Media organizations weigh in on 'hot news' case

More than a dozen media organizations are urging a federal appeals court to recognize that “hot news” misappropriation claims are an important legal remedy to protect news organizations’ content from Internet aggregators that do not conduct original reporting.

Agence France-Presse, The Associated Press, The New York Times and The Washington Post are among the organizations that joined a friend-of-the-court brief filed Tuesday with the U.S. Court of Appeals in New York City (2nd Cir.) in the case Barclays Capital v. Theflyonthewall.com.

The case involves the once-obscure “hot news” doctrine, which was first recognized by the Supreme Court more than 90 years ago. The doctrine recognizes that a news organization can obtain an injunction against a competitor who continuously and systematically copies its news stories while they are still timely. Copyright law provides only limited protection for news stories because the law protects expression, not the underlying facts.

“Today, originators make most news stories available on the Web as soon as they leave the editor’s desk,” the brief states. “With a simple computer program and a few keystrokes, a free-rider can immediately copy that valuable news content from the Internet. The free-rider can then republish the originator’s news while it is still ‘hot,’ in a product that competes for public attention and revenue from such sources as advertising, subscriptions, and paid applications.”

Unless such free-riding is restrained, the brief states, news organizations won’t be able to recover their costs and will have little incentive to engage in original journalism.

However, in a separate filing, Google and social networking site Twitter argue against restricting the free flow of information by granting news organizations limited exclusivity to the facts. Reporting of truthful information is “one of the most protected forms of speech” under the First Amendment, the brief states.

The case in question involves three financial firms that sued financial news aggregator Theflyonthewall.com for “hot news” misappropriation. The firms claim the website took the firms’ investment research without authorization and redistributed the recommendations before the firms had a chance to share it with their clients.

A federal judge in March ruled that Theflyonthewall.com could not publish the firms’ pre-market research until 30 minutes after the stock market opened. Theflyonthewall.com also was ordered to wait two hours to publish research issued while the market was open. The Second Circuit has set aside the injunction pending an appeal by Theflyonthewall.com.

The news organizations’ brief does not take a position on whether “hot news” should apply in the case or whether a particular party should prevail. However, the Second Circuit’s opinion could have important implications for future “hot news” litigation that affects media companies.

The news organizations are asking the court to, among other things, craft an opinion that recognizes that the hot news doctrine remains necessary to protect the news industry’s incentive to gather and report the news. They are also asking the Second Circuit to reject the lower court’s suggestion that plaintiffs in hot news lawsuits have a duty to sue all free riders in order to protect their right to an injunction.

“A ‘duty to police’ would be particularly burdensome and unworkable,” the brief states. “Unauthorized aggregation of published news content (both automated and human-controlled) is widespread and continuous. Publishers cannot ‘police’ all these forms of misappropriation as a practical matter.”

The other news organizations that have signed on to the brief are: Advance Publications; A.H. Belo, which publishes several daily newspapers including The Dallas Morning News; Belo, which owns or operates 20 local television stations and two regional cable news channels; E.W. Scripps; Gannett; McClatchy; Newspaper Association of America; Philadelphia Media Holdings; Stephens Media; and Time.