AP v. Meltwater News: Summary & Questions

online copyright case MeltwaterMeltwater News – a San Francisco “commercial media-monitoring service” – hasn’t had much luck in the court room lately. First, they tussled with the UK’s National Licensing Agency and came out bruised. Then, a New York District Court judge ruled against the news clipping service in favor of the Associated Press. While not as widely discussed as other Internet law cases currently making headlines, Associated Press v. Meltwater is significant because the ruling could stifle the growing “niche information” industry. Moreover — and only tangentially related — the case brings into question whether or not we need to redefine the “sweat of the brow” doctrine, as it relates to copyright infringement, when a case involves a digital information company.

These days, search technology almost qualifies as an inalienable right. And if current trends continue, the next generation may consider print newspapers a novelty in the same way Millennials consider record players to be retro quaint.  That’s why cases like Associated Press v. Meltwater matter; they shape the boundaries of digital communication and define the rules regarding the commodification of electronically distributed information.

So, let’s review the Associated Press v. Meltwater News lawsuit. Why did the AP sue Meltwater? Why did the Electronic Frontier Foundation publicly support Meltwater? What did the AP argue? What did Meltwater argue? Perhaps most importantly, how did the judge rule and why?  Finally, we’ll touch on how this case could affect online business moving forward.

Why Did the AP Sue Meltwater News?

The Associated Press brought a copyright infringement lawsuit against Meltwater News in February 2012. The former alleges the latter was taking unfair advantage of their intellectual property via an online news clipping service.  Specifically, the AP argued that Meltwater’s use of AP headlines and ledes in their e-mailings infringed on copyrights , thus damaging the AP financially. In laymen’s terms, the AP felt Meltwater was simply copying, re-packaging, profiting, and not compensating the AP for their reporting and analytical efforts – not to mention the overhead the AP incurs to produce said reporting and commentary.

Associated Press v. Meltwater News: Plaintiff’s Argument

The Associated Press’ argument was straightforward: don’t use our content in your press clippings because it’s the online equivalent of selling stereos that just happened to fall off the back of a truck.

Now you may be thinking, “What about fair use? Can’t anybody reference another work so long as it passes the fair use test? Doesn’t the fair use test allow for the use of excerpts?” And perhaps most germane to this case, “Didn’t Kelly v. Arriba Soft Corporation establish that search engines are operating within the bounds of fair use?”

An attorney for the AP, Elizabeth A. McNamara, explained that fair use rights kick in when a given mark is used for comparison or critique. In this case, Meltwater was using the material despite a lack of commentary, analysis and context, and therefore should be held accountable.

Associated Press v. Meltwater News: Defendant’s Argument

In their defense, Meltwater argued fair use. They averred that their service is, essentially, a specialized search engine that should not be held liable for copyright infringement. The media-monitoring service highlighted the structure of other search engines, like Google, and pointed out that standard search result pages include content snippets.

Both The electronic Frontier Foundation and Public Knowledge wrote amicus briefs in support of Meltwater. Their support stemmed from a shared belied that the AP’s claim trumpeted a “dangerously narrow view of what is ‘transformative’ in a copyright court battle over a news-tracking service.”

Associated Press v. Meltwater News: Judge’s Ruling

After considering both arguments, U.S. District Judge Denise L. Cote ruled that “Meltwater copies AP content in order to make money directly from the undiluted use of the copyrighted material; this is a central feature of its business model and not an incidental consequence of the use to which it puts the copyrighted material…Investigating and writing about newsworthy events occurring around the globe is an expensive undertaking and enforcement of the copyright laws permits AP to earn the revenue that underwrites that work. Permitting Meltwater to take the fruit of the AP’s labor for its own profit, without compensating AP, injures AP’s ability to perform this essential function of democracy.”

In other words, AP wins and Meltwater loses.

Does The Judge’s AP v. Meltwater Decision Inadvertently Make Newsletters Illegal?

Millions of companies and freelancers send out regular newsletters to people who voluntarily add their address to mailing lists. Most mailing lists are essentially a marketing tool, and therefore free, but many are only sent to individuals who pay money to belong to a group or club.

Let’s pretend that Company A, which is in the business of installing pools, maintains a backyard landscaping newsletter for their customers. In it, they highlight pool trinkets and deck building services. Occasionally, Company A’s newsletter includes links to articles about pool maintenance and backyard lifestyle ideas from a variety of online publications. One day, Magazine Y decides that Company A is infringing on their copyrights by including links to Magazine Y articles in their monthly e-mailing. So, Magazine Y decides to file a copyright infringement lawsuit against Company A.

Under the legal precedence set in AP v. Meltwater, Magazine Y would win and Company A would have to comply with any damages and injunctions ordered by the court, in addition to their own attorney fees. While it may seem like an easy thing to simply exclude any media outlet that doesn’t want to be involved in a newsletter, the costs of being sued could be enough to put some small business out of business. More than that, it opens the door for a new type of copyright troll.

Do We Need To Re-Examine Sweat of the Brow Copyright Standards?

Though not related to the central questions of AP v. Meltwater , the case raises another legal question: since information is now a hot commodity, and since the Internet has created a new industry which deals solely in data-collection, analysis and distribution, is the old standard that “sweat of the brow” efforts cannot be copyrightable? It’s a stretch – but it’s something to consider since information brokering is emerging into a multi-billion-dollar industry.

Under U.S. law, the “sweat of the brow” doctrine dictates that labor alone does not constitute a “new work” and therefore any works that only have sweat of the brow labor as a distinguishing factor cannot be granted federal copyright protections. For example, a phone book is not copyrightable. To wit, it’s understandable how a judge could consider Meltwater’s services, determine that it’s a sweat of the brow creation, and therefore declare it unworthy of intellectual property protection.

But data and content creation and content distribution companies, like Meltwater, are the hot new thing. As such, it may be time to start re-examining how current legal precedence could butt proverbial heads with the rising cloud-based content industry.

What This Case Could Mean For The Future Of Online Copyright Lawsuits?

AP v. Meltwater could have significant effect on future online copyright cases. The courts have definitively spoken and their message is clear: It’s not cool to simply re-package another party’s content and sell it for profit without compensating the work’s originator in some manner. It’s a ruling that inadvertently muddies already established online intellectual property case law – like Kelly v. Arriba Soft.

Meltwater intends to appeal the decision, as they contend it “misapplies fair use doctrine and is at odds with a variety of prior decisions that have paved the way for today’s Internet.” To keep up with our perspective on the case, join our mailing list.

Do you have an online copyright legal issue? If yes, and you want to consult an attorney, contact Kelly Warner Law. We have a dedicated team of lawyers well-versed in Internet intellectual property law. Get in touch today.

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