Settles, Admits To Questionable Hot News Appropriation Claim

from the well-that's-unfortunate dept

Earlier this year, we noted that News Corp appeared to be testing the waters with a hot news claim against for copying various Dow Jones Newswire stories. The details of the case suggested there might actually be a copyright issue, in that some of the material appeared to simply be cut-and-pasted from Dow Jones (including typos). has now settled the case, but what’s troubling is that in doing so it also admitted to violating hot news as well. This may not matter in the long run, since a settlement like this isn’t precedential and doesn’t say one way or the other whether or not the court agrees that “hot news” is appropriate (even if News Corp — predictably — claims that this is a vindication for “hot news.”) It’s just odd that the company would fold on the hot news claim without even testing to see if it’s legit. Though, given the fact that the company did appear to cut-and-paste articles, perhaps it’s for the best. I could see the hot news issues getting clouded by the company’s other bad actions. Still, settlements like this will only encourage more questionable hot news claims to be brought.

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Comments on “ Settles, Admits To Questionable Hot News Appropriation Claim”

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adele pace (profile) says:

hot news doctrine

The hot news doctrine came from the INS case in 1918. INS v Associated Press 248 US 215.

It is an old case which faded into obscurity for a while. It’s contours were ill defined but clarified in the Motorola v NBA years later when it was revived and it’s boundaries more clearly delineated.

The Motorola case was about the publishing of hot news in the form of basketball scores. There was a further case (PGA Golf) more recently over the publication of golf scores. There have been other cases since INS over stock quotes and time sensitive news such as weather reports.

INS and AP were competitors in news. The INS case was about whether the defendant could be restrained from appropriating news taken from bulletins issued by INS for the purpose of reselling it on the basis of the tort of unfair competition in business.

There were time differentials involved as INS was on the West Coast and AP on the East Coast. AP hadn’t obtained copyright in their articles so didn’t rely on copyright and FURTHER as even the complainant acknowledged NEWS IS NOT WITHIN THE OPERATION OF THE COPYRIGHT ACT.

Newspapers were not within the protection of the copyright acts of 1790 and 1802. (Clayton v. Stone, 2 Paine 382) The Judges didn’t proceed on the copyright issue and Brandeis specifically rejected any copyright protection in “news of the day” or facts.

However all Judges except Brandeis were prepared to recognise a limited value in the expenditure in aggregating, publishing and disseminating news whilst it was fresh or “hot news”. (first mover advantage, and lead time).

The actual news was recognised as too evanescent and important to be recognised as property but it was given the status of a kind of quasi property right in relation to time sensitive news until the commercial value of the news dissipated.

In the INS case there was some element of copying by the defendant and failure to credit the source of the articles they obtained. What they did was received the articles through the telephone and by telegraph from employees of AP, and they re-wrote the complainant’s articles. However they added commentary of their own.

Brandeis issued a very inspiring dissenting judgement. I remember it even though it has been six years since I read it. He was very much alive to the dangers of recognising a tort of misappropriation in relation to ‘news of the day’ and ‘facts’. He felt that the tort of unfair competition wasn’t applicable to the facts before him.

Brandeis said “That competition is not unfair in a legal sense merely because the profits gained are unearned, even if made at the expense of a rival, is shown by many cases besides those referred to above. He who follows the pioneer into a new market, or who engages in the manufacture of an article newly introduced by another, seeks profits due largely to the labor and expense of the first adventurer, but the law sanctions, indeed encourages, the pursuit. [Footnote 14] He who makes a city known through his product must submit to sharing the resultant trade with others who, perhaps for that reason, locate there later. 80 U. S. 673. He who has made his name a guaranty of quality protests in vain when another with the same name engages, perhaps for that reason, in the same lines of business, provided precaution is taken to prevent the public from being deceived into the belief that what he is selling was made by his competitor. One bearing a name made famous by another is permitted to enjoy the unearned benefit which necessarily flows from such use, even though the use proves harmful to him who gave the name value”

…..”The rule for which the plaintiff contends would effect an important extension of property rights and a corresponding curtailment of the free use of knowledge and of ideas, and the facts of this case admonish us of the danger involved in recognizing such a property right in news, without imposing upon news-gatherers corresponding obligations. A large majority of the newspapers and perhaps half the newspaper readers of the United States are dependent for their news of general interest upon agencies other than the Associated Press. The channel through which about 400 of these papers received, as the plaintiff alleges, “a large amount of news relating to the European war of the greatest importance and of intense interest to the newspaper reading public” was suddenly closed. The closing to the International News Service of these channels for foreign news (if they were closed) was due not to unwillingness on its part to pay the cost of collecting the news, but to the prohibitions imposed by foreign governments upon its securing news from their respective countries and from using cable or telegraph lines running therefrom. For aught that appears, this prohibition may have been wholly undeserved, and at all events the 400 papers and their readers may be assumed to have been innocent. For aught that appears, the International News Service may have sought then to secure temporarily by arrangement with the Associated Press the latter’s foreign news service”

It is definitely worth a read.

pacelegal (profile) says:

hot news

Sorry, Justice Oliver Wendell Holmes also dissented as did one other Judge. There were a number of criteria which limited the application of the tort, and although the case has been credited with establishing the hot news doctrine, this didn’t happen until later when NBA v Motorola was decided.

I appreciate that’s copy and paste job and failure to attribute was not good practice, it seems that Dow Jones and other organisations are preparing to use hot news misappropriation in a less clear cut case. I think Brandeis’ views are quite important, namely that ‘news’ can’t be properly legally conceptualised as property. One of the hallmarks of property is the right to exclude others.

If you read the original case not even Pitney J countenanced a rival competitor being prevented from acquiring news as a tip, verifying it and independently coming up with their own stories. This was a time when there wasn’t even the infrastructure to convey news from Europe to the US and Justice Holmes was proposing a two hour time delay.

INS were actually publishing AP’s stories BEFORE AP got the opportunity to do so.

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