My prior post considered whether news aggregators such as the Huffington Post can be held liable for copying the opening paragraphs of news articles under copyright law. The main issue is whether such copying qualifies as fair use. But, even if fair use applies, and even if news aggregators suddenly cease copying sections of articles word for word, there is still another issue lurking. Specifically, are news aggregators liable under the laws of various states that retain the doctrine of “hot news” misappropriation?
I have already in this blog discussed a recent decision by the Second Circuit concerning the ongoing validity of hot news misappropriation lawsuits. These lawsuits allege that a defendant has copied factual information that is “hot news”—news that, in a bygone era, would literally be “hot off the press.” The most well-known case is International News Service v. Associated Press, a Supreme Court decision from 1918. In that case, the Supreme Court considered whether INS was liable for rewording AP stories and republishing them without attribution to AP. The Supreme Court held that INS was liable under a theory of misappropriation, as the majority viewed INS’s behavior to be a form of free riding that had the potential to cripple AP’s business model if left unchecked.
The Second Circuit decision in Barclays Capital Inv. v. Theflyonthewall.com, Inc. indicates that, based on Second Circuit precedent, hot news misappropriation lawsuits are not preempted by the Copyright Act. Theflyonthewall majority focused largely on their view that the defendant was not free riding because Barclays and the other plaintiffs were not “breaking news” but “making news” by stating their opinions on whether to buy, hold, or sell securities. The opinion also argued that the defendant in any case properly attributed the recommendations.
The stories published by news aggregators such as the Huffington Post are often about breaking news events, which makes the factual situation distinguishable from that of Flyonthewall. Based on the logic in the Second Circuit’s majority opinion, there is a much stronger argument that the news aggregators are free riding by republishing time-sensitive news stories and should therefore be found liable under the misappropriation doctrine. This is why, in a press release following the Second Circuit’s decision, the Associated Press trumpeted the decision as a victory for news publishers.
But it is still unclear how the decision will apply to news aggregators in future cases. Aside from the circumstances under which a news aggregator might be held liable under a theory of misappropriation, the preemption issue is not settled law throughout the nation. One of the notable aspects of the Second Circuit’s opinion was the suggestion in the concurrence by Judge Raggi that all hot news misappropriation claims should be preempted under the Copyright Law. She indicated that it while Second Circuit precedent precluded the Court from reaching this conclusion, she believed it to be correct. Will another court of appeals agree with this suggestion?
Beyond the preemption issue, there is also the argument that the hot news misappropriation doctrine is inconsistent with the First Amendment. The Second Circuit opinion did not reach this issue. But the amicus brief in the case squarely raised the question of whether the hot news misappropriation theory would lead to prior restraints in violation of the First Amendment. Google and Twitter jointly filed an amicus brief that argued this point. An amicus brief filed by the Citizen Media Law Project, the Electronic Frontier Foundation, and Public Citizen also argued in favor of this result.
If courts ultimately decide that how news misappropriation theories of liability are consistent with the Copyright Act’s preemption clause and do not run afoul of the First Amendment, then the scope of the tort is still unclear. Courts will need to address the following questions. First, what factors support a finding of free riding? Second, is there a requirement that plaintiff and defendant are direct competitors? The Second Circuit now seems to indicate that this is not a requirement, but other circuits may disagree. Beyond that, there is a question as to the extent of possible injury to the plaintiff’s business that is necessary for the hot news misappropriation doctrine to apply.
While the Second Circuit focused on free riding, it is not clear how its analysis will ultimately apply to the huge industry of news aggregators. The Huffington Post, for example, has its share of critics who express the view that it reaps tremendous financial gain from free riding on the hard work of traditional media outlets. But if the Huffington Post provides proper attribution for the source of the story, then, leaving aside the copyright law fair use issues, should that be sufficient for the Huffington Post to avoid liability? My own view is that, so long as the articles clearly attribute the original source of the news reporting and provide a link to the original article, that should be enough to avoid liability. Judge and legal scholar Richard Posner similarly argues that proper attribution should be the main focus of misappropriation law.
So long as the misattribution requirement means that an article must clearly indicate the original source of material, then news aggregators will continue to drive traffic to the original articles. This illustrates that the economics of reporting news on the Internet is fundamentally different from the world of news reporting that existed at the time the Supreme Court decided INS. It is not necessarily a zero-sum game anymore.
Too much protection to the original source of the news story is also not likely to benefit the public. Were the hot news misappropriation theory to be vigorously applied such that attribution was not sufficient many loyal readers of both traditional media and Internet news aggregators would have to wait to find out the most important news. The original source would have a monopoly for a period of time. In reality, news reporting does not work this way, which can only be a good thing. The public does not have to find the one and only news source that is responsible for reporting the most important news of the day.
Consistent with the origins of the hot news misappropriation doctrine, the requirement that there be proper attribution of factual information would only apply to the type of “hot news” information that involves time-sensitive news reporting. In practice, most news publications already make it their practice to do so. Thus, the requirement would not lead to any radical modifications to the business models of news publications. And it would be relatively simple in most cases for judges to decide whether a news story gave proper attribution. Finally, this rule would not suppress any reporting of factual information, and would not raise serious First Amendment questions regarding prior restraints.
It will be interesting to see whether this issue remains largely theoretical or whether the AP and other news organizations bring lawsuits that will soon bring lawsuits that will test the limits of the hot news doctrine. Were a court to conclude that news aggregators were liable, even though they did not commit any violations of copyright law, that would be huge news indeed.