Consumer Law

The Hot News Doctrine Rides Again

By Paul Levy

by Paul Alan Levy

Does a firm that expresses an opinion "own" that opinion, and thus have the ability to prevent others from reporting on the fact that the firm has expressed the opinion?  When a newspaper or other entity reports some facts, does it "own" the news and can it prevent others from truthfully reporting the same facts?  Granting ownership in important public facts would seem to be at odds with intellectual freedom, yet it takes resources to develop the facts and news organizations have been struggling to invoke concepts of ownership as a way to ward off competition for readers from online news web sites that re-report what the established media are reporting.

A ruling yesterday by District Judge Denise Cote holds the online financial reporting firm theflyonthewall.com liable for both copyright infringement and misappropriation for engaging on the business of obtaining trading recommendations issued by the financial analysts at major brokerage and investment firms and publishing them before the market opens.  As in many situations involving a hot news claim, the defendant was also republishing copyrighted content, thus making it much harder to sympathize with the defendant. At the same time, one might well wonder why copyright law does not provide sufficient protection for the public interest in encouraging the creation of the underlying intellectual work, and whether the threat to freedom posted by the hot news doctrine is justified as a matter of public policy by a need to foster the creative endeavor.  

Although the so-called hot-news doctrine has been acknowledged in strong dicta in a number of Second Circuit cases, most notably NBA v Motorola in 1997, that court has not issued a holding in the modern era on whether the Supreme Court?s World War I era ruling in International News Service v. Associated Press survives either copyright preemption or the First Amendment.  With the defendant declaring its intent to appeal, the case will likely set up a major test of this hoary doctrine.

Full post as published by CL&P Blog on March 19, 2010 (boomark / email).