The circuit further noted that a claim meeting these criteria could survive preemption because of the “extra elements” of “(i) the time-sensitive value of factual information, (ii) the free-riding by a defendant, and (iii) the threat to the very existence of the product or service provided by the plaintiff.”
These “extra elements” also embody the policy reason articulated by the court in NBA for this limited exception to the usual prohibition against protecting facts:
Although increasing public access to news by encouraging news gathering seems, as a policy matter, to be a good idea, the creation of a cause of action to support it is fraught with difficulties.
For one thing, it is not at all clear that “free riding” by competitors at the margins will be likely to drive a producer out of a profitable line of business – as a matter of pure economics, unless the free riding competitors make the market entirely unprofitable, the producer should stay in the business.
For another, business and market forces such as the first mover advantage and the news-gathering organization’s likely reserves of business goodwill and consumer trust may well be sufficient to keep its business profitable and provide consumers with the news they need.
Thus, if the tort is designed to protect the business of news-gathering organizations, it no doubt succeeds, but if it is designed (as the Second Circuit asserts) to protect the public’s access to breaking news, it may be too blunt an instrument, particularly to the extent it upsets the balance struck between the free use of facts and protection of expression in the federal copyright law.
Nonetheless, it is clear that the tort exists under New York law and, however limited it may be, the allegations against AHN certainly satisfy its elements; the court therefore correctly refused to dismiss the AP’s claim for misappropriation of hot news against AHN.
Copyright Management Claim
The AP also asserted a claim against AHN for violation of §1202(b) of the DMCA. That section prohibits intentionally removing or altering any “copyright management information” or trafficking in works with removed or altered copyright management information.
The DMCA defines “copyright management information” to include the name of the copyright owner of the work and other identifying details, including the information set forth in a notice of copyright, “conveyed in connection with copies or phonorecords of a work or performances or displays of a work.”8
The AP apparently claimed that, by distributing “headlines” or other excerpts of their articles without author and copyright information, AHN violated the DMCA. It is notable that, unlike infringement claims, claims under these DMCA provisions are not subject to fair use or similar defenses.
Reported cases interpreting the DMCA Copyright Management provision are very thin on the ground. In fact, when a federal court in New Jersey examined the issue in 2006 in IQ Group, Ltd. v. Wiesner Pub., LLC, it could find no cases at all interpreting the provision.9 The IQ Group court, looking at the extremely broad language of the DMCA defining “copyright management information,” noted that “the section, read literally, applies wherever any author has affixed anything that might refer to his or her name. Examination of the legislative history, as well as extrinsic sources, however, shows that the statute should be subject to a narrowing interpretation.”
Among other things, the court noted that if every removal of source-identifying information constituted a violation of the DMCA, then the removal of a trademarked logo (for example) would violate both the copyright law and the trademark law. Such overlap between different intellectual property regimes is to be avoided.
To avoid this and other undesirable results of an overly broad reading of §1202, the IQ Group court looked to legislative history and related sections of the statute (including the immediately preceding §1201, which concerns circumvention of technological measures designed to protect copyrighted works) and determined that §1202 was intended to refer only to the removal or alteration of copyright management information that functions “as a component of an automated copyright protection or management system.”
In other words, the court found that §1202 was designed to address efforts to thwart digital rights management (or DRM) systems and not the ordinary copyright notices (or, in that case, logos) affixed to copyrighted works.
The court in Associated Press, however, rejected this finding. Although it acknowledged the New Jersey decision (and a similar California decision), it found that the plain language of the statute did not support any limitation on the definition of copyright management information and that external sources such as legislative history were therefore irrelevant.
It therefore held that any removal of any source-identifying information from any work, digital or otherwise and whether or not incident to a DRM system, could be considered a basis for a DMCA violation.
This ruling places New York directly in conflict with New Jersey and California in an area that, once obscure, is becoming more and more important due to a shift in the way people consume information in general and news in particular.
New Consumption Models
In an online world that contains hundreds of constantly updating information sources (of widely varying quality) from hard news sites to personal blogs, consumers are increasingly turning to aggregators for content.
Common online services now permit users to aggregate their favorite Web pages, blogs and news feeds and read them (excerpted or in full) all in one place along with additional user-customized content such as stock charts or weather reports.
More and more people also use RSS, a kind of Web “clipping service” allowing them to consolidate online content into a single place. The RSS “feed” of a site generally includes the most recent headlines and brief summary of each story, and most modern browsers include RSS readers, as do recent versions of Microsoft Outlook.
These feeds and aggregators do not typically reproduce the identifying information that may appear on their source Web sites – at least not in any consistent manner. Under the broad reading set out in Associated Press, they may be automatic violators of the DMCA, but it would be hard to argue that the drafters of the statute intended to prevent legitimate users from consuming information in this way.
All of this aggregation and customization is becoming mainstream precisely because the Internet has greatly increased the number of information sources available, and consumers are struggling to work out how to package it.
Any limitations on that conduct are likely to harm not only consumers, but their information suppliers as well. Although the Associated Press court can hardly be faulted for its reading of New York law, its careful decision may have considerable unintended repercussions.
Stephen M. Kramarsky, a member of Dewey Pegno & Kramarsky, focuses on complex intellectual property litigation.
Endnotes:
1. See Feist Publications Inc. v. Rural Telephone Service Co. Inc., 499 U.S. 340 (1991).
2. No. 08 Civ 323(PKC), 2009 WL 382690 (S.D.N.Y Feb. 17, 2009).
3. The AP having alleged that AHN copied some of their stories in full, simply removing the author and copyright information, those allegations were plainly enough to state a claim for infringement. Whether those allegations were true, or whether AHN might have some defense such as fair use, was not an issue for a motion to dismiss.
4. 17 U.S.C. §301(a).
5. See Feist, 499 U.S. at 352.
6. 105 F.3d 841, 852-853 (2d Cir. 1997).
7. Id.
8. 17 U.S.C. §§1202(b), 1202(c).
9. 409 F.Supp.2d 587, 592 (D.N.J. 2006).
