A federal court in New York has ruled that "hot news" claims for misappropriation of breaking news content brought by the Associated Press (AP) against a news-related website, All Headline News Corp. (AHN) are not preempted by the Copyright Act. The Associated Press v. All Headline News Corp., et al , 08 Civ. 323 (PKC) (S.D.N.Y. Feb. 17, 2009). This is the first time that a court has applied the "hot news" doctrine to content on the Internet. The court also departed from prior decisions to find that removal of a textual copyright notice or author attribution may violate the "copyright management information" provisions of the Digital Millennium Copyright Act (DMCA), 17 U.S.C. § 1202(b).

AP alleges that AHN copies AP's headlines and news stories from the Internet, sometimes re-writes them and sometimes merely republishes the text unchanged. AHN removes or alters all attribution to AP and publishes the stories as originating with AHN. AP brought claims for "hot news" misappropriation, copyright infringement, trademark infringement and unfair competition under the Lanham Act and New York law. AHN moved to dismiss all claims except those brought under the Copyright Act.

The district court reasoned that the "hot news" doctrine arises out of the Supreme Court's decision in International News Service v. Associated Press , 248 U.S. 215 (1918), which found that breaking news is the "quasi property" of a news-gathering organization and subject to protection against a competitor's interference. The court, determining under New York choice of law rules that New York was the place of injury, applied New York substantive law. The court found that the Second Circuit's has unambiguously ruled in Nat'l Basketball Ass'n v. Motorola, Inc., 105 F.3d 841, 845 (2d Cir. 1997) that a claim for misappropriation of hot news is valid under New York law and not preempted by the federal Copyright Act and denied AHN's motion to dismiss the misappropriation claim.

The court next turned to AP's claims that removal of authorship and ownership attribution violates the DMCA by "intentionally remov[ing] or alter[ing] any copyright management information." 17 U.S.C. § 1202(b). The court declined to follow recent decisions from courts in New Jersey and California holding that the DMCA should be construed to apply only "to protect copyright management performed by the technological measures of automated systems." IQ Group, Ltd. v. Wiesner Publishing LLC, 409 F. Supp. 2d 587, 597 (D.N.J. 2006); Textile Secrets Int'l, Inc. v. Ya-Ya Brand, Inc., 524 F. Supp. 2d 1184, 1201-02 (C.D.Cal. 2007). Unlike those courts, which relied heavily on the legislative history of the DMCA, the Associated Press court concluded that the statutory language was unambiguous, and, thus, refused to consider the legislative history. The court found that, because the Copyright Act defines "copyright management information" to include identifying information about the copyright owner of the work - including the copyright notice, 17 U.S.C. § 1202(c)(3) - the DMCA claim was pled properly.

Finally, the court dismissed AP's claims for trademark infringement and unfair competition, concluding that: (1) the trademark claims lacked proper factual support and were protected by principles of fair use; and (2) a false implication that AHN has permission to republish AP articles was not actionable under the section 43(a) of the Lanham Act, because it is "of no consequence to purchasers." Slip Op. at 13 (citing Dastar Corp. v. Twentieth Century Fox Film Corp ., 539 U.S. 23, 32-33 (2003)). The court denied the motion to dismiss the common law unfair competition claims for "passing off" AP's news articles as its own, however, finding that these claims are not preempted by Section 301(a) of the Copyright Act.

This ruling recognizes - at least in a preliminary context - the availability of a remedy in favor of news organizations against competitors on the Internet in those states that recognize the "hot news" doctrine. The court's ruling with respect to copyright management information furthers a split of authority regarding the scope of the prohibition on altering copyright management information. Some courts have held that copyright management information is protected by the DMCA only if it is incorporated in technological measures such as digital signatures. See, e.g., IQ Group, supra; Textile Secrets, supra . Other courts have taken the approach of the Associated Press court in refusing to limit copyright management information to technological measures. See, e.g., McClatchey v. The Associated Press, 2007 WL 776103 (W.D.Pa. 2007); cf. Gordon v. Nextel, 345 F.3d 922 (6th Cir. 2003) (protecting non-technological copyright management information on illustrations); Schifer Pub., Ltd. v. Chronicle Books, LLC , 2004 WL 2583817 (E.D.Pa. 2004) (holding that printed copyright management information on the inside cover of a book did not apply to the individual photos in the book, but not disputing validity of printed copyright management information as a rule).

The defendant in Associated Press evidently did not raise the issue that altering or removing copyright management information is actionable only if the actor has "reasonable grounds to know" that doing so will "induce, enable, facilitate, or conceal an infringement." 17 U.S.C. § 1202(b). Further, the defendant did not pose any argument - as made by some defendants in other cases - that the statute expressly provides a remedy for removal or alteration of copyright management information on existing copies, and not for failure to include such information on derivative works such as a re-written story or on new copies of the work.