International News Service v. Associated Press
248 U.S. 215, 39 S.Ct. 68, 63 L.Ed.211 (1918)
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Rule of Law:
A news-gathering organization has a quasi-property interest in the time-sensitive news it collects, and the systematic appropriation of this news by a competitor for commercial purposes, before its commercial value has passed, constitutes unfair competition.
Facts:
- Associated Press (AP) is a cooperative organization of approximately 950 newspapers that gathers news globally at significant expense for the exclusive benefit of its members.
- International News Service (INS) is a competing for-profit corporation that gathers and sells news to its client newspapers.
- AP's bylaws required its members to provide local news exclusively to AP and prohibited them from sharing AP's collected news with non-members before publication.
- INS systematically took news stories gathered by AP from two public sources: bulletin boards maintained by AP members and early editions of AP member newspapers.
- INS would then transmit this news, either verbatim or rewritten, via telegraph to its own client newspapers for publication.
- Due to time zone differences and the speed of telegraphy, INS could often publish AP's East Coast news in western newspapers at the same time as, or even earlier than, AP's own member papers in those markets.
- This practice allowed INS to profit from AP's news-gathering efforts without incurring the associated expenses, while directly competing with AP and its members.
Procedural Posture:
- Associated Press sued International News Service in the U.S. District Court, seeking an injunction to stop INS's alleged pirating of its news.
- The District Court granted a preliminary injunction against INS bribing AP employees or inducing AP members to violate by-laws, but refused to enjoin INS from taking news from public bulletin boards and early newspaper editions.
- Both parties appealed this decision to the U.S. Circuit Court of Appeals.
- The Circuit Court of Appeals affirmed the injunctions granted by the District Court and modified the order to also enjoin INS from taking news from the public sources until its commercial value as news had passed away.
- The U.S. Supreme Court granted certiorari to review the decision of the Circuit Court of Appeals.
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Issue:
Does a news organization's practice of taking news gathered by a competitor from early editions of newspapers and publicly posted bulletins, and then selling it as its own, constitute unfair competition?
Opinions:
Majority - Mr. Justice Pitney
Yes. A news agency's appropriation of uncopyrighted news gathered by a competitor constitutes unfair competition. While news matter may become common property as against the public after publication, it retains the attributes of quasi-property between business competitors. AP's news is its stock-in-trade, acquired through substantial expenditure of labor, skill, and money. INS's practice of taking this valuable, time-sensitive material and selling it as its own amounts to reaping where it has not sown. This conduct is an unauthorized interference with AP's legitimate business at the point where profit is to be made, and it gives INS a special advantage by allowing it to avoid the costs of news gathering. This is not a typical 'palming off' case; rather, it is a case where INS substitutes misappropriation for misrepresentation, selling AP's goods as its own.
Concurring - Mr. Justice Holmes
Yes, but on the grounds of implied misrepresentation rather than a property right in the news. Once published, an uncopyrighted combination of words is not property and can be repeated by anyone. However, the wrong here lies in unfair trade. By taking AP's fresh news and presenting it as its own, INS is implicitly misrepresenting that it acquired the news through its own enterprise and expense. This falsehood damages AP by denying it the credit it has earned. The proper remedy is not to prohibit INS from using the news, but to correct the misrepresentation by requiring INS to provide an express credit to the Associated Press for a certain number of hours after publication.
Dissenting - Mr. Justice Brandeis
No. The systematic appropriation of a competitor's published news does not constitute unfair competition. The general rule of law is that once knowledge or ideas are voluntarily communicated to the public, they become 'free as the air to common use.' There is no common law property right in news, and it is not protected by copyright or patent law. INS obtained the information lawfully from public sources, without any breach of contract or trust. Unfair competition requires an element of fraud, such as 'palming off,' or coercion, neither of which is present here. Creating a new property right in news is a complex legislative task with significant public policy implications that courts are ill-equipped to handle; it should be left to Congress.
Analysis:
This landmark decision established the 'hot news' misappropriation doctrine, creating a federal common law tort for a specific type of unfair competition. It significantly expanded the concept of unfair competition beyond the traditional boundaries of 'palming off' or 'passing off.' The court's recognition of a 'quasi-property' right in factual, time-sensitive information between competitors provided a new avenue for protecting intangible business assets not covered by copyright or patent law. The doctrine's influence has waxed and waned but remains relevant in modern disputes involving data aggregation, online databases, and high-speed financial market information.
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