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Ben Marks, Weil Gotshal & Manges
1. Introductory Remarks on Newspublishing
and Fair Use
Benjamin E. Marks
Copyright & Technology 2010
py g gy
New York, NY
June 17, 2010
Weil, Gotshal & Manges LLP
2. Protecting News Content
Copyright Law
Federal law
Protects expression, but not facts or ideas
Tension with First Amendment resolved by the Fair Use
doctrine
Statutory damages & attorneys fees available
The “Hot News” Misappropriation Doctrine
State-law judge-made offshoot of the general law of
State law, judge made
unfair competition
Can be used to protect facts but only for a very limited
window
i d
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3. Fair Use
Fair use is an affirmative defense to copyright
infringement
Nonexclusive list of factors to be considered in
determining whether copying was fair:
purpose and character of the use
nature of the copyrighted work
t f th i ht d k
amount and substantiality of the portion used
effect of the use upon the potential market for or value
of the copyrighted work
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4. New York Misappropriation Law
Usually invoked by a plaintiff who has what she considers
something of commercial value used or usurped b
thi f i l l d d by
another without compensation
Used by courts to fill in some of the gaps between other,
more specific forms of IP protection
Highly fact-specific and dependent on fact-finder’s view of
“fairness”
“f i ”
Valuable (but unreliable) source of protection for
information ge e ated by labor, s , and investment o
o at o generated abo , skill, a d est e t of
resources
Some types of misappropriation are preempted by Section
301 or th C
the Copyright A t
i ht Act
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5. Elements of a “Hot News” Claim
Hot News
The Second Circuit has articulated a five-part test that “hot
news” claims must satisfy t survive copyright preemption:
” l i t ti f to i i ht ti
a plaintiff generates or gathers information at a cost
the information is time-sensitive
time sensitive
a defendant’s use of the information constitutes free-riding on
the plaintiff’s efforts
the defendant is in direct competition with a product or
service offered by the plaintiffs
the ability of others to free-ride on the efforts of the plaintiff or
others would so reduce th i
th ld d the incentive t produce th product
ti to d the d t
or service that its existence or quality would be substantially
threatened
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6. Application of the “Hot News” Doctrine
Hot News
The landmark case: INS v. AP, 248 U.S. 215 (1918)
There have been relatively few true “hot news” cases
since INS
Only one “hot news case tried to a decision on
hot news”
equitable remedies:
Barclays Capital Inc. et al v. Theflyonthewall.com, __ F.
Supp.2d __, 2010 WL 1005160 (S D N Y M 18 2010)
S 2d (S.D.N.Y. Mar. 18,
(appeal pending)
Other noteworthy recent cases:
Associated Press v. All Headline News Corp., 2009 WL
382690 (S.D.N.Y. Feb. 17, 2009)
Dow Jones & Co. v. Briefing.com, No. 10 Civ. __ (S.D.N.Y.)
(filed April 20, 2010)
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7. Barclays Capital Inc. et al v. Theflyonthewall.com, __ F.
Supp.2d
Supp 2d __, 2010 WL 1005160 (S.D.N.Y. Mar 18 2010)*
(S D N Y Mar. 18, 2010)
Barclays Capital, Merrill Lynch, & Morgan Stanley sued Fly
for copyright infringement and “hot news” misappropriation
hot news
arising out of Fly’s distribution of plaintiffs’ equity research
recommendations.
Fl ’ prior practice h d b
Fly’s i ti had been t publish verbatim or near-
to bli h b ti
verbatim excerpts of research reports.
Fly’s continuing practice through trial was to publish
“headlines” of the research recommendations.
Cross-motions for summary judgment denied.
Bench trial before Judge Cote in March 2010
2010.
______________________________
*Speaker is counsel for Plaintiffs-Appellees
Speaker Plaintiffs Appellees
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8. Barclays Capital Inc. et al v. Theflyonthewall.com
(cont.)
(cont )
Copyright Infringement Claims
Liability conceded shortly before trial
Fly’s litigation position on infringement claims was
“objectively unreasonable” Slip Op. at 45 (citing
Wainwright Secs., Inc. v. Wall Street Transcript
Corp., 558 F.2d 91 (2d Cir. 1977))
p, ( ))
Relief
permanent injunction
statutory damages
prejudgment interest
attorneys f
fees
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9. Barclays Capital Inc. et al v. Theflyonthewall.com
(cont.)
(cont )
Hot News Misappropriation Claims
The Record Evidence
Plaintiffs generate information at a cost
Time-sensitivity
y
Free-riding
Direct competition
Substantial threat to the existence or quality of the product
Principal Defenses
First Amendment
No free riding
free-riding
No competition (Fly not an investment bank)
Insufficient proof of actual, quantifiable damage caused directly
by Fly (hey others do it too)
(hey,
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10. Barclays Capital Inc. et al v. Theflyonthewall.com
(cont.)
(cont )
Scope of Injunctive Relief Against Misappropriation
Carefully crafted and narrow
Limited period of exclusivity for plaintiffs to disseminate their
recommendations
pre-market open recommendations: until 10am or half-hour
after NYSE opens
mid-day recommendations: two hours after release by clients
y y
Exception for “non-systematic, contextual reporting after the
market opens”
Possible reevaluation after one year if Fly can demonstrate
that plaintiffs have not taken reasonable steps to restrain
similar activity by others
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11. What Does the Future Hold?
More “hot news” litigation
Appeal in Barclays Capital
Numerous amici weighing in including, among others, the
Associated Press the New York Times the Washington
Press, Times,
Post, the Newspaper Association of America, Dow
Jones, Google, and Twitter
Dow Jones & Co v. Briefing.com
v Briefing com
Proposed legislative remedies
federal “hot news” tort
hot news
amendment of Copyright Act
Ongoing search for business solutions
Weil, Gotshal & Manges LLP