A federal district judge in New York ruled for the Associated Press in the case of AP v. Meltwater. The ruling, if upheld on appeal, can have large ramifications throughout the blogosphere and for content aggregators.
The Associated Press, or AP, is a not-for-profit group which creates news reports from all over the country. AP’s revenue comes from licensing fees it earns by licensing uses of its articles to newspapers, websites, and other subscribers.
Meltwater is an Internet media monitoring service. Their news service is a method for their clients to keep tabs on how they are portrayed in the press. AP alleged that Meltwater is infringing AP’s copyright by republishing AP articles without a license. Meltwater uses a computer program to scrape news articles on the web and provides excerpts of those stories daily to its subscribers. Meltwater did not dispute that it took content from AP stories that is protected by the Copyright Act. Instead, Meltwater claimed an affirmative defense of fair use. Meltwater argued it is a search engine, albeit one which is a closed system for subscribers only. This case revolves around thirty-three Registered Articles of the AP which Meltwater copied and then delivered excerpts of to its subscribers. Meltwater News employs automated computer programs known as “crawlers” to scan the Internet for news. This is the same method which most search engines will employ. Meltwater’s crawlers scan approximately 162,000 online news websites from over 190 countries each day to create an index of the websites’ content. It is of notes that Google, Yahoo, and other large search engines do have licenses from the AP.
Meltwater argues that they are not liable for their copyright infringement since it is “fair use” of the plaintiff’s copyrighted work.17 U.S.C. § 107 provides that “the fair use of a copyrighted work . . . for purposes such as criticism, comment, news reporting, teaching . . . scholarship, or research, is not an infringement of copyright.” It is important to note that Meltwater did not claim it was ‘news reporting’ as stated in the fair use exception, but rather that it was a search engine. Courts look to four non-exclusive statutory factors to determine whether a defendant has made fair use of a copyrighted work: (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work. In this case, the first and fourth factors weighed heavily against Meltwater. For the first factor, the district court quote Harper & Row Publishers, Inc. v. Nation Enterp., 471 U.S. 539, 562 (1985), “the fact that a given use is profit-driven is not the focus of the commerciality inquiry. Instead, the “crux of the profit/nonprofit distinction is . . . whether the user stands to profit from the exploitation of the copyrighted material without paying the customary price.” Given that Meltwater charges it subscribers thousands of dollars annually for their service, the purpose and character of the infringement is clearly for profit. For the fourth factor, the court quoted Castle Rock Entertainment, Inc v. Carol Publishing Group, 150 F.3d 132, 145 (2nd Cir. 1998), as the concern of this factor is not with “whether the secondary use suppresses or even destroys the market for the original work or its potential derivatives, but [with] whether the secondary use usurps or substitutes for the market of the original.” Meltwater subscribers would have no use for an AP subscription when Meltwater can provide the same information. This constitutes suppressing the market for the original work.
Ultimately, the court decided that commercial Internet news clipping services do not provide enough of a public service to outweigh the enforcement of the copyright laws and therefore allowing Meltwater a free ride on AP’s reporting cannot be justified
If this ruling is upheld by the appellate court and/or the Supreme Court, then content aggregators and bloggers will need to take notice. The internet is often though of as the wild west when it comes to intellectual property law. There is a fine line between a blog linking to another website with a short description, and a blog wholly copying another website’s posts. For amateur bloggers, this is a small matter of poor etiquette, but for professionals, Meltwater may become a very noteworthy.
On July 27, Google Inc. asked U.S. Circuit Judge Denny Chin to dismiss a lawsuit from the Authors Guild over the company’s plan to digitize books and provide excerpts through their search engine service. Google filed a motion seeking dismissal and arguing their actions fall under fair use and also provide a benefit to the public and the authors themselves. The Authors Guild also filed for summary judgment. Both parties’ motions are set for oral argument on Oct. 9.
The case has been ongoing since The Authors Guild, along with The American Society of Media Photographers and other parties, sued Google in 2005 claiming the company’s plan to create an online literary database was carried out without permission from copyright holders. Google estimated it has already scanned more than 20 million books and posted excerpts from over 4 million. The process began when Google entered agreements with public and university libraries to digitize and upload information for their Google Books service. So far, Google says works have been scanned from Harvard University, Oxford University, Stanford University, the University of California, the University of Michigan, and the New York Public Library. Judge Denny Chin began hearing the case as a trial judge and has retained jurisdiction after being elevated to the Federal Appeals Court in 2010.
The Authors Guild believes that Google’s actions constitute massive copyright infringement. Google argues, however, that their Google Books service actually furthers the objectives of copyright law by providing significant public benefits. Google believes their service even provides a benefit to the authors themselves and argues the authors have failed to prove Google Books displaced any book sales whatsoever. Google Books, the company argues, actually makes the authors’ works more easily available and may have even increased sales. Additionally, Google argues that Google Books constitutes fair use since it creates significant benefits without diminishing the value of the copyrighted works in question.
Previously, in March 2011, Judge Chin rejected a $125 million settlement reached between the plaintiffs and Google. While this may seem unreasonable, the Judge believed the proposed settlement was far too broad. Judge Chin accused Google of using the settlement to implement a business plan that would leave them with a monopoly to copy works without permission. The settlement went beyond the bounds of the litigation and would strengthen Google’s control over the search engine market. The United States, Amazon.com, and Microsoft had raised antitrust concerns following the first proposed settlement. Further talks to reach an alternate settlement between the parties were unsuccessful. In May, the judge granted class-action status to the plaintiffs, allowing photographers and graphic artists to join the suit.
In Dish Network LLC v. American Broadcasting Cos et al, a U.S. District Judge in Manhattan, Laura Taylor Swain, granted a motion by Fox to dismiss copyright and contract claims by Dish. The claims result from Dish’s new AutoHop feature, which allows viewers to skip commercials. In order to achieve a more favorable ruling, Dish filed preemptively in New York, only hours before claims by CBS, Fox, and NBC were filed in California. Dish’s New York dispute involves ABC, CBS, Fox, and NBC.
After the judge’s ruling, the issue will be tried in both New York and California on several different issues. Dish’s claims against Fox, and copyright claims against CBS and NBC were all dismissed to be heard in California. Dish’s contract claims against CBS and NBC, however, will proceed in New York since the companies failed to assert those claims in California. All claims by Dish against ABC also remain in New York.
Dish filed the suit in New York District Court primarily to preempt suits by CBS, Fox, and NBC in California. In fact, the networks filed suits against Dish in Los Angeles only hours after the New York case was filed. The networks are concerned that Dish’s ad-skipping feature will result in a severe decline in advertising and believe that it violates their copyrights and licensing agreements with Dish.
In court, Dish argued that the case should be tried in New York since they filed first and the contracts with ABC and CBS required it. Dish’s New York filing sought a declaratory ruling that their AutoHop service does not violate copyright law, but the judge said Dish did not specify the copyright or licensing agreements that may have been violated. The judge also said that part of the claim belonged in California and that Dish filed primarily to avoid a case there. As a result, the judge believed Dish’s filing was improperly anticipatory and dismissed some of the claims. The judge also ordered the parties to coordinate the trials to avoid inefficiencies.
Dish likely tried to have the case litigated in New York partly because of a favorable Second Circuit ruling in Manhattan. In Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008), the court granted summary judgment for Cablevision that their proposed RS-DVR system did not infringe as reproductions or public performances. In examining the potential audience, the court found that single subscribers using a DVR did not constitute a Public Performance. Presumably, Dish thought this ruling made New York a more favorable venue to hear the copyright issues that arise from their DVR’s AutoHop capability.
In the trial, Dish will also rely on the Supreme Court’s ruling in Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984). Known as the “Betamax Case,” the Supreme Court decision ruled that individual time shifting or recording complete television programs constitutes fair use. The court held that VCR manufacturers could not be held liable for infringement, and the case has been at the center of recent technological copyright issues like file sharing. While there is a clear parallel between VCRs and DVRs, Dish’s case is complicated by the AutoHop’s alteration of the broadcast since, in the original Betamax ruling, the court noted that the entire work was merely reproduced at a different time in its entirety. Dish has maintained, however, that the AutoHop does not alter the broadcast signal or delete commercials. According to Dish, the AutoHop skips commercials by fast-forwarding them, not by removing them.