September 27, 2013 4:43pm PT by Eriq Gardner
How a Fox News Lawsuit Might Impact the Future of News
When Fox News sued a media monitoring company called TVEyes at the end of July, did it realize it was suing a defense contractor?
The lawsuit alleges that TVEyes is running a service making "verbatim reproduction" of Fox News' programming and participating in a "massive ongoing pattern and practice of infringement."
Now, the defendant is seeking to have a New York judge throw out several of Fox News' claims. The company has hired Andrew Schapiro at Quinn Emanuel, who was also Google's attorney in the billion-dollar fight with Viacom. Earlier this month, he filed a motion to dismiss that describes TVEyes as recording and indexing over 1,600 television and radio stations around the world, and whose customers include the United States Department of Defense, the United Nations, several members of Congress, The New York Times, Time Warner Cable, professional sports teams and leagues and other political organizations.
Some of its customers presumably use the service as a form of egosurfing, others for PR and marketing purposes -- and perhaps some news organizations are using it to quickly check out how some of Fox News' conservative commentators are treating the day's most topical news. Whatever those motivations, Fox News sees TVEyes as a form of unfair competition: It's alleged that users of the service would otherwise be watching Fox News telecasts, going to Fox News websites, or bolstering ITN Source, Fox News' licensed clip service.
Fox News' lawsuit against TVEyes is primed to address an area of tort law -- "hot news misappropriation" -- that has been around for nearly a century, but largely fell out of favor until very recently when some publishers wondered whether the threat of online content aggregation required some legal response. Now, a new ruling on the topic could be imminent.
The hot news doctrine dates back to a 1918 ruling from the U.S. Supreme Court involving the Associated Press going up against a competitor wire service. Justice Mahlon Pitney wrote that news was "quasi property," and that there should be some consideration of a news organization's expenditure of labor, skill and money in gathering tips and producing content.
Throughout the years, the "hot news" doctrine has suffered some legal blows, most recently in a 2011 decision by the 2nd Circuit Court of Appeals. In that case, a website called TheFlyontheWall.com successfully fought an injunction that was issued after it kept posting leaked stock market buy and sell recommendations from Barclays Capital. A 2nd Circuit judge wrote, "We conclude that in this case, a Firm's ability to make news -- by issuing a Recommendation that is likely to affect the market price of a security -- does not give rise to a right for it to control who breaks that news and how."
Some in the tech community were relieved at the ruling, but the case left possible openings for future courts to draw the line on "scoop" free-riding. Notably, this past March, the Associated Press, with support from some news organizations (including TVEyes customer The New York Times) prevailed in a ruling against Norway-based news monitoring service Meltwater, whose software enables users to track in real-time when their company is mentioned in breaking news, scraping headlines and article snippets in its reports. The judge in the Meltwater case rejected the defendant's fair use defense, writing, "the public interest in the existence of such commercial enterprise does not … justify allowing Meltwater to free ride on the costly news gathering and coverage work performed by organizations."
That's where Fox News steps in.
In its lawsuit alleging copyright and hot news misappropriation claims (read here) against TVEyes, the cable network points to the expense of producing its news programming and its time-sensitive nature, and says, "If TVEyes is allowed to continue its willful free-riding on Fox News's programming, it will substantially reduce Fox News's incentive and ability to produce new content, jeopardizing both the quality and the quantity of premium news reporting available to consumers."
Now comes the motion to dismiss (read here), which says the cable network's "skeletal allegations" don't sufficiently support its claims because, among other things, the plaintiff doesn't identify "which particular time-sensitive facts purportedly were … taken."
More interestingly, TVEyes addresses a news future where digital technologies and bots play a role in the delivery of factual information.
"TVEyes captures the content of thousands of television and radio broadcasts and, using its own proprietary technology, indexes the content and delivers small, relevant excerpts to its customers in response to user-selected keywords," it says. "All of this indexing, organizing, and delivering occurs solely at TVEyes' expense, and Fox does not allege otherwise."
The company attempts to draw a distinction between what it does and what Fox News does.
"More importantly, in delivering its keyword results to customers, TVEyes merely reports the fact that a particular keyword was mentioned in a particular Fox broadcast," it says. "This, by definition, is not the same underlying news reported by Fox; it is a new fact, and therefore cannot constitute free-riding."
Fox News is now due to respond, and a judge will have to weigh in.