Hot News Case - The Dialogue Continues

The purpose of copyright is to "promote progress."  We achieve this promotion by giving authors a limited monopoly over their works so that they may profit from them. This is what is known as "the incentive theory."  If we give authors the incentive to create works, they will create more of them, thus adding ideas and expression to the marketplace.  On the other hand, we don't give copyright protection to mere facts. It makes sense, because the facts rightfully belong to all of us.  Expanding copyright protection to mere facts would lead to the marketplace of ideas looking like a downtown after the Mega-lo-Mart opens up in the suburbs.

Nevertheless, we do all benefit from news organizations hard work in bringing us the facts.  If anyone can just free ride off of the Associated Press' work, then eventually they are going to stop providing them to us.  After all, the AP is a business, and as much public service as they provide, they are not a charity.

I read an excellent law review article on this subject a while back. See Ryan T. Holte, Restricting Fair Use to Save the News: A Proposed Change in Copyright Law to Bring More Profit to News Reporting.  Suffice to say that I get Holte's point, and I agree with the argument that the public is better served if there are news organizations competing to get the hottest news -- and they should be incentivized to do so.

It looks like Holte's theory gained a little traction this week. The Prior Art reports on Associated Press v. All Headline News Corp. and the Southern District of New York's finding that the AP might have a viable case for "hot news appropriation" if:

(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. (Source)
In International News Service v. Associated Press, 248 U.S. 215 (1918), the U.S. Supreme Court supported a similar theory, and in National Basketball Ass'n v. Motorola, 105 F.3d 841 (2nd Cir. 1997), the Second Circuit relied upon INS v. AP in holding that the "hot news doctrine" was something separate from copyright:
INS is not about ethics; it is about the protection of property rights in time-sensitive information so that the information will be made available to the public by profit-seeking entrepreneurs. If services like AP were not assured of property rights in the news they pay to collect, they would cease to collect it. The ability of their competitors to appropriate their product at only nominal cost and thereby to disseminate a competing product at a lower price would destroy the incentive to collect news in the first place. The newspaper-reading public would suffer because no one would have an incentive to collect "hot news." We therefore find the extra elements - those in addition to the elements of copyright infringement - that allow a "hot-news" claim to survive preemption are: (i) the time-sensitive value of factual information, (ii) the free-riding by a defendant, and (iii) the threat to the very existence of the product or service provided by the plaintiff. (Source)
I am certainly uncomfortable with any suggestion that the news can belong to any single author. On the other hand, I would hate for the marketplace for hot news and investigative reporting to close down due to an inability to profit from it. Holte's suggestion includes amending the Copyright Act:
[T]he amended provision should include these key points: (1) the protection would not extend to traditional news headlines—to allow third parties the ability to advertise a competitors story and link to it; (2) the protection would only last for twenty-four hours—so that after a reporter has realized a profit in his story, the story could subsequently be reproduced freely to allow the dissemination of ideas; and (3) the reporter’s rights in the story could not be used to restrict a purely nonprofit organization from posting the story. As with all laws, the enforcement and refinement of their meaning must come from the courts, with clear legislative intent from Congress as a guide. The legislative intent in this case would be clear in that Congress would be legislating to encourage news reporting by allowing reporters temporary rights in their stories, yet still allowing the dissemination of ideas by making the monopoly rights temporary and not comprehensive. (Source)

Holte's suggestion has some potentially troublesome First Amendment implications, which his article recognizes. But, this case gives some attention to the debate that Holte sought to begin -- we obviously have a problem that needs to be cured -- so hopefully this dialogue will heat up before the news agencies decide that it is no longer profitable to bother serving their Fourth Estate function.

(For more on the Associated Press' lawsuit, see the CMLP's legal threats database entry, Associated Press v. All Headline News.)


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