Wednesday, March 24, 2010



Court Blocks Website From Reporting The News

First amendment??
"In the last few years, there's been a push by some companies to bring back the immensely troubling "hot news doctrine," that appears to violate everything we know about the First Amendment and copyright law. Basically, the "hot news doctrine" says that if someone reports on a story, others are not allowed to report on their reporting for some period of time -- on the theory that it somehow undermines the incentive to do that original reporting. Last year, we wrote about the very troubling implications of allowing the hot news concept to stand. Beyond the free speech implications, it also has the troubling quality of effectively creating a copyright on facts -- which are quite clearly not covered by copyright. On top of that, it's not necessary in the slightest. As anyone who is actually in the online news business knows, getting a scoop gets you traffic -- even if others report the same thing minutes later. Being first gets you the attention. You don't need to artificially block others from reporting the news.

Unfortunately, with various publications struggling, some have picked up on the hot news doctrine as a way to somehow block competition. Tragically, it looks like a court has now adopted the hot news doctrine in one case. Paul Alan Levy alerts us to the news that a judge issuing an injunction against TheFlyOnTheWall.com, a website that would publish summaries of Wall Street research. The Wall Street firms said this undermined their business model -- and the court agreed. It passed an injunction saying that TheFlyOnTheWall had to hold off publishing any news about any Wall Street research report until either 10am (if the report is released early in the morning) or for two hours after it's released if it comes out during the day.

These totally arbitrary restrictions are highly troubling from a free speech standpoint and seem effectively random. This seems like yet another case of a company being upset by interference with its business model, which should be a reason to change the business model -- not run to the courts.

But what's most troubling of all is that now all the publishers who have been salivating over the hot news doctrine have a legal ruling to point to. Can you imagine how the world would work if you couldn't blog about or mention a particular piece of news for a few hours because the Associated Press got to it first? It's hard to see how this could possibly stand up to a First Amendment analysis, and it's quite troubling that the judge found the way she did.

Source

4 comments:

Anonymous said...

This is simply the courts (and the laws) being used to protect powerful, well-connected, special interests. In spite of what the MSM thinks, (or tries to make us think) public information is just that, public, meaning anyone has a right to discuss it.

And, a "reporter" is simply someone who transfers information to another. If you see an auto accident and tell your friend, YOU are a reporter! It is of course, in the MSM's best interest ($$$) to make everyone think that they, and only they, have that right.

The Finn said...

I guess my opinion on this depends on how much theflyonthewall.com actually edits and summarizes the research reports. I suspect they are more in the leeching business than the news business. If my assumption is correct and they are basically republishing information edited by others, I see no great injustice here. If on the other hand they actually employ reporters who write their own material based on material gatherer elsewhere then it's clearly wrong.

It's just that there are maybe 5000 analysts writing their morning reports every day. I doubt that a firm with less than say a thousand reporters could comb all of them and produce meaningful news out of that mess. For comparisons sake Bloomberg employs 2200.

Anonymous said...

I am with the Finn on this one. The Fly On the Wall website admits that they scour news sources and reprints them. The site, for all intents and purposes, is a site that compiles articles from other sources in their entirety and then sells access to them.

Clearly this is above the scope of any "free use" or "derivative of intellectual property."

It seems that the site was trying to get something for nothing and then selling it to others. It is a nice business plan if you can make it work.

Anonymous said...

While I agree with The Finn about the essentially leech-like characteristics of the particular site in question it doesn't change the fundamental problem with the issue and the decision.
There is no tort of 'interfering with one's business model' and no legal notion of this that sounds in damages (or anything else). In order for an injunction to be granted someone must have identified an arguable case and an overriding need for protection. I cannot see how that could be present - or how damages could have been inadequate if it had.
There is not and has never been property in mere facts, only in their expression.
It seems like economics is here trumping the law.