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News gatherers urge court to protect 'hot news' doctrine

'Vital to a functioning democracy'

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Major US news organisations have filed papers with a New York court arguing that the controversial 'hot news' doctrine should be preserved and that they should be able to sue anyone who republishes their news quickly.

Associated Press (AP), Agence France-Presse (AFP), the New York Times, local paper giant Gannet and others have petitioned (pdf) the US Court of Appeals for the Second Circuit asking that their views be taken into account when ruling on the issue in a case about financial information.

The companies have filed a 'friend of the court' brief in the case, which involves financial services firms Merrill Lynch, Morgan Stanley and others.

In that case the financial firms produced research on stock markets which was used by Theflyonthewall.com as the basis of bulletins to its subscribers. The financial firms argued that the use of facts they had uncovered was a breach of their hot news rights.

The hot news doctrine is the product of a 1918 US Supreme Court ruling which sought to allow AP to benefit from the investment it had made in sending reporters across the world to report on the First World War.

International News Service (INS) was copying AP's stories but copyright law could not be used to stop the practice because it covers the expression of an idea, not the idea or fact lying behind it.

The Supreme Court gave AP and other news-gatherers a right that was almost like an intellectual property right over facts. Fact-gatherers were given a period of time in which nobody else could report facts that it had uncovered.

This was called the hot news doctrine and it made its way on to state and federal statute books until repealed at a federal level. Some states, including New York, retain it on their statute books, though.

The newspapers and news agencies have written to the Court of Appeals to urge it to take their interests into account when ruling on the Theflyonthewall.com case, and to preserve hot news rights.

"The doctrine provides limited but vital protection for [us] and other entities that invest in gathering, editing, and publishing fresh news," said the filing. "[Hot news] permits a news originator to obtain injunctive relief against an entity that systematically and continuously copies the originator’s published news while it is still timely, and then republishes that news in a product that competes with the originator’s own product.

"The [hot news] doctrine ultimately rests on the public interest. It 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," it said.

A lower New York court ruled that the hot news doctrine stood and that restrictions on when Theflyonthewall.com could not republish the financial firms' research for half an hour after stock markets opened and two hours after it was published, if markets were open at the time.

While the news organisations do not take a view on whether that ruling was right they have asked the Court of Appeals to consider their interests when ruling on the appeal from that decision.

"[We] urge the Court to craft its opinion with recognition that the 'hot-news' doctrine remains necessary to protect the news industry’s incentive to gather and report news," said the brief. "[We urge the Court to] reject the 'duty to police' imposed by the district court on appellees, and hold that a 'hot-news' plaintiff is not required to sue all misappropriators in order to preserve its right to an injunction."

The news organisations told the Court that the doctrine was essential for the full functioning of democratic society.

"The consequences of unchecked, widespread free-riding on news origination would be devastating to publishers and costly to society," it said. "At a minimum, originators will lose their incentive to continue expending resources to gather and deliver timely news to the public. newspapers and broadcasters that are economically weakened by free-riding cannot long carry out their primary mission – telling the public the truth about the powerful. They can be easily crushed or ignored by a hostile government funded by tax dollars, or hobbled by lawsuits brought by rich business interests."

Google and Twitter have also filed a brief to the court in the case arguing that the hot news doctrine is out of date and should not be maintained by courts.

"How, for example, would a court pick a time period during which facts about the recent Times Square bombing attempt would be non-reportable by others?" the companies said in their filing, according to news site Ars Technica. "News reporting always has been a complex ecosystem, where what is 'news' is often driven by certain influential news organizations, with others republishing or broadcasting those facts – all to the benefit of the public."

Copyright © 2010, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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