AP v. All Headline News: Applying the “Hot News” Doctrine to the Internet

The U.S. District Court for the Southern District of New York refused to dismiss most of the counts of the plaintiff’s complaint. In so holding, the court in Associated Press v. All Headline News Corp., ___ F. Supp. 2d ___, 2009 WL 382690, No. 08 Civ. 323 (S.D.N.Y. Feb. 17, 2009), confirmed the current viability of the “hot news” misappropriation doctrine first set forth by the U.S. Supreme Court in 1918, as well as that doctrine’s applicability to the Internet. Moreover, the District Court furthered a split in authority over the scope of the Digital Millenium Copyright Act’s prohibition against altering copyright management information.

Background

The Associated Press (AP) is a not-for-profit membership corporation that claims to be the oldest and largest news agency in the world, with about 3,000 reporters worldwide. AP distributes its new reports to thousands of new outlets. All Headline News (AHN) describes itself as “a leading provider of news, weather, and other content for web sites, wireless, digital signage, interactive applications, broadcast and print use.”

In January 2008, AP sued AHN, claiming that instead of using its own reporters,  poorly-paid AHM writers copy or rewrite breaking news they find on the Internet, including AP stories, distributing them as their own. AP claims that AHN’s practices infringe on AP’s copyright and violate AP’s quasi-property right in breaking news under the New York common law tort of “hot news” misappropriation. AP also alleges that AHN removes AP’s identification as the source of some reports in violation of the Digital Millennium Copyright Act. AP further alleged trademark infringement in violation of the Lanham Act, and unfair competition in violation of both the Lanham Act and New York law.

AHN filed a motion to dismiss which was largely denied by Judge P. Kevin Castel of the U.S. District Court of the Southern District of New York on February 17, 2009. Judge Castel Granted AHN’s motion as to the Lanham Act claims, but denied the motion as to all other counts. Associated Press v. All Headline News Corp., ___ F. Supp. 2d ___, 2009 WL 382690, No. 08 Civ. 323 (S.D.N.Y. Feb. 17, 2009).

The “Hot News” doctrine is alive and well

AP asserted that it has a “quasi” property right in “hot news,” as originally set forth in International News Service v. Associated Press, 248 U.S. 215 (1918), and that AHN was misappropriating that property. In International News Service, the Supreme Court determined that one news agency should not be able to appropriate and profit from the work of another. 248 U.S. at 239-241.

AHN argued that choice of law required the court to consider the “hot news” claim under Florida law, where AHN was incorporated and where it kept its principal place of business – Florida may not recognize the “hot news” doctrine and New York does. The court disagreed, finding that New York law applies since the plaintiff suffered the injury in New York. The court cited Schultz v. Boy Scouts of America Inc., 65 NY2d 128, 195 (1985) for the proposition that, “the place of the wrong is considered to be the place where the last event necessary to make the actor liable occurred.” Accordingly, New York, which does recognize the “hot news” doctrine, applies and the count could not be dismissed on that basis. 2009 WL 382690, *4.

AHN alternatively argued that the hot news doctrine cannot be viable under New York law because it is preempted by the federal Copyright Act. The court pointed to Nat’l Basketball Ass’n v. Motorola, Inc., 105 F.3d 841, 845 (2d Cir. 1997), which specifically held that the Copyright Act does not preempt the state law claim of hot news misappropriation. Accordingly, the court denied the motion to dismiss the hot news claim. 2009 WL 382690, *5.

DCMA claims not limited to “the technological measures of automated systems”

The AP alleged that AHN’s removal or alteration of copyright management information from its new s reports constituted a violation of the Digital Millenium Copyright Act (DMCA), as set forth in 17 U.S.C. section 1202(b). AP cites the DMCA as defining “copyright management information” as including (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. section 1202(c)(3).

AHN pointed to recent cases in New Jersey and California as determining, based on a review of the legislative history pertaining to the DMCA, that the DMCA should be construed to apply only “to protect copyright management performed by the technological measures of automated systems.” IQ Group, Ltd. v. Wiesner Publishing LLC, 409 F. Supp. 2d 587, 597 (D.N.J. 2006); Textile Secrets Int’l, Inc. v. Ya-Ya Brand, Inc., 524 F. Supp. 2d 1184, 1201-02 (C.D. Cal. 2007).

But the Associated Press court rejected the New Jersey and California courts’ analysis, pointing out that a review of legislative history is only appropriate if the statutory language in unclear. 2009 WL 382690, *5-6. The Court found that the DMCA language was unambiguous and therefore refused to consider legislative history. The plain language of the statute defines “copyright management information” as including identifying information about the copyright owner without references to “technological measures.” Accordingly, AP properly pled the DMCA claim, and the court declined to dismiss it. 2009 WL 382690, *6.

Conclusion

The Associated Press ruling recognizes the applicability of the “hot news” doctrine to the Internet – in states that recognize the doctrine. In doing so, the ruling recognizes a potentially available remedy for news organizations who feel their competitors are copying their web-based content. The ruling also furthers the split of authority regarding the scope of the DMCA’s prohibition on altering copyright management information. Future courts will have to take sides with either the New Jersey/California interpretation, which limits the scope of the statute pursuant to considerations of the legislative history, or the New York interpretation, which broadens the scope of the statute based on an unambiguous reading of the statute itself.

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