Barclays Capital v. TheFlyOnTheWall.com [1]

TheFlyOnTheWall.com is, according to its website [2],  a subscription-based investment-news service that "filter[s] through market information" to assist investors. In mid-2006, a group of investment firms brought suit against FOTW over the latter's use of the firms' investment research and recommendations. FOTW republished (sometimes nearly verbatim) various recommendations and reports created by the investment banks, charging a subscription fee for access to the collated information.

The firms brought suit against FOTW, alleging both copyright infringement (for the reports copied nearly verbatim) and "hot news" misappropriation (for content that contained the substance of the firms' recommendations but did not copy the text). FOTW eventually dropped its challenge to the copyright claims, and the firms were awarded a total of $12,750 in statutory damages and an injunction against further infringement (plus pre-judgment interest and some attorneys' fees).

The remaining question, once the copyright claims were decided, involved New York's recognition of a claim for "hot news" misappropriation and whether or not such a claim is preempted by federal copyright law.  Notably, FOTW voluntarily waived its First Amendment defense to the "hot news" claim.  The trial court eventually ruled that there was no preemption, found (in a bench trial) for the firms, and permanently enjoined FOTW from reporting the firms' recommendations for a period between 30 minutes and 2 hours each morning.

On June 20, 2011, the Second Circuit reversed and vacated the permanent injunction. The Court ruled that the firms' "hot news" claims were in fact preempted by federal copyright law but only on the facts of the case, holding that the record below did not support a finding that there was an "extra element" of FOTW's conduct that would allow New York state law to punish that conduct without running afoul of preemption.  Specifically, the Second Circuit held that FOTW did not "free-ride" on the firms' work, because it was conducting a separate function -- collating and gathering the firms' recommendations -- at its own expense.  Critically, the Court found that the firms were not reporting the news when they announced their recommendations; rather, the Firms were creating the news and FOTW was doing the separate work of breaking that news. A concurrence argued that FOTW was not in direct competition with the firms.