AP Joins Brief in Potentially Groundbreaking Legal Case

By: Shawn Moynihan

The Associated Press has joined a who’s-who list of news organizations in an brief related to a case that, depending upon the ruling, could have greater ramifications on how news aggregators can redistribute others’ original reporting.

Barclays Capital, Morgan Stanley and Merrill Lynch had filed suit against theflyonthewall.com, a financial news aggregator, claiming that it was obtaining and disseminating critical information — in particular, its daily stock recommendations — and unfairly damaging the firms’ business in the process. In March, the firms scored a victory when federal judge Denise Cote issued an order limiting the republication of the firms’ stock recommendations by the site.

Judge Cote based her ruling on the “hot-news” misappropriation doctrine recognized under New York state law. This legal principle, which dates back to 1918 and came out of a landmark case involving the AP, can be used as protection against the unauthorized copying and redistribution of factual information otherwise not covered by the Copyright Act.

In April, theflyonthewall.com filed a plea with the U.S. Court of Appeals for the Second Circuit, arguing that the injunction would force it out of business. On May 19, the appeals court granted a stay of the injunction and an expedited appeal, with briefs due to be filed by July 26.

The case marks the first time that the Second Circuit has had the opportunity to consider the “hot-news” doctrine in the Internet age — and a ruling in theflyonthewall.com’s favor could have significant legal impact on how aggregators can spread information reported by other parties.

An amicus brief is a document that can be filed in court by parties not directly related to the case being considered. In this one, the AP joins a list of news organizations that includes Gannett Co Inc., The New York Times Co., Time Inc., and the E.W. Scripps Co., as well as the Newspaper Association of America.

The “hot-news” doctrine, the brief states, “recognizes that free-riders who have not invested in a journalistic infrastructure can always undersell news originators. Unless generalized free-riding on news originators’ efforts is restrained, originators will be unable to recover their costs of newsgathering and publication, the incentive to engage in the news business will be threatened, and the public will ultimately have fewer sources of original news.

“Although they do not favor either side in this appeal, amici have a substantial interest in the opinion that the Court will render,” the brief continues. “That opinion will likely be given substantial consideration in future ‘hot-news’ litigation that is brought by news originators.”

AP General Counsel Srinandan Kasi, in speaking with E&P Wednesday, said, “We’re not taking any sides to this. We’re one of many news organizations on the brief.”

Meanwhile, in a separate brief filed Monday, Google Inc. and Twitter Inc. asked the court to overturn the injunction, stating that an ultimate ruling against the site could “seriously impair the distribution of factual information on the Internet” and violates the First Amendment’s ban on prior restraint: “In a world of modern communications technology, where anyone with a cell phone may disseminate news throughout the world even as it is occurring, the notion that a single media outlet should have a monopoly on time-sensitive facts is not only contrary to law, it is, as a practical matter, futile.”

Dow Jones & Co. Inc. filed its own amicus brief in the case, noting that the “hot-news” doctrine must be applied with great care. In addition, a collective amicus brief was filed by the Citizen Media Law Project, Electronic Frontier Foundation and Public Citizen Inc., asking the appeals court to be mindful that its application of the “hot-news” doctrine doesn’t hamper free speech protections.

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