In Barclays Capital, et al. v. Theflyonthewall.com, Inc., Docket No. 1-1372-cv (2nd Cir. June 20, 2011), the Second Circuit U.S. Court of Appeals dealt a significant blow to the viability of the tort of “hot news” misappropriation and thereby gave an additional boost to the status of online content aggregation companies.
As so-called “new media” companies go, the subset known as content aggregators — such as the Huffington Post or the Drudge Report — have been a curious burr in the side of many, more traditional media businesses engaged in news gathering and reporting. If content aggregation sites are readily able and without payment to repurpose the efforts of the old line news outfits such as the Associated Press, The New York Times or ABC News, for example, does this threaten the core news gathering and reporting functions of that latter group and, if so, should there be a prohibition on such aggregation activities.
Background of Hot News Doctrine
The “hot news” doctrine is intertwined with copyright law and derives from a 1918 U.S. Supreme Court case involving International New Service (INS) and the Associated Press (AP), in which INS was prohibited from free riding on the AP’s efforts by taking factual accounts derived from AP news stories and then presenting the news stories as INS’s own reports. International News Service v. Associated Press, 248 U.S. 215 (U.S. 1918). The doctrine was later severely limited by the Second Circuit in National Basketball Association v. Motorola, 105 F.3d 841 (2nd Cir. 1997), which addressed a collaboration between Motorola and a reporting service using pagers to transmit with only a few minutes delay game scores and data compiled from various sources and which competed somewhat with the NBA’s own efforts at packaging and selling games data in more or less real time. The NBA court articulated a multi-factor test for when a hot news misappropriation claim would survive copyright law preemption and ultimately concluded that the hot news claims asserted by the NBA were preempted by copyright law because the actions complained about by Motorola, among other things, did not involve any free riding and thus did not satisfy the elements of a hot news claim. Read the rest of this entry »