Property Law Developments—Joseph William Singer

A federal district court has upheld Google’s library book project as an authorized fair use under the federal Copyright Act, 17 U.S.C. §101 et esq., Authors Guild, Inc. v. Google, Inc., 2013 WL 6017130 (S.D.N.Y. 2013). The court upheld the power of Google to scan copyrighted books held by libraries and to give those libraries digital copies of those scans. It also upheld Google’s power to make the text of those books searchable so that researchers could view snippets of those books and could search the books for particular phrases, words or concepts. The court ruled both practices to constitute a fair use, 17 U.S.C. §107. In determining that the ability to search the digital copies and to view snippets was a fair use, the court found that the use was transformative, did not supplant or supersede the originals, and was not designed to make a profit.

A recent case replays the conflict in the famous case of INS v. AP (International News Service v. Associated Press), 248 U.S. 215 (1918), which held that a news organization could stop a rival from selling news it had gathered for a short period when the news was still hot. In effect, the doctrine created a property right against a competitor’s use of the information for commercial purposes during the initial sales period. The Second Circuit reaffirmed that doctrine in the case of Barclays Capital Inc. v. Theflyonthewall.com, 2011 WL 2437554 (2d Cir. 2011), while simultaneously clarifying that noncompetitors were perfectly free to transmit the information without limit once it had been made public. The court held that investment banks could not stop a financial Web site from publishing on the Internet the research conclusions of the banks’s analysts once they were released to the public. At the same time, the banks could stop competitors from copying and reselling the information at least for a while. In effect, the hot news doctrine creates a property right against competitors but not against noncompetitors. Although noncompetitors can report the conclusions and reasoning of hte analysts, copyright law prohibits them from simply reprinting the actual language of the reports. The decision reversed the lower court’s ruling which had required defendant website to wait until 10 am to publish news about the financial reports that had been made public before 9:30 am, Read article.