Businesses looking to capitalize on amusing or interesting videos in social media channels should beware of potential copyright infringement liability and bear in mind that a fair use defense may not be available. When a Texas Chevrolet dealership, Frank Kent Country, LLC (“Frank Kent”), modified an individual’s copyrighted video (including by adding new audio and captions) and published it on social media, a commercial licensing entity, Viral DRM, LLC (“Viral”), which had acquired the video and accrued causes of action for infringement, sued the dealership. Frank Kent moved to dismiss the action, but the U.S. District Court for the Northern District of Texas denied the motion, holding that Viral had standing to sue, and rejecting Frank Kent’s fair use defense because the modified video replaced Viral’s market and undermined Viral’s business.
