Hot News Is Back: Court Blocks Website From Reporting The News

from the first-amendment? dept

In the last few years, there’s been a push by some companies to bring back the immensely troubling “hot news doctrine,” that appears to violate everything we know about the First Amendment and copyright law. Basically, the “hot news doctrine” says that if someone reports on a story, others are not allowed to report on their reporting for some period of time — on the theory that it somehow undermines the incentive to do that original reporting. Last year, we wrote about the very troubling implications of allowing the hot news concept to stand. Beyond the free speech implications, it also has the troubling quality of effectively creating a copyright on facts — which are quite clearly not covered by copyright. On top of that, it’s not necessary in the slightest. As anyone who is actually in the online news business knows, getting a scoop gets you traffic — even if others report the same thing minutes later. Being first gets you the attention. You don’t need to artificially block others from reporting the news.

Unfortunately, with various publications struggling, some have picked up on the hot news doctrine as a way to somehow block competition. Tragically, it looks like a court has now adopted the hot news doctrine in one case. Paul Alan Levy alerts us to the news that a judge issuing an injunction against TheFlyOnTheWall.com, a website that would publish summaries of Wall Street research. The Wall Street firms said this undermined their business model — and the court agreed. It passed an injunction saying that TheFlyOnTheWall had to hold off publishing any news about any Wall Street research report until either 10am (if the report is released early in the morning) or for two hours after it’s released if it comes out during the day.

These totally arbitrary restrictions are highly troubling from a free speech standpoint and seem effectively random. This seems like yet another case of a company being upset by interference with its business model, which should be a reason to change the business model — not run to the courts.

But what’s most troubling of all is that now all the publishers who have been salivating over the hot news doctrine have a legal ruling to point to. Can you imagine how the world would work if you couldn’t blog about or mention a particular piece of news for a few hours because the Associated Press got to it first? It’s hard to see how this could possibly stand up to a First Amendment analysis, and it’s quite troubling that the judge found the way she did.

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Companies: theflyonthewall

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Comments on “Hot News Is Back: Court Blocks Website From Reporting The News”

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43 Comments
Anonymous Coward says:

The Wall Street firms are all happy about this now…until another publication uses the “hot news doctrine” against them. Then they’ll gnash their teeth and clench their fists and have a temper tantrum like any 2-year old. “I want what I want when I want it. What’s immature about that?” Entitlement culture at it’s finest.

ethorad (profile) says:

Re: Re:

I’d be interested to see how that goes*. After all, given the speed of the blogosphere and the twitterverse (and facebookland?) the chances of a traditional media company being the first to report on any given large event is pretty small.

Plus, if the newspapers all put up paywalls so you can’t read their stories without paying, how are you to know that you’ve been scooped and so can’t report on something?

*Actually, not that interested since I’m fairly certain I can predict which way it’ll go …

Ralph-J (profile) says:

Link Building Advantage

Although I don’t agree with the idea of the Hot News doctrine, there is an indirect competitive advantage to whoever reports news first. While reporting by others might be illegal for a set period of time (and probably only in the US!), this will likely not prohibit anyone from linking to the article, be it with a short line, a quote etc. Consequently, their article tends to get most inbound links from Facebook, Twitter, blogs, other websites etc., and inevitable rank higher in search engine results, both for this article, and generally. In the end, this means more traffic and more income from advertising.

Pete says:

What law did the judge cite in the decision?

I’m not aware of any law that places restrictions on reporting. Heck, that runs afoul of both “freedom of speech” and “freedom of the press”.

It’s very scary that a judge can make what seems to be a clearly unconstitutional decision and invent a law out of whole cloth and you can get in trouble for not obeying the decision.

I am wondering more and more everyday if I should move to another country… but I’m not sure if anywhere else is even better anymore

anonymous says:

Hot News doctrine recognized by U.S. Supreme Court (1918)

U.S. Supreme Court
International News Service v. Associated Press, 248 U.S. 215 (1918)

CERTIORARI TO THE CIRCUIT COURT OF APPEALS
FOR THE SECOND CIRCUIT

***

But one who gathers news at pains and expense, for the purpose of lucrative publication, may be said to have a quasi-property in the results of his enterprise as against a rival in the same business, and the appropriation of those results at the expense and to the damage of the one and for the profit of the other is unfair competition against which equity will afford relief. P. 248 U. S. 236.

Technopolitical (profile) says:

The Wall Street firms said this undermined their business model -- and the court agreed.

” The Wall Street firms said this undermined their business model — and the court agreed.”

I think rightly so were the courts. And i think it will stand on appeal, The “News” at question here , is actually original research produces to be a exclusive to paying customers. Now at all the same as “breaking news for the Times , et al ……

Technopolitical (profile) says:

Re: The Wall Street firms said this undermined their business model -- and the court agreed.

(spelling corrected)
” The Wall Street firms said this undermined their business model — and the court agreed.”

I think rightly so were the courts. And i think it will stand on appeal, The “News” at question here , is actually original research produced to be a exclusive to paying customers. Not at all the same as “breaking news for the Times , et al ……

anonymous (20) says:

Judge Cote’s Opinion & Order,p.55,dated 18 MAR 2010:

Under NBA, the elements of
an INS claim surviving federal preemption are:

(i) a plaintiff generates or gathers information at a
cost; (ii) the information is time-sensitive; (iii) a
defendant’s use of the information constitutes free
riding on the plaintiff’s efforts; (iv) the defendant
is in direct competition with a product or service
offered by the plaintiffs; and (v) the ability of
other parties to free-ride on the efforts of the
plaintiff or others would so reduce the incentive to
produce the product or service that its existence or
quality would be substantially threatened.
NBA, 105 F.3d at 845.

Michial Thompson (user link) says:

little mike should be concerned

WOW, little mikee, seems that this injunction has little to do with free speach. Seems that all it stops is a site from doing exactly what you do, take someone elses work and republish it for your own gain….

Seems like a pretty good idea actually. Maybe if you and your counterparts could take and actually write something original you wouldn’t be so concerned.

abc gum says:

Re: little mike should be concerned

Michial Thompson keeping it classy as usual.

That’s the thing about Michial Thompson, he acts in such a mature manner and never belittles anyone with silly name calling or other derogatory retort.

I look forward to the time when the weather and traffic report can only be found on one channel, because we can not tolerate the theft of facts which clearly belong to whomever whines the loudest.

Justin Levine (profile) says:

Thank Goodness For This Decision!

I have a great business model wherein I employ slave labor to undercut the prices of my competition. A competitor sued me on behalf of my slaves – claiming violations of the the 14th Amendment and other related civil rights. The judge allowed me to continue this operation under the “cheap goods” doctrine, but because he had to “balance these interests” with Constitutional considerations, he limited my employee operations to just 2 days of indentured servitude before I had to capture new slaves and start the process over again.

Good thing that courts are in place to uphold these business models, rather than people’s so-called “rights”.

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