Attorney Steve® copyright law essentials - The "Hot News Doctrine"
The "Hot News" Doctrine: A Legal Analysis (Introduction)
The "Hot News" doctrine is a legal theory that aims to protect time-sensitive factual information from being misappropriated by competitors or third parties. This doctrine originated from the New York Court of Appeals' ruling in the International News Service v. Associated Press (INS v. AP) case in 1918. Over the years, several cases have been litigated under this legal theory, solidifying the doctrine's applicability in copyright law. This blog will provide an ianalysis of the "Hot News" doctrine, exploring its origins, core principles, and practical implications. Additionally, we will review selected cases that have shaped the doctrine and examine their outcomes.
I. Origins and Development of the "Hot News" Doctrine:
The "Hot News" doctrine emerged from the INS v. AP case, which involved INS copying news stories from AP bulletins without authorization. The Court recognized that such actions constituted "quasi-property rights" and established the first legal precedent for the doctrine. While not explicitly part of federal copyright law, courts have invoked the "Hot News" doctrine as a means to protect certain factual information.
"Prompt knowledge and publication of worldwide news is essential to the conduct of a modern newspaper, and, by reason of the enormous expense incident to the gathering and distribution of such news, the only practical way in which a proprietor of a newspaper can obtain the same is either through cooperation with a considerable number of other newspaper proprietors in the work of collecting and distributing such news, and the equitable division with them of the expenses thereof, or by the purchase of such news from some existing agency engaged in that business."
II. Core Principles:
1. Misappropriation of "Hot News":
The "Hot News" doctrine applies in cases where a defendant, without authorization, misappropriates factual news from a plaintiff who expends substantial efforts to gather and present that information. To establish a claim under the doctrine, plaintiffs must demonstrate that the defendant's actions constitute free-riding and threaten the economic value of the plaintiff's news.
2. Time-Sensitive and Asset-like Nature of "Hot News":
The doctrine recognizes that news, particularly time-sensitive information, has asset-like qualities, much like intellectual property. Plaintiffs invest significant resources, skill, and labor into generating timely news content. Consequently, such investment should receive limited protection against misappropriation.
III. Litigated Cases:
1. Associated Press v. All Headline News Corp (APHW) (2009):
In this case, AP sued APHW for misappropriation of "hot news." APHW had copied AP's stories, modified headlines, and published them as their own. The court ruled in favor of AP, finding that APHW engaged in unfair competition and violated AP's quasi-property rights under the "hot news" doctrine. This decision further reaffirmed the applicability and importance of the doctrine.
"This action arises out of the activities of All Headline News Corp. ("AHN"), an online venture that disseminates news reports to customer web sites, including reports of breaking news. The Associated Press ("AP"), which describes itself as "one of the world's oldest and largest news organizations" and "the gold standard' of objective journalism" brings this action alleging that the defendants have engaged in "free riding" on the AP's news articles. Specifically, it alleges that defendants have unlawfully copied and altered AP news stories in violation of the federal Copyright Act, 17 U.S.C. §§ 106, the Digital Millennium Copyright Act, 17 U.S.C. § 1202, the Lanham Act, 15 U.S.C. §§ 1114 1125(a), and New York common law. Pursuant to Rule 12(b)(6), Fed.R.Civ.P., the defendants move to dismiss all claims except Count Two, which alleges copyright infringement. For the reasons explained below, the defendants' motion is granted in part and denied in part.
2. Barclays Capital Inc. v. TheFlyOnTheWall.com (2011):
This case involved the "hot news" doctrine's application to financial news. Barclays and other financial firms sought an injunction against TheFlyOnTheWall.com, a financial news aggregator, alleging misappropriation of time-sensitive research recommendations. The court issued a preliminary injunction, emphasizing the unique harm caused by the aggregation of "hot news" in the financial sector and affirming the doctrine's relevance.
According to Wikipedia:
"Hot-news misappropriation as a cause of action originated from International News Service v. Associated Press wherein the Supreme Court held that hot news, defined as time-sensitive information, is protectable as "quasi-property." This misappropriation doctrine was developed further with the aim to "protect costly efforts to gather commercially valuable, time-sensitive information that would otherwise be unprotected by law." Significantly, the 'hot' news doctrine is concerned with "the copying and publication of information gathered by another before he has been able to utilize his competitive edge."
Given that the Copyright Act of 1976 deals specifically with copyright misappropriation for original works, different judges' holdings questioned the tort of hot-news misappropriation as a cause of action. These discussions included copyright protection as only belonging to the realm of originality and not effort as well as holdings that the creative organization of information was copyrightable but not the information itself. Seventy-nine years later, National Basketball Association v. Motorola, Inc. ("NBA"), provided answers to the questions that preceded it and also provided a five-element test for determining hot-news misappropriation.
Test for determining hot-news misappropriation
In Barclays Capital Inc. v. Theflyonthewall.com, Inc., the court used the five-element test set out in NBA, which was cited in the District Court's opinion as follows:
1) A plaintiff generates or gathers information at a cost;
2) The information is time-sensitive;
3) A defendant's use of the information constitutes free riding on the plaintiff's efforts;
4) The defendant is in direct competition with a product or service offered by the plaintiffs;
5) 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 "Hot News" doctrine, originating from the INS v. AP case, has become an influential element of copyright law. It aims to protect the property-like interests of news organizations against unfair competition and free-riding. Over the years, courts have recognized the doctrine's applicability and attempted to refine its scope and limitations.
Through cases such as AP v. APHW and Barclays Capital v. TheFlyOnTheWall.com, courts have consolidated and reinforced the need to protect timely factual information. However, variations in outcomes, as seen in NBA Properties v. SportRadar and theFlyonthewall.com v. CNBC LLC, highlight the ongoing evolution of this doctrine. While the "Hot News" doctrine complements traditional copyright protections, its precise boundaries and applicability may continue to warrant clarification in future legal proceedings.
Beware of Copyright Preemption invalidating state law claims
In the case of Greer vs. Fox, a Plaintiff lost on a motion to dismiss as the Court found his claims of hot news misappropriation were misappropriated by Federal Copyright Law. This decision highlights the importance of engaging competent and experienced copyright counsel to assist you BEFORE YOU FILE YOUR LAWSUIT.
Contact a California Media and IP Law Firm
If you are involved in a dispute over another company stealing your news and headlines and reformatting it for personal financial gain, contact us to discuss your case at (877) 276-5084 or fill out our contact form and we will contact you.