International News Service (INS) and the Associated Press
(AP) were news organizations that wrote stories and sold them to
newspapers. AP sued INS for getting pre-publication copies of AP's
stories, and then repackaging and selling the stories to INS's client
newspapers.
AP claimed that INS:
Bribed newspaper employees to send AP stories to the
INS.
Convinced newspapers to share their AP stories with INS
prior to publication.
Copied AP stories out of early edition newspapers on the
East Coast and sent them to INS customers on the West Coast.
AP actually had correspondents over in Europe covering
WWI. INS did not. INS was writing their stories about WWI by reading
what AP was reporting.
The Trial Court found for AP and issued and injunction to
INS telling them to stop the first two practices, but that they could
still copy AP stories out of published newspapers. AP appealed.
The Trial Court felt that the conduct was unfair but they
were not sure if it were actually illegal.
The Appellate Court affirmed. AP appealed.
The US Supreme Court affirmed.
AP argued that news stories are similar to literary
properties and should be protected as such.
INS argued that news does not fall with in the operation
of the Copyright Act. In addition, INS argued that once AP makes
the information available to the public, they don't control it anymore
and can't dictate what people do with it.
INS argued that the news is essentially abandoned
property, once the paper is published.
The US Supreme Court recognized the dual character of
news articles. They distinguished between the substance of the
information and its form.
AP didn't invent the news.
The US Supreme Court found that there was a quasi-property
right in the news as it is "stock in trade to be gathered at the
cost of enterprise, organization, skill, labor and money, and to be
distributed and sold to those who will pay money for it".
Basically, The Court said that while there is no
copyright on the 'facts, there is an economic value to 'news', and as
such a company can have limited proprietary interest in it against a
competitor (but not the public) who takes advantage of the information.
The US Supreme Court upheld the common law rule that
there is no copyright in facts and developed the common law doctrine of
misappropriation through the tort of unfair competition.
If this case had gone the other way, AP would still not
have lost all value of their product. People would still pay AP for their
newsfeeds. In this manner, the idea of intellectual property is different
from chattel such as a farmer's tomatoes. If someone takes your
tomatoes, you have no value left. Here, INS's efforts only resulted in a
partial decrease in the value of AP's property.
On the other hand, if AP wasn't getting paid a lot, they
might chose not to pay to put reporters in Europe, and then nobody would
be collecting the news.
Btw, all those Civil Procedure fans out there might be
interested to notice that this case was decided under Federal common law.
This was pre Erie Doctrine.
