6 Comments

Summary:

Dow Jones is suing a British news service, alleging that it steals breaking news reports, and that this is illegal under a century-old court ruling. But the U.S. wire service is trying to close the barn door long after the horse has left

News used to be a relatively rare commodity, dispensed by a handful of special outlets — printed on paper, etc. and delivered by the postman or via a dedicated terminal. Now the news is everywhere, almost instantly, to the point where a study by the Pew Research Center found a surprisingly large proportion of news consumers didn’t even remember where the news they saw originally came from.

This may be good for news consumers, but it isn’t good for news outlets at all, which is why they keep moaning about the activities of aggregators, and trying to find legal ways of shutting them down or forcing them to pay — even though trying to stuff the democratization of distribution genie back into the bottle is arguably a fool’s errand, thanks to Twitter and the social web.

In the latest example of this trend, Dow Jones & Co. — which runs a business wire and also owns the Wall Street Journalfiled a lawsuit against a British service called Real-Time Analysis and News or Ransquawk. According to DJ, the service routinely broadcasts the same news within seconds of it appearing on the Dow Jones wire (there are a number of similar services, which get their name from the “squawk boxes” that brokerage firms used to get updates from the trading floor).

copyright

One interesting thing about the Ransquawk case is that Dow Jones isn’t alleging a breach of copyright — even though it accuses the British company multiple times in its statement of claim (which is embedded below) of repeating “verbatim, or nearly verbatim” versions of its news. So why not make the case about copyright infringement? Because U.S. copyright law doesn’t apply to short phrases such as headlines or news briefs, and it also doesn’t apply to facts.

As a result, Dow Jones has fallen back on an antiquated principle in U.S. common law known as the “hot news misappropriation doctrine,” which dates back to World War I. In a case launched (coincidentally enough) by another wire service in 1918, Associated Press argued that a competing wire called the International News Service was mis-appropriating its European news and selling it to newspapers before the AP’s updates could arrive.

The Supreme Court ultimately found that the INS was guilty because what it was taking consisted of “hot news” — the kind whose value rapidly diminishes over time — and therefore it was infringing on AP’s livelihood by “free riding” on its journalistic labor (although one dissenting judge noted that all the service had done was read news reports that AP had already made freely available).

Ever since that ruling, news companies have been trying to use the “hot news” principle to go after other news providers who either aggregate or provide similar breaking-news services. In 2006, a number of leading brokerage firms sued (PDF link) a business-news site called Flyonthewall.com for misappropriation of news, and won a judgement that forced the service to delay re-publishing news for as much as two hours — but an appeals court disagreed, saying:

“The Firms are making news; Fly, despite the Firms’ understandable desire to protect their business model, is breaking it.”

Breaking news is more or less broken

newspapers

Like the brokerage firms, Dow Jones is trying to piggyback on the original “hot news” ruling by making its claim in New York state, which adopted aspects of the doctrine as part of state law — despite the criticisms made by legal scholars that enshrining a form of property right in factual statements contravenes federal copyright law. In its claim, Dow Jones goes to some lengths to argue that Ransquawk does business in New York and/or is hurting the wire service’s business prospects in that state.

It’s true that seconds can matter when it comes to financial news in particular (Reuters charges certain clients thousands of dollars a month to get labor statistics just two seconds before they are released to the rest of its business customers). But it’s also true that sources of information are everywhere — and if anything, they are multiplying faster than Dow Jones or the court can count them.

For example, part of the Dow Jones claim states that Ransquawk reproduced within seconds the wire service’s “scoop” that Twitter had filed securities documents in preparation for an initial public offering or IPO. But that ignores the fact that literally hundreds of Twitter users — both wire services and individuals — did exactly the same thing within seconds of the filing.

The reality, as I’ve argued before, is that Twitter is the news-wire for a growing number of people now, and the life-span of a so-called news “scoop” continues to dwindle rapidly. Dow Jones may not want to believe it, but there are plenty of legal ways that Ransquawk — or anyone else, for that matter — can find out market-moving information within seconds or minutes of Dow Jones moving it on the wire. Suing every provider like Ransquawk is like closing the barn door after the horse has long since moved on to greener pastures.

Thumbnail photos courtesy of Shutterstock / Dayna More and Shutterstock / mtkang

  1. Great article Matthew. Thanks for writing!

    Share
    1. Thanks for reading.

      Share
  2. Taking an article and reproducing it verbatum, without permission, is theft. And especially for those companies trying to profit off the backs of those who are genuinely providing the resources to cover the news in the first place. Responding to a news story in your own manner, however, seems completely legit. Assuming you provide the proper attribution where warranted.

    Share
  3. While you’ve taken a logical position, you haven’t come up with an answer to the fundamental questions here. Who is providing the value, and should the company providing the value be able to profit from it?

    Maybe it’s not your job to solve public policy questions. But it’s a problem nonetheless, and we, as a society, have to deal with its ramifications. If information wants to be free, but the cost of gathering information is high, then who will pay for those far-flung news bureaus of the Wall Street Journal, New York Times, and others?

    Fundamentally, aggregators like Gawker, HuffPo, and others are stealing an asset they didn’t pay to create, and profiting from it. News bureaus globally are being stripped, consolidated, and shuttered. Even here at home, local papers are dying, and are not being replaced by ad-supported local news startups.

    Don’t get me wrong. I’m not a luddite, and I’m aware that we can’t put this genie back into a bottle. But there is a common good which is being lost here. How is the electorate supposed to get informed? Who will pay for the work of real reporters? Does the existence of the internet, by definition, mean we have to live in a world of mouth-breathing, misinformed, derp-minded troglodytes?

    Share
    1. Mathew Ingram Friday, January 10, 2014

      Those are good questions, and I wouldn’t claim to know all the answers, but I think there are better ways to generate the revenue needed than by pursuing nuisance copyright cases against random outlets that you think are “stealing” your content.

      Looking at the behavior of the recorded music industry is instructive, I think — did it really gain the industry anything to engage in a decade’s worth of multibillion-dollar lawsuits? Not really. It wasn’t until they changed the way they think about how people consume music and how to generate value from it (streaming, etc.) that they really started to turn things around. The biggest economic problem for news entities has nothing to do with sites “stealing” content — it has to do with advertising and how that market has also been disrupted.

      Also, no one said that maintaining a newsroom that made sense in the 1970s is somehow a God-given right for media outlets — they may have to adapt, and that may require downsizing or alternative approaches to what they do, and that’s not necessarily a bad thing.

      Share
  4. Thanks for your reply, Matthew. I’m not suggesting that big newsrooms are the media outlets’ God-given right. That’s a straw man. I’m suggesting that real news gathering is in the common interest, but only big news organizations are paying for it currently. The ad model breaks down, as we know. The music/apps model is not easily transferrable. Music is driven by hits, which people will pay $2 for on iTunes. Will people pay $2 on iTunes for a great hard-hitting investigative report from the Wall Street Journal? If not, and if there is no viable business model that supports journalism, then it is truly doomed. And we, as a society, pay the price.

    Share

Comments have been disabled for this post