
`does not violate Santos’s rights, because “a copyright holder
`may not prevent another person from making a ‘fair use’ of
`copyrighted material.” Google, 593 U.S. at 18. As explained
`below, they are correct.
`1.
`Fair use
`Section 107 of the Copyright Act codifies the fair use
`doctrine and provides that
`the fair use of a copyrighted work, including such use by
`reproduction in copies or phonorecords or by any other
`means specified by that section, for purposes such as
`criticism, comment, news reporting, teaching (including
`multiple copies for classroom use), scholarship, or
`research, is not an infringement of copyright.
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`17 U.S.C. § 107 (emphasis added). To determine whether the use
`of a work is a fair use, the following factors must be
`considered:
`(1) the purpose and character of the use, including whether
`such use is of a commercial nature or is for nonprofit
`educational purposes; (2) the nature of the copyrighted
`work; (3) the amount and substantiality of the portion used
`in relation to the copyrighted work as a whole; and (4) the
`effect of the use upon the potential market for or value of
`the copyrighted work.
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`Id.
`The statutory embodiment of the doctrine “indicates, rather
`than dictates,” how the doctrine applies. Google, 593 U.S. at
`18. All four factors listed in § 107 “are to be explored, and
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`the results weighed together, in light of the purposes of
`copyright.” Andy Warhol Found. for Visual Arts, Inc. v.
`Goldsmith, 11 F.4th 26, 37 (2d Cir. 2021) (citation omitted).
`The list of factors is not exhaustive. Google, 593 U.S. at 19.
`Instead, fair use is a “flexible” concept. Warhol, 598 U.S. at
`527 (citation omitted). “[T]he party asserting fair use bears
`the burden of proof.” Authors Guild v. Google, Inc., 804 F.3d
`202, 213 (2d Cir. 2015). Each of the four factors is discussed
`in turn, and the results weighed together.
`i.
`Purpose of Use
`This factor “considers the reasons for, and nature of, the
`copier’s use of an original work,” with the central question
`being “whether the new work merely supersedes the objects of the
`original creation[,] (supplanting the original), or instead adds
`something new, with a further purpose or different character.”
`Warhol, 598 U.S. at 528 (citation omitted). A use that has a
`further purpose is said to be “transformative.” Id. at 529.
`Where a copied work is being used for one of the purposes
`identified in the preamble of § 107, there is a “strong
`presumption” in favor of fair use. NXIVM Corp. v. Ross Inst.,
`364 F.3d 471, 477 (2d Cir. 2004) (citation omitted). “Among the
`best recognized justifications for copying from another’s work
`is to provide comment on it or criticism of it.” Authors Guild,
`804 F.3d at 215. This is because “[c]riticism of a work . . .
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`ordinarily does not supersede the objects of, or supplant, the
`work. Rather, it uses the work to serve a distinct end.”
`Warhol, 598 U.S. at 528.
`Santos argues that because the defendants themselves
`solicited the Videos, the defendants’ subsequent use of the
`Videos was not transformative. Defendants argue that their use
`of the Videos was squarely for purposes of criticism and comment
`and thus this factor weighs in favor of fair use. Defendants
`are correct.
`It is clear from the face of the FAC and the YouTube clips
`of the JKL segments incorporated by reference into the FAC that
`the defendants copied the Videos for the transformative purposes
`of criticism and commentary. As alleged in the FAC, Cameo is a
`website that allows fans to “request personalized video messages
`from public figures and celebrities.” The FAC asserts that
`Santos created the Videos “to generate an inspiring message” and
`“convey[] his feelings of hope, strength, perseverance,
`encouragement, and positivity.” In contrast, any reasonable
`observer of the JKL segments during which the Videos were shown
`would understand that their inclusion on the show served as
`criticism of and commentary on a newsworthy public figure.
`Kimmel prefaced the broadcast of the first of the three
`Videos by noting that the “disgraced former Congressman George
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`Santos has a new gig making videos on Cameo for $400 a pop,”
`making a joke about Santos’s indictment for wire fraud by
`stating that there’s a “good chance he already has your credit
`card information,” and stating that he had sent “ridiculous
`requests” to Santos in order “to find out ‘Will Santos Say It’.”
`Before showing each Video, Kimmel read the request to the
`audience and asked the audience “Will Santos Say It?” Kimmel
`then played the Videos in full and, between Videos, interjected
`his own commentary.
`In short, a reasonable observer would understand that JKL
`showed the Videos to comment on the willingness of Santos -- a
`public figure who had recently been expelled from Congress for
`allegedly fraudulent activity including enriching himself
`through a fraudulent contribution scheme -- to say absurd things
`for money. Thus, the Videos were used for political commentary
`and criticism, purposes that do not supersede the “objects” of
`the original Videos. Warhol, 598 U.S. at 539.1
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`1 The Supreme Court has emphasized that it is not the subjective
`intent of the user, or the subjective interpretation of a court,
`that determines the purpose of the use. Warhol, 598 U.S. at
`544. “But the meaning of a secondary work, as reasonably can be
`perceived, should be considered to the extent necessary to
`determine whether the purpose of the use is distinct from the
`original, for instance, because the use comments on, criticizes,
`or provides otherwise unavailable information about the
`original.” Id. at 544-545.
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`Moreover, “a further justification for [JKL’s] use of [the
`Videos] is apparent” in that the segments “target” the Videos.
`Id. at 539-540. “[C]ommentary or criticism that targets an
`original work may have compelling reason to ‘conjure up’ the
`original by borrowing from it.” Id. at 532 (citation omitted).
`Here, “the original copyrighted work is, at least in part, the
`object of” Kimmel’s commentary. Id. at 540. It is “the very
`nature” of the Videos -- that is, the fact that Santos was
`willing to read the requested messages on camera for $400 --
`“that enables the commentary.” Id.
`Santos’s argument that the defendants should not be able to
`“seek refuge in the fair use concept of transformation that they
`themselves manufactured through deceit” finds no support in
`copyright law. Defendants’ conduct may have been deceptive and
`unkind, but the Supreme Court in Warhol emphasized that whether
`a work is transformative turns on neither the “subjective intent
`of the user,” 598 U.S. at 544, nor the “stated or perceived
`intent of the artist.” Id. at 545 (citation omitted). A court
`must instead conduct “an objective inquiry into what use was
`made, i.e., what the user does with the original work.” Id.
`Here, the purpose of the defendants’ use was clearly for
`criticism and commentary of the Videos themselves and their
`author.
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`Santos also argues that the commercial nature of
`defendants’ use and their “bad faith” in soliciting the videos
`weigh against fair use. But, while “a finding that copying was
`not commercial in nature tips the scales in favor of fair use .
`. . the inverse is not necessarily true, as many common fair
`uses are indisputably commercial.” Google, 539 U.S. at 32.
`Here, even though JKL’s use was in the course of a commercial
`endeavor, “that is not dispositive of the first factor,
`particularly in light of the inherently transformative role” of
`the Videos when shown on JKL. Id.
`Next, an infringer acts in bad faith where it is aware that
`its access to the original “was unauthorized or was derived from
`a violation of law or breach of duty.” NXIVM, 364 F.3d at 478.
`Even assuming that defendants acted in bad faith here by
`procuring personal-use licenses using accounts with fake names
`(rather than forthrightly negotiating a commercial fee), bad
`faith is not dispositive “of the fair use question, or even of
`the first factor.” Id. at 479 (citation omitted). Here, “the
`first factor still favors defendants in light of the
`transformative nature of the secondary use as criticism.” Id.
`ii. Nature of Work
`The second factor under § 107
`directs courts to consider the nature of the copyrighted
`work, including (1) whether it is expressive or creative or
`more factual, with a greater leeway being allowed to a
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`claim of fair use where the work is factual or
`informational, and (2) whether the work is published or
`unpublished, with the scope of fair use involving
`unpublished works being considerably narrower.
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`Warhol, 11 F.4th 26, 45 (2d Cir. 2021) (citation omitted). This
`factor generally favors the fair use defense when a copyrighted
`work is more “informational or functional” than “creative”. 4
`Nimmer on Copyright § 13F.06 [A] (2024). The second factor has
`“rarely,” however, played a significant role in the
`determination of a fair use dispute since even factual works are
`entitled to copyright protection. Authors Guild, 804 F.3d at
`220.
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`The second factor of § 107 does not weigh strongly either
`in favor of or against the fair use defense. As to the first
`subfactor, the FAC alleges that the videos were “created by
`Santos using his own effort, creativity, and unique personality
`traits” and “capture Santos’s unique and distinctive form of
`motivational expression both in the personalized and engaging
`manner in which the videos are captured and in the originality
`with which Santos conveys his feelings of hope, strength,
`perseverance, encouragement, and positivity.” Although the
`defendants wrote the messages, Santos added some language and
`original touches. Santos likely also made choices as a
`videographer about lighting and framing of the Videos. Taking
`all allegations in the FAC as true and drawing all reasonable
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`inferences in favor of the plaintiff, the Videos are more
`expressive than factual.
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`The second subfactor favors defendants. Santos’s copyright
`registrations state that all of the Videos were published on the
`same days as they were created. Per the Cameo Terms of Service,
`uploading a Talent video to the platform grants Cameo an
`irrevocable license “to use, reproduce, license, distribute,
`modify, adapt, publicly perform, publicly display, and create
`derivative works” of the video. Uploading a video also grants
`to the User and the recipient (if different from the User) a
`non-exclusive, perpetual license to use, reproduce, distribute,
`and publicly display the video. Pursuant to 17 U.S.C. § 101,
`“publication” includes “offering to distribute copies . . . to a
`group of persons for purposes of further distribution, public
`performance, or public display.” Thus, Santos published the
`Videos when he uploaded them to Cameo. Because the first
`subfactor favors Santos and the second favors defendants, the
`second factor weighs against fair use, but only slightly so.
`iii. Portion of the Work
`The third factor considers “the amount and substantiality
`of the portion used in relation to the copyrighted work as a
`whole.” 17 U.S.C. § 107(3). Even “a small amount” of copying
`may fall outside the scope of the fair use doctrine where the
`excerpt copied “consists of the ‘heart’” of the original work.
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`Google, 593 U.S. at 33 (citation omitted). On the other hand, a
`court may consider whether the substantiality of the challenged
`use “was tethered to a valid, and transformative, purpose.” Id.
`at 34. Copying “the entirety of a work is sometimes necessary
`to make a fair use.” Swatch Group Management Services Ltd. v.
`Bloomberg L.P., 756 F.3d 73, 90 (2d Cir. 2014). The “ultimate
`question under this factor is whether the quantity and value of
`the materials used are reasonable in relation to the purpose of
`the copying.” Warhol, 11 F.4th at 46 (citation omitted).
`The third factor is neutral with respect to the fair use
`defense. It is undisputed that the Videos were aired in their
`entirety on JKL; however, here, the use was transformative. The
`use of the Videos to criticize and comment on a public figure
`would have been undermined by showing less than the entirety of
`the Videos, because the audience would not know whether Santos
`had indeed said everything in the requests. Thus, the third
`factor does not weigh against a finding of fair use.
`iv. Effect on Market
`The fourth factor under § 107 considers “whether, if the
`challenged use becomes widespread, it will adversely affect the
`potential market for the copyrighted work” and for the market
`for any derivative work. Warhol, 11 F.4th at 48 (citation
`omitted). The question is whether the copying “usurps the
`market for the first by offering a competing substitute.” Id.
`18
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`Case 1:24-cv-01210-DLC Document 29 Filed 08/19/24 Page 19 of 27
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`at 48. In weighing this factor, a court may consider where
`appropriate any public benefits or harms from the copying and
`their extent. Google, 593 U.S. at 35-36. There is, however,
`“no protectible derivative market for criticism,” because “[t]he
`market for potential derivative uses includes only those that
`creators of original works would in general develop or license
`others to develop,” and “the unlikelihood that creators of
`imaginative works will license critical reviews or lampoons of
`their own productions removes such uses from the very notion of
`a potential licensing market.” Campbell, 510 U.S. at 592.
` The fourth factor of § 107 does not weigh against a
`finding of fair use. If anything, it weighs in favor of fair
`use. Defendants’ use of the Videos “are undoubtedly
`transformative secondary uses intended as a form of criticism,”
`and “[a]ll of the alleged harm arises from the biting criticism
`of this fair use, not from a usurpation of the market by
`defendants.” NXIVM, 364 F.3d at 482 (citation omitted).
`Moreover, the “public benefits the copying will likely
`produce” are “related to copyright’s concern for the creative
`production of new expression.” Google, 593 U.S. at 35. That
`is, the production of criticism and satirical commentary would
`be stifled if users of a work were required to obtain permission
`from its creator. The public benefits of criticism are
`
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`
`19
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`Case 1:24-cv-01210-DLC Document 29 Filed 08/19/24 Page 20 of 27
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`“comparatively important . . . when compared with dollar amounts
`likely lost.” Id. at 35-36.
`Santos argues that defendants’ use devalued the market for
`Cameo videos, including Santos’s, by “undermining the integrity”
`of the Cameo.com platform. Santos does not explain how any
`impact on the popularity of the Cameo platform -- which is
`entirely speculative -- impacts more specifically the public
`interest in the creative production of new expression.
`Moreover, the FAC identifies no harm to the potential or
`existing market for the Videos that Santos created for the
`defendants, other than the “very use at bar.” Swatch, 756 F.3d
`at 91 (citation omitted). Thus, this factor weighs in favor of
`fair use.
`
`v.
`Consideration of All Fair Use Factors
`Taking all four factors into consideration, the defense of
`fair use is clearly established by the FAC and documents
`integral to it. The defendants’ use of the Videos was
`transformative; “transformative uses tend to favor a fair use
`finding because a transformative use is one that communicates
`something new and different from the original or expands its
`utility, thus serving copyright’s overall objective of
`contributing to public knowledge.” Authors Guild, 804 F.3d at
`214. While the second factor weighs slightly against the fair
`use defense, the third factor does not, and the fourth factor
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`Case 1:24-cv-01210-DLC Document 29 Filed 08/19/24 Page 21 of 27
`
`favors the defense. Thus, defendants’ motion to dismiss
`Santos’s claim for copyright infringement is granted.
`II. Fraudulent Inducement
`Santos alleges that by creating fake profiles and falsely
`representing themselves as fans seeking personalized videos for
`personal use, the defendants fraudulently induced Santos to
`provide the requested videos. Defendants argue that his claim
`fails because he has failed to allege that he suffered any
`monetary loss as a result of their representations. They are
`correct.
`The elements of fraudulent inducement under New York law
`are 1) a misrepresentation or material omission of fact which
`was false and known to be false by the defendant 2) made for the
`purpose of inducing the other party to rely upon it; 3)
`justifiable reliance of the other party on the misrepresentation
`or material omission; and 4) resulting injury. Ambac Assurance
`Corporation v. Countrywide Home Loans, Inc., 31 N.Y.3d 569, 578-
`79 (2018).2 Under New York’s “out-of-pocket” rule, “damages are
`to be calculated to compensate plaintiffs for what they lost
`because of the fraud, not to compensate them for what they might
`
`2 Defendants cite New York law in their motion to dismiss.
`Plaintiff does not dispute that New York law applies to this
`action. “[W]here the parties agree that [New York] law
`controls, this is sufficient to establish choice of law.”
`Insurance Company of the State of Pennsylvania v. Equitas
`Insurance Limited, 68 F.4th 774, 779 n.2 (2d Cir. 2023).
`21
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`Case 1:24-cv-01210-DLC Document 29 Filed 08/19/24 Page 22 of 27
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`have gained” in the absence of fraud. Connaughton v. Chipotle
`Mexican Grill, Inc., 29 N.Y.3d 137, 142 (2017) (citation
`omitted). New York law does not allow “damages for fraud based
`on the loss of a contractual bargain.” Id. at 142-43 (citation
`omitted).
`Defendants are correct that the FAC fails to allege injury
`resulting from any fraud. The FAC alleges damages in an amount
`no less than the difference between the cost the defendants paid
`for the videos and the price of an expedited commercial license
`for each video -- that is, the FAC seeks the “recovery of
`profits which would have been realized in the absence of fraud,”
`not out-of-pocket economic loss caused by defendants’
`misrepresentations. Id. at 142. Thus, the claim for fraudulent
`inducement is dismissed.
`III. Breach of Con
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