Court Issues Blow to Hot News Doctrine, AP Calls it a Win
An interesting debate about the “Hot News” doctrine has arisen from a court ruling, or the overturning of a ruling rather, that says TheFlyOnTheWall.com can get away with reporting financial stock ratings as originally reported by Wall Street firms. The site had lost the case initially, but a judge overturned it in appeals court.
The “hot news” concept, legally established in the early 1900s, basically says that news organizations have rights to stories they first report for some amount of time. The thinking is that the competition can’t jump in and steal a story. The concept has proven flawed, particularly in the Internet age, and is rarely enforced. Much of this is likely to do with facts not falling under copyright law.
The debate of the day comes in, where most see this ruling as another nail in the coffin of the hot news doctrine, which has practically already been on life support. Though some major news organizations are spinning it in a different way. The Associated Press issued the following statement:
The United States Court of Appeals for the Second Circuit today issued a decision (Barclays Capital Inc. v. Theflyonthewall.com, Inc. No. 10-1372-cv) which reaffirms the vitality of the “hot news” misappropriation doctrine. The “hot news” doctrine protects news organizations, which invest heavily in gathering and disseminating the news, against free-riders who would copy this news and resell it in competition with the original newsgatherers. The Court agreed with the position taken in an amicus brief by AP and 13 other news organizations, which asked that any ruling preserve the protections of the “hot news” doctrine. In contrast, the Court rejected arguments by Google, Inc. and Twitter, Inc. that asked the court to repudiate prior Second Circuit precedent and abolish the “hot-news” doctrine in federal courts.
The Second Circuit dismissed a claim by investment banks against a newsletter that was reporting on their stock recommendations. reaffirmed prior Second Circuit law finding that copyright law does not preempt a traditional “hot news” case – where one news company copies and resells news that was originally gathered by another news organization. It found, however, that the banks were “making the news,” while the newsletter was “breaking it,” and that the case was therefore not a preempted “hot news” claim.
The Court contrasted these facts with a “hot news” complaint that AP had previously brought against a media company alleged to have copied AP-gathered news and to have published that news as its own, in competition with AP’s services. Such a case, the Court said, was likely a viable “hot news” claim that would not be preempted by the Copyright Act.
AP views the Second Circuit’s decision as a victory for the news media and the public. News organizations, which obtain the news at substantial expense and break it to the public, continue to be protected against unfair competitors who would copy and resell this news while it is still fresh, while incurring little or no cost themselves. The decision preserves a vital economic incentive for newsgathering.
The court ruling says:
The parties, the district court, and amici have raised a wide variety of interesting legal and policy issues during the course of this litigation. We need not address most of them. We conclude that under principles that are well established in this Circuit, the plaintiffs’ claim against the defendant for “hot news” misappropriation of the plaintiff financial firms’ recommendations to clients and prospective clients as to trading in corporate securities is preempted by federal copyright law. Based upon principles explained and applied in National Basketball Association v. Motorola, Inc., 105 F.3d 841 (2d Cir.1997) (sometimes hereinafter “NBA”), we conclude that because the plaintiffs’ claim falls within the “general scope” of copyright, 17 U.S.C. | 106, and involves the type of works protected by the Copyright Act…, and because the defendants’ acts at issue do not meet the exceptions for a “hot news” misappropriation claim as recognized by NBA, the claim is preempted. We therefore reverse the judgment of the district court with respect to that claim.
The NBA case mentioned refers to when the court found that scores and stats were not considered to fall under the hot news doctorine or copyright law. You know, because they’re facts.
As far as that bit about Google and Twitter, it doesn’t seem like a total loss for them, as in the ruling, it also says, “The defendant-appellant, TheFlyontheWall.com, Inc. is among other things, a news ‘aggregator.’ For present purposes, an aggregator is a website that collects headlines and snippets of news stories from other websites. Examples include Google News and the Huffington Post.”