The Facts Ma’am, Just the Facts: Are they Fair Game?
Posted: November 17, 2010
A long-standing principle of copyright law is that facts are in the public domain and not subject to copyright protection. Websites, like Google News and the Drudge Report, that aggregate news headlines and excerpts from, as well as link to, other websites rely on this principle that facts are free. But recent cases and a revival of an old legal doctrine are casting some doubt on this business model. Although the facts may be free, how you express them can sometimes lead to unexpected liability.
“Hot news” misappropriation is a tort claim which was first recognized by the U.S. Supreme Court in 1918 in Int’l News Serv. v. Associated Press. It is being revived recently among news-reporting organizations for the purpose of protecting information conveyed as “breaking news.” Just last March, a court found that Flyonthewall.com, an Internet-based financial news website which aggregates and publishes stock recommendations taken from various Wall Street firms, was liable for misappropriation by a federal court in New York, in Barclays Capital Inc. v. Flyonthewall.com. The court found that this particular news aggregator was engaging in “free-riding activity that is directly competitive with the [Wall Street] Firms’ production of time-sensitive information, thereby threatening their incentive to continue in the business.”
The line between a copyright infringement and a successful hot news misappropriation can be blurry. A federal court in Maryland, in the case of Agora Financial, LLC v. Samler, recently made this distinction:
The distinction, therefore, between the rights protected under a copyright infringement claim and a “hot news” misappropriation claim is that copyright law protects a copyright holder’s exclusive right to reproduce, distribute, perform or display “original” material while the “hot news” misappropriation theory protects an individual’s exclusive right to profit or otherwise benefit from the labor expended in discovering, gathering and generating certain “non-original” material, such as factual information.
The court found that the financial investment recommendations at issue were not “hot news,” but more likely subject to copyright protections. The court noted, “[A] recommendation to invest in a company is not a fact, but instead an ‘original’ work, which . . . entails ‘judgment’ and ‘creativity.’ . . . While plaintiffs may be able to protect their ‘original’ investment recommendations under federal copyright law, they cannot protect these recommendations under the ‘hot news’ misappropriation theory.”
On their surface, Barclays and Agora both involve use of another’s financial investment advice, but each had a different outcome on whether the content at issue was subject to copyright law or the tort claim of hot news misappropriation. What is for sure, hot news misappropriation is highly factually dependent; there is no bright-line rule.
As “user-generated content” takes over the World Wide Web, seemingly everyone and their grandmother (literally) has a FaceBook page. More and more companies (and law firms!) are entering the “blogosphere,” trying to carve out their niche and, hopefully, provide something valuable for readers, rather than just generating more white noise. But, in doing so, users generating content – whether individuals or companies – need to be careful that they are not using someone else’s content in a way that could give rise to liability, be it copyright infringement, hot news misappropriation or some other claim. It may be obvious to everyone that the blatant copying of someone else’s opinions or analysis is off limits. But just because you are re-posting “facts” doesn’t necessarily get you off the hook.