Federal Judge Recognizes AP’s ‘Hot News’ Claim in Suit over Online Use of Content

On Feb. 17, 2009, a federal judge refused to dismiss The Associated Press’s (AP) claim that the AP can assert an ownership interest in “hot news” against a competing online service.

The AP sued the Web site All Headline News (AHN) in U.S. District Court in Manhattan on January 12, alleging six counts of copyright and trademark infringement, unfair competition, and misappropriation of “hot news,” also called “breaking news.” AHN markets itself as a service that provides news updates to Web sites and print news organizations for a subscription fee. It can be found online at http://www.allheadlinenews.com/.

According to Judge P. Kevin Castel’s order in The Associated Press v. All Headline News Corp., No. 08 Civ. 323, 2009 WL 382690 (S.D.N.Y. Feb. 17, 2009), the AP alleged that AHN hires “poorly paid individuals” to find news stories on the Internet, many of which are AP stories, and rewrite them or copy them directly under the AHN name, removing any information identifying the stories’ original authors or copyright holders, indicating instead that the stories originate with AHN. The AP alleged AHN is “free riding” on the AP’s original reporting. AHN moved to dismiss all of the AP’s claims except those for copyright infringement.

Castel wrote that under the “hot news” tort, recognized by the U.S. Supreme Court in International News Service v. Associated Press, 248 U.S. 215 (1918), a news organization can claim that “hot news” is its “quasi property,” and thus can be protected against a competitor’s interference. This is in contrast to copyright law, which permits a news organization to claim a copyright to the words and structure of a news story, but not to its underlying facts. Castel quoted the Supreme Court’s holding that allowing one news agency to appropriate and profit from the work of another would “render publication profitless, or so little profitable as in effect to cut off the service by rendering the cost prohibitive in comparison with the return.”

Castel observed that although he was not bound by the International News Service case because the Supreme Court later held in Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938), that federal common law does not apply to state law claims, the doctrine of “hot news” persists in several states, including New York.

AHN argued that Florida law should apply because its principal place of business was Florida, but Castel found instead that New York law applied because the AP is headquartered in New York, where the alleged injury occurred. Moreover, AHN is alleged to have offices at Rockefeller Center in New York City.

Castel found that under National Basketball Association v. Motorola, Inc., 105 F.3d 841 (2d Cir. 2007), a “hot news” claim can be brought in New York when a five-part test is met: “(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.”

The AP also alleged that AHN violated the Digital Millennium Copyright Act (DMCA), 17 U.S.C. 1202(b), by removing or altering information in AP stories that identified the AP as the copyright holder. AHN argued that the DMCA should be construed as protecting only “technological measures” of copyright management. But Castel said AHN “cited no textual support for limiting the DMCA’s application to the ‘technological measures of automated systems,’ a phrase that appears nowhere in the statute.”

Although Castel upheld the AP’s claims of misappropriation of “hot news” and violation of the DMCA, he dismissed its claims of trademark infringement under 15 U.S.C. 1114(1) and unfair competition under 15 U.S.C. 1125(a). Castel said the AP failed to explain what specific AHN conduct infringed the AP’s copyright or amounted to unfair competition.

– Patrick File
Silha Fellow and Bulletin Editor

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This page contains a single entry by cla published on October 12, 2009 12:30 PM.

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