In 1992, Los Angeles blew up. A rioter threw a brick to the head of Reginald Denny. The Los Angeles News Service videotaped it from a helicopter. Reuters copied the videotape in New York. Reuters then sent the videotape to London, where it was relayed to satellites and transmitted throughout the planet.
Los Angeles News Service is in the business of licensing its news stories, photographs, audiovisual works, and other services to other news media outlets. Previously, copyright holders had to litigate in every country around the world where a violation was found. Now, as long as they can prove infringement started in the US, they can recover damages in a US based suit.
In this case, the U.S. District Judge said that the news service was entitled to recover damages "flowing from exploitation abroad of domestics acts of copyright infringement." Presumably, this is in addition to the news service's flowing entitlement to exploit domestic acts of broad damage.
Reuter's main defense in the district court action was fair use. The Ninth Circuit upheld the lower court’s decision that Reuter’s recording and subsequent transmission of the News Service's broadcast for the purpose of reporting the news was not a fair use. Despite the fact that the New Service’s works were factual in nature and had been previously published, the court found that Reuter’s commercial use of the “heart” of the works was not very transformative.
Additionally, while Los Angeles News Service was unable to prove the loss of subsequent sales, the court found that if Reuter’s actions were permitted, they “would result in a substantially adverse impact on the potential market for the original works,” because an organization purchasing news footage from Los Angeles News Service would no longer need to purchase it from the News Service, thus “lessening the market” for the New Service’s footage.