That early 20th century lawsuit over the practice of stealing someone’s investment in producing “hot news” now has a 21st century companion.
In 1918 the Supreme Court ruled that The Associated Press had a property right to the news it spent money producing only to be ripped off by a competing service calling itself International News Service, which was rewriting AP stories from early copies of newspapers and selling the news stories in competition with the AP.
Now, Barclays Capital, Merrill Lynch and Morgan Stanley are suing a website called Theflyonthewall.com for stealing its time-sensitive information about the stock market and distributing it for a fee in competition with their fee-supported service.
According to the Reporters Committee for Freedom of the Press, the current state of the law is such that the hot news doctrine applies if a person or company “generates or gathers time-sensitive information at a cost; the defendant’s use of the information constitutes free-riding; the defendant is in direct competition with the plaintiff’s product or service; and that if others could also free-ride on the plaintiff’s efforts, the plaintiff’s incentive to produce the product or service would be substantially threatened.”
The case may be heard by the 2nd U.S. Circuit Court of Appeals this summer.
There might a few people in Southern Nevada who should pay heed, because they have been stealing costly Review-Journal “hot news” and selling it to their own customers. The problem for us may be that “substantially threatened” clause since the thief is insignificant.
The problem today that perhaps needs to be addressed, in addition to those who sell purloined news, is those who rip it off and aggregate it on advertising-supported websites in competition with the originators’ ad-funded websites.