Hot News Misappropriation Still Lives

The District Court of the Southern District of New York has applied the doctrine of “hot news” misappropriation in the context of Internet based news headlines. The doctrine was considered by the court to deny a motion to dismiss Associated Press’ claim against All Headlines News, an Internet based news headline aggregation service. The decision is an interesting reminder of the existence of misappropriation in some US states as a separate, but similar, cause of action to breach of copyright.

Legal context The doctrine of hot news misappropriation was established as a type of unfair competition in 1918 by the US Supreme Court in International News Service v Associated Press. The doctrine serves to protect the ‘quasi-property’ rights of news-gathering organisations in breaking news – time-sensitive content that quickly loses value as it comes into the public realm. Since its origin, misappropriation has survived various changes to the ways in which Federal and State laws interact, albeit in a narrower niche (described in NBA v Motorola):

(1) a plaintiff generates or gathers information at a cost; Technology

(2) the information is time-sensitive;

(3) a defendant’s use of the information constitutes free riding on the plaintiff’s efforts;

(4) the defendant is in direct competition with a product or service offered by the plaintiffs; and

(5) the ability of other parties to free-ride on the efforts of the plaintiff or others would so reduce the incentive to produce the product or service that its existence or quality would be substantially threatened.

Facts Being a pre-trial motion, the facts as pleaded by AP were assumed as being true and inferences were drawn in favour of the plaintiff. Having said that, many of the facts relevant to the “hot news” decision are relatively uncontroversial as relevant to application of the doctrine.

AP is a long established and well known news organisation. AP submitted that it goes to great effort and expense to report original news from around the globe. AHN in contrast is focused on providing news content feeds for paid subscription. AHN’s business was based (in part) on re-writing AP’s headlines for publication throughout its distribution network. One persuasive fact was that AHN didn’t undertake significant research themselves in creating the news stories.

Analysis The District Court confirmed that a cause of action for “hot news” misappropriation remains viable under New York law, and is not pre-empted by federal law, where the NBA test is met.

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