Obsolete Hot News Doctrine Back In The News As Bloomberg Is Sued For Reporting Too Quickly
from the oh-come-on dept
It's been a few years since we've really talked about the Hot News doctrine, which was a mostly obsolete and, frankly, bizarre attempt to turn the idea of publishing a similar news story too quickly after the original reporters broke the story into a form of "misappropriation." It stems from the International News Service v. Associated Press case from a century ago (literally: 1918), in which the AP argued that even though there is no copyright in facts, having INS release a similar story too quickly to AP's articles was a form of "misappropriation" of its "hot news." Incredibly, the court agreed. However, multiple later cases, plus the entire rewriting of copyright law in 1976 had most people believing that the entire concept of "hot news" was obsolete and effectively dead.
Indeed, in 2003, Judge Richard Posner suggested that the entire concept "can be jettisoned" and he later committed to that in some of his rulings. However, around 2010, a variety of hot news cases popped up, and yet basically all of them have been losers (the one exception I can think of being a default judgment where the defendant didn't even show up).
Still, over the last few years it felt as though we were back to the general feeling that "hot news" was a dead letter. Except... DC news organization Capitol Forum is now suing Bloomberg under the Hot News doctrine, in yet another attempt to revive the silly concept. The complaint makes a valiant effort, but one that seems likely to fall way short. The lawsuit also argues copyright infringement, and we'll get to that in a second, but the attempt at crying "hot news" seems particularly week:
In addition to violating Capitol Forum’s copyright protection, Bloomberg’s conduct also violates Capitol Forum’s proprietary rights under the common law tort of “hot news” misappropriation. This doctrine prohibits free riding by competitors. It prohibits a direct competitor from acquiring and republishing time-sensitive news and analysis generated by its competitor and intended only for its competitor’s subscribers and authorized recipients.
The timeliness of business and financial news reporting is essential to Capitol Forum’s subscribers. Bloomberg competes directly with Capitol Forum for subscriptions by end-users, and Capitol Forum and Bloomberg’s products are marketed and sold to the same customer base. Bloomberg’s conduct in this regard necessarily diverts business opportunities from Capitol Forum.
This free riding on Capitol Forum’s reports impairs Plaintiff’s incentive to provide that reporting as an exclusive service to its existing subscribers and to potential new clients. To the extent that Plaintiff is deprived of the intended exclusivity of its reports as a result of its being made available by Bloomberg, such conduct by Bloomberg reduces the value of the reports to Capitol Forum’s subscribers. It has already caused Capitol Forum subscribers to cancel their subscriptions because they can obtain the same Capitol Forum news and analysis from Bloomberg’s First Word service. If left undisturbed, Bloomberg’s conduct inevitably will, among other things, adversely affect Capitol Forum’s willingness to continue to make substantial investments in generating and distributing such reports
This argument may have been successful in the 1920s, but given all of the precedent against this kind of thing between now and then, it seems like quite a stretch to think that courts will be willing to bring back Hot News -- especially given the 1976 Copyright Act, which more or less pre-empts any state law attempts to create copyright-like regulations.
So what about the copyright claims in the lawsuit? That may come down to specifics, but from Capitol Forum's own description of what is happening, it seems like a difficult case to make:
On numerous occasions, Bloomberg has impermissibly solicited and obtained Plaintiff’s proprietary reports, has copied and quoted the most creative and original aspects of the reports, has published its own summary or abstract of the content of the reports in the form a “news alert,” and has distributed these “news alerts” to its own subscribers on its “First Word” news service. While Bloomberg cites Capitol Forum as the source of its summaries and abstracts, it does not undertake creative or journalistic efforts of its own to transform Plaintiff’s work into something new or different from Capitol Forum’s original report. Other than including a current market price or a reference to a past article, Bloomberg does not add any of its own analysis or contribute any meaningful reporting to Plaintiff’s work. Bloomberg’s “news alerts” simply extract the key information from Plaintiff’s reports, and repackage Capitol Forum’s work in a bullet-point form for a quick read. The purpose of Capitol Forum’s reports and Bloomberg’s “news alerts” are precisely the same: to inform their subscribers of Capitol Forum’s copyrighted and proprietary reporting. Bloomberg’s conduct constitutes direct infringement of Plaintiff’s exclusive right under the Copyright Act to reproduce, use, and control its copyrighted works.
The filing, notably, provides no actual examples of the copying. And from this description, it certainly sounds quite possible that Bloomberg is not infringing at all. Quoting other sources is likely to be fair use, and repackaging their work "in bullet-point form for a quick read" could certainly be seen as transformative in a fair use analysis. Indeed, Capitol Forum flat out admits above that Bloomberg has "published its own summary of the content, which again suggests fair use and not infringement. The whole thing seems to be a situation of Capitol News trying to plead a hot news claim under copyright law (which isn't going to fly at all). Of course, specific examples might result in a different analysis, but if the infringement argument was strong, you'd think the actual complaint would demonstrate it much more clearly (including identifying actual examples of the copyright-covered content being copied).
There are two other elements in the filing that seem worth commenting on. First, in an attempt to claim that this infringement is "willful" Capitol Forum points to an important fair use case (also filed against Bloomberg) in which the 2nd Circuit ruled that Bloomberg reposting an entire earnings call was fair use (i.e., a win for Bloomberg). However, Capitol Forum is pointing to Bloomberg's filings in that case saying that there the company "conceded that the fair use exception does not apply when the copyrighted material is based on an analysis—and is not just reporting 'facts.'" That... seems unlikely to be a fair or accurate statement of Bloomberg's position. There are many cases in which fair use applies to analysis and not just facts.
There's also this:
Bloomberg’s knowledge is also demonstrated by Bloomberg BNA’s copyright guideline, which states that it is a copyright violation to summarize a Bloomberg article.
And the simple response there is that Bloomberg BNA's internal guidelines are (a) legally meaningless and (b) bullshit. That's not an accurate statement regarding copyright law. It is not a copyright violation to summarize anyone's articles.
The other interesting element of the filing is the claim of vicarious infringement, in that Capitol Forum argues that a Bloomberg employee, Joshua Fineman, induced a Capitol Forum subscriber to pass along its news alerts.
For example, commencing around December 2016, and continuing through December 2017, Joshua Fineman of Bloomberg’s First Word news service induced one of Capitol Forum’s subscribers, a West Coast hedge fund, to provide him with Capitol Forum reports in exchange for providing the hedge fund with market information that it did not possess. This arrangement continued until Capitol Forum learned of its subscriber’s actions and demanded that they stop. The hedge fund informed Mr. Fineman that it would no longer agree to trade information with him. In response, Mr. Fineman acknowledged that their actions were illegal and stated that he would not put the hedge fund in that position again. Despite this recognition of illegality, Mr. Fineman continues his infringing activities with respect to other Capitol Forum subscribers. Mr. Fineman continues to induce and encourage other Capitol Forum subscribers to directly infringe Capitol Forum’s copyright protections by soliciting those subscribers to send Capitol Forum copyrighted articles to him.
As such, Mr. Fineman and Bloomberg have induced, caused, encouraged, and materially contributed to the direct infringement by Capitol Forum’s subscribers. Mr. Fineman and Bloomberg are aware that the Capitol Forum material is copyrighted and that Capitol Forum subscribers who transmit these reports violate Plaintiff’s copyright by sending them to Bloomberg.
It is possible that this part of the filing might create a bit more of a headache for Bloomberg. Even if the practice of forwarding such emails is not just standard across industry, but practically second nature to almost everyone, it might still be seen as infringing. Still, it does seem like Capitol Forum's bigger issue, then, would be with the subscribers who are infringing on their works directly by distributing its alerts, but (not surprisingly) the company probably is less interested in suing its own customers -- especially when they likely have smaller pockets that Bloomberg.
No matter what, this will be an interesting case to follow, but hopefully not one that gets very far, especially in its attempt to revive "Hot News."
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Filed Under: breaking news, copyright, hot news
Companies: bloomberg, capitol forum
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Well, without the hot-news doctrine, freeriding is legal and now the lay of the land. Not sure I agree with it, but the courts have spoken.
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Re: Freeriding
WTF is "Freeriding" and how will this case affect it? Hot News was never a valid concept and has been dead for a century.
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Re: Re: Freeriding
Free riding in this case is the idea that other news establishments will parrot the reporting of the first to publish, and therefore any income is a 'free ride', they are getting income from the sweat of the brow of the original reporting.
While it might be a concern, its been a well understood fact of news for decades now. And it ignores that many news orgs might already have sweat of the brow in that same topic but were merely beat to the publishing line by a different organization. That is why the facts don't have copyright in them. Because 'first to publish' doesn't give you ownership of the facts.
Its just more we are failing as a business and want more money flailing.
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If all you have is facts, then you have nothing that is granted copyright protection. If your business model relies on exclusive content then your 'hot news' needs something you can hold exclusivity on. Hot News only covered facts, and if all you have is facts, readers/viewers are going to naturally lean toward news outlets they primarily visit.
If you can not provide anything other than facts to the consumer, just because you are first to acquire the facts in no way entitles you to ownership of distribution of those facts. Hot news allowed the first to publish to potentially own facts that conceivably several outlets had put the effort into discovering. For instance, multiple outlets might read the tea leaves on an indictment and all be staking out waiting for an arrest - but only one news outlet could publish. Even if several outlets had put in effort, the first person with a front page in the wild got all the credit and were allowed to sell the paper they all manufactured. Whatever good it might have had, the doctrine also lead to contradictions in its stated sweat of the brow intent.
If you want to produce value out of facts, you need more than a government enforced monopoly to entice consumers. The first to publish likely has a head start if not exclusive access to sources, they know where to look for more (hot news generally involves developing stories), they have in theory, the best information. That is an advantage they can sell. Once they report the facts those facts are available to everyone. But that does not give the insights the first publisher may have to its competition.
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The problem is that this advantage loses value when they can be copied almost instantly.
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Since when has "you've read it here first" ever been an actual advantage?
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It's huge. Consider TMZ's reputation for breaking stories of celebrity troubles. They are a market leader because of it.
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I'm fairly sure that when people are talking about real news, gossip about the private lives of celebrities is really not what they're thinking about.
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"The problem is that this advantage loses value when they can be copied almost instantly."
Then, the answer is to base your own value on something other than how quickly you spew out a particular fact, not to prevent other from having access to factual information.
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My weak counterargument: that stifles reporting and leads to hoarding of information.
I am an investigative journalist and I specialize in locating and acquiring video of relatively recent catastrophic events. Nearly all of the material I obtain is in the public domain, but 100% of it what I publish was not publicly known to exist prior.
I go to extreme lengths to ensure that I only publish derivative works with inextricably intertwined original creative additions, thus ensuring that I can protect my breaking stories for a decent amount of time. Anyone who wants to broadcast or otherwise use it will either have to obtain the underlying material independently (often impossible), or license it from me. If I didn't do that I wouldn't be able to pay my bills through my work.
Because sweat of the brow and hot news are not protectable, and because the above process can be extraordinarily time consuming (often amounting to the creation of a docudrama TV episode), I have been sitting on a few huge stories for nearly two years.
(I learned a hard lesson early on by not doing that with the first major piece I published. I published original raw footage that had taken me months of hard work to obtain and whose existence no one else was aware of. Within a few hours of me publishing it the footage was on every news channel in the world. Some credited me but most didn't even do that. Never again! Out of spite I still refuse to sell my material to the news station that was first to copy that video.)
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I'll be honest, what you say is confusing here. You're claiming that your work is being copied without attribution, yet you also claim that it's largely based on public domain footage. I'm sure it's frustrating for your work to be exposed, but as long as the footage that's actually being retransmitted is not your original footage that's just how news works. You can't demand extra payment for public domain footage nor control it by definition.
So, the correct tactic would surely be to create original product containing the footage to sell, which from your mention of docudrama episodes you have apparently done. But, then, what's the problem? If people are taking edited or new footage without attribution then you have a legal option to get recourse that has nothing to do with "hot news". Plus, if your episodes have any real substance to them, then the news story would likely act as marketing for the full product as such stories are rarely going to be as in depth or focussed as a full investigation. There's plenty of successful documentaries where the basic details are known but people still want to watch the full story.
I certainly wish you luck, but something doesn't add up in my mind here, and certainly doesn't seem to be compelling enough an argument to place artificial restrictions on thing that are apparently already public domain.
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Same geolocation snowflake, different names? I'm tempted to think satire, but given the similarity to Jhon Sanford Smith...
Meh. Article 13 voted.
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...are they seriously trying to claim that forwarding an email is copyright infringement?
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Re:
...are they seriously trying to claim that forwarding an email is copyright infringement?
Well it would be under Article 13, wouldn't it?
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Do you think a forwarded email is covered by some special copyright exception? Common sense says it should be; 17 U.S.C. does not.
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E-mail is considered property of the recipient to do with as they please.
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E-mail is considered property of the recipient to do with as they please.
Not really. Each new email (even a forwarded, edited one, is a derivative work) has a new copyright. You send an email, you have affixed those words and created a new, fully copyrighted work!
However, the act of sending it also grants an implied license to the recipient to do whatever the hell they want with it. That's fair use. It doesn't become the property of the recipient.
Kinda like how these message boards work. Your post is copyrighted the moment you hit "Submit." But just about anything we do with it after that can be fair use.
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Serious response:
I'm sure there's an argument that forwarding an email could constitute infringement. However, a legal, binding decision that forwarding something (or even including it in a reply) is actionable would have a catastrophic effect.
Not-so-serious response combining some ideas from various comments from others in the past:
if Shiva invented email, and platforms are responsible for enabling abuse... does virtually the whole world get to sue him for contributory infringement?
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Not according to rulings involving recipients who have put letters into books and answering-machine messages into songs. The courts said very clearly that these were the property of the recipient, even if the recipient uses it commercially.
There have been many lawsuits over this. It's well-established law in fact. Perhaps someone with more energy than me can look it up.
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Name one lawsuit that backs up your claim. Just one. And I don’t mean use vague, evasive language about the supposed details of a case you heard about — I mean an actual case, with an actual citation, that can actually be looked up and studied to check its relevance to this discussion.
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Not according to rulings involving recipients who have put letters into books and answering-machine messages into songs. The courts said very clearly that these were the property of the recipient, even if the recipient uses it commercially.
There have been many lawsuits over this. It's well-established law in fact. Perhaps someone with more energy than me can look it up.
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No wonder their industry is dying & they are demanding everyone else pay to protect them... Do they think they are an **AA??
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Re:
Their industry is dying because Craigslist ripped its classified-advertising guts out.
They weren't able to compete with free.
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In Idaho there is a classifieds printed paper and online site called the thrifty nickel. The print version is free. It's lasted for many years. They compete just fine with Craigslist and the local paper.
It is still possible to compete with entities that exist solely online or that are free. You just have to adapt and make a product that people want at a price they are willing to pay. In the case of the thrifty nickel they provide a free product and charge ad space. The ads are content and the content are ads.
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"Their industry is dying because Craigslist ripped its classified-advertising guts out."
Then they shouldn't have based their entire industry on those ads?
"They weren't able to compete with free."
They still appear to exist, plus there is such a thing as a FREE newspaper where I live. They are able to compete, it's just that some people don't want to make the necessary changes in order to compete in the modern marketplace.
Plus, once again I ask what your solution is - ban a perfectly legal business model because some people in the old industry are lazy?
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Yes it is all Craigslists fault & not the fault of leadership ignoring the iceberg dead ahead, and deciding people enjoy autoplaying videos, malware serving ads, the word in a story no requiring megs & megs of data, paywalls will save them, fire everyone FB told us to pivot to video, and well the leaderships salaries keep going up like they are doing a good job as they stay the course into the iceberg.
Speaking of ice, are you also lamenting for those poor ice men who are out of business because refrigerators became a thing? Why don't we still have them!?!? We totally could have taxed the makers of these demon cold boxes to keep the ice men afloat!!
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Ice already floats. No new taxes required.
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Hot news isn't hot enough, but was the analysis accurate?
In the news business, when your only claim to fame is that 'we got there first' it is imperative that that news organization be mostly first. In today's nano second computer controlled trading scenario, one's 'hot news' customers need to be significantly ahead of everyone else with information or the impact is seriously decreased.
It would be interesting to see a quantitative and qualitative analysis of the two disparate analysis' compared with market reactions to the stories to see if one was more right than the other. And though the article above does not mention how far behind the Bloomberg story was vs the Capital Forums story, even an hour might have something to say about market reaction, and whether investors with access to the Capital Forums feed might have changed their minds when they got wind of the Bloomberg analysis.
In the end, being first isn't everything in financial news reporting. Being right is also a major contributor. Now, behind the smoke and mirrors, which is Capital Forums actually complaining about?
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Re: Hot news isn't hot enough, but was the analysis accurate?
I should add that it is not like in the olden days where someone walks by a news vendor on a city street and sees maybe five different newspapers all screaming similar headlines over the same event. Capital Forums isn't going to sell more 'papers' for one article, but they might get more subscribers if they consistently are timely with their information, and are not only insightful with their analysis, but right.
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INS?
Wow, there's a blast from the past. Haven't heard of them in almost fifty years -
"Carl Kolchak, INS" :)
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funny typo.
the company probably is less interested in suing its own customers -- especially when they likely have smaller pockets that Bloomberg.
What are you trying to say Mike? Out with it man! What will Bloomberg do with those smaller pockets? We must know.
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Come on, Mike. Don't you see the missed opportunity by not supporting Hot News? Whenever the inevitable troll post comes along saying "But why aren't you writing about <insert unflattering story regarding company troll hates>", you could just blame it on the Hot News Doctrine!
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Wrong legal doctrine
Of course, it would be so much easier if this was filed in the EU. And article 13 had been passed, which seems likely, but it has yet to do so. Fair use will allow them to spend attorneys fees though.
Last I checked it doesn't appear that the USA will join the EU anytime soon. Most would say EW to the concept.
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Typo
There is typo before the first blockquote:
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Too true. How could that have happened back then, if 'hot news' was a legal monopoly?
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.1918 .all .over .again
.Forum
.sues
.Bloomberg
.for
."Hot"
."News"
.violations!!
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However, news outlets outside of the United States are not subject to American laws.
When I ran my online radio station, and operated it from Australia, news items posted on the website were only subject to Australian laws. American laws did not apply either my station or website, because I was operating from Australia. So US laws did not apply to my radio station and web site, when it was in operation.
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