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Companies and individuals need to be careful about not distributing copyrighted works, such as newsletters, without authorization. To bring this point home, as reported by the Washington Post, a federal jury in Baltimore has returned a multimillion-dollar verdict against financial services company Legg Mason Inc. for distributing unauthorized copies of daily stock market e-mail commentary Lowry’s Market Trend Analysis, published by Lowry’s Reports Inc., to hundreds of its broker-dealers for years. Over that period of time, only a handful of Legg Mason employees reportedly had paid the annual $700 publication subscription. Lowry’s, based in North Palm Beach, Fla., states on its Web site that it was founded in 1938 to provide analysts and investment professionals with an “unbiased, factual analysis of the stock market.” Its work is premised on daily price change/volume statistics of all stocks traded on the New York Stock Exchange and the NASDAQ stock market. Tabulations are compiled each day that the markets are open and provide the “the statistical foundation for [Lowry's] supply vs. demand analysis of market trends.” Lowry’s states that it is the originator of the “highly respected power ratings, for analyzing major sectors, industry groups and individual stocks.” THE LAWSUIT In late 2001, Lowry’s filed suit against Legge Mason in federal district court in Baltimore, Md., where Legg Mason is headquartered. Lowry’s, according to the South Florida Business Journal, alleged that Legg Mason for more than a decade had purchased a single subscription to Lowry’s Market Trend Analysis for approximately $700 per year and then distributed copies of each report by fax, e-mail or intranet to as many as 1,300 Legg Mason stock brokers and favored clients, all in violation of the copyright act. Lowry’s is reported to have alleged that its reports contained prominent copyright warnings, and that Legg Mason was believed to have violated more than 100 of Lowry’s registered copyrights and thousands of its unregistered copyrights. THE JURY VERDICT Almost two years later, a Baltimore federal jury came down with a verdict in favor of Lowry’s and adverse to Legg Mason. According to the Washington Post, the verdict is in the approximate amount of $20 million. One expert reportedly stated that the award includes $825,000 for lost revenue and assessments of $50,000 each for certain violations and $100,00 each for other violations of approximately 250 of Lowry’s registered copyrights. A spokesperson for Legg Mason reportedly has stated that the verdict is “grossly excessive” and said that Legg Mason is considering its next legal steps, including a potential appeal. THE MESSAGE In the wake of its victory, Lowry’s president Paul Desmond was reported as saying the verdict sent “an important message to readers of copyrighted data all across the country.” It is hard to argue with that. In the electronic age, with the click of a mouse, it is simple and commonplace to distribute copyrighted works to many others without authorization. Results like the verdict against Legg Mason may help deter such conduct. Eric Sinrod is a partner in the San Francisco office of Duane Morris ( www.duanemorris.com), where he focuses on litigation matters of various types, including information technology disputes. Mr. Sinrod’s Web site is www.sinrodlaw.com, and he can be reached at [email protected] . To receive a weekly e-mail link to Mr. Sinrod’s columns, please type Subscribe in the subject line of an e-mail to be sent to [email protected] .

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