Blog Post

‘Hot News’ Returns In Hollywood Publisher Catfight

For decades, publishers have tried and failed to use the law of “hot news” to chase competitors from their stories. This hasn’t dissuaded Penske Media and its controversial editor, Nikki Finke, from trying again.

In a court filing last week, Penske said it may invoke the “hot news” rule as part of its effort to keep the Hollywood Reporter from sluicing stories from Finke’s

The filing is the latest twist in a spat that erupted last fall when Penske sued the Hollywood Reporter’s parent company, Prometheus, over allegations it lifted website code and copied stories. At the time, Finke issued a series of screeds that accused Prometheus of “egregious theft” and gloated that her rival was “dropping assets like flies.”

By raising the hot news claim, Penske is rolling the dice on a narrow rule that courts have routinely snatched away when modern publishers try to use it.

“Hot news” first arose in 1918 after the UK government shut off newspaper baron William Randolph Hearst from telegraph cables during World War I. Hearst responded by instructing his reporters to rewrite Associated Press stories. The rewritten stories were wired to the West Coast where they often appeared in Hearst’s papers before the original AP version — meaning that Hearst was using the AP’s own stories to scoop it.

The U.S. Supreme Court responded by deciding that, even though facts can’t be copyrighted, the AP was entitled to a limited property right in its news for a short period of time.

Today, Finke obviously sees her situation in much the same way. The new filing, which was first noticed by the New York Times, says that Penske may add a new claim of “hot news misappropriation .. some of which occurred as recently as [last] week.”

Unfortunately for Finke, Penske’s chances seem about as good as Adam Sandler winning an Oscar. That’s because every company in recent decades that has tried to use the hot news rule to make publishing gold has been left holding nothing but a legal bill.

Modern courts, reluctant to chill reporting and free speech, have erected an elaborate five-part barrier to using “hot news” that no-one has been able to cross. Investment banks were the latest to strike out after an appeals court ruled last year they could not stop a website called from republishing tips based on the banks’ client reports.

While the doctrine is still technically alive, Finske is unlikely to be the one to revive it. This is especially true if the Hollywood Reporter is right that many of its “copied” stories were actually based on common press releases.

This edition of the hot news controversy will likely do little more than confirm Finke’s reputation as a litigious freak. It’s worth noting that last February, Penske lawyer Bryan J. Freedman sent a cease and desist letter to Deadline rival The Wrap, demanding that it too refrain from its alleged cribbing. The Wrap was able to get high-profile entertainment attorney Bert Fields to issue a pro bono rebuttal, and to date no lawsuit has been filed.

If its any consolation to Finke, Penske does have a potential copyright claim over the use of a scrap of source code by a third party developer hired by Prometheus. The parties have proposed a trial date for July of 2013.