Harking back to a 1919 U.S. Supreme Court decision, a Manhattan federal judge has recognized the right of The Associated Press to claim a property right in the “hot news” it distributes.

Southern District of New York Judge Kevin Castel rejected a motion to dismiss a claim brought by the AP against All Headline News Corp. (AHN) for misappropriating AP breaking news and presenting it as the work of its own reporters.

In his ruling, Castel reaffirmed the long-recognized but little-used common law doctrine that “hot news” is the quasi property of a news organization.

The judge also refused to dismiss a claim brought by the venerable news cooperative under the Digital Millennium Copyright Act (DMCA).

The rulings came in The Associated Press v. All Headline News Corp., 08 Civ. 323, a suit where the AP alleged that defendants W. Jeffrey Brown and Danielle George instructed “poorly paid individuals” at All Headline News to locate breaking news stories from other sources and edit them for use under the All Headline News banner.

Many of the reports allegedly came from the AP, which claimed six specific acts of “free riding” on AP articles and claimed that All Headline News personnel were instructed to remove or alter any identification of the AP as the author or copyright holder.

All Headline News moved to dismiss all but the copyright claims brought by AP.

Castel said the federal common law cause of action for misappropriation of “hot news” was first recognized in 1919 by the U.S. Supreme Court in International News Service v. Associated Press, 248 U.S. 215.

Treating breaking or hot news as the “quasi property” of a news organization, the Supreme Court said that allowing one news agency to steal the work of another would “render all publication profitless, or so little profitable as in effect to cut off the service by rendering the cost prohibitive in comparison with the return.”

While the seminal case of Erie R. Co. v. Tompkins, 304 U.S. 64 (1938), would “render the federal common law origins of International News Service non-binding on the federal courts,” Castel said, the doctrine persisted in several states, including New York.

All Headline News argued that Florida law should apply because its principal place of business was Florida, and the hot news doctrine had never been recognized in that state.

Castel said New York choice-of-law rules applied. In any case, he said that AP had argued a claim for hot news misappropriation would be recognized under Florida law.

“No authority has been cited to show that Florida recognizes a cause of action for hot news misappropriation,” he said. “Then again, defendants have not persuasively demonstrated that Florida would not recognize such a claim.”

The judge went on to apply New York law because AP has its headquarters in New York, the alleged injury was suffered in New York and All Headline News is alleged to have offices at Rockefeller Center.

“A cause of action for misappropriation of hot news remains viable under New York law, and the Second Circuit has unambiguously held that it is not preempted by federal law,” he said, citing the case of NBA v. Motorola Inc., 105 F.3d 841 (2d Cir. 1997).

All Headline News’ argument against the AP’s claim under the Digital Millennium Copyright Act for removing or altering the copyright-management information from AP news reports was that the act should be construed as protecting only copyright management by technological measures.

But Castel said the defendants “cited no textual support for limiting the DMCA’s application to the ‘technological measures of automated systems,’ a phrase that appears nowhere in the statute.”

The judge granted All Headline News’ motion to dismiss claims for trademark infringement and unfair competition under the Lanham Act.

Andrew Deutsch of DLA Piper, who represented the AP, said the defense had claimed that the doctrine of hot news had been eliminated by the copyright laws. He said the decision was a good one “because it cuts off the argument that if they are not taking copyrightable expression of news stories then it’s ok.”

Deutsch also said it was a critical decision for news services because their material can be all to easily misappropriated “with a few key strokes” in the online era.

Brian Caplan of Caplan & Ross represented All Headline News.

“The opinion does not deal with the merits of the factual allegations — and this is a very fact-intensive inquiry,” Caplan said.