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Ben Marks, Weil Gotshal & Manges

Presentation by Ben Marks, Weil Gotshal & Manges

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Ben Marks, Weil Gotshal & Manges

  1. 1. Introductory Remarks on Newspublishing and Fair Use Benjamin E. Marks Copyright & Technology 2010 py g gy New York, NY June 17, 2010 Weil, Gotshal & Manges LLP
  2. 2. Protecting News Content  Copyright Law  Federal law  Protects expression, but not facts or ideas  Tension with First Amendment resolved by the Fair Use doctrine  Statutory damages & attorneys fees available  The “Hot News” Misappropriation Doctrine  State-law judge-made offshoot of the general law of State law, judge made unfair competition  Can be used to protect facts but only for a very limited window i d Weil, Gotshal & Manges LLP
  3. 3. Fair Use  Fair use is an affirmative defense to copyright infringement  Nonexclusive list of factors to be considered in determining whether copying was fair:  purpose and character of the use  nature of the copyrighted work t f th i ht d k  amount and substantiality of the portion used  effect of the use upon the potential market for or value of the copyrighted work Weil, Gotshal & Manges LLP
  4. 4. New York Misappropriation Law  Usually invoked by a plaintiff who has what she considers something of commercial value used or usurped b thi f i l l d d by another without compensation  Used by courts to fill in some of the gaps between other, more specific forms of IP protection  Highly fact-specific and dependent on fact-finder’s view of “fairness” “f i ”  Valuable (but unreliable) source of protection for information ge e ated by labor, s , and investment o o at o generated abo , skill, a d est e t of resources  Some types of misappropriation are preempted by Section 301 or th C the Copyright A t i ht Act Weil, Gotshal & Manges LLP
  5. 5. Elements of a “Hot News” Claim Hot News  The Second Circuit has articulated a five-part test that “hot news” claims must satisfy t survive copyright preemption: ” l i t ti f to i i ht ti  a plaintiff generates or gathers information at a cost  the information is time-sensitive time sensitive  a defendant’s use of the information constitutes free-riding on the plaintiff’s efforts  the defendant is in direct competition with a product or service offered by the plaintiffs  the ability of others to free-ride on the efforts of the plaintiff or others would so reduce th i th ld d the incentive t produce th product ti to d the d t or service that its existence or quality would be substantially threatened Weil, Gotshal & Manges LLP
  6. 6. Application of the “Hot News” Doctrine Hot News  The landmark case: INS v. AP, 248 U.S. 215 (1918)  There have been relatively few true “hot news” cases since INS  Only one “hot news case tried to a decision on hot news” equitable remedies:  Barclays Capital Inc. et al v., __ F. Supp.2d __, 2010 WL 1005160 (S D N Y M 18 2010) S 2d (S.D.N.Y. Mar. 18, (appeal pending)  Other noteworthy recent cases:  Associated Press v. All Headline News Corp., 2009 WL 382690 (S.D.N.Y. Feb. 17, 2009)  Dow Jones & Co. v., No. 10 Civ. __ (S.D.N.Y.) (filed April 20, 2010) Weil, Gotshal & Manges LLP
  7. 7. Barclays Capital Inc. et al v., __ F. Supp.2d Supp 2d __, 2010 WL 1005160 (S.D.N.Y. Mar 18 2010)* (S D N Y Mar. 18, 2010)  Barclays Capital, Merrill Lynch, & Morgan Stanley sued Fly for copyright infringement and “hot news” misappropriation hot news arising out of Fly’s distribution of plaintiffs’ equity research recommendations.  Fl ’ prior practice h d b Fly’s i ti had been t publish verbatim or near- to bli h b ti verbatim excerpts of research reports.  Fly’s continuing practice through trial was to publish “headlines” of the research recommendations.  Cross-motions for summary judgment denied.  Bench trial before Judge Cote in March 2010 2010. ______________________________ *Speaker is counsel for Plaintiffs-Appellees Speaker Plaintiffs Appellees Weil, Gotshal & Manges LLP
  8. 8. Barclays Capital Inc. et al v. (cont.) (cont )  Copyright Infringement Claims  Liability conceded shortly before trial  Fly’s litigation position on infringement claims was “objectively unreasonable” Slip Op. at 45 (citing Wainwright Secs., Inc. v. Wall Street Transcript Corp., 558 F.2d 91 (2d Cir. 1977)) p, ( ))  Relief  permanent injunction  statutory damages  prejudgment interest  attorneys f fees Weil, Gotshal & Manges LLP
  9. 9. Barclays Capital Inc. et al v. (cont.) (cont )  Hot News Misappropriation Claims  The Record Evidence  Plaintiffs generate information at a cost  Time-sensitivity y  Free-riding  Direct competition  Substantial threat to the existence or quality of the product  Principal Defenses  First Amendment  No free riding free-riding  No competition (Fly not an investment bank)  Insufficient proof of actual, quantifiable damage caused directly by Fly (hey others do it too) (hey, Weil, Gotshal & Manges LLP
  10. 10. Barclays Capital Inc. et al v. (cont.) (cont )  Scope of Injunctive Relief Against Misappropriation  Carefully crafted and narrow  Limited period of exclusivity for plaintiffs to disseminate their recommendations  pre-market open recommendations: until 10am or half-hour after NYSE opens  mid-day recommendations: two hours after release by clients y y  Exception for “non-systematic, contextual reporting after the market opens”  Possible reevaluation after one year if Fly can demonstrate that plaintiffs have not taken reasonable steps to restrain similar activity by others Weil, Gotshal & Manges LLP
  11. 11. What Does the Future Hold?  More “hot news” litigation  Appeal in Barclays Capital  Numerous amici weighing in including, among others, the Associated Press the New York Times the Washington Press, Times, Post, the Newspaper Association of America, Dow Jones, Google, and Twitter  Dow Jones & Co v. v Briefing com  Proposed legislative remedies  federal “hot news” tort hot news  amendment of Copyright Act  Ongoing search for business solutions Weil, Gotshal & Manges LLP