©opyBites: Copyright Law Blog

Unfair Competition, Google, and the News

Back in good ol'1918, the Associated Press (AP) won a lawsuit against International News Service (INS), which was a competing distributor of international news to American newspapers. The origins of the lawsuit began when INS was unable to get equal access to certain foreign news markets covered by the AP. Since this disparity in access was commercially significant, INS chose to essentially read the AP bulletins in the east coast newspapers as they appeared and then rewrite them for its client newspapers further west. While the AP was considerably unpleased with this form of competition, it wasn’t exactly clear if they had a claim against INS. After all, INS was simply copying facts known to the public after the stories were published in east coast newspapers.

In a rather complicated decision, the Supreme Court decided in International News Service v. Associated Press, 248 U.S. 215 (1918) that while AP would have no rights against the public to prevent the copying of its news, INS as a competitor created a different context where a claim of unfair competition could be sustained.

The reasons for this differentiation can perhaps be best explained by the holding of a later case, National Basketball Assoc. v. Motorola, Inc., 105 F.3d 841 (2nd Cir. 1997), which examined a similar situation to INS v. AP:

We hold that the surviving "hot-news" INS-like claim is limited to cases where: (i) a plaintiff generates or gathers information at a cost; (ii) the information is time-sensitive; (iii) a defendant's use of the information constitutes free-riding on the plaintiff's efforts; (iv) the defendant is in direct competition with a product or service offered by the plaintiffs; and (v) the ability of other parties to free-ride on the efforts of the plaintiff or others would so reduce the incentive to produce the product or service that its existence or quality would be substantially threatened.

Thus, even where laws of copyright might not prevent copying, cases like INS v. AP and NBA v. Motorola stand for the proposition that competitors do not always have the right to copy information otherwise public from each other. In essence, if the activity in question is essentially a form of parasitic free-riding by one competitor against another, a possible claim for unfair competition can arise if the copying is of time-sensitive information gathered at significant cost by the victim.

So why does all this history and law matter?

Well, it’s all quite simple actually, as out of the dark corner of Google’s bedroom closet has crawled out once again the haunting form of the INS v. AP doctrine:

Newspapers take aim at Google in copyright dispute

Newspaper, book and magazine publishers have come together to protect their content against the "kleptomania" of internet search engines.

A task force of industry publishing associations will seek compensation for the use of their content by Google and other search engines. They will also seek meetings with regulators and lawmakers, including officials at the European Commission.

(read more via the link above)

No Registration Means No Lawsuit

Watkins v. Southeastern Newspapers, Inc. (11th Cir. January 20, 2006)

The 11th Circuit rejected an appeal by Watkins, which argued that the district court erred by allowing in evidence a letter from the Copyright office and, further, that the award of summary judgment was improper. In a per curiam opinion, the appeals court rejected both arguments. On the issue of summary judgment, the 11th Circuit offers a very straightforward basis for its decision (citations ommitted):

The Copyright Act provides, in relevant part, that “no action for infringement of the copyright in any United States work shall be instituted until preregistration or registration of the copyright claim has been made····” This Court has held that “[t]he registration requirement is a jurisdictional prerequisite to an infringement suit.”

In this case, because the evidence in the record shows that Watkins failed to register the copyright in his book before bringing his copyright infringement claims, the district court did not have jurisdiction to consider Watkins's claims, and therefore, did not err in granting Southeastern's renewed motion for summary judgment.

News from the Library of Congress

Study Group to Host Public Roundtables in March 2006 on Copyright Exceptions for Libraries and Archives

A committee appointed by the Library of Congress will hold two public roundtables in March 2006—in Los Angeles and in Washington, D.C.— to gather insights and opinions on how to revise copyright exceptions for libraries and archives (Section 108 of the Copyright Act).

The committee consists of independent experts from the commercial and not-for profit sectors. The roundtables, which are free and open to the public, will be held Wednesday, March 8, in Los Angeles and on Thursday, March 16, in Washington, D.C.

. . .

The group is studying how Section 108 of the Copyright Act (titled “Limitations on exclusive rights: Reproduction by libraries and archives”) may need to be amended to address the relevant issues and concerns of libraries and archives, as well as creators and other copyright holders. As part of this process, the Study Group is reaching out to the library, archives, rights-holder and creative communities for input on recommendations for possible revisions to the current library and archives exceptions. The March roundtables will be the first opportunity for these communities to share their views with the Study Group face-to-face.

Information on how to participate in the roundtables will be published in the Federal Register in February 2006 and made available on the Section 108 Study Group Web site: www.loc.gov/section108. In lieu of participating in the roundtables, comments may be submitted to the Study Group directly via the Web site.

Posner on Trade Secrets

ConFold Pacific, Inc. v. Polaris Industries, Inc. is a recent case from the Seventh Circuit resolving a contract dispute between two parties. Within the decision, Judge Posner provides a brief comparison of trade secrets with other areas of intellectual property law, including copyright (citations omitted):

[The appellant] believes mistakenly that a trade secret is a property right in the same sense in which a person has a property right in his mattress. A property right in the latter sense is a right good against the whole world, which a trade secret is not, because it is perfectly lawful to "steal" a firm's trade secret by reverse engineering. In contrast, a patent right is good against the whole world. A copyright is not because independent discovery is a defense to a copyright--or a trade secret--claim; it is not a defense to a patent claim. But a copyright is a fuller property right than a trade secret, because copying is infringement; copying a trade secret, which is what reverse engineering does, is not.

A trade secret is really just a piece of information (such as a customer list, or a method of production, or a secret formula for a soft drink) that the holder tries to keep secret by executing confidentiality agreements with employees and others and by hiding the information from outsiders by means of fences, safes, encryption, and other means of concealment, so that the only way the secret can be unmasked is by a breach of contract or a tort. . . . .

In general, if information is not a trade secret and is not protected by patent, copyright, or some other body of law that creates a broader intellectual property right than trade secrecy does, anyone is free to use the information without liability. . . . .