Intellectual Property Law

Hot News Meets DMCA

By Sheppard Mullin

Hot News! ... for IP lawyers. Hot news is still good law. After 90 years, a dusty 1918 Supreme Court case (International News Service v. Associated Press, 248 U.S. 215 (1918)), often overlooked and generally ignored, was resurrected from the judicial cobwebs by Judge Castel. The case before Judge Castel involved the same news gathering icon and was styled Associated Press v. All Headline News Corp. (decided on February 17, 2009, United States District Court for the Southern District of New York, 08 Civ. 323(PKC)). As an added attraction, Judge Castel also weighed in on an increasingly diverse debate over what constitutes protected "Copyright Management Information," or "CMI," under the Digital Millennium Copyright Act (DMCA).

AP sued to prevent All Headline from taking its original news reports and redistributing them under All Headline's name. Unlike AP, All Headline does not do any original news gathering but, instead, hires people to locate news stories for re-publication. The re-publication is sometimes verbatim and is often made after some minimal rewrites and deletion of any copyright notices of AP or others. AP made a variety of copyright and unfair competition claims, most notably that the theft or misappropriation of its "hot news" or "breaking news" substantially destroyed the economic value of AP's news gathering service for paid subscribers. All Headline moved to dismiss.

Although preemption by the 1976 Copyright Act was touched upon, Judge Castel pointed out that the House Report, accompanying the 1976 Act, expressly states that hot news misappropriation was a branch of the unfair competition doctrine that was not preempted. See page 132 of the House Report, HR Rep. 94-1476, September 3, 1976. The viability of misappropriation had also been affirmed ten years earlier in National Basketball Association v Motorola, Inc., 105 F3d 841, 845 (2d Cir. 1997), which applied a five-part test:

1. Plaintiff generates or gathers information at cost.

2. The information is time sensitive.

3. The defendant's use is free riding on the plaintiff's efforts.

4. The defendant is in direct competition.

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

The five-part test provides a substantial hurdle but, in this case, a hurdle overcome by AP to defeat the motion to dismiss.

AP also defeated All Headline's motion to dismiss the DMCA claim alleging removal or alteration of AP's Copyright Management Information (CPI) which, in this case, meant the removal of AP's identifying byline and copyright notice. This, in fact, may have been the more controversial of the decided issues. A number of courts have taken the position that CPI, as contemplated by the DMCA's new media emphasis, only protected such CPI performed by the technological measures of an automated system. See, e.g., IQ Group, Ltd. v Wiesner Publishing LLC, 409 F. Supp. 2d 587, 597 (D.N.J. 2006); Textile Secrets International, Inc. v Ya-Ya Brand, Inc., 524 F. Supp. 2d 1184, 1201-02 (C.D.Cal. 2007). The DMCA defines CPI as encompassing "[t]he name of, and other identifying information about, the copyright owner of the work, including the information set forth in a notice of copyright." 17 U.S.C. sec. 1202(c)(3). Under the view of the two prior courts, relying heavily on the legislative history of the DMCA, the goals and purposes of the DMCA were directed solely to the digital regulation of copyrighted material embodied in electronic form.

Judge Castel took issue with these prior decisions and invoked the plain language doctrine. If the statutory language is clear, the court is limited to enforcing that language as written. Since finding nothing in the statutory text which limits the CPI's reach solely to electronically embodied, digital works, the Court found that the physical removal of a traditional, visually displayed copyright notice may violate the DMCA's CPI protection. Accordingly, the Court denied the motion to dismiss.

The AP/All Headline case is instructive for two reasons. It reminds us that often overlooked judicial doctrines like misappropriation of hot news can sometimes come to the aid of a potentially weak copyright case, such as one seeking to protect factual news stories, while at the same time exhorting us to consider "retro" applications of laws, such as the DMCA, which we might normally be inclined to believe only have applications in the digital realm. Perhaps more importantly, these two causes of action may aid in encouraging early settlement of such claims that have a copyright component, especially where the copyrights in question were not registered prior to infringement. Notably, neither the hot news doctrine nor CPI violation requires any registration as a prerequisite for suit. It also provides a potential end-run around the Supreme Court's decision in Dastar Corp. v Twentieth Century Fox Film Corp., 539 U.S. 23 (2003), which declined to extend Lanham Act protection to removal of the original production company's name when re-distributing a public domain television series. Just as important, if not more, the DMCA has its own special "statutory damage" provision that may be invoked whether or not the work, from which the CPI was removed, was itself ever registered for copyright. If nothing else, this latter "show me the money" approach may itself warrant closer attention.

Authored By:

Edwin Komen

(202) 772-5328

ekomen@sheppardmullin.com

Full post as published by Intellectual Property Law on March 06, 2009 (boomark / email).