Re: hot news

On 97-05-28, Steve Jamar <sjamar[_at_]law.howard.edu> wrote:
>
> After Feist and with changing technology I find it very hard to believe
> that copyright exists in facts. I also find it hard to believe that
> the misappropriation tort will protect non-secret facts. Neither the
> UTSA nor the Restatement protect such things. So I guess I disagree
> that the Hot News idea has much vitality.
>
> One regularly sees reports which begin "as the Washington Post will
> report tomorrow" on overnight news shows (e.g., MSNBC and CNN). This
> is taking the news before it is published in the paper. Isn't this a
> misappropriation under Bob Penn's interpretation? It certainly does
> not square with the misappropriation tort as it applies to trade secrets.
> Has it been expanded beyond that area? I've not specifically researched
> it of late, but it would seem to me to be hard to find a basis for
> misappropriation of *facts* in the absence of a contract or fiduciary
> duty.
>
> The fact that someone would sue hardly seems to be the test of legality -
> though such suits, like SLAPP suits could chill the practice, regardless
> of legality.
>
> I wonder, what is "systematic taking of news"? If I publish an online
> newsletter and I take all my facts from other newspapers and news sources,
> systematically, what is the misappropriation? It may violate journalistic
> ethics (as if there were any real journalism standards), or it may violate
> your or my or other's sense of propriety and fairness, but what is the law
> supporting such a proposition?
>
> I thought the hot news cases were wrongly decided when decided. They are
> nonsense now.
>
> NBA is wrong. Of course, this is just my position and the courts may make
> the new cause of action you proclaim, but I would then just argue that it
> is bad law and bad policy. I hope there are more suits and it gets
> settled, properly, in the brave new world of information.

  The fact that MSNBC or CNN may lead into a story by stating that "the Washington Post will report tomorrow" does not transform something into misappropriation. For instance, MSNBC, CNN and Washington Post are all members of the AP, and as such have certain consensual sharing arrangements. The acknowledgment given may be part of those arrangements.

As far as my proclaiming a "new cause of action," a cause of action for misappropriation of hot news was proclaimed by the Supreme Court [the AP v. INS case] in about 1909 [or 1919....sorry, I forgot the date]. While the cause of action has expanded and shrunk over the years, the Second Circuit proclaimed in the NBA case, 105 F.3d 841 (2d Cir. 1997) that AP v. INS remains good law albeit in narrow circumstances. Indeed, the legislative history of the 1976 Act reflects that Congress did not intend to preempt all forms of misappropriation claims and cited an AP v. INS "hot news" claim as an example of a claim that is not preempted. [Courts have long disagreed over the import of this piece of legislative history as it was offered in connection with a version of the statute that ultimately was enacted in different form].

Moreover, the mighty Feist case even cites the AP v. INS case.

Part of my confusion of your position is your statement that you "find it very hard to believe that copyright exists in facts." You are absolutely right....copyright does not exist in facts. The misapropriation tort is not aimed at copying in the same sense that copyright is and it does not protect expression. Rather, it protects the "time" value of hot news. The commercial value of hot news exists only for a short time. For instance, the stock exchanges charge high fees to obtain realtime quotes, but they are given away for free after a 15 minute delay. Once the quotes or the news are no longer hot, they may be disseminated freely.

If you do publish an online newsletter and you take all of your facts from yesterday's newspapers, I don't think you'd run to much of a risk. But, if you publish an online newsletter in which Reuters or AP stories appear minutes after they ran on the wire, I'd say that you very well may find yourself as a defendant in a misappropriation case. And, under NBA, there is a substantial risk that you would be found liable.

I'm sure that you're not alone in thinking that "NBA is wrong." But, it nevertheless is the decision of the Second Circuit! :)

Bob Penn
<thresshold[_at_]aol.com> Received on Wed May 28 1997 - 23:24:57 GMT