You Must Wait Two Hours Before Reporting Someone Elses News Rules Federal Judge Denise Cote
by Jacqui Cheng
Google and Twitter have weighed in on the “hot news” doctrine, which grants newspapers in some states a time-limited, quasi-property right over facts they report, arguing that the legal concept is old ‘n’ busted in the instantaneous Internet age.
The companies filed an amicus brief in the legal case between financial website theflyonthewall.com and Barclays Plc, claiming that Internet chatter cannot be contained and that restricting the spread of news content could hurt the public.
A US federal judge ruled back in March that The Fly had misappropriated content from major analyst firms—Morgan Stanley, Barclays Plc, and Merrill Lynch—to get a “free ride” on their stock recommendations.
The firms (and the judge) believed that they had invested time and resources into researching the market, and The Fly was making money off of their hard effort by offering subscriptions so that users could access The Fly’s near-realtime writeups of the analysts’ work.
Judge Denise Cote agreed that the site was directly competing with the investment banks by publishing their time-sensitive information, “thereby substantially threatening their incentive to continue in the business.” She ruled that The Fly must wait a minimum of two hours before publishing information about the banks’ reports—a crippling blow to a site that competes on the Internet against hundreds of others that do publish that information instantaneously.
The Fly came back after the injunction asking if it could publish this information after it appeared elsewhere (such as Dow Jones, Reuters, Bloomberg, the Wall Street Journal—the list goes on). The company argued that it was going out of business due to this unreasonable restriction and may soon be forced to close.
The difficulty of drawing a line
Now, Google and Twitter have jumped to The Fly’s side. In their amicus brief, the two companies said the idea of “hot news” protection in the Internet age is “obsolete.” They pointed out that it’s nearly impossible to implement some period of exclusivity for news when it can spread so quickly across blogs, Twitter, Facebook, and so on, and that upholding such a restriction could actually hurt the news-consuming public. – More here