Tali - the royalty company of the filmmakers in Israel - contended that the Petah Tikva Municipality infringed upon its copyright when it screened three films without paying royalties: One was screened for free at a youth center, and the other two were screened to the general public for ILS 30.
The Court held that the screening at the youth center was protected under the "fair use" defense but in relation to the other two films, Tali’s copyright were infringed upon. The defense of "fair use" entails two cumulative conditions - purpose and fairness. The use of the work must be for one of the purposes stipulated in the law or a similar purpose. To the extent that the use falls within the scope of the same purposes, the nature of the use, it’s scope, it’s effect on the value of the work and its potential market, etc., are reviewed. In addition, the more the use is a commercial one, the greater the tendency not to apply the defense. Here, the screening at the youth center was carried out for an important social purpose, when the number of viewers created a minimal exposure of the work from which no profit was made and thus the defense should be applied. In relation to the other two screenings, these are screenings intended for the general public and from which the municipality made a profit, so it is deemed a commercial use. Therefore, the defense does not apply to the other two screenings.