Second Circuit Offers Important Guidance on License Defenses

Companies that embed third-party video content – especially for marketing, media, or communications – received helpful clarity from the Second Circuit in Richardson v. Townsquare Media Inc. But the decision comes with limits that businesses should not ignore. At its core, this case addresses a fundamental copyright question: When does embedding third-party content expose a business to infringement liability?

What is the Copyright Status of Work Being Shared?

Among the many copyright issues that did not exist before the age of social media is this: Is it copyright infringement to embed someone else’s social media post into a publication on another website or platform? Courts have grappled with this question with some frequency and come up with different and unsatisfying answers to liability and the available defenses.

In Richardson v. Townsquare Media, Inc., the court resolved one of those issues by confirming that embedding YouTube videos may be protected by a license granted through YouTube’s terms of service. For businesses that regularly incorporate social media content into websites, blogs, or campaigns, that’s meaningful news.

The bigger takeaway, however, is this: your copyright risk may depend less on the technology you use to embed content and more on the platform you source it from – and the fine print governing that platform.

Why This Matters for Businesses

Embedding social media content is now standard practice across industries – from media outlets and retailers to municipalities and nonprofits. But many organizations or their employees assume embedding is legally “safe” because they are not copying or hosting the content themselves, and because the content is made available on a site that makes embedding available to its users.

That assumption can be costly. Copyright holders have increasingly pursued claims against businesses that embed their content without permission, sometimes seeking significant statutory damages. Most of those claims ultimately settle, but the cost of settlement and of defending them is very real.

The Legal Landscape: Three Common Defenses (and Their Limits)

Businesses typically rely on one of three defenses when faced with an infringement claim arising from embedded content:

1. No Copying (The “Server Test”)

Some courts – most notably the Ninth Circuit – have held that embedding does not constitute infringement because the content is not actually copied and stored on the defendant’s servers; it remains on the platform’s servers.

The problem: This rule is not widely adopted outside of the Ninth Circuit. Businesses operating nationally should not rely on this theory alone.

2. Fair Use

The fair use defense to copyright infringement allows one to use copyrighted content in a transformative way (e.g., commentary, criticism, or reporting).

The problem: The fair use defense is fact-specific, unpredictable, and evolving. It rarely provides the certainty businesses want when publishing content at scale, or the ability to cut off claims early in a litigation.

3. License via Platform Terms of Service

This is where the Richardson decision is most important.

The argument: When a user uploads content to a platform like YouTube, they agree to terms that grant the platform broad rights to distribute that content – and often to sublicense those rights to others.

The key issue: Does that sublicense automatically extend to your business when you embed the content, or is more required?

What the Second Circuit Decided

In Richardson, the defendant embedded a YouTube video on its website and argued that YouTube’s terms of service granted it a license to do so. The District Court agreed, and the Second Circuit affirmed. It found that:

• YouTube’s terms clearly grant users the right to embed videos, and
• That right functions as a valid sublicense defense to copyright infringement

Bottom line:  Embedding YouTube videos can be protected – but only because of how YouTube’s terms are written.

The Real Takeaway: Not All Platforms Are Equal

This is where many businesses get into trouble.

While YouTube’s terms supported a sublicense defense, other platforms’ terms may not. Courts have consistently treated this as a fact-specific inquiry, closely analyzing the exact language of each platform’s terms of service.

That means:

• What’s permissible on YouTube may not be permissible on Instagram, TikTok, or X
• Even small differences in contract language can determine liability
• Platform terms can change – altering your risk overnight

What Businesses Should Do Now

To reduce risk when embedding third-party content:

Do not assume embedding is always safe. Embedding avoids some risks – but not all. It is not a blanket defense to infringement.

Treat platform terms of service as risk-defining documents. Before embedding content at scale (e.g., in marketing campaigns or media publishing), ensure someone is reviewing:

• Whether sublicensing is explicitly permitted
• Whether the sublicense scope includes you
• Whether commercial use is addressed
• Any restrictions on embedding

Be especially cautious outside of YouTube. Until similar clarity exists elsewhere, embedding content from other platforms carries great legal uncertainty.

Align legal and marketing teams. Embedding decisions are often made by marketing or content teams. Legal should provide clear, practical guardrails to avoid inconsistent or risky practices.

Reassess existing content. If your organization embeds third-party content across websites or blogs, it may be worth auditing where that content originates and under what terms it was used.

Final Thought

The Second Circuit’s decision provides meaningful reassurance – but only in a narrow lane. For businesses, the real lesson isn’t that embedding is safe. It’s that embedding is only as safe as the license behind it.