News scraper Meltwater loses US court case

Paltry traffic ruled no compensation for lost fees

Headline-scraper Meltwater has lost another court case, this time in the US. The Associated Press brought the case in a federal court, with Judge Denise Cote arguing that the service had stolen an unfair advantage over its rivals by refusing to take out a license for headlines and excerpts.

In 2011 the aggregator lost a case in which it argued that it doesn't need a license to distribute headlines. The UK copyright tribunal last year judged that around 30 per cent of the material Meltwater supplied to clients was newspaper headlines and excerpts – which by law require the company to buy an NLA (Newspaper Licensing Agency) license.

The NLA began to go after aggregators in 2009, reckoning that commercial services such as NewsNow charge clients £95 per month for tailored clippings. The agency has now licensed most aggregators and also businesses directly. The UK rates are regulated by the Copyright Tribunal to stop the industry price-gouging, and charities get a free or reduced license. For businesses, the proposition is simple: employ an intern or in-house clipper, or use a licensed aggregator.

"Meltwater has obtained an unfair commercial advantage in the marketplace and directly harmed the creator of expressive content protected by the Copyright Act," Cote said in her verdict. "Permitting Meltwater to take the fruit of AP's labor for its own profit, without compensating AP, injures AP's ability to perform this essential function of democracy," she added.

In the UK, Meltwater argued they were "driving traffic" to UK newspaper sites, sending 94,000 click throughs to the papers from their aggregator in one year. However, since the Daily Mail website alone receives (PDF) 3.5 million impressions every hour (it's more in a typical weekday hour) that isn't a meaningful number.

Meltwater said in a statement that it will appeal the decision. The NLA's blog is over here.

Newspapers need every bit of good news they can get, these days. ®

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