The AP's "hot news" lawsuit lives on; are scoops "quasi-property?"

A New York federal judge ruled Tuesday that The Associated Press can sue its competitors not merely for copyright infringement, but for a "quasi property" right in the news known as the "hot news" doctrine. See the AP's own coverage.

Well, let it not be said that I fell down on the job when "hot news" crossed my beat. I took a look at both sides' motions and the judge's ruling to learn more about the case. The doctrine raises some questions for me about journalistic practice and ethics. And, it has some interesting history to boot.

According to 2nd Circuit law quoted in the order in this case [PDF], a "hot news" misappropriation claim is viable when:

(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;

(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.

Personally, I can't see how all five of these don't apply to any news organization that's writing a story that follows a "scoop" by a competitor. 

It's quite common for editors to ask reporters to "match" a story that has been published or broadcast by a competitor by re-tracing the facts, and often the sources, of the "scoop." As long as it's all re-reported and re-written, that's fair game. But the criteria of a "hot news" claim are still met; because newsgathering still costs money, the information is still time-sensitive (that's why we're rushing to get the second-day story), and it could still be thought of as  "free-riding" if the second news outlet is just publishing a do-over of the themes, sources, ideas, in the first article—and such second-day stories could reduce the incentive to get scoops. (Although "substantially threaten" might be a reach.) It's all a bit theoretical, since individual scoops aren't really worth that much money, but it does seem like "hot news" misappropriation claims could allow any scooper to sue the still-competing "scoopee."

Now in this case, the AP argues that the defendant, All Headline News (AHN), has no "newsgathering" operation at all, and that it just re-writes AP articles shortly after they're published on various Internet sites. But that seems irrelevant to the analysis presented in this order.

The History of "Hot News"

The "hot news" doctrine that The Associated Press now wants to enforce is actually a product of a much earlier AP litigation. "Hot news" originates in a lawsuit that AP brought 90 years ago against a competing news service, International News Service (INS), which was owned by Hearst and later became part of United Press International (UPI). "In 1918, INS was unable to provide its clients with news stories from the war zones because, having been accused of violating wartime censorship restrictions, it was barred from use of the British and French mail and cables," writes the AP in its brief against AHN. INS solved that problem by grabbing early editions printed in AP newspapers and sending them to its own clients. INS even bribed employees of the AP and AP member newspapers to get AP's news before it was published. (And yet, the AP notes—"Unlike AHN, INS was a real news service, with reporters who gathered the news.")

Ultimately, the Second Circuit found that AP had a property right, separate from copyright, in the news that it sold, "arising from the labor and expense involved in its gathering and disseminating that news." This right could only be used against competitors and only lasted as long as the news had commercial value. The case then went to the Supreme Court, which voted 5-3 in favor of the AP's "quasi property" and upheld the 2nd Circuit decision. 

Justice Brandeis wrote in dissent:

[T]he fact that a product of the mind has cost its producer money and labor, and has a value for which others are willing to pay, is not sufficient to ensure to it this legal attribute of property.  The general rule of law is, that the noblest of human productions – knowledge, truths ascertained, conceptions, and ideas – become after voluntarily communication to others, free as the air to common use.

International News Service v. Associated Press, 1918.

That decision is no longer federal law, for reasons I won't get into, but it has been integrated into the common law in several states, including New York, where this case is being litigated. AHN argued that the dissenters' view was ultimately victorious, because of a later decision, Feist Publications. In that case, the court made it clear that it was perfectly legal to copy a phone book, which held uncopyrightable facts, regardless of how much hard work goes into making a phone book. (And the AP does go on in this case about the time and expense of its newsgathering operation.)

"The views of Justices Holmes and Brandeis have ultimately prevailed, and INS has been filed away as an accident of history.  To the extent any state law still attempts to breath life into the case or its doctrine, it too must fall."

AHN also argued that the "hot news" doctrine was just meant to apply to bad actors like INS, which bribed AP employees and intercepted AP telegraph messages. Successful "misappropriation" claims involved confidential information not yet released to the public, and recent court rulings have only found misappropriation where there was "fraud or deception, or an abuse of a fiduciary or confidential  relationship." It argued that despite all the AP's rhetoric about its newsgathering operation, all it had was a copyright claim (which is still alive, and AHN has said it will contest vigorously.) 

Interestingly, AHN mentions in a footnote the AP's controversial copyright campaign against bloggers, even citing BoingBoing, in a July 2008 motion: "Within the past month, the AP has apparently sent threats to various third parties, such as bloggers, for doing nothing more than copying one or two paragraphs of AP content (which virtually anyone would consider a fair use under copyright law). The AP has also apparently recently begun a “licensing” program in which it demands extortionate royalties from anyone who copies merely five words or more from an AP story, regardless of fair use." (See p.1, AHN Reply, PDF]

The AP notes that AHN has no news operation at all, and says its employees just browse the Internet scooping up AP copy and re-writing it. AP also accuses AHN of paying its writers badly, and says the company is now "off-shoring" preparation of AHN news stories to the Phillippines and Malaysia. (But paying writers poorly, I happen to know, is not a crime.)

AP lawyers explain their support for "hot news" lawsuits: "Today more than ever, the public needs the hot-news doctrine to protect its access to news. News happens globally, in conflict zones and disaster areas. Most of the time, the reporter has to go to the news, often by overcoming various barriers to access. To collect this news requires massive, continuing investments by news services... they must be able to recoup their costs by selling their news stories to newspapers, websites, and other publishers. They cannot profitably do so in the face of parasites like AHN."

Judge Kevin Castel wrote that the defendants didn't have any good reasons why the most recent 2nd Circuit case on this issue should not apply here. In that case, the NBA was allowed to use the "hot news" doctrine to sue Motorola for transmitting its basketball game scores. (Castel's order linked below)

The Associated Press is represented by DLA Piper. All Headline News Corp. was represented by Darby & Darby until September 2008, and is now represented by Brian Caplan of Caplan & Ross.

UPDATE: Eric Goldman has legal analysis of this case, including thoughts on the non-"hot news" claims.

The Associated Press v. All Headline News Corp. et al, 08-cv-00323-PKC, S.D. New York.

• First Amended Complaint [PDF]
• Order [PDF]

Photo: La Prensa, Panama / J. Mullin

Comments

[Tortmaster]

Joe: "Personally, I can't see how all five of these don't apply to any news organization that's writing a story that follows a "scoop" by a competitor."

The important element for you to consider is free riding (iii). By "re-tracing ... re-report[ing] and re-writ[ing]", you were expending effort and thus not free riding.

[Joe Mullin]

Tortmaster,

Thanks for your comment. The re-reporting certainly involves expended effort, but so does AHN's work, which is alleged to be mere re-writing.

I don't know what would meet the legal definition of "free riding," if there is one. But I do think some journalists definitely think of "re-reporting" as a kind of free riding, especially if the first article was an investigative or "think piece."

Finding the right sources--a particularly knowledgeable expert, the victim of a crime--can take a lot of reporting legwork. Not to mention just having an interesting story idea.

[Ross Marci]

Joe.

The whole AP thing has been something I've been watching ever since they tried to take on bloggers.

The AP has certainly been trying to re-frame accepted fair use principles recently as you touched on before.

News people all the time make reference to stories written by others. I found some links on a Poynter

"AP No Angel In Copyright Fight"
http://www.poynter.org/article_feedback/article_feedback_list.asp?user=&id=145478

It's also fair to say that AP engages in much of that same behaviour. Doesn't AP take quotes from others sometimes with nothing more than a "According to reports" attribution? ....and didn't AP offshore news operations to Bangalore?

Smells rotten to me... This really looks like AP is certainly just trying to crush a small competitor.. If I were AP I wouldn't want to go to a jury with this. They could end up losing big.

[Davis Freeberg]

The problem that I have with this lawsuit is that I don't believe that the AP would stop reporting news, if people are allowed to "misappropriate" their articles. There is a lot of value in being first and breaking a story and while not everyone is going to give you credit, enough will to make sure that the original content creators are recognized for their work.

To argue that reporting would somehow die without these protections seems suspect to me. Personally, I think that the AP is being pretty short sighted on this one. When they went after the bloggers, I decided to put a moratorium on links to the AP from my own social network. They probably don't care about the pitiful traffic I can send them from my blog, but there are plenty of other pitiful bloggers who understand what it means to be part of the larger conversation. While I can understand why Hollywood studio execs have struggled to move past their dinosaur era, I would have thought that journalists would be more progressive about the internet.

The AP has essentially taken on the role of the RIAA for print. In the short run, it may net them a few legal protections, but in the long run they're going to lose a big chunk of their readers, who enjoy the new media world that we live in.

If I was an AP member, I'd be doing a lot more than demanding fee reductions. Contrary to their arguments, it is their current management, not the AHN that are causing the damage to their brand.

[Joe Mullin]

Davis and Ross, thanks for the comments.

The AP's copyright spat with bloggers was certainly ham-handed. But, that didn't end up anywhere near a courtroom, and I think at this point any comparison with RIAA (with 30,000 copyright lawsuits to its name) is an overstatement.

I also think that if AP's allegations against AHN are true -- and it bears repeating they are only allegations -- AHN's business could look quite bad in a jury trial. Our culture has a very dim view of copying -- even the kind of copying that's perfectly legal.

Finally, like Davis, I am skeptical of how much AHN's business really hurts the AP's bottom line. If the AHN business model truly works as the AP describes it, I wonder who AHN's clients are.

[Ross Marci]

Joe:

Interesting comments. And it raises a couple of questions.

Either AHN doesn't really operate like AP is alleging, and AP is simply trying to defame and crush a smaller competitor in the courts.

or

AP has declined so far that they are truly harmed by a small company. In which case, AP has so much more to worry about than a business like AHN's.

And Joe.. I agree that copying is bad, however news people refer and attribute news to other news entities all the time.... It is common and accepted and there are rules to this I am sure. Part of AP's suit was that AHN was attributing the Associated Press. AP called that a trademark violation, however if AHN didn't do that attribution it really would be plagiarism. Damned if you do and damned if you don't I guess.

But you know what I find as really interesting here.. so far the only valuable insight and commentary on this has come not from the Associated Press (who's articles on this lawsuit read like propaganda) or from AHN (who has not released any news) but from blogs and bloggers.

[Ken L.]

While there's an initial backlash against the AP, government protection of some of the fruits of newsgathering could help save journalism.

As newspapers die off as online eyeballs fail to support reporters' salaries, one option for some is a paid model like the WSJ.

If a company could hire 10 cheap writers to log onto wsj.com every morning, re-write the pieces to avoid a pure copyright claim and post them on a free site, it would cost the Journal millions in lost revenues. If the real news gatherers have no ownership of their labor, then journalism is in trouble.

Just a thought.