What's That They Say About Payback?

Righthaven was formed to generate revenue for itself and its newspaper clients by bringing copyright enforcement actions with respect to news articles reposted on the Internet without authorization. Righthaven's approach to monetization of online content was to file lawsuits seeking huge potential damages for copyright infringement, then settle for something around the lawsuits' nuisance value, an average of about $2,500 per case.

In the universe of potential defendants, Righthaven for the most part chose to go after those that many felt were vulnerable: individual bloggers, penniless non-profits, and local political campaigns. The defendants who were sued for material posted on their sites by third parties had failed to take advantage of the protection of the Digital Millennium Copyright Act takedown provisions, which could have shielded them from liability. And many of the lawsuits involved articles posted in a manner deemed acceptable in the blogger universe, if not to the copyright owners: a short article excerpt with a link to the original source.

These tough tactics, employed in a multiplicity of actions filed primarily in just two federal districts, generated a backlash that ultimately compromised Righthaven's ostensible goal: protection of the interests of copyright owners.

I can't help saying it: Hard cases sometimes make bad law. Whatever the merit of some of the copyright infringement claims made in Righthaven cases, those meritorious claims, as well as some larger issues of importance to online copyright owners, may be about to go under the bus with Righthaven itself.

EFF Pushes the Troll Back under the Bridge

After Righthaven was well on its way to filing more than 200 actions and had received payments to settle many of them, defendants began fighting back with the assistance of the Electronic Frontier Foundation, which branded Righthaven a "copyright troll."

With the EFF leading the way, a number of the defendants in Righthaven lawsuits convinced the courts that their use of the copyrighted articles was protected by the fair use doctrine. This much of the story I wrote about in March 2011, and then, another court concluded that a Righthaven defendant's use of the copyrighted article in question was fair. Righthaven LLC v. Hoehn, 2011 U.S. Dist. LEXIS 65830 (D. Nev. June 20, 2011) (posting of an entire copy of a newspaper article is fair where the purpose is to foster discussion).

The adverse rulings on fair use slowed down Righthaven a bit, but the EFF's body blow to the company came in its challenge to Righthaven's right to sue under copyright law.

What's So Important about Standing to Sue?

The difference between asserting the copyright fair use defense and challenging Righthaven's standing to sue, is that the entitlement to the fair use defense must be decided on a case-by-case basis. That's because fair use is a fact-sensitive evaluation that can't readily be made on a class-wide basis, where each defendant may have used different content, or used it in a different way, or have other distinguishing characteristics bearing on the applicability of fair use (posting on a non-profit versus a for-profit website, for example).

Looking at it from a practical litigation perspective, if the court rules that entitlement to the fair use defense can't be decided on a defendant's preliminary motion prior to discovery and preparation for trial, pursuing the issue can get very expensive for a copyright defendant. That's why many defendants took Righthaven's "get out cheap" settlement offers, regardless of the fact that a court might ultimately have found their use to be fair, as some courts did in Righthaven cases.

Unlike a typical copyright plaintiff that brings suit to enforce a copyright in which it has record ownership, however, Righthaven's right to sue (in law jargon, its "standing to sue") depended upon a single element common to all of the cases: the nature of the joint venture agreement between Righthaven and its clients. Quite simply, if you win against Righthaven on that issue in one case, you probably win in all of them.

Righthaven's business model was built upon the notion that it would obtain from its customers a limited right in their content that would be sufficient to support Righthaven's status as a copyright plaintiff, but would not interfere with the customers' continued exploitation of their works. After a pitched court battle, the EFF got a copy of Righthaven's agreement with its clients. The EFF argued, and the district courts have thus far agreed, that the agreement fell short of the goal of giving Righthaven standing to sue.

Under the Copyright Act, a copyright plaintiff must be asserting a right that is an exclusive right of a copyright owner. What the agreement had conferred, in essence, was merely a right to sue. As one court put it succinctly, the mere right to sue, by itself, is not an exclusive right of a copyright owner. Righthaven LLC v. Democratic Underground, (D. Nev. June 14, 2011).

The Dominoes Fall

After the first adverse ruling on Righthaven's standing in the Democratic Underground case, courts in other cases quickly followed it. In the District of Colorado, where 34 lawsuits brought with respect to articles in The Denver Post were filed, the court's ruling in Righthaven LLC v. Wolf resulted in the dismissal of all of the Righthaven cases in Colorado, as they were assigned to a single judge who applied his ruling in Wolf across the board.

The rulings set the stage for the next phase of the EFF's Righthaven takedown: the filing of motions for sanctions. Under the federal rules of procedure, a prevailing party in a lawsuit may seek an award of attorney fees under certain circumstances, such as where they can show that the filing of the suit was made without a proper basis.

As of the latest tally on the Righthaven Lawsuits website, more than $225,000 in attorney fee awards have been assessed against Righthaven. Righthaven has pleaded poverty and said that it may be forced to file for bankruptcy, but the court in the Hoehn case issued an order allowing the seizure of Righthaven's assets to satisfy the award. Proceedings in those collection efforts are continuing, with a considerable amount of drama surrounding the question of exactly what those assets are and where they can be located.

More motions for attorney fees may be filed, and a class action firm is attempting to organize a lawsuit by the Righthaven defendants that settled.

What Happens Next?

Even as Righthaven has been besieged by attorney fee judgments, one of its attorneys has said that it is not yet down for the count. The company has filed numerous appeals, on both the fair use issue and the standing issue. Those appeals currently are pending in the U.S. Court of Appeals for the Ninth Circuit. Whether Righthaven will survive as an entity long enough to pursue those appeals is an open question.

Righthaven's litigation campaign hasn't won it many admirers, to say the least. Many of its practices, while not improper, were viewed as unfair and overreaching: the filing of lawsuits without first requesting the removal of content, and the targeting of individuals and organizations with the least ability to defend themselves, among other things. Even the new CEO of its former client MediaNews Group, parent of The Denver Post, said he thought it was "a dumb idea from the start" when he announced that the company would not renew its contract with Righthaven.

But as the confetti seems ready to rain down on the celebration at the anti-Righthaven party, some of the partygoers, such as bloggers who are themselves copyright owners whose content is appropriated by others without permission, might want to stop and think about some of the aspects of the Righthaven rulings that may have gone a bit too far in favor of online reposting of content. If Righthaven is brought down before it has the opportunity to have its appeals heard, those rulings will stand, for good or ill.

I'll leave you with this point, made by Ken Paulson, president of the First Amendment Center at Vanderbilt University. He commented on the Hoehn fair use ruling, in which the court held that the reposting of an entire news article is fair use and suggested that editorial opinions are less creative, and entitled to less copyright protection, than the design of a Barbie doll:

Posting an entire editorial on a website will mean more people will see the viewpoint and may well encourage discussion and exploration. That's a good thing.

On the other hand, what becomes of a free press if virtually everything can be freely taken and used by others without compensation to the journalist or the company he works for?

Copyright symbol image by Mike Blogs via Flickr.

Jeffrey D. Neuburger is a partner in the New York office of Proskauer Rose LLP, and co-chair of the Technology, Media and Communications Practice Group. His practice focuses on technology and media-related business transactions and counseling of clients in the utilization of new media. He is an adjunct professor at Fordham University School of Law teaching E-Commerce Law and the co-author of two books, "Doing Business on the Internet" and "Emerging Technologies and the Law." He also co-writes the New Media & Technology Law Blog.

Is it an infringement of copyright to post an excerpt from an online news article -- including a link to its source -- on a website, a blog, or an online forum? This practice is ubiquitous in online journalism, but its legal status has been in question since the hyperlink was invented.

Righthaven, LLC, a for-profit intellectual property enforcement enterprise, has taken straight aim at the practice of online excerpting and linking through litigation. Founded last year by the publisher of the Las Vegas Review-Journal, Stevens Media, and a group of copyright attorneys, the company has brought more than 230 copyright infringement lawsuits against website owners, bloggers, and even some individuals. All have been charged with posting unauthorized copies of copyrighted newspaper articles that have been assigned to Righthaven for the purposes of litigation.

The Electronic Frontier Foundation (EFF), an online civil liberties group, has denounced Righthaven as one of the new "copyright trolls."

In response, Attorney Steven Gibson, Righthaven's founder, says the company is merely "taking a fresh approach to help stem the tide of infringement on the Internet."

Regardless of who's right, these two opposing organizations are helping to define the legal use of digital content. The outcome of their legal battles may have important implications for legal rights and responsibilities of news organizations, bloggers, and commentors across Internet.

Cashing in on content

Righthaven has more than an approach; it has a business model.

The first 200 or so Righthaven lawsuits have been mostly brought in the District of Nevada, where the company is based, and typically allege that it owns copyright rights in an article published on the website of the Law Vegas Review-Journal. (Those rights were transferred to Righthaven by written agreement with Stephens Media.) The complaints assert that the named defendant or defendants are responsible for copyright infringement resulting from the posting of an unauthorized copy of the subject article, or a portion of the article, on the defendant's website or other online service.

What makes these suits especially difficult for site owners is that most of them concern articles that have been posted on a defendant's site by a third party, such as in a comment on the defendant's blog or online forum. The complaints do not make the distinction between copies posted by the owner of an online site and the user of an online site -- they only allege that an unauthorized copy of the article is posted on the defendant's site and that the defendant is responsible for the infringement.

In general, the operator of a website is exposed to liability for copyright infringement even where the copyrighted work is posted by a user of the site. The Digital Millennium Copyright Act limits the liability of site owners who take advantage of its provisions and remove copyrighted content upon receipt of a "takedown" notice.

But Righthaven's business model is to target websites that have not taken advantage of the so-called safe harbor provision in the DCMA. Significantly, Righthaven does not request that the articles be removed prior to filing suit.

Who pays

The defendants in Righthaven lawsuits for the most part have been individual website owners and relatively small institutions -- often non-profits. The company has also been targeting the actual posters of copyrighted articles in some of its recent complaints.

One prominent exception to this pattern is the lawsuit filed against the Drudge Report, a leading conservative news aggregation website. On February 17, Drudge settled with Righthaven for an undisclosed sum.

Similarly, the group filed a lawsuit on February 24th against Citadel Broadcasting Co., owner of a major radio network, over the posting of a copyrighted photograph on the website of one of its stations.

According to one of several websites that track Righthaven lawsuits, the company follows the filing of a complaint with a demand for damages ranging from $75,000 to $150,000, and pressures for a quick settlement.

In addition to damages, Righthaven often seeks the transfer of the defendants' domain names. This is an unusual demand that critics have charged is questionable under the law and designed to intimidate unsophisticated defendants and add to the pressure to quickly settle.

Early Success

Numerous defendants appear to have succumbed to Righthaven's settlement demands, for amounts that may be as small as the mid- to low-four figures. Because the terms of settlements typically are confidential, the amounts actually paid in the settlements are in most cases not a matter of record.

On the day the Drudge case ended, the Righthaven Lawsuits website (not affiliated with the copyright company) noted that 104 Righthaven cases had closed, presumably by settlement. The site estimated that Righthaven has earned in excess of $365,000 in revenue, based upon an estimated $3,500 per case.

Some defendants have failed to respond to Righthaven complaints, which has allowed the company to begin filing motions -- first, for the entry of a default, then for the entry of a default judgment. A default judgment is an enforceable court order for the payment of the amount of damages awarded by the court. These cases have the potential to yield a greater return for Righthaven than those that have settled thus far, and may include other legal relief that Righthaven has requested, such as the turnover of the defendant's domain name.

On February 10, Righthaven made its first motion for a default judgment. It demanded $150,000 in damages for infringement -- the maximum amount of statutory damages allowed under U.S. law for willful infringement of a single work -- $1,500 in attorney fees, and $350 in costs. In addition to financial damages, it also requested a permanent injunction and an order turning over the defendant's domain name to Righthaven.

The court has yet to rule on Righthaven's request, but it is unlikely that anything near the maximum of statutory damages will be awarded. Judges have considerable discretion is awarding statutory damages, ranging from the minimum amount of $750 per work to the maximum requested by Righthaven. But where the defendant can show that it was not aware of the infringement, that figure can be reduced to as little as $200.

Standing up for their Rights

Not all of the Righthaven defendants are settling or failing to answer. Some have raised a variety of defenses, including the copyright "fair use" doctrine, with some success.

In Righthaven v. Realty One Group, a blogger who posted an eight-sentence excerpt from a Las Vegas Review-Journal article, including a link, obtained a dismissal on the grounds of fair use. The court ruled that the use of the excerpt was fair as a matter of law -- that is, without the need for further fact-finding.

The ruling noted among other things that the blogger copied only the factual portion of the article, not the reporter's commentary, and thus the blogger's use "does not satisfy a reader's desire to view and read [the entire article including] the author's original commentary and thereby does not dilute the market for the copyrighted work."

The court also noted that the blogger had included a link to the source of the article containing the full text.

The Righthaven v. Realty One Group decision is a significant ruling in that it may influence Nevada District judges assigned to other cases in which Righthaven is alleging that only a portion of an article was posted. But many of the lawsuits involve the posting of entire articles. Fair use is a lot more difficult argument to make when an entire work has been appropriated.

From Fair Use to Implied License

Nevertheless, in Righthaven v. Klerks -- a case involving the posting of an entire article -- the operator of an online forum successfully used the fair use defense in moving to reopen the case after a default had been entered for failure to answer. Klerks asserted that he had not been properly served in the case.

The court ruled that as a preliminary matter, Klerks had shown that fair use was a "sufficiently meritorious" defense to justify reopening the case, even though the fact that the entire article was used was a factor weighing against a fair use finding.

Klerks also raised what the court called a potentially more meritorious defense: Implied license. A license to use a copyrighted work may be implied where the conduct of the copyright holder is such that the party using the work may justifiably infer that there is consent to the use.

The court in Klerks v. Righthaven pointed to the fact that the newspaper publisher "encouraged people to save and share the article with others without restrictions, and permitted users to 'right-click' and copy the article from its website." The ruling added, there was a "plausible argument" for an implied license, "especially in light of the established and accepted custom of users freely and openly sharing certain information posted on the Internet."

That is a broad statement indeed, and one that should concern content owners whose intent in making their work available online is selective sharing, not permission for wholesale and unrestricted copying.

As with the issue of fair use, the final resolution of the implied license issue must await further proceedings in the case.

EFF to the Defense

In the fall of last year, the EFF moved on from denouncing Righthaven as a copyright troll to inviting Righthaven defendants to seek the organization's legal assistance. The copyright troll accusation has resurfaced in the arguments that the EFF has made in two of the several cases in which it has become involved: Righthaven v. Democratic Underground and Righthaven v. Center for Intercultural Organizing (CIO).

In one of its filings in Righthaven v. Democratic Underground, the EFF described Righthaven's complaint as the action as "a particularly abusive instance of a broad and aggressive strategy" by a "sham" plaintiff.

Righthaven has responded in kind. In a filing in that same case, it referred to the EFF as "vexatious" and "vituperative." In an affidavit filed in the CIO dispute, Righthaven accusing the EFF of having "aggressively litigated" the cases in which it is involved by "driving up litigation costs through extensive motion practice and discovery efforts."

Will the judges find these respective accusations relevant to the underlying issues in the litigation? Or view them as mere attempts at adversarial well-poisoning? That much remains to be seen.

Ed. note: On March 22, the court ruled in favor of CIO on the issue of fair use; see the update at the end of the article for details.

But it is clear that the EFF intends to disrupt Righthaven's business model. Any litigation in which the EFF becomes involved is likely to be hard-fought on both sides.

Righthaven Takes Its Show on the Road

The fair use rulings in the District of Nevada may have slowed Righthaven down a bit. It appears that the company may have temporarily suspended filing additional lawsuits in that district.

However, Righthaven has now partnered with MediaNews, the publisher of the Denver Post. In December, Righthaven filed a single complaint with respect to content from that newspaper in the District of South Carolina, and on January 20, it started filing a series of complaints in the District of Colorado.

Notably, the outgoing CEO of MediaNews, Dean Singleton, is also the chairman of the Associated Press. The AP has previously taken a strong position against excerpting news stories.

From a procedural perspective, filing new lawsuits in other federal districts is a smart move. Judges in the other federal districts are not obliged to follow the District of Nevada rulings that are adverse to Righthaven, nor would they be required to follow any adverse ruling on appeal from the U.S. Court of Appeals for the Ninth Circuit. (Colorado is in the Tenth Circuit; South Carolina is in the Fourth Circuit.)

More revenue, more responsibility

Even if Righthaven is reasonably successful overall in its litigation campaign on behalf of its present and future newspaper clients, as a practical matter it is unlikely to put a dent in the practice of re-posting online news content and linking to its source.

What it may achieve is a de facto licensing scheme that will restore some small amount of the revenue loss suffered by its client newspapers due to declining subscription and advertising sales. How large or small that revenue stream will be depends upon how the courts view the fair use, implied license, and other issues raised in the case. In any event, sorting out those issues in the Righthaven cases may provide needed guidance on the use of online news content.

Meanwhile, the immediate lesson for website operators, blog owners, and other service providers that allow users to submit content to their sites is that they should take advantage of the protection of the DMCA safe harbor provisions. Like flu shots, seat belts, and bicycle helmets, the DMCA can provide low-cost protection from damages for infringement caused by third parties.

For content owners, there may also be important lessons in how the judges in the Righthaven lawsuits address the issue of implied license. At a minimum, content owners should review any license terms in their website terms of use. Making clear what uses are expressly licensed may forestall arguments that there is a much broader, implied license to distribute their content.

UPDATE: On Friday, March 18, Judge James Mahan, who is presiding over Righthaven's lawsuits against the Center for Intercultural Organizing, announced that he would dismiss the charges on the grounds of fair use. The lawsuit involves the posting of an entire article from the Las Vegas Review-Journal on CIO's website. According to a news article in the Las Vegas Sun, Judge Mahan indicated the following in a ruling from the bench (i.e., without a written opinion):

* that CIO was using the article for educational purposes and not to raise money;
* that the article was primarily factual as opposed to creative;
* that its use did not harm to the market for the article;
* that Righthaven was remiss for not notifying CIO in advance of the lawsuit;
* that the copyright in the article, once transferred to Righthaven by the Las Vegas Review-Journal, was entitled to lesser protection under the Copyright Act;
* and finally, that the use of the copyright in the article -- presumably, as the basis for a lawsuit -- has a chilling effect on free speech and doesn't advance the purposes of copyright.

In response to a statement by Righthaven's attorney indicating that the company intended to appeal, the judge commented: "I realize this is going to be appealed. I tell litigators 'that's why God created San Francisco.'" That's the location of the Ninth Circuit Court of Appeals, where the Righthaven v. Center for Intercultural Organizing case is likely headed next.

Copyright symbol image by Mike Blogs via Flickr. The "Delink Righthaven" graphic was created by kbingh.

Jeffrey D. Neuburger is a partner in the New York office of Proskauer Rose LLP, and co-chair of the Technology, Media and Communications Practice Group. His practice focuses on technology and media-related business transactions and counseling of clients in the utilization of new media. He is an adjunct professor at Fordham University School of Law teaching E-Commerce Law and the co-author of two books, "Doing Business on the Internet" and "Emerging Technologies and the Law." He also co-writes the New Media & Technology Law Blog.

Owner Versus Licensee

Ownership of a copy is an important concept in copyright law. Ownership of a copy of a work is distinct from ownership of the copyright in a work, which is retained by the author or publisher of a book or other work. Ownership of a copy determines whether the copyright owner has the right under copyright law to control subsequent transfers of the copy by sale, gift, rental or lending. In the case of computer programs, ownership of a copy determines whether the program may be used for specified purposes without infringing the copyright owner's rights.

In the last several decades, questions concerning the ownership of copies of digital content have arisen with respect to various kinds of digital content. The federal courts are currently grappling with the issue in the context of audio CDs, videogames and software in a trio of cases that were recently argued before the U.S. Court of Appeals for the Ninth Circuit. The resolution of these disputes may help predict how other federal courts will view the issue of ownership of copies of e-books and other electronic publications, such as the proliferating category of all digital magazines targeted at Apple's iPad and other tablet devices.

The Copyright First Sale Doctrine

The copyright first sale doctrine has its origins in a dispute that arose when the publisher of a copyrighted novel sought to preclude dealers who purchased copies of the book for resale from reselling it at a price lower than that stipulated by the publisher. The publisher relied on language that was printed on the inside cover of the book that established a specific retail price and stated that dealers were not licensed to sell it at a lower price, and that a sale at a lower price would be treated as an infringement of the publisher's copyright. In Bobbs-Merrill Co. v. Straus, the U.S. Supreme Court concluded that this notice did not give the publisher the right, under copyright law, to limit subsequent sales of the books by the initial purchaser.

The ruling in Bobbs-Merrill Co. v. Straus was subsequently codified in what is now Section 109(a) of the Copyright Act, which states that "the owner of a particular copy or phono record lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phono record."

As evidenced by a nation that is thick with used bookstores and charity used book sales, under this section the purchaser of a printed book can sell, give away or even burn the copy without the permission of the copyright owner.

Section 109 does not, however, define the critical term "owner ... of a copy," leaving copyright officials and federal courts to interpret it on a case-by-case basis.

Owner of a Copy

It's easy to conclude that the purchaser of a printed book who pays the price and walks out of the store with it is the "owner" of that copy of the book, because the transaction has two significant incidents of a typical sale: Payment of a single price, and transfer of permanent possession of the item. But as an episode involving the remote deletion of e-books from Amazon's Kindle e-reader device demonstrates, some e-book ecosystems allow the seller to remotely delete content, a fact which makes the transfer of possession potentially less than permanent. E-books are also typically sold subject to an agreement containing a variety of provisions limiting purchasers' rights. For example, the Terms of Use available on the Barnes and Noble website contains provisions that restrict the right to transfer "digital content" to another device and limit the right to lend digital content to another user.

The Register of Copyrights recently studied the issue of ownership of digital content on mobile devices during the triennial rule-making proceeding under the Digital Millennium Copyright Act. The issue arose in the context of the Register's determination of whether the purchaser of a device such as an Apple iPhone is the owner of copies of the firmware installed on the device, and thus whether the purchaser has the right to modify the software in order to "jailbreak" it. The Register threw up her hands and rested her decision instead on the "fair use" doctrine, commenting that even the federal courts have disagreed as to the proper test under copyright law for determining ownership of software copies.

Current Disputes

The struggle in the federal courts over the issue of ownership can be seen in three cases argued simultaneously in June in the U.S. Court of Appeals for the Ninth Circuit. Each case presents the issue of ownership of copies under copyright law in a different context, although all three involve reliance on contractual language to limit the rights of purchasers and recipients of copyrighted content. In an unusual move, the court agreed to the request of the parties to these cases that they be heard simultaneously by the same appellate panel, due to the similarity of the issues they present.

Universal Music Group v. Augusto involved online auctions of promotional CDs distributed by the music company to reviewers, radio stations and others in or associated with the music industry. The CDs were distributed by the company with an included agreement stating that the CD was licensed to the recipient and that resale or transfer of possession was not permitted. Universal argued that the language in the agreement precluded a finding that the recipient was an owner under copyright law. The trial court concluded that, among other things, the transfer of possession of the CDs to the recipients for an indefinite period of time indicated that the recipients were owners of the copies.

Another case, Vernor v. Autodesk, involved packaged software that was resold by the original purchaser to a reseller who posted it for sale in an online auction. Autodesk, the software developer, relied on language in the shrink-wrap license agreement accompanying the software in the original transaction, stating that the distributor granted to the purchaser a "non-exclusive, non-transferable license" and prohibited subsequent transfers of the software without its consent.

Autodesk argued that this language prohibits its original purchaser from disposing of Autodesk software in the secondary market. The trial court disagreed, concluding that because the original transaction allowed the purchaser to retain possession of the copy for a single, up-front payment, the transaction was a sale that transferred ownership of the copy. Significantly, however, the trial court found that rulings in the Ninth Circuit (the federal appellate court which the trial court was bound to follow) were in conflict on the issue and that if the court followed the most recent of those conflicting opinions, it would have ruled in favor of Autodesk on the issue of ownership.

The third case, MDY Industries, LLC v. Blizzard Entertainment, Inc., involved videogame software, and the question of whether the terms of the end user license agreement accompanying the videogame preclude a finding that the purchaser is the owner of a copy under 17 U.S.C. § 117(a). That section affords owners certain rights to use copies of computer programs. In MDY, the issue was not the transfer of the videogame software, but the use of the videogame with a third-party computer program that is not approved by the video game developer. The trial court concluded that purchasers' use of the videogame software with unapproved programs was not protected under Section 117(a) because the end user license agreement had so limited the purchasers' rights that the transaction could not be considered the sale of a copy. Like the court in Vernor v. Autodesk, the court in MDY referenced the conflicting rulings in the Ninth Circuit on the issue of ownership, but chose instead to follow the later rulings that are more favorable to the position of content owners.

Conclusion

What is at stake in these cases is not the ability of copyright owners to limit transfers or certain uses of their copyrighted works at all, but whether they may do so under the Copyright Act. The Copyright Act affords content owners powerful and versatile remedies that are not available if the limitations that content owners place on their works are viewed merely as contract provisions, and the violations of them are treated as breaches of contract.

What is at stake for purchasers of e-books and other electronic publications is whether they will be treated under copyright law as owners of copies of the books and magazines they download, or simply licensees with limited rights.

Jeffrey D. Neuburger is a partner in the New York office of Proskauer Rose LLP, and co-chair of the Technology, Media and Communications Practice Group. His practice focuses on technology and media-related business transactions and counseling of clients in the utilization of new media. He is an adjunct professor at Fordham University School of Law teaching E-Commerce Law and the co-author of two books, "Doing Business on the Internet" and "Emerging Technologies and the Law." He also co-writes the New Media & Technology Law Blog.

The battles fought by several of those firms (Barclays Capital, Mogan Stanley and Merrill Lynch) are detailed in the recent federal district court ruling in Barclays Capital, Inc., v. Theflyonthewall.com (S.D.N.Y. Mar. 18, 2010). The firms won a big victory when federal judge Denise Cote, relying on the "hot news" misappropriation doctrine recognized under New York state law, issued an order limiting the republication of the firms' stock recommendations by the defendant, financial news aggregator theflyonthewall.com ("Fly").

Fly countered with a plea [PDF] to the the U.S. Court of Appeals for the Second Circuit that the enforcement of the injunction would force it out of business. In a dramatic turn, on May 19 the appeals court granted a stay [PDF] of the injunction and a rare expedited appeal, calling for briefs to be filed by July 26.

This case about the hot news doctrine has now itself become "hot news."

The Hot News Doctrine

As previously written on MediaShift, the "hot news" misappropriation doctrine is a legal principle first recognized in the early twentieth century when the Associated Press news service sued a rival service for paying off AP employees to pass on early versions of stories that were intended for West Coast newspapers. The rival service rewrote the stories to avoid claims of copyright infringement, and then sold them to West Coast news outlets.

The U.S. Supreme Court ruled in 1918 in International News Service v. Associated Press, that the AP had a right in the news content that it gathered that was distinct from its rights under copyright law: "the peculiar value of news is in the spreading of it while it is fresh," the Court famously commented.

With a bow to the First Amendment, the Court distinguished an individual's right to disseminate information contained in a newspaper once published from a business competitor's act of appropriation of material that had been acquired through expenditure of labor, skill and money. The Court concluded that the AP could sue on the theory that the rival's conduct constituted "unfair competition in business." Although the ruling was later criticized and challenged, the U.S. Court of Appeals for the Second Circuit reaffirmed its viability in 1997 in National Basketball Association v. Motorola, Inc., a case involving transmission of basketball scores.

The Barclays case is the first time that the Second Circuit has had an opportunity to consider the hot news doctrine in the context of the Internet age, which began picking up steam just after the ruling in NBA v. Motorola.

Current views on the viability of the hot news doctrine are mixed. The doctrine exists in tension with First Amendment values that protect the right to freely disseminate facts, and with the limits of copyright law, which do not extend to mere facts but only to the expression of facts. Nevertheless, the federalization of the hot news doctrine (which currently has been recognized only in a handful of states) has been proposed as a tool to support the efforts of traditional media to protect their content from online competition. That and other proposals to support traditional journalism made it into a recently released FTC Staff Discussion Draft [PDF] that summarized the discussions at the FTC workshops on the future of journalism.

The Value of Timely Financial Information

The Barclays opinion demonstrates the value of hot financial news, and the effects that unauthorized dissemination of that news can have on the financial firms that prepare and market it.

At issue in Barclays is the information contained in reports prepared by the financial firms for their largest and most lucrative customers and disseminated as "actionable recommendations" -- recommendations to buy, sell or hold a stock. As the district court explained, the firms' recommendations are not casually made; they are the product of the efforts of a large staff of analysts and related functionaries who acquire, sift and compile information on an ongoing basis, at great cost and expense.

The recommendations yield value for the financial firms primarily in the form of fees on the trades made by customers who frequently use the trading arm of the financial firm to make a trade on that recommendation. The value of the recommendations to the customers is the timeliness of the information: It is typically disseminated to them between midnight and 7 a.m., before the opening of the New York Stock Exchange. And it is significant as well that the reputation of the big firm analysts is such that their recommendations are themselves news and may move the market price of a stock significantly and in a very short period of time once widely known. Having those recommendations before market opening can provide the firms' clients with "an early informational advantage," as the court commented. The value of the recommendations derive not just from the quality of the information, but the "exclusivity and timeliness" of it.

To protect the value of this "informational advantage," the firms have implemented elaborate systems aimed at limiting access to the recommendations, including the use of password-protected proprietary Internet platforms, and licensing provisions that narrowly limit the right to disseminate the reports and forbid their redistribution to unauthorized parties. The district court described other technologies that are used to control access and dissemination, including blocking access to the firms' proprietary systems from certain websites and social networking platforms, and the use of personalized, encrypted URLs to deliver information to clients. (This makes it easier to track down the source of leaked reports.)

Despite these efforts, online financial news aggregators have been able to gain access to recommendations in advance of their public release. Fly, the district court found, was one of the first online financial news subscription services to engage in the practice of systematically obtaining and disseminating the actionable recommendations of traditional financial firms. Until the institution of the Barclays lawsuit in 2005, Fly's source of these recommendations was employees of the financial firms, who provided them despite the fact that they were not authorized to do so. After the litigation commenced, Fly changed its tactics; but it was still able frequently to obtain those recommendations, often from licensees of the information, and disseminate the recommendations to its subscribers before the financial markets' opening bell.

The Impact on Financial Firms

According to the district court opinion, the aggregators' activities have had an impact on the financial firms' business model and revenue generation, a finding critical to the analysis of one of the key elements of the hot news doctrine: Whether the "free riding" by Fly and the other online services on the financial firm's efforts in generating their actionable recommendations "would so reduce the incentive to produce the product or service that its existence or quality would be substantially threatened." This element of the hot news doctrine, the court found, implicates the public interest in protecting "socially valuable products or services in danger of being under-produced."

The court ruled resoundingly in the financial firms' favor on this point, crediting the firms' evidence that they had cut their analyst staff and budgets significantly because, in addition to other factors, the analysts' reports were no longer the driving force behind the generation of commission revenue to the extent that they had been previously.

"With clients able to review the Firms' recommendations and even research reports through other sources, the research department have been handicapped in their ability to argue for their historical share of the Firms' overall budgets," the court found, resulting in cuts of from 20 percent to half or more over the past decade.

The conduct of Fly and the other online news aggregators, the court concluded, threatens the ability of the firms' to monetize their research and continue to produce it. In evaluating the appropriateness of an injunction, the court further commented that this activity "is a valuable social good," and "plays a vital role in modern capital markets by helping to disclose information material to the market, to price stocks more fairly and, as a result, to produce a more efficient allocation of capital."

The Injunction

The injunction crafted by Judge Cote was carefully aimed at the time period that the financial firms identified as most critical to maintaining the value of its recommendations. Fly was enjoined from disseminating the firms' pre-opening recommendations in most cases before one-half hour after the opening of the New York Stock Exchange. The court also provided for a re-evaluation of the injunction after a one-year period, to determine whether the financial firms have taken action against other news aggregators. It would be inequitable, the court found, to enjoin Fly from publication of the firms' recommendations if the firms fail to take action against others engaged in the same conduct.

Conclusion

The result in Barclays v. Theflyonthewall.com is likely to be important not only for financial firms seeking to protect analysts' recommendations, but for general news outlets as well. A reaffirmation of the viability of the "hot news" doctrine by the Second Circuit could spur additional lawsuits and would probably bolster the position of advocates for enacting the doctrine on a nationwide basis. If the ruling is overturned, the legal avenues available to content owners seeking to protect their content from aggregation services will have been further narrowed.
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UPDATE**: The importance of this dispute is reflected in the filing of several amicus (friend of the court) briefs. The brief filed jointly by the Electronic Frontier Foundation, the Citizen Media Law Project of the Berkman Center for Internet and Society at Harvard University and Public Citizen asks the court to focus on the strong First Amendment interests at issue in the case. Google and Twitter have also filed a joint brief supporting Fly's position, citing both First Amendment and copyright concerns. Both Dow Jones, Inc., singly, and a group of media companies including the Associated Press, Time, Inc., The New York Times Co. and the Washington Post have also filed amicus briefs.

Jeffrey D. Neuburger is a partner in the New York office of Proskauer Rose LLP, and co-chair of the Technology, Media and Communications Practice Group. His practice focuses on technology and media-related business transactions and counseling of clients in the utilization of new media. He is an adjunct professor at Fordham University School of Law teaching E-Commerce Law and the co-author of two books, "Doing Business on the Internet" and "Emerging Technologies and the Law." He also co-writes the New Media & Technology Law Blog.

Local police, apparently suspicious of the coincidence between the two events, questioned Collins and administered a polygraph test. He was later charged with false informing, and the University disciplined Collins as a result of that charge. These developments were reported in subsequent news stories in the Journal & Courier. The online versions of the articles prompted many vitriolic statements by readers, including a number that accused Collins of being responsible for Steffey's disappearance.

Steffey's body was eventually discovered; his death apparently was the result of an accident. Even before that discovery, the false-informing charge against Collins was dismissed for lack of evidence. Collins subsequently brought suit against numerous parties, including the police, the University, one online commenter who used his real name, as well as various anonymous commenters, and the newspaper. Collins claimed that the newspaper was liable for defaming him, not only in its news coverage, but also as a result of the accusatory statements made by the online commenters with respect to those news stories.

In Collins v. Purdue University, 2010 WL 1250916 (N.D. Ind. March 24, 2010), a federal court held that under Section 230 of the federal Communications Decency Act (CDA) of 1996, the newspaper could not be held liable for the online comments posted by third parties.

Had the same accusatory third-party comments been published in the newspaper's print edition -- say in a letter to the editor or an op-ed piece -- the newspaper might have had a much harder time avoiding liability. That's because the legal rule in Section 230 of the CDA that is applicable to liability for online statements made by another party is much more favorable to a publisher than the legal rules applicable to liability for third-party statements in a print publication.

Why is Liability Different on the Internet?

The U.S. Congress took a bold step in 1996 with the enactment of Section 230 of the CDA. (See this previous MediaShift report, which also discussed Section 230.) While most of the provisions of the Act were aimed at censoring objectionable content on the Internet, Section 230 was aimed at protecting "interactive service providers" from liability for objectionable content provided by third party users of their services. Section 230 also protects users themselves from liability for content provided by other users.

The purpose of Section 230 was, among other things, "to maintain the robust nature of Internet communication," and to maintain the Internet and interactive computer services as "a forum for a true diversity of political discourse, unique opportunities for cultural development, and myriad avenues for intellectual activity," according to a ruling in Zeran v. America Online [PDF] (4th Cir. 1997).

Under Section 230, an "interactive service provider" (e.g., an Internet Service Provider or a website operator, among others) may not be treated as the "publisher or distributor" of "information" provided by a third party user of its service. As the district court explained in Collins v. Purdue University, this language has been consistently interpreted to provide online publishers with broad immunity from liability for defamation and other wrongful acts on the part of users of their services.

The Expansive Interpretation of Section 230

The ruling in Collins v. Purdue University is a routine application of Section 230. Since the enactment of Section 230 in 1996, there have been hundreds of opinions interpreting the provision, and expanding its coverage beyond the kinds of defamation claims more usually associated with parties defined as "publishers" or "distributors."

For example, the protection afforded interactive service providers such as the newspaper in Collins v. Purdue is not limited to defamation claims. Courts have interpreted the language prohibiting the treatment of a provider "as a publisher or distributor" to limit the liability of providers for a wide range of other wrongful acts by users. (But note that claims of intellectual property infringement are expressly excluded from the protective scope of Section 230). Thus, in Green v. America Online [PDF] (3d Cir. 2003), an online provider was protected from liability for damage to a user's computer that was allegedly caused by another user's malicious transmission of a "punter" signal in an online chat room.

Online providers have also been held immune from liability for the acts of sexual predators who contacted underage victims via their services (Doe v. MySpace [PDF] (5th Cir. 2008)) and from liability under civil rights statutes for religious harassment by users (Noah v. America Online (E.D. Va. 2003)). The online bulletin board Craigslist has been held immune under Section 230 from a local sheriff's claims that the service is liable under public nuisance laws for causing or inducing prostitution as a result of its "erotic services" listings. Dart v. CraigsList [PDF] (N.D. Ill. 2009)

The interpretation of Section 230 has been expansive not only in the range of claims against which it protects providers, but in situations in which it operates to protect service providers and users from liability for content provided by other parties. For example, the owner of a mailing list has been held immune from liability for defamatory statements contained in an e-mail message that the owner forwarded to mailing list subscribers. Batzel v. Smith [PDF] (9th Cir. 2003).

As controversial as some of Section 230 rulings have been, one of its more troubling applications may be in a case involving an attempt by the original author of defamatory content to have it removed from a provider's site.

In Global Royalties v. Xcentric Ventures (D. Ariz. 2007), the "Ripoff Report" online consumer complaint site was sued for refusing to remove allegedly defamatory postings at the request of the original user. The court held that refusing to remove a posting, even at the request of the original author, was an editorial function reserved to the site owner, and protected under Section 230.

The Role of Anonymity for Online Comments

If a newspaper can't be sued for defamatory online comments by readers, what about suing the individual who posted the comments?

Section 230 does not affect the liability of individuals for their own online statements, and such lawsuits can be and have been brought. But, unlike at least one of the posters in the Collins v. Purdue University case, the individuals responsible for defamatory posts frequently do not post under their real names.

In order to successfully sue an anonymous individual who posted an online comment on a newspaper (or any other) website, the plaintiff usually must serve a subpoena on the newspaper to obtain account registration information or an IP address that will lead to the poster's true identity. Many newspapers resist such subpoenas, however, and, as I have previously written, a plaintiff often must make a special showing to the court before an order will be issued requiring the newspaper or other provider to turn over of identifying information.

While it is possible to obtain such an order and ultimately sue the actual author of a defamatory online statement, it is a challenging endeavor for a plaintiff, who may spend a great deal in attorney fees to prosecute a lawsuit against a defendant who may ultimately turn out to be penniless or otherwise judgment-proof. By immunizing online providers such as newspapers from such lawsuits, Section 230 removes the obvious deep-pocket defendant from the line of fire.

Newspapers Reconsidering Online Comments?

It's easy to see the effect of Section 230 on almost any website that allows comments (such as newspapers): User comments often range from thoughtful, intelligent and carefully reasoned to venomous, vitriolic, and obviously defamatory, and everything in between.

The protection of Section 230 of the CDA enables newspapers to ignore the the user comments made on their sites, at least from the perspective of legal liability for defamatory or harmful content. Despite the legal protection Section 230 provides, however, some news sites utilize measures aimed at improving the nature of the discourse in their comments areas.

As The New York Times recently noted in an article on this phenomenon, the Wall Street Journal allows its subscribers to choose whether they will view only comments posted by other subscribers, and many news sites that police comments for content facilitate the reporting of offensive comments by other readers.

The article also reported that both the Gray Lady herself and the Washington Post are revising their comments policies to at least lessen the importance of anonymous comments. The Washington Post reportedly is considering a rating system that would boost the prominence of commenters using their real names.

This is not the first time that newspapers have reconsidered their online commenting policies. In 2005, the Los Angeles Times abandoned an early experiment in user participation when it closed a website that allowed readers to rewrite editorials, due to an overabundance of obscene content added to the site. In 2006, the Washington Post temporarily suspended online commenting when it determined that reader responses to a particular article violated its prohibitions against personal attacks, profanity and hate speech.

In a recent controversy over anonymous online comments, the Virginia Polytechnic Institute and State University (Virginia Tech) reportedly has threatened the student newspaper, the Collegiate Times, with financial consequences in an effort to abolish anonymous comments on the newspaper website. The University's Commission on Student Affairs cited "discontent" in the college community over "irresponsible and inappropriate" anonymous comments. But the editors have so far refused to modify the policy to allow only authored comments.

Conclusion

It was the stated goal of the U.S. Congress in enacting Section 230 of the CDA to "offer a forum for a true diversity of political discourse, unique opportunities for cultural development, and myriad avenues for intellectual activity." That goal has certainly been achieved, but the diversity of discourse, cultural development and intellectual activity that is supported by Section 230 is accompanied by a significant amount of objectionable content in the form of defamation, vitriol and hate speech.

Section 230 provides newspapers and other online providers with legal protection from liability for such content provided by third parties, leaving providers to determine as a matter of individual policy and editorial judgment what measures, if any, they will take to address the appearance of such content on their sites.

Image of Craigslist headquarters via cyberaxis

Jeffrey D. Neuburger is a partner in the New York office of Proskauer Rose LLP, and co-chair of the Technology, Media and Communications Practice Group. His practice focuses on technology and media-related business transactions and counseling of clients in the utilization of new media. He is an adjunct professor at Fordham University School of Law teaching E-Commerce Law and the co-author of two books, "Doing Business on the Internet" and "Emerging Technologies and the Law." He also co-writes the New Media & Technology Law Blog.

One of the most watched television events in U.S. history was the announcement of the verdict in the O.J. Simpson murder trial in October 1995. By the time that trial was televised, the public had become accustomed to watching footage of both civil and criminal proceedings in state courts, and such proceedings continue to be broadcast today.

But shortly after the O.J. verdict, the United States Judicial Conference, the administrative body that oversees the operations of federal courts, formally approved a recommendation against broadcasting federal court proceedings. As a result of that policy and the various court rules adopted in response, with a handful of exceptions, cameras have been kept out of federal courtrooms.

The emergence of new channels of communication via the Internet has prompted some recent efforts to use new technologies to expand access to proceedings in federal courts. In two civil cases involving controversial subjects of great public interest, federal District Court judges approved plans to stream the proceeding via the Internet. But both plans were successfully challenged on appeal in opinions that cited the 1996 Judicial Conference policy, calling into question the potential for new technologies to bring federal court proceedings into greater public view.

The Prop. 8 Trial

In the most recent failed effort to stream a federal court civil proceeding, the U.S. Supreme Court on January 13 halted plans to provide live streaming of audio and video of the controversial "Prop. 8" trial in California.

The Prop. 8 lawsuit, Perry v. Schwarznegger, is just one chapter in the ongoing political and legal struggle over same-sex marriage. The plaintiffs are proponents of same-sex marriage who are seeking to establish that the repeal of California's same-sex marriage law by the Proposition 8 ballot measure violates the federal constitutional rights of same-sex couples. Because the named defendants in the case refused to defend Prop. 8 (including state officials such as Governor Arnold Schwarznegger), defense of Prop. 8 is being undertaken by a group of defendant-intervenors that includes the organization that campaigned successfully for its adoption.

Due to the enormous public interest in the case, District Court Judge Vaughn R. Walker approved a plan to stream live video and audio of the non-jury trial to an overflow courtroom in the same courthouse, as well as to several other federal courthouses throughout the country. The broadcast plan was fashioned as part of a pilot program approved by the Chief Judge of the Ninth Circuit Court of Appeals.

The defendant-intervenors objected, arguing that broadcast of the proceedings would violate their due process rights to a fair trial, because all of their witnesses declared that they would refuse to testify if the proceedings were broadcast. The intervenors cited the 1996 Judicial Conference policy, which was based upon a study recommendation against allowing such broadcasting on the basis that "the intimidating effect of cameras on some witnesses and jurors [is] cause for concern."

Hollingsworth v. Perry

The defendant-intervenors ultimately went to the U.S. Supreme Court to stop the broadcasting plan, where the witness intimidation argument was well-received. In Hollingsworth v. Perry, No. 09A640 (U.S. Jan. 13, 2010), the Court ruled that the process that led to the approval of the broadcast experiment was flawed, and that the defendant-intervenors had established that irreparable harm would result if it was allowed to take place. In an unsigned ("per curiam") ruling, the Supreme Court delved into the minute details of the rules and policies governing federal courts. The Court concluded that under those dictates there was insufficient notice and opportunity for public comment before the court rules were changed to allow the pilot program under which the plan was approved.

But the Court didn't stop at disapproval of the procedure by which the broadcast plan was put in place.

Even if the relevant court rules had properly been amended, the Court commented, "questions would still remain" about the District Court's exercise of its discretion to allow broadcasting in a trial in which witnesses had "stated concerns for their own security." That the case was a "high-profile" one was a reason not to allow the broadcasting on an experimental basis, the Court found, because no studies had been conducted to analyze "the effect of broadcasting in high-profile, divisive cases."

The Court's decision was not unanimous, and revealed a split on the issue of courtroom broadcasting along partisan lines that are familiar in other contexts. A dissent authored by Associate Justice Steven Breyer vigorously challenged the legal basis for countermanding the District Court's decision. On the question of potential harm to the witnesses, he pointed out that the witnesses were not anonymous, that each of them had already been "publicly identified" with the Prop. 8 cause by appearing on television and Internet broadcasts, touring California to support its adoption, or because they had "already engaged in extensive public commentary far more likely to make them well known than a closed-circuit broadcast to another courtroom."

Justice Breyer also pointed to the extensive public coverage of the impending trial, which had drawn the attention of "literally hundreds of national and international newspapers." Associate Justices Stevens, Ginsburg and Sotomayor joined in the dissent.

The Tenenbaum Trial

Preceding the Supreme Court ruling in Hollingsworth v. Perry, a similar controversy arose over plans to allow Internet streaming of a hearing in a high-profile, peer-to-peer file-sharing case in federal court in Massachusetts. In January 2009, District Court Judge Nancy Gertner approved a plan proposed by the defendant to "narrowcast" the hearing to a single location in Boston, where it would then be made publicly available via a further webcast.

Although existing Court of Appeals and local District Court rules prohibited broadcasting, Judge Gertner concluded that she nevertheless had the discretion to approve broadcasting in individual cases. She rejected the arguments of the record company plaintiffs that the potential jury pool for the impending trial on the merits would be prejudiced by the broadcasting plan. On the contrary, Judge Gertner concluded, "the public benefit of offering a more complete view of these proceedings is plain, especially via a medium so carefully attuned to the Internet Generation captivated by these file sharing lawsuits."

The recording companies appealed, and in a ruling that presaged the Supreme Court in Hollingsworth v. Perry, the First Circuit Court of Appeals disapproved the plan. In this case, the appeals court concluded that Judge Gertner had misinterpreted the District Court's local rule, and that there was no "discretionary catch-all" exception to the general prohibition against broadcasting civil proceedings. The appeals court also rejected the defendant's argument that the blanket prohibition in the local rule violated his right to a public trial.

With a nod to the emergence of new technologies for providing access to trials, the court commented: "While the new technology characteristic of the Information Age may call for the [change] of some boundaries, the venerable right of members of the public to attend federal court proceedings is far removed from an imagined entitlement to view court proceedings remotely on a computer screen."

Circuit Judge Lipez dissented, echoing Judge Gertner's conclusion that there were "no sound policy reasons" not to allow the broadcasting plan. He emphasized that the proceeding that would be broadcast was not a trial on the merits, only the oral arguments of the attorneys. He, too, referenced the impact of new technologies on access to the court, but drew a different conclusion from the majority opinion.

"Since [the adoption of the District Court rule], dramatic advances in communications technology have had a profound effect on our society," Lipez wrote. "These new technological capabilities provide an unprecedented opportunity to increase public access to the judicial system in appropriate circumstances. They have also created expectations that judges will respond sensibly to these opportunities." Accordingly, Judge Lipez called for an immediate re-examination of the blanket prohibition in the local rule.

Live Blogging and Tweeting

Are the federal courts closed to all new reporting technologies? Not completely. Although the broadcasting plan in the Prop. 8 trial had to be scuttled, the District Court did allow live blogging, apparently without much comment or disagreement on the part of the parties to the litigation. See, for example, the Prop. 8 live-blog archives at firedoglake.com, and the San Jose Mercury News.

But there is disagreement on the issue of whether live blogging is a form of "broadcasting" that must be evaluated under the same standards as a live video or audio feed. The issue was addressed in United States v. Shelnutt, a criminal case in the Middle District of Georgia, in which the District Court based its decision on Federal Rule of Criminal Procedure 53. While broadcasting may be allowed under some local federal rules in civil cases, under the federal rule the prohibition against "broadcasting" in criminal cases apples to all federal district courts nationwide.

In Shelnutt, a reporter for the Columbus Ledger-Enquirer newspaper who was covering the trial, made an application to the court to be permitted to use a handheld device to live blog the trial via the newspaper's Twitter account. In declining the reporter's request, the District Court relied upon a 2002 amendment to the federal rule that replaced the prohibition against the "taking of photographs" and "radio broadcasting" with the more general term "broadcasting," for the express purpose of covering "modern technology capabilities."

The District Court in Shelnutt ruled that "the contemporaneous transmission of electronic messages from the courtroom describing the trial proceedings, and the dissemination of those messages in a manner such that they are widely and instantaneously accessible to the general public" fell within the definition of "broadcasting" in Fed. R. Civ. P. 53. Thus, no live blogging was permitted.

Reporters in other jurisdictions around the country have met with mixed results on their requests to live blog court proceedings. For example, reporters were permitted to live blog from the Scooter Libby criminal trial in 2007, although they did so from an overflow courtroom to which the proceedings were broadcast by live television feed.

The Citizen Media Law Project guidelines on Live-Blogging and Tweeting from Court cite a number of other state and federal courts that have allowed live blogging in the past. They wisely suggest that such reporting not be attempted without advance court permission, and provide helpful tips on how to make an appropriate request.

The Future of New Media in the Courtroom

While some lower federal courts have shown flexibility in allowing new communications channels access to their courtrooms, they are doing so against the grain of long-standing negative views in the federal judiciary on the issue of live reporting. These negative views have deep roots in U.S. Supreme Court rulings such as Sheppard v. Maxwell, in which the Court found that intrusive press presence in the courtroom in the sensational murder trial of Dr. Sam Sheppard was a factor in depriving him of his right to a fair trial.

The ruling in Hollingsworth v. Perry is also a reminder of the Supreme Court's historic, arms-length relationship with both the press and the larger public. The Court has famously refused to allow either live or delayed television broadcasting of its own proceedings, and although audio tapes of the arguments are made, they are not released to the public until the end of each term. The Court began making exceptions to this policy on a case-by-case basis in the litigation following the 2000 presidential elections, to allow same-day release of audio tapes. But television broadcasting remains completely off-limits, and some justices, most notably Justice Antonin Scalia, have publicly expressed their strong opposition to any change in that policy.

With the departure of Justice David Souter, who declared in 1996 that cameras would roll in the U.S. Supreme Court "over my dead body," it was thought that the Court might warm up on the subject. Souter's replacement, Associate Justice Sotomayor, expressed her positive experience with cameras in the courtroom during her nomination hearings. But the ruling in Hollingsworth v. Perry seems a likely signal against change at the Supreme Court level.

Without a change in the prevailing attitude at the U.S. Supreme Court or a widespread move on the part of federal appeals courts and local district courts to modify their rules, live reporting via new media channels is likely to be limited to the courtrooms of individual judges with more liberal attitudes toward access to the courts, and to cases in which none of the parties is motivated to challenge a court's decision allowing it.

Jeffrey D. Neuburger is a partner in the New York office of Proskauer Rose LLP, and co-chair of the Technology, Media and Communications Practice Group. His practice focuses on technology and media-related business transactions and counseling of clients in the utilization of new media. He is an adjunct professor at Fordham University School of Law teaching E-Commerce Law and the co-author of two books, "Doing Business on the Internet" and "Emerging Technologies and the Law." He also co-writes the New Media & Technology Law Blog.

The shift has taken place due to the increased presence of commenting and feedback features on news websites, and partly thanks to the use of comment-friendly platforms such as WordPress. In these contexts, the news outlets have chosen to accept user comments, and they retain a certain amount of control over which ones appear on their site. Now, a new technology, Google's Sidewiki annotation tool, is poised to present a challenge to website owners, including news outlets, that attempt to control the interface between their site and end users. Suddenly, they won't have as much control over comments related to their content.

And that change in control might lead to some legal tussles down the road.

Google Sidewiki

Google debuted Sidewiki in September. The tool permits users of the Google toolbar to write comments about any website they visit. These comments are then visible to other Sidewiki users when they navigate to the same page. But the comments are hosted by Google, rather than the website itself.

The Google Sidewiki site provides a graphic depiction of what a Sidewiki entry looks like. When the Sidewiki button on the Google toolbar is clicked, a sidebar opens to the left of the webpage and displays the comments entered by Sidewiki users.

Usually, a website's publisher decides whether or not to provide comment functionality, and if such functionality is provided, the site's owner retains the ability to delete unwanted comments. But a website operator has virtually no control over the Sidewiki functionality. This is something of a major shift.

Attack of the Commenters

Some websites have already been the subject of negative Sidewiki comments. In a September 24 blog post on Econsultancy, "Google Sidewiki: Brands under Attack," the author included examples of Sidewiki comments on the Microsoft and Apple websites. Microsoft products were described as "useless" and "crap," and Apple was slammed for "lying" and shipping products with "severe bugs."

Another example comes from a September 24 comment on the website of the Daily Mail. A commenter named "supaswag" wrote, "Why?? ... would you read this sad toss? Don't you have more important things to do? Seriously ... you'll find better/proper news here..." The link included in the comment led to the website of a Daily Mail competitor, the Guardian.

Responding to Sidewiki

A website owner is given few options to respond to comments like those listed above. Website owners can claim their sites through the Google Webmaster functionality, and thereby gain access to the top comment spot on Sidewiki. This means they can add whatever content they wish to the thread about their site(s). Other user comments are sorted according to a secret Google algorithm that takes into account the responses of Sidewiki users to the question of whether or not a particular comment is "useful," among other factors.

Google has a Sidewiki content policy that prohibits spam and malware, threatening, harassing and sexually explicit comments and the like. But commercial content in general is not prohibited, only "unwanted promotional or commercial content" (which is included in the definition of spam). It is not clear by whom the promotional or commercial content must be "unwanted" in order for it to constitute spam.

There is a link for reporting abuse, but the link leads to a form that is available to any Sidewiki user; it does not appear that website owners themselves are given any priority when it comes to communicating concerns to Google.

Sidewiki and the Law

One of the legal issues raised by Sidewiki is whether it intrudes upon the rights of website owners to control their interface and interactions with users. A similar type of technology that comes to mind is pop-up advertisements. Web users have become accustomed to seeing pop-ups -- and equally accustomed to blocking them. But several years ago, the ubiquitous and intrusive nature of pop-ups led a group of media companies to join in a litigation effort against Gator. Gator distributed technology that enabled the delivery of pop-up advertisements on websites without the permission or participation of the sites' owners.

The media company plaintiffs, as well as other plaintiffs in similar lawsuits, took the position that the pop-up advertisements violated trademark law. The media companies were successful in obtaining a preliminary injunction, and the litigation was eventually settled favorably. The company that distributed the pop-up technology is now out of business. As a result, there was never a definitive resolution of the issues raised in that case.

The lawsuits related to trademark law were based upon the fact that the pop-up functionality was being used to deliver commercial advertising, which presents a different set of legal considerations. But what if the comments that appear next to a site via Sidewiki are non-commercial comments by users, rather than commercial messages? Legal challenges by site owners to Sidewiki may be complicated by the fact that Sidewiki facilitates all kinds of messages, both commercial and non-commercial.

Has Sidewiki Got Legs?

Sidewiki is not the first or only service of its kind. Services such as Draw Here, Fleck, Trailfire and MyStickies have offered website annotation capability for a few years, but none of these services have garnered widespread adoption. (One annotation startup, ReframeIt, claimed recently that Google appropriated its patented technology in creating Sidewiki.)

Right now, Sidewiki users appear to be relatively few, and the technology presents some barriers to widespread use. In order to see Sidewiki comments, a user must install the Google Toolbar and its enhanced features. And a user must also be logged in to a Google account in order to use the Sidewiki functionality.

But being the media giant that it is, Google may have the capacity to bring Sidewiki, and website annotation, into mainstream use. If that happens, online news outlets, along with other websites, may find that the dialog on and about their sites is increasingly controlled by Google. And that could result in some interesting legal issues for all parties.

Jeffrey D. Neuburger is a partner in the New York office of Proskauer Rose LLP, and co-chair of the Technology, Media and Communications Practice Group. His practice focuses on technology and media-related business transactions and counseling of clients in the utilization of new media. He is an adjunct professor at Fordham University School of Law teaching E-Commerce Law and the co-author of two books, "Doing Business on the Internet" and "Emerging Technologies and the Law." He also co-writes the New Media & Technology Law Blog.

In June of this year, the personal email account of a Twitter employee was accessed, apparently as a result of an insecure password. By Twitter's own account, the unauthorized access to that account was the first in a series of actions that ultimately gained the hacker (who calls himself "Hacker Croll") access to Twitter corporate documents that were maintained on Google Apps.

The documents ranged from executive meeting notes, partner agreements, financial projections and sensitive personal information such as credit card numbers, to more mundane items such as the meal preferences, calendars and phone logs of various Twitter employees.

The hacker eventually sent the documents to tech blog TechCrunch, which decided to post some but not all of them. They are online here, here and here. Soon, a debate raged about whether or not TechCrunch was right to post the documents.

The Twitter files in question aren't exactly the Pentagon Papers, but their dissemination -- and the resulting controversy -- may help clarify whether blogs and bloggers are journalists.

Before getting to that issue, a brief and very general survey of the legalities involved in unauthorized access to corporate documents may be helpful background. There are several bodies of law that may be implicated by the scenario outlined in Twitter's account of the incident.

Unlawful Access

According to Twitter, the documents sent to TechCrunch were obtained through unauthorized access to an employee's email account, followed by unauthorized access to other email and online accounts. There are a number of federal and state enactments that the hacker may have violated by accessing those accounts without authorization.

Unauthorized access to electronic communications such as stored email (as opposed to email that is "intercepted" in transit) is covered by the federal Stored Communications Act (SCA). Violations of the Act may result in a criminal prosecution or a civil action for damages. In addition, many states have enacted laws that are similar to the federal statute.

Unauthorized access to a computer is largely covered under the federal Computer Fraud and Abuse Act (CFAA), which makes unauthorized access a crime under specified circumstances. Like the SCA, the CFAA permits a person (which includes a corporation or other entity) who suffers damage or loss by such access to bring a civil action for damages and an injunction.

As is the case with the SCA, there is an extensive body of law that relates to the CFAA, as well as a number of important, outstanding disagreements about how it applies. For example, when copies of electronic documents are obtained via unauthorized access to a computer network and the original documents are neither damaged nor destroyed, there is a question as to whether there was either "damage" or "loss" within the meaning of certain sections of the CFAA.

Many, if not most, states have computer crime statutes that potentially cover the kind of unauthorized access alleged by Twitter. These enactments may be similar to the federal statute, but they can be more broadly applicable. For example, Section 502 of the Penal Code of California (where Twitter's main office is located), like the federal statute, criminalizes certain acts of unauthorized access to computer systems and similarly provides for a civil right of action.

That said, an incident might fall under the unauthorized computer access statute of more than one state. A prosecutor in a particular state might seek to bring charges based on the location of the hacker at the time of the unauthorized access, or the location of the server or servers upon which the email account or accounts were hosted.

According to TechCrunch, which documented extensive discussions with Hacker Croll, the attacker is French, and thus may be operating from outside the U.S. If that's the case, while U.S. laws may still apply to the hacker's conduct, either criminal prosecution or a civil action may be more difficult to maintain as a practical matter.

Trade Secrets

Unauthorized access to corporate information in general (regardless of the manner in which the items were obtained) may constitute trade secret misappropriation. A secret formula or process such as the closely guarded recipe for making the Coca-Cola soft drink is what most people probably think of as a trade secret. Most states have enacted some version of the Uniform Trade Secrets Act (UTSA), which defines the term very broadly to include not only a secret process or formula but also any other "information" that has economic value as a result of being kept secret. Corporate documents containing information that would be valuable to a competitor, such as business plans and non-public financial information, can fit that definition under the proper circumstances. The UTSA provides for a civil action for unlawful access to trade secrets.

There is also a federal statute, the Economic Espionage Act of 1996 (EEA), that criminalizes the theft of trade secrets. The federal statute is broader than state trade secret misappropriation laws in some respects, and narrower in others. The EEA expressly covers "all forms and types of financial...information," and violations may result in 10 years in prison and up to a $250,000 fine.

But in a case of "domestic" trade secret theft, there must be a showing of intent to economically benefit a person other than the rightful owner of the trade secret. Hacker Croll has denied having any intent of that nature. If that is the case, then the EEA may not apply. On a related note, it has also been suggested that the California law criminalizing the receipt of stolen property may apply to this incident.

Privacy

Some of the information obtained via the Twitter hack appears to pertain to individuals, such as documents discussing individuals who had applied to Twitter for jobs. This information is both personal to the individual and potentially proprietary to a corporation. Some states allow a right of action for public disclosure of private facts, where private information which is not of public concern, and which would be highly offensive to a reasonable person, is publicly disseminated. This right of action might come into play if the information was posted publicly, either by the hacker or by TechCrunch. But it is not clear that applying for a job is the kind of embarrassing personal information usually involved in such a lawsuit, and it could be argued that such information is of legitimate public interest, at least with respect to some individuals.

In any event, TechCrunch apparently decided not to post any of the personal information included in the documents. The site said it would only post "information that is relevant to Twitter's business, particularly product notes and financial projections...." TechCrunch editor Michael Arrington discussed his reasoning in an interview with the New York Times in which he stated that he had been working with Twitter to determine which documents to publish.

The discussion of potentially applicable laws is speculative, and will remain speculative unless Twitter decides to take legal action against the hacker or TechCrunch, or if federal or state authorities decide to prosecute Hacker Croll. In either event, press shield laws and the First Amendment are likely to come into play.

Confidential Information and the First Amendment

As previously noted, the Twitter documents aren't exactly the Pentagon Papers, but in some respects the same issues are involved. TechCrunch is taking the position that, regardless of the manner in which the hacker obtained them, the documents are of legitimate public interest and that posting them is protected by the First Amendment. The U.S. Supreme Court has ruled that the interest in privacy of information can be outweighed by the public interest in the dissemination of truthful information about matters of public importance.

See, for example, the court's opinion in Bartnicki v. Vopper, 532 U.S. 514 (2001), which involved a radio station that played a recording of a phone conversation about school district labor negotiations. The tape was made illegally by an unknown third party and sent to the station anonymously. It's important to note that the court specifically stated it was not ruling on whether the same analysis would apply to a case involving a disclosure of trade secrets.

The issue of trade secrets has arisen on more than one occasion in the last several years with respect to Apple Inc.'s continuing efforts to protect its trade secrets from disclosure. One case was settled with an agreement by the operator of the Think Secret blog to shut down his website, albeit without disclosing the source(s) of his information.

In another case, Jason O'Grady, the operator of Powerpage.org, dug in his heels and refused to reveal the source of confidential information about a potential new Apple product release. Apple chose not to sue O'Grady for posting the information. Instead, it brought suit against unknown "John Doe" parties it suspected of leaking the information to O'Grady and served a subpoena on O'Grady seeking information that would lead to their identities. O'Grady claimed protection under the California press shield law and the First Amendment.

In a precedent-setting opinion, the California Court of Appeals ruled in O'Grady v. Superior Court that by engaging in "open and deliberate publication on a news-oriented website of news gathered for that purpose," O'Grady was a "publisher" and his "online news magazine" was a "publication" within the meaning of the California press shield law -- even though the site did not have a regular publication schedule. The court also found that the source of the information was protected from disclosure under the First Amendment, despite the fact that Apple claimed it was protected by trade secret law. The court ruled that there was a "legitimate public interest" in information about a potential new product release under the circumstances presented.

The O'Grady case is of particular interest with respect to the posting of the Twitter documents because TechCrunch is located in California, and any legal action to obtain information about the identity of "Hacker Croll" is likely to take place in a court that would apply California law.

Are All News Sites Created Equal?

The O'Grady opinion offers much to consider when debating whether TechCrunch's actions would fall under the protection of the California press shield law. Despite the broad language used in O'Grady to apply the California press shield law, and the resulting headlines claiming that the ruling extended First Amendment protection to a blogger, the California court expressly reserved any findings on that issue. It has yet to be resolved in any definitive way.

The court stated that while Powerpage.org arguably was a blog, the term had an "amorphous" and unsettled meaning. The court chose instead to treat the site as an "emagazine," "ezine" or "webzine" because of its "multiple staff members and other factors," including the non-reverse-chronological manner in which the site was laid out. In contrast, TechCrunch is avowedly a blog and its reverse chronological presentation of material falls within the commonly accepted definition of a blog.

The result is that if TechCrunch is served with a subpoena issued from a California court seeking information on Hacker Croll, the courts may be forced to rule on whether blogs and bloggers, at least some of them, are "press" and therefore entitled to the protection of the California shield law.

Photo of Michael Arrington by Kenneth Yeung and photo of Jason O'Grady by Garrison Gunter via Flickr.

Jeffrey D. Neuburger is a partner in the New York office of Proskauer Rose LLP, and co-chair of the Technology, Media and Communications Practice Group. His practice focuses on technology and media-related business transactions and counseling of clients in the utilization of new media. He is an adjunct professor at Fordham University School of Law teaching E-Commerce Law and the co-author of two books, "Doing Business on the Internet" and "Emerging Technologies and the Law." He also co-writes the New Media & Technology Law Blog.

Outlaw Linking

It is perhaps ironic that one of the proposals to change the law to benefit newspapers comes from a judge who happens to blog. Judge Richard Posner of the U.S. Court of Appeals for the Seventh Circuit is also a professor at the University of Chicago Law School and a brilliant and prolific scholar. When Judge Posner speaks, people listen. And recently, when Judge Posner spoke, or rather, blogged, on the subject of the future of newspapers and what should be done about it, people not only listened, they talked back -- loudly.

In a June 23 blog post entitled "The Future of Newspapers," Judge Posner looked at the state of the newspaper business. True to his membership in the law and economics school of legal thought, he focused on the economic factors behind the current distress, suggesting that competition from free online news outlets is forcing newspapers into a spiral of decline. Newspapers are slashing staff to cut costs in response to shrinking advertising revenues, thereby damaging the quality of their content and further depressing demand.

Judge Posner suggested that the solution to the problem as he outlined it may be to change copyright law to prohibit linking to or paraphrasing newspaper content:

Expanding copyright law to bar online access to copyrighted materials without the copyright holder's consent, or to bar linking to or paraphrasing copyrighted materials without the copyright holder's consent, might be necessary to keep free riding on content financed by online newspapers from so impairing the incentive to create costly newsgathering operations that news services like Reuters and the Associated Press would become the only professional, non-governmental sources of news and opinion.

Those are the last sentences in the post, and Judge Posner doesn't elaborate further on the issues that his suggestion poses. As commentator Eric Schonfeld noted, Judge Posner's post does not address the issue of "fair use" or the related First Amendment issues that would be implicated by such an expansion. Although the doctrine of fair use is embodied in the federal copyright statute, it is well recognized that free speech limitations on state regulation underpin the doctrine. See, for example, Harper & Row v. Nation Enterprises, 471 U.S. 539 (1985). It is not clear how much, if at all, the statutory definition of fair use could be trimmed without running afoul of the First Amendment.

Schonfeld describes Judge Posner's suggestion as "misguided," and other online commentators have piled on, variously characterizing it as bizarre, extreme, unpragmatic and just plain bad.

At the moment, Judge Posner's suggestion is merely that -- a suggestion. But at least one proposal has made it into legislative form.

Let Them Become Non-Profits

In May, Senator John Kerry convened a hearing on the future of journalism before the Senate Subcommittee on Communications, Technology, and the Internet.

Among other presenters, Arianna Huffington, co-founder and editor in chief of the Huffington Post, defended her enterprise and news aggregators generally. She argued that restricting access to content is the wrong approach for traditional news outlets and that news aggregators are not the sole cause of newspapers' economic problems. Her solution is new revenue models.

"The great upheaval the news industry is going through is the result of a perfect storm of transformative technology, the advent of Craigslist, generational shifts in the way people find and consume news, and the dire impact the economic crisis has had on advertising," she testified at the conference. "And there is no question that, as the industry moves forward and we figure out the new rules of the road, there will be -- and needs to be -- a great deal of experimentation with new revenue models."

Among the topics of discussion was a proposal by Sen. Ben Cardin for legislation that would allow newspapers to transition to non-profit entities, thereby qualifying them for exemption from certain taxes. The catch is that, as non-profits, newspapers would have to refrain from endorsing political candidates. His proposal is pending as S. 673 (111th Cong., 1st Sess. 2009); it has been referred to a committee and no further action has been taken on the bill since its introduction in March.

Change Copyright, Tax and Antitrust Laws

A proposal by a pair of Washington attorneys to address the problems of newspapers would go further than either the Posner or Cardin proposals, at least in terms of scope. Bruce W. Sanford and Bruce D. Brown echoed Judge Posner's concern about the survival of traditional journalism in a May article in the Washington Post. In Laws That Could Save Journalism, they opined that unless Congress makes changes in public policy "we will soon find ourselves with the remnants of a broken industry incapable of providing the knowledge necessary to manage life in a complex world." To fairly place that statement and their proposals in context, it should be noted that both attorneys are former journalists with extensive experience representing traditional media clients, and Sanford is counsel to the Society of Professional Journalists.

Sanford and Brown also propose a change in copyright law, to prohibit "the taking of entire web pages by search engines." Like Judge Posner, they don't elaborate on that point, but presumably they are referring to the fact that when search engines "crawl" websites, they copy entire web pages to their servers in order to index the contents and provide results in response to web searches.

Search engine crawling and copying can, in most cases, be inhibited by deploying a "robots.txt" file on the content owner's server containing directions as to what may be crawled and copied. Most search engines respect the directions set forth in a robots.txt file.

Two federal district courts have held that a content owner's failure to deploy such a file gives rise to an "implied license," effectively permitting the owner's content to be crawled, copied and cached without giving rise to a claim of copyright infringement. But protecting content by the deployment of a robots.txt file is a double-edged sword, as online users are less likely to find newspaper content that is not indexed by search engines, as Sanford and Brown point out.

Echoing some of the proposals outlined at the Kerry hearings, Sanford and Brown also propose that regulatory restrictions on the ownership of media outlets be eliminated, that federal tax policy be changed to favor newspapers, and that antitrust law be changed to permit traditional news outlets to adopt collective pricing policies. But perhaps their most interesting suggestion is that the "hot news" doctrine recognized under New York law be "federalized," that is, enacted by Congress as a federal law applicable nationwide. As we discussed in a prior post, under the "hot news" doctrine, uses of news content that are not protected under federal copyright law can be challenged under the state law of unfair competition, and the Associated Press has been successful in using the doctrine to challenge the use of its content by competitors. Federalizing the doctrine would make it easier for other traditional publishers to similarly challenge the use of their original content in circumstances not covered by the New York law.

No doubt anticipating criticism for proposing laws that would favor traditional publishers, Sanford and Brown point to a precedent: Online publishers were favored in 1996 with the enactment of Section 230 of the Communications Decency Act, which exempts online providers from defamation and other liability from content posted by third parties. The protection that Section 230 provides to online providers has generally protected them from costly judgments based on content that they have not originated.

Mandate the Automated Content Access Protocol

In July, European publishers issued a call for legal assistance in the form of the Hamburg Declaration. The document calls for "strongly urgent improvements in the protection of intellectual property on the Internet." While the Declaration itself is short on specifics, the press release accompanying the Declaration referenced the Automated Content Access Protocol, a proposed industry standard that would enable content owners to specify to search engines through metadata embedded in the content not only how their content could be crawled and copied, but also how it could be displayed in search engine results. The proposed standard has been criticized as a "robots.txt on illegal steroids." The Declaration calls up EU regulators to "back it up," i.e., mandate search engines to implement the standard.

Conclusion

As the debate rages over both the root causes of traditional journalism's economic troubles and possible legal solutions, the online world marches on. It is impossible to say whether any of these proposals for legal change will make it to the statute books. And even more impossible to predict is whether any of these potential laws will have an effect on the upheaval caused from the shift of content from traditional to online forms.

Jeffrey D. Neuburger is a partner in the New York office of Proskauer Rose LLP, and co-chair of the Technology, Media and Communications Practice Group. His practice focuses on technology and media-related business transactions and counseling of clients in the utilization of new media. He is an adjunct professor at Fordham University School of Law teaching E-Commerce Law and the co-author of two books, "Doing Business on the Internet" and "Emerging Technologies and the Law." He also co-writes the New Media & Technology Law Blog.

In criminal cases, the issues are similar, but the stakes can be higher for everyone involved. A refusal to turn over information in response to a grand jury subpoena can result in a contempt proceeding and a coercive jail term, as individuals as diverse as New York Times reporter Judith Miller and video blogger Josh Wolf have learned.

In one recent case, an Illinois court upheld the issuance of a grand jury subpoena seeking information on anonymous newspaper blog commenters who had, the court concluded, relevant information about the defendant in a murder case.

I Know Who You Are and What You Did

In 2008, Frank Price was arrested in Madison County, Ill., and charged with first degree murder for the death of a 5-year-old child, a development that was reported in the local newspaper, the Alton Telegraph. The article was posted on the newspaper's website and drew the attention of a number of anonymous commenters, some of whom purported to have personal knowledge of Price as well as past incidents of his abuse against children. Detectives investigating the case contacted the newspaper informally, seeking to learn the identity of the anonymous commenters, but the newspaper refused and told the detectives that the information had to be requested formally.

Shortly thereafter, the newspaper was served with a grand jury subpoena requesting records that would lead to the identity of five of the commenters, including full names, addresses and IP addresses. The newspaper filed a motion challenging the subpoena, arguing that the comments fell within the protection of the Illinois reporter's shield law.

Journalist Shield Laws

As we noted in our prior blog post discussing the two rulings in civil cases, individual state journalist shield laws vary greatly in their provisions. The Montana Media Confidentiality Act is worded very broadly, and covers "any information obtained or prepared" by a news outlet. In Doty v. Molnar, the court focused on that language in concluding that anonymous comments were protected under that Act from disclosure in a civil suit.

The Oregon Media Shield Law protects "the source of any published or unpublished information obtained by the person in the course of gathering, receiving, or processing information for any medium of communication to the public." In Beard v. Doe, the Oregon court ruled that anonymous comments fell within that language and were thereby protected from disclosure.

The Illinois reporter's shield law, 735 Ill. Comp. Stat. 5/8-901., provides that a court may not compel "any person" to disclose the "source of any information obtained by a reporter" unless "all other available sources of information have been exhausted and...disclosure of the information sought is essential to the protection of the public interest involved." A "source" is defined as "the person or means from or through which the news or information was obtained."

The Alton Telegraph v. The People of Illinois

In the Alton Telegraph case, the newspaper argued in its brief that the Illinois reporter's shield law protected the identity of the anonymous commenters because the commenters were both "persons" and "sources" within the meaning of the Illinois law.

The newspaper also argued that the subpoena should be quashed because the prosecutor had not shown that all other sources of information had been exhausted, and that the disclosure was essential to the protection of the public interest. The prosecutor argued that the commenters were not "sources" for the newspaper or its reporters because the comments were posted after the newspaper's article on the topic was published, and the commenters were not "individuals who approved a reporter as an anonymous or confidential source."

In its ruling, the court construed the statutory language narrowly, agreeing with the prosecutor that the commenters were not "sources" for a story that had already been written and published, and therefore the identity of the commenters fell outside the protection of the shield law. But the court did recognize the importance of newspaper commenters (whom the court refers to alternatively as "bloggers" and "commentators") and their potential to serve as future leads for reporters, and suggested that arguments that they should be protected should be directed to the legislature:

While the bloggers were not used specifically to write this article, there is the possibility of the commentators becoming sources. It can be argued that the commentators are persons through which the information was obtained. However, the information is not necessarily obtained for the purpose of gathering the news. The commentary section provides readers with a platform for discussing the case at their leisure. Bloggers feel the comfort, and sometimes too much comfort, of freely conversing with the protections normally provided through the expected anonymity of the Internet. A lack of these protections and/or anonymity might well have a chilling effect on future bloggers.

On balance, the court concluded, that while the newspaper's interest in protecting the identity of individuals who made unsolicited, public comments was "not negligible," that interest did not "go far enough to serve the larger purpose of the reporter's privilege, which is to allow 'the public to receive complete, unfettered information.'" The court concluded that ordering the newspaper to reveal the commenters' identities would not "make the public unwilling to express their opinions or to provide information during the course of a reporter's actual investigation, in future cases, nor does it deny the public the right to receive complete unfettered information in this and future instances."

The court ordered the newspaper to provide information on only two of the five specified individuals, however. As to those individuals, the court found that the state had met its burden to show that the information they sought was relevant, that the information could not be obtained by other means, and that the individuals had "relevant information about the defendant's prior conduct, his propensities for violence, and the relationship with the child."

Grand Jury Subpoenas and Gag Orders

The Alton Telegraph case is not the only recent instance of law enforcement seeking information from anonymous commenters. Unlike civil proceedings, grand jury proceedings are secret; thus these incidents may fly under the radar unless a party who is served with a subpoena chooses to publicize it or challenge it in court. But some grand jury subpoenas contain "gag order" provisions warning recipients that mere disclosure of the subpoena may obstruct law enforcement, thereby suggesting but not stating that the recipient of the subpoena might be prosecuted if the subpoena is disclosed.

Such a gag order provision was contained in a grand jury subpoena issued in 2008 by a prosecutor in the office of the Bronx District Attorney to the operators of the New York political blog Room 8. The subpoena sought the production of identifying information about a single commenter on the blog, and warned that disclosure of the subpoena "could impede the investigation being conducted and thereby interfere with law enforcement." The subpoena and the included warning were subsequently withdrawn and the operators went public concerning the incident.

An article posted on the website of the Las Vegas Review-Journal on May 26, 2009, concerning the federal prosecution of a Las Vegas businessman, drew over 100 comments. Thomas Mitchell, the editor of the paper, revealed in an editorial on June 7 that a short time later the newspaper received a federal grand jury subpoena seeking information about the anonymous commenters, including "full name, date of birth, physical address, gender, ZIP code, password prompts, security questions, telephone numbers and other identifiers [and] the IP address." This subpoena also contained a warning: "You have no obligation of secrecy concerning this subpoena; however, any such disclosure could obstruct and impede an ongoing criminal investigation."

In a story published by the Review-Journal on June 17, Mitchell stated that the newspaper had reached an agreement with prosecutors to limit the amount of information that the newspaper would be compelled to produce, narrowing it to only two user accounts. Prosecutors indicated that they sought the information out of concern for the safety of jurors hearing the underlying criminal case based on what they regarded as threatening statements in the comments. According to the story, the American Civil Liberties Union remained concerned about the chilling effect of the subpoena, however, and filed a motion to quash the subpoena.

Mitchell also pointed out something that seems to get lost in the shuffle in these controversies: The newspaper may not even have the identifying information that law enforcement is seeking. As Mitchell noted: "We don't require registration. A person could use a fictitious name and email address, and most do. We have no addresses or phone numbers."

This is probably the case for many newspaper websites, in which case server logs that record the IP addresses of website visitors might provide the best clue to a subscriber's real identity. Resolving IP address information to yield a user's real identity is possible, but it can be a complex process and would probably require additional subpoenas to Internet service providers.

The Las Vegas Review-Journal can't fall back on a state shield law in this case, because the proceeding is in federal court. Currently, there is no federal journalist shield law, so newspapers seeking to challenge a grand jury subpoena must argue that the information requested by a prosecutor is protected under federal constitutional law principles. There is currently an ongoing move in Congress to adopt a federal journalist shield law.

Do Blog and Website Operators Protect Anonymity?

While some newspapers like the Alton Telegraph and the publications involved in the civil suits discussed above have taken legal action to protect the identity of anonymous commenters on their websites, not all media organizations do so. Typically, a site's online terms of use, terms of service, privacy policy or similar document will address the issue by reserving the right to provide information on website users in response to legal process, with no promise that they will even notify a user whose information is sought by law enforcement.

As noted by the court in the Alton Telegraph case, the newspaper's website required commenters to read and assent to a user agreement stating that comments submitted to the website "are not private," and its privacy policy stated that the newspaper reserved the right to disclose user information "when the law requires it." In The Alton Telegraph v. the People of Illinois, the law required it.

Jeffrey D. Neuburger is a partner in the New York office of Proskauer Rose LLP, and co-chair of the Technology, Media and Communications Practice Group. His practice focuses on technology and media-related business transactions and counseling of clients in the utilization of new media. He is an adjunct professor at Fordham University School of Law teaching E-Commerce Law and the co-author of two books, "Doing Business on the Internet" and "Emerging Technologies and the Law." He also co-writes the New Media & Technology Law Blog.

And some news organizations are also looking to the legal system for assistance in protecting their product from the challenges presented by the proliferation of online news sites, including the copying and redistribution of their news stories by unauthorized third parties.

What are the legal tools available to news organizations that want to protect their content? Several strands of intellectual property law and related principles must be considered in evaluating the nature of the rights asserted by news organizations when they do battle over rights to news content. And it's best to understand past rulings and the history of litigation between wire services and news aggregators.

Just the Facts, Ma'am

It's true that you can't, literally, copyright the news, insofar as the news consists of individual facts. It's a bedrock principle of copyright law that copyright rights extend to the expression in a work, not to the individual facts that are conveyed. (See Feist Publications, Inc. v. Rural Tel. Service Co.) But verbatim copying of a portion of an online news article containing facts, even when it is accompanied by a link to the original source, can constitute infringement of the copyright in the author's expression, according to the position taken by news organizations in lawsuits against online news aggregators since the early days of the commercial Internet.

The news aggregators have countered with the argument that making available an excerpt of a news story, accompanied by a link to the original source, is a "fair use" under copyright law. This is also the argument made in defense of bloggers that excerpt news stories, either with or without adding additional commentary.

What's Fair is Fair

Determining fair use under copyright law is not a simple task. Determination of whether a use is "fair" involves evaluating a number of non-exclusive factors enumerated in Section 107 of the Copyright Act, such as whether the use is commercial or non-commercial, how much of the underlying work has been copied, and whether the resulting use competes in the marketplace as a replacement for the original. The determination of fair use is a highly fact-sensitive inquiry that requires courts to weigh and balance numerous factors, making it difficult to predict how they might view a particular use of excerpts of and links to news stores.

It is therefore not surprising that there has yet to be a definitive ruling on the extent to which news aggregators or bloggers are protected by the fair use doctrine, despite a number of highly public disputes. For example, the parent company of the Boston Globe recently settled copyright litigation brought by GateHouse Media over the excerpting of GateHouse content on the Globe's Boston.com website.

And in 2007, the Associated Press brought a copyright infringement lawsuit against the Moreover news aggregation service owned by Verisign. This dispute also ended with a settlement on undisclosed terms.

The Associated Press came up against the same difficulties in defining fair use when it demanded that the Drudge Retort parody website remove excerpts of and links to AP news stories. This dispute was also settled out of court, apparently when the Drudge Retort removed the excerpts. At the time the AP announced that it planned to issue guidelines outlining what it believed to be the parameters of fair use of its news content, but apparently those guidelines have never been issued.

The Center for Social Media recently released a video that tries to explain best practices for video-makers who want to repurpose copyrighted content under fair use:

Google News and Google Blues

One of the most prominent news aggregators is, of course, the Google News search engine. Google's presentation of excerpts and links has been challenged by several news organizations, although those challenges brought under U.S. law have been settled. In 2006, Google settled a dispute with the AP over the use of its content on the Google News site in the face of litigation threats, agreeing to pay the AP an undisclosed licensing fee for the inclusion of AP content and also to give authorized versions of AP stories priority in search results on Google News.

But the controversy between Google and the AP has heated up against recently. According to Forbes, the AP is seeking to strike a new deal with Google that will give authorized AP content priority in general Google searches. Apparently, the AP hopes that giving its authorized content priority in searches will limit the availability of unauthorized excerpts of its news stories by burying them in search results.

Google has been sued internationally as well over aggregation of news content. In 2007, a group of Belgian newspapers obtained a copyright infringement ruling against Google for the inclusion of their content on the Google News search engine and, in 2008, the group announced that it would seek damages of as much as $77 million. That ruling may have influenced Google to settle a similar lawsuit brought by French news outlets with an agreement to pay undisclosed licensing fees.

The "Hot News" Doctrine

Disputes over reuse of news content are not new, and the Associated Press has long been at the forefront when it comes to challenging rivals that use its content. In the early 20th century, the U.S. Supreme Court was faced with a case in which the AP sought to protect its news content from a rival news organization that traded on the time difference between the publication of AP stories in East Coast newspapers and the later deadlines for West Coast papers. The rival paid off AP employees to pass on early versions of AP stories destined for East Coast papers, rewrote the stories to avoid a copyright claim, and sold the resulting product to West Coast news outlets, thereby taking advantage of AP's effort and expenditure in gathering the news.

In its landmark 1918 ruling in International News Service v. Associated Press, the Supreme Court recognized a limited, "quasi property" right in news content that was distinct from copyright law. The Court found that AP could sue its rival for the tort of misappropriation, on the theory that the rival's conduct constituted "unfair competition in business."

Although the Supreme Court's ruling was subsequently criticized for both technical and substantive reasons, the hot news doctrine survived in a number of subsequent rulings, including the 1997 opinion of the Second Circuit Court of Appeals in National Basketball Association v. Motorola, Inc., where the NBA sought to restrain Motorola from offering its subscribers a service that reported scores at NBA events in near-real time.

The appeals court found that the "hot news" doctrine lived on in the law of the State of New York. The court concluded that to make such a claim, the content owner had to prove, among other things, that the information in question is "highly time sensitive" and that the content owner goes to "some cost or expense to collect it," that the competitor using the information is doing so in direct competition with the content owner, and that the use of the information would render the content owner's publication of the content "profitless, or so little profitable as in effect to cut off the service by rendering it cost prohibitive in comparison with the return."

In 2009, in The Associated Press v. All Headline News Corp., a federal district court ruled that despite its age and some criticism of its continued viability, the hot news doctrine was still "hot," and that under New York law the AP could assert a hot news misappropriation claim against the All Headlines News company for copying and rewriting -- or in some cases, copying in their entirety -- AP news stories.

The Digital Millennium Copyright Act

The Digital Millennium Copyright Act (DMCA) is part of copyright law, but it gives the owners of digital content some additional rights. In the AP's case against All Headline News Corp., the district court also ruled that the AP could pursue a claim under the copyright management provision of the DMCA, 17 U.S.C. §1202, which prohibits the removal or alternation of "copyright management information." The court concluded that the defendant may have violated this provision when it removed references to the AP as owner and author of the articles that it copied.

Conclusion

With most of the disputes over the use of excerpts of news stories settled, questions remain over the extent to which news organizations can protect their content from unauthorized use. But new controversies arise on a regular basis. The Associated Press, ever the leader in this area, has recently announced that it intends to pursue "legal and legislative actions" against parties that use but do not license its content. AP Chairman Dean Singleton stated at the annual AP meeting in April: "We can no longer stand by and watch others walk off with our work under misguided legal theories." As financial pressure on news organizations continues and the need to protect and monetize content becomes even more pressing, such disputes are likely to continue.

Jeffrey D. Neuburger is a partner in the New York office of Proskauer Rose LLP, and co-chair of the Technology, Media and Communications Practice Group. His practice focuses on technology and media-related business transactions and counseling of clients in the utilization of new media. He is an adjunct professor at Fordham University School of Law teaching E-Commerce Law and the co-author of two books, "Doing Business on the Internet" and "Emerging Technologies and the Law." He also co-writes the New Media & Technology Law Blog.

A post on a social networking site like MySpace could end up anywhere, and depending upon where it ends up, the result could be catastrophic. We've covered that territory before on MediaShift, discussing a case involving discipline of a teacher for conduct shown on a MySpace page.

In Moreno v. Hanford Sentinel, a California appeals court considered a case in which a rant posted on a MySpace page was copied and sent to a local newspaper. When the newspaper republished it without the author's permission, the author and her family members were seriously damaged by violent community reaction. They brought suit, and the courts were confronted with defining the boundaries between public and private online spaces.

Ode to Coalinga

College student Cynthia Moreno posted the "Ode to Coalinga," her hometown, in her MySpace journal. The "Ode" was extremely critical of Coalinga and its inhabitants.

Apparently Moreno thought better of having posted it, and she deleted it six days later. But not before the principal of the local high school, Roger Campbell, gave the Ode to his friend Pamela Pond, the editor of the local newspaper, the Coalinga Record.

Pond published the Ode as a letter to the editor. Although her MySpace page contained only Moreno's first name, Pond added Moreno's last name, which she apparently was readily able to ascertain. What's more -- this part of the story is related only in Moreno's brief to the court and not in the opinion -- Moreno learned that Campbell had given the Ode to Pond before it was actually published, and she contacted Pond to ask her not to print it. According to Moreno, Pond said she would not publish it, but then changed her mind and did so.

When the Ode was reprinted in the Record, the community reacted with death threats and gunfire directed at Moreno's family home. Her family had to move out of Coalinga, and severe losses caused the family to close its 20-year-old business.

Moreno and other members of her family filed suit against the newspaper publisher, principal Campbell and the school district of which he was an employee.

According to one online source, Moreno and her family are not the only ones who suffered consequences from the publication of the Ode. Pond was dismissed from the newspaper.

No Copyright Claim

It isn't clear why Moreno's lawsuit didn't include the claim that would probably be most obvious to attorneys: copyright infringement. The Ode was copied from Moreno's MySpace page and reprinted contrary to her express wishes. The appeals court specifically noted in its opinion that no copyright infringement claim had been made. Rather, Moreno's brief reveals that the unauthorized copying was asserted as part of Moreno's Intentional Infliction of Emotional Distress claim that Campbell's conduct was outrageous.

The Media Defendants SLAPP the Lawsuit Away

One limitation placed on certain lawsuits under California law is the California "anti-SLAPP" law that protects certain defendants from what are referred to as "strategic lawsuits against public participation." The law allows the defendant in such a lawsuit to bring a motion early in the proceedings to obtain a ruling that, among other grounds, the suit should be dismissed because it involves a statement on an issue of public interest. The publishers of the Coalinga Record were quickly dismissed from the case under the anti-SLAPP law, although the court's ruling did not detail the specific reasons for that dismissal. Moreno and her family nevertheless continued to press their suit against the remaining defendants, focusing not on the publication of the article itself, but on the conduct of Campbell in sending it to the newspaper and his reasons for doing so.

Right of Privacy

The first cause of action alleged by Moreno and the other plaintiffs was violation of the right of privacy under California law. The second cause of action was intentional infliction of emotional harm. Both are defined by state law, in this case, the law of California.

The right of privacy is defined very differently by the various states. In California, the right of privacy derives from the state constitution as well as judicial development through common law, and specific statutes enacted by the legislature.

Moreno's claim boiled down to a claim of invasion of privacy by the "public disclosure of private facts." As the court noted, in order to prove such a claim under California law, the plaintiff must show "(1) public disclosure (2) of a private fact (3) which would be offensive and objectionable to the reasonable person and (4) which is not of legitimate public concern." All four elements must be established.

The contours of this cause of action under California law have been frequently litigated, not surprisingly, in cases involving news media as defendants. Often, what is in contention in those cases is not whether a particular fact is private, but whether it is "of legitimate public concern." So, for example, in Shulman v. Group W Productions, Inc. (Cal. Supreme Court 1998), the California Supreme Court rejected a car accident victim's claim for public disclosure of private facts where her extrication from the wreck was filmed and audio recorded, then broadcast, without her permission. The court found that there was a legitimate public interest in reporting on a car accident and the attendant response of medical emergency personnel. Critical to the discussion was the First Amendment interests implicated in news reporting.

In this case, the remaining defendants focused not on the issue of legitimate public concern, but whether Moreno's expression of her opinions about Coalinga and embodied in the Ode constituted a private fact. They argued that the Ode was readily available on Moreno's MySpace page, and available to anyone with an Internet connection. And that's the argument that the court brought:

Here, Moreno publicized her opinions about Coalinga by posting the Ode on MySpace, a hugely popular Internet site. Moreno's affirmative act made her article available to any person with a computer and thus opened it to the public eye. Under these circumstances, no reasonable person would have had an expectation of privacy regarding the published material.

The court rejected the argument that the Ode should be considered private because Moreno had "expected a limited audience" and she removed it several days after she posted it. The court commented that the publication of the Ode "was not so obscure or transient that it was not accessed by others."

What is absent from the opinion as well as Moreno's briefs is any discussion of whether Moreno used any of the MySpace privacy settings to limit access to her journal. We are thus left to speculate whether, had she limited access to the journal to a small circle of MySpace friends, she might have had a stronger argument that she had an expectation of privacy in the Ode.

Intentional Infliction of Emotional Distress

Moreno's second cause of action, for intentional infliction of emotional distress, met with more success.

As the court noted, the elements of a cause of action for intentional infliction of emotional distress under California law consists of: "(1) outrageous conduct by the defendant, (2) intention to cause or reckless disregard of the probability of causing emotional distress (3) severe emotional suffering, and (4) actual and proximate causation of the emotional distress."

The trial court rejected Moreno's claim for intentional infliction of emotional distress, concluding that as a matter of law Campbell's conduct could not meet the necessary standard of outrageous conduct. In arguing to the contrary, Moreno and her family focused on the relationship between Campbell and one of the plaintiffs, Moreno's sister Araceli. Campbell was the principal of Araceli's school. Moreno's brief argued that as her principal, he was "the official most responsible for protecting Coalinga High students," and that his intentional conduct that caused the family of his student to be harassed was extreme and outrageous.

The appeals court disagreed with the trial court and concluded that "reasonable people may differ on whether Campbell's actions were extreme and outrageous." When reasonable people may disagree on such a finding, the result is an issue that must be decided by the finder of fact, in this case, likely a jury. Thus, the court remanded the case for further proceedings on the emotional distress claim.

Conclusion

There are many lessons in Moreno v. Hanford Sentinel, not the least of which is the lesson learned by many other people who have posted personal information to MySpace and other social networking sites and blogs: Think before you post. In particular, it is wise to assume that anything that is placed online, in the form of a blog post, email or otherwise, can easily show up somewhere other than where it was intended to go.

Jeffrey D. Neuburger is a partner in the New York office of Proskauer Rose LLP, and co-chair of the Technology, Media and Communications Practice Group. His practice focuses on technology and media-related business transactions and counseling of clients in the utilization of new media. He is an adjunct professor at Fordham University School of Law teaching E-Commerce Law and the co-author of two books, "Doing Business on the Internet" and "Emerging Technologies and the Law." He also co-writes the New Media & Technology Law Blog.

As newspapers are closing or abandoning their print editions, online news sources are growing in importance -- as are sites that rely on user-submitted news stories. But with so much unfiltered news content available online, how do you separate the accurate from the inaccurate and truth from parody? You might think that traditional news sources would be better able than ordinary readers to separate the sheep from the goats. But in 2007, local Maine TV morning show hosts reported as true defamatory statements contained in an Internet parody of a news story. In its recent ruling in the resulting defamation case, a federal court found that the hosts were merely negligent, and therefore not liable for defamation, in failing to look behind the admittedly absurd statements in the parody.

A Bias Incident and a Parody

The bias incident that prompted the defamation lawsuit in Levesque v. Doocy took place in 2007 at a middle school in Lewiston, Maine. A student left a bag containing leftover ham on a lunchroom table near where some Somali Muslim students were sitting. They notified police, the school administration got involved and the offending student was ultimately disciplined. The local newspaper got wind of the story and interviewed the school principal, Leon Levesque, who was quoted in the resulting news article concerning the incident and the school's response.

Several days after the local newspaper article was published, freelance writer Nicholas Plagman wrote a parody news article about the incident and submitted it to the Associated Content website where he had previously posted numerous articles. Plagman's parody combined some of the actual facts surrounding the incident with manufactured facts and fictitious quotations purporting to have been obtained from Levesque and others, and falsely indicated that the source of some of the material in the story was the Associated Press. Plagman's account of how he came to write the article, and the subsequent fallout, is related in this story from the sunjournal.com.

The Associated Content website accepts user-generated articles on diverse topics and allows the users to designate the topics under which the articles are indexed. It is self-described as an "open content network" that allows users to receive compensation through "performance payments" that are determined by the number of page views that an article generates, among other payment arrangements. The topics that a user may designate on a particular submission include "local," "politics," "opinion/editorial," "humor," and, significantly for this case, "news."

Plagman did not label his article as a parody. Because he indicated that the story should be indexed under "humor" and "news" on the Associated Content site, it became retrievable on the Google News search engine.

Parody Makes It to Cable TV

When the morning TV news talk show, "Fox & Friends," noticed the Plagman story, the show's research department began gathering background information and was able to verify some of the facts related in the parody through other sources. The material, including the Plagman parody, was delivered to on-air hosts Steve Doocy and Brian Kilmeade. Doocy did some additional research on Google News, following which the hosts went live with the story. Attributing the fictitious quotations from the Plagman parody to Levesque, the hosts repeatedly ridiculed him for the fictitious statements. Two hours in to the program, they contacted Levesque for comment, but he did not return their calls.

It is interesting to note that both of the on-air hosts made statements questioning the accuracy of the story. As the court's opinion relates: "...Doocy on a number of occasions stated, 'I am not making this up,' once asserting that 'I've looked it up on a couple of different websites up there from local papers,' and at various times, Kilmeade stated 'I hope we're not being duped,' 'I thought this was a joke,' and 'I thought this was almost from The Onion. I didn't think that was actually true.'"

Case Dismissed

Levesque subsequently contacted the cable station, and it issued an apology and a retraction. Nevertheless, Levesque alleged in his subsequent defamation lawsuit against the hosts and the TV network that he received threatening emails and phone calls resulting from the statements by the hosts and the fictitious quotations attributed to him on the morning news program.

When the defendants moved to dismiss the case, the federal district court in Maine concluded that some of the statements made by the hosts of the program about Levesque could be found by a jury to be defamatory and false. However, because Levesque, as a school principal, was a "public official," he had to meet a more stringent standard to recover in a defamation suit. The district court ruled Levesque could not show that the statements were made with "actual malice," and thus his defamation action was dismissed. In its March 19 ruling, the U.S. Court of Appeals substantially agreed with the district court and upheld the order dismissing the case.

The Actual Malice Standard

The more stringent standard that the court found Levesque had failed to meet is the product of a series of U.S. Supreme Court rulings beginning in the 1960s. In New York Times, Inc. v. Sullivan, the Court held that under the First Amendment, a public official who brings an action for defamation must show not only that a statement was false, but that it was made with "actual malice."

The term "actual malice" is a legal "term of art," that is, it has a particular meaning in the law. In a defamation case involving a public official or public figure, "actual malice" does not mean "actual malevolent intent or ill will," or an act done with "malicious intent." The term refers to a false statement was made either with actual knowledge of its falsity or with reckless disregard for the truth.

The policy behind this restrictive rule, which makes it extremely difficult for public officials or public figures to recover in defamation actions, was described by the Supreme Court in New York Times Co. v. Sullivan as stemming from "a profound national commitment to the principle that debate on public issues should be uninhibited, robust, and wide open, and that it may well include vehement, caustic, and sometimes unpleasantly sharp attacks on government and public officials." The actual malice rule was extended to "public figures" in Gertz v. Robert Welch, Inc. in 1972. (The limitations on defamation actions brought by "public figures" in the United States is one element that fuels the phenomenon of libel tourism.)

Vetting a Questionable Story

As the appeals court related in Levesque v. Doocy, determining whether a statement was made with "actual malice" is a very fact-intensive inquiry. The standard is a subjective one, meaning it does not depend upon an external, objective standard of "reasonably prudent conduct" nor does it depend upon an assessment of whether the defendant followed professional standards of reportage. It can be assessed, however, by evaluating the circumstantial evidence:

Recklessness amounting to actual malice may be found where a publisher fabricates an account, makes inherently improbable allegations, relies on a source where there is an obvious reason to doubt its veracity, or deliberately ignores evidence that calls into question his published statements.

You might think that the news hosts' skeptical comments about the truth of the Plagman parody would fit the above description of reckless conduct. But the appeals court deemed the hosts' statements of incredulity to be part of the typical patter of morning news programs, where "such statements frequently are used as devices to magnify the presentation and grab viewers' attention." The court accepted as true the hosts' statements that, despite their skeptical hype, they never in fact doubted the veracity of the Plagman parody. The hosts' gullability, the court found, was merely negligent (although "distasteful") and did not rise to actual malice.

Yet another factor the court noted was Plagman's skill in constructing the parody. Plagman included many true facts and quotations gathered from the available sources, and interwove them with his own fabrications. The program's researchers were able to verify many of the facts via the original local news story, which apparently led them to believe in the veracity of the absurd statements fabricated by Plagman. Again, this led the court to conclude that the defendants' conduct was negligent only and did not amount to actual malice.

The Internet as a News Source

What about the fact that the professional news organization relied upon a non-traditional, Internet news outlet as the story's source? On that point the court commented:

We acknowledge that the case law which instructs our inquiry does not include situations in which defendants relied on Internet sources, a more recent but undoubtedly commonplace practice today. While publishers should employ greater caution with those Internet websites that do not go through the vetting process of traditional news media, reliance in part on an Internet posting does not necessarily change our legal analysis.

Neither the court of appeals opinion, nor the fuller account of the vetting process contained in the district court opinion [PDF file] reveal whether the news program's research before airing the story included an evaluation of the Associated Content website as a whole. Had the researcher or the program hosts clicked around on the site, they might have quickly discovered the statement on the home page that, "Anyone can submit content on any subject in any format."

The appeals court also gave great weight to the reliance that the program's researchers and the hosts placed on the fictitious reference in the Plagman parody to the Associated Press as a source for the story. This apparently boosted their confidence in the veracity of the article, even though they were not otherwise familiar with the Associated Content website on which the article was found. In fact, the record showed that one of the hosts actually thought that Plagman's article was an Associated Press article.

For its part, the Associated Content website responded to the incident by removing all of Plagman's 150 articles from the site.

Conclusion

At the least, the case of Levesque v. Doocy is a cautionary tale about the perils of relying upon non-traditional sources in vetting hard news stories. Such sources can produce amazing content and impressive scoops, as attested by the amateur reporting via the Twitter micro-blogging service on the U.S. Airways plane landing in the Hudson River. But the relationship between traditional news reporting and non-traditional reporting is yet to be adequately worked out.

The defendants in Levesque v. Doocy who were taken in by Plagman's parody were saved from a libel judgment by the actual malice standard. But the damage done to their journalistic reputations did not go unnoticed. As the district court commented:

The facts in this case -- a morning cable news show derisively reporting events and statements obtained unwittingly from an online parody -- should provide grist for journalism classes teaching research and professionalism standards in the Internet age. But First Amendment principles developed long before the Internet still provide protection to the gullible news program hosts against this public official's claims for defamation and false light invasion of privacy. Poetic justice would subject the defendants to the same ridicule that they accorded the plaintiff. But in real life, the aggrieved school superintendent must be satisfied with their later retraction and a professional reputation sullied less than theirs.

Jeffrey D. Neuburger is a partner in the New York office of Proskauer Rose LLP, and co-chair of the Technology, Media and Communications Practice Group. His practice focuses on technology and media-related business transactions and counseling of clients in the utilization of new media. He is an adjunct professor at Fordham University School of Law teaching E-Commerce Law and the co-author of two books, "Doing Business on the Internet" and "Emerging Technologies and the Law." He also co-writes the New Media & Technology Law Blog.

One such group of "guerilla journalists" has assisted the animal activist group SHARK ("SHowing Animals Respect and Kindness") in a campaign to videotape incidents of alleged animal cruelty at rodeo events; the videos are then posted on the SHARK website and on YouTube.

The Professional Rodeo Cowboys Association (PRCA), the professional group that sanctioned several of the events at which the SHARK videos were made, fought back against the bad publicity with a legal maneuver under the Digital Millennium Copyright Act (DMCA) -- one that appears to have backfired. The Electronic Frontier Foundation (EFF), which represented SHARK in the matter, leveraged that backfire into a settlement which entails, according to the EFF, "a new model for handling take-down notices" under the DMCA.

The PRCA's action under the DMCA

On the PRCA's behalf, a notice was sent to YouTube under the DMCA, demanding that the SHARK videos be removed from the site. The DMCA permits the sending of a "take-down" notice by the owner of copyrighted material; the operator of a site that receives such a notice must remove the material promptly or risk losing the DMCA safe harbor protection from legal liability for copyright infringement. YouTube indeed removed the videos. In addition, it blocked access to all of the videos uploaded by SHARK and closed SHARK's YouTube account.

Here's a typical video on YouTube by SHARK:

But according to SHARK, the videos in question were created by SHARK members and other individuals concerned about animal cruelty. SHARK maintained that the PRCA was not a copyright owner with respect to those videos and therefore the PRCA was not entitled under the DMCA to demand that they be removed. Indeed, the DMCA requires a take-down notice to include a statement under oath that the "complaining party" is acting with the authority of "the owner of an exclusive right that is allegedly infringed," as well as a statement of a "good faith belief that use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law."

If the videos in question were made by SHARK members, then the copyright owners are the SHARK members not the PRCA, and, on the face of things, the PRCA could not properly allege that the videos were used in a manner "not authorized by the copyright owner."

SHARK's counter-notice

The DMCA anticipates that mistakes may be made, and that erroneous or legally unsustainable take-down notices may be sent, as reflected in the "good faith" standard mentioned above. At least one federal appellate court has ruled that an extended investigation into the underlying circumstances is not required to form the required "good faith belief," and that "good faith" is judged according to a subjective standard.

The DMCA also contains a counter-notification provision permitting the person who originally posted the material in question to request that it be restored. A counter-notice must also be executed under oath, and reflect a "good faith belief" that the material was removed as a result of "mistake or misidentification." SHARK filed a DMCA counter-notice, asserting that the PRCA take-down notice was "baseless," and most of the videos were ultimately restored by YouTube.

SHARK's legal action

The DMCA also anticipates that a take-down notice may be sent for an improper motive, and thus a counter-notice is not the only remedy when material is removed improperly. The DMCA permits the person whose material was removed pursuant to a take-down notice to bring an action against the party that sent the take-down notice, if the party that sent the take-down notice "knowingly materially misrepresents...that material or activity is infringing." Damages and attorneys fees may be awarded in such an action.

Note that the fact that material alleged to be infringing was ultimately restored does not mean that the person sending the take-down notice necessarily lacked the necessary good faith belief, or that the take-down notice involved a misrepresentation. A copyright owner may believe in good faith that a particular use of its content infringes its rights, even if ultimately a court would conclude that it is not. Circumstances involving claims of fair use in particular are subject to disagreements between copyright owners and those that make use of their content. But fair use was not at issue in the dispute between SHARK and the PRCA.

In August 2008, SHARK brought an action against the PRCA alleging not only was the notice improper, but that the PRCA knew that it was improper and sent it anyway. The SHARK complaint alleged that "the PRCA sent the notice in order to chill SHARK's efforts to raise public awareness of animal abuse at PRCA-sanctioned events, and not in order to enforce any perceived copyright interest."

In its response, PRCA denied that allegation that it had no protectable copyright interest in the videos, and also pointed the finger at the media management company acting on its behalf, stating that "the controversy between the parties also includes whether Pro Rodeo Films, Inc., the third-party media management company engaged by the PRCA, had a proper and valid basis to issue the take-down notice."

EFF track record on DMCA and citizen journalism

Relatively few cases have been brought over improper DMCA take-down notices, and fewer still have involved the type of "citizen journalism" activity in which SHARK and its members were engaged. But it bears pointing out that one of those few cases involved a significant victory by the Electronic Frontier Foundation representing a group of students who posted internal company emails by an electronic voting machine manufacturer that they said proved that the machines were flawed. In Online Policy Group v. Diebold, a federal district court ruled favorably on the EFF's argument that the take-down notices were improper under the DMCA, not because the voting machine company did not have copyright rights in the emails in question, but because the students posted them under the circumstances protected by the fair use doctrine. That case was ultimately settled with a $125,000 payment by the company to the students.

The PRCA's no videotaping rule

Because the SHARK v. PRCA action was settled without any further significant legal proceedings or a court ruling, we are left to speculate as to the basis the PRCA or its media management company thought they had to issue the take-down notice in question. The PRCA's answer to the complaint contains a clue: The PRCA alleged that SHARK's claims were barred by the equitable doctrine of "unclean hands" because of its "failure to adhere to rules and guidelines posted at PRCA-affiliated arenas that expressly prohibit videotaping PRCA events." Perhaps the PRCA or its media management company believed at the time that if the videotapes were made by SHARK members in violation of that rule, it argued that the take-down notices were proper.

But making a videotape of a sports event in violation of a no-videotaping rule does not give rise to a claim under copyright law. (Although unauthorized videotaping under some circumstances might give rise to some other legal claim.) And the settlement reflects that fact.

The settlement

The PRCA has agreed as part of the settlement to make a payment of $25,000 to SHARK. The PRCA also agreed that any future copyright infringement claims it makes against SHARK will be submitted to SHARK first. If SHARK refuses to remove a video in which the PRCA continues to assert a copyright claim, no DMCA take-down notice will be filed until it is reviewed by PRCA's general counsel. One clear purpose of the provision is to avoid the issuance of take-down notices by parties acting on behalf of the PRCA who may not have the appropriate legal understanding or training, or even knowledge of the facts, to determine whether there is legal justification for issuing a notice. One hopes that short-circuiting the DMCA take-down process will save both parties time and aggravation, not to mention attorney fees.

In addition, in the course of the settlement negotiations between the parties, SHARK was also able to place on the table PRCA's practices in enforcing its "no videotaping" rule. Thus, the settlement also includes an agreement by PRCA not to discriminate in its enforcement of the no-videotaping rule with respect to ticket holders and attendees at PRCA events. Presumably this means that if the PRCA, despite its rule, permits ticket holders and attendees generally to videotape at its events, it may not selectively enforce that rule against SHARK members or other animal activists. This leaves SHARK and its members free to continue their videotaping, unhindered by the PRCA.

Jeffrey D. Neuburger is a partner in the New York office of Proskauer Rose LLP, and co-chair of the Technology, Media and Communications Practice Group. His practice focuses on technology and media-related business transactions and counseling of clients in the utilization of new media. He is an adjunct professor at Fordham University School of Law teaching E-Commerce Law and the co-author of two books, "Doing Business on the Internet" and "Emerging Technologies and the Law." He also co-writes the New Media & Technology Law Blog.

In 1998, the U.S. Congress enacted the Child Online Protection Act (COPA), a law intended to control child access to sexually explicit material on the Internet. The law was immediately challenged on free speech and other grounds and its enforcement was delayed. After ten years of litigation, on January 22 the U.S. Supreme Court dealt the final blow to the law by refusing to hear the U.S. Government's last appeal from lower court rulings declaring the law unconstitutional.

The Internet might have been a very different place if the law had the law been upheld, at least in the United States.

The Child Online Protection Act

The prospect of children obtaining access to obscene and indecent material on the Internet has preoccupied Congress since online networked communications moved into wide public use in the 1990s. When the more broadly applicable anti-obscenity provisions of the federal Communications Decency Act of 1996 were struck down as an unconstitutional restraint on free speech, Congress quickly tried again with COPA. The hope was that a more narrowly focused law aimed at protecting children under the age of 17 from sexually explicit material would survive a constitutional challenge.

COPA defined the posting of material that is "harmful to minors" on the Internet for commercial purposes as a criminal offense. But the Act also provided that website operators and other content providers could defend against a prosecution under the Act by showing that children's access to harmful content was restricted by requiring the use of a credit card, a debit account, an "adult access code" or "adult personal identification number," a "digital certificate that verifies age," or "any other reasonable measures that are feasible under available technology."

In other words, to avoid prosecution, website operators and other content providers would be put in the position of either removing content that might be deemed "harmful to minors," or putting it behind a firewall and limiting access via some kind of age-verification technology.

"Harmful to Minors"

For good or ill, an enormous variety of content is readily available online, from the most refined works of art to the least refined, objectionable trash. COPA would have required the trash to be kept behind a firewall.

What's wrong with putting trash behind a firewall?

From the perspective of the First Amendment, one problem with limiting access to trash is that one person's trash may be another person's treasure. That is, the attempt to define material that is "harmful to minors" risked sweeping into the trash content that might be harmful to some, but not to others.

COPA provided that material that is harmful to minors includes any communication that is obscene or that:

( A ) the average person, applying contemporary community standards, would find, taking the material as a whole and with respect to minors, is designed to appeal to, or is designed to pander to, the prurient interest; ( B ) depicts, describes, or represents, in a manner patently offensive with respect to minors, an actual or simulated sexual act or sexual contact, an actual or simulated normal or perverted sexual act, or a lewd exhibition of the genitals or post-pubescent female breast; and ( C ) taken as a whole, lacks serious literary, artistic, political, or scientific value for minors.

On first scan this definition might sound like a pretty good list of things that should be kept from children. Prompted by the American Civil Liberties Union and a coalition that included providers of sexually related materials, however, the courts took a closer look.

One significant flaw in the "harmful to minors" standard was found in the fact that the Act applied a single standard to all minors under the age of 17. The courts found that the definition was over inclusive because sexually related material might be defined as obscene to younger minors, but not to older minors. In other words, content that could lawfully be kept from a five-year-old might not be properly classified as harmful to a 17-year-old.

ACLU video on the COPA decision by the Supreme Court

Under the First Amendment, a law that restricts speech is required to be "narrowly tailored" to advance the government's legitimate interest, and in this respect the law was found to have failed the "narrowly tailored" test.

Are Age Verification Technologies Effective?

Whether COPA was "narrowly tailored" to achieve the Government's legitimate interest in restricting child access to sexually explicit materials also involved an examination of whether age verification technologies could effectively prevent child access to objectionable material. The challengers to COPA argued that age verification techniques were imperfect because many children could evade them, while the government argued that evasion by some should not compromise the overall effort to bar access to the majority of minors.

But the trial court found that there was "no evidence" that age verification services or products then available on the market could actually establish or verify age reliably or ultimately prevent access to objectionable content by minors. For example, the court took notice of the fact that the individual entering age verification information into a web browser isn't necessarily the person whose information is being entered, and that while requiring a credit, debit or other payment card number be entered to obtain access to a website might deter a five-year-old, it would be unlikely to deter a motivated teenager.

Other problems with age verification technology were also identified: implementing them would impose costs on content providers and users alike and would result in lost traffic to firewall-protected sites; and the use of verification systems would deter web users who wanted to remain anonymous from accessing protected content. And importantly, the courts noted that the law did not extend to websites located outside the United States, thus children could still access objectionable content from abroad even if all objectionable content on U.S.-based sites was effectively bottled up.

The courts found, therefore, that the age verification requirement was not "narrowly tailored" to serve the Government interest of protecting children from sexually explicit material, and that it would have a chilling effect on speech protected by the First Amendment.

How Would COPA Change the Web?

To return to the question posted at the beginning, the Internet would likely be a more segmented environment under COPA. In order to protect themselves from criminal prosecution, U.S.-based content providers would likely be screening their content to make sure that anything that might be deemed harmful to a toddler or a five-year-old was kept behind a secure firewall, available only with a credit card or debit card or other age-verifying technology. That's a wide swath of content.

Another thought that comes to mind is that webmasters would have to carefully watch content posted by users, to assure that user-generated content on their sites did not violate the "harmful to minors" standard. Even a malicious comment by a user on an otherwise benign website available to young children might raise an issue under the "harmful to minors" standard.

But at the same time, such content would no doubt be freely available on foreign websites. And presumably it would also be available on firewall-protected U.S. websites to children or teens savvy enough to evade age-verification systems by cribbing a parent's credit or debit card number or otherwise passing themselves off as over 17.

This is not the Internet that we experience today.

Age Verification and Social Networking Sites

To some extent, the conclusion drawn by the courts in the COPA case with respect to the workability of age verification techniques was echoed recently in a study commissioned by 49 state attorneys general and released on January 14. The Internet Safety Technical Task (ISTT) Force was asked to determine the extent to which current technologies could address safety risks to minors on the Internet, primarily in the context of social networking sites.

The ISTT study did not reject the concept of using age-verification and other technologies to protect children online entirely. But while the study expressed "cautious optimism" at progress being made both in the field of age verification and in technologies that filter Internet content, the study concluded, like the courts in the COPA case, that such technology is not perfect. The study cautioned against over-reliance on technological solutions alone to protect minors from harmful content on the Internet.

What's more, the study pointed out that almost all of the age-verification technologies that they examined presented privacy and security risks that would have to be weighed against any benefits they provided.

The study is an important read for anyone concerned about the topic of online access to objectionable content by children. Among the interesting observations expressed in the study was that "the Internet increases the availability of harmful, problematic and illegal content, but does not always increase minors' exposure. Unwanted exposure to pornography does occur online, but those most likely to be exposed are those seeking it out, such as older male minors."

Finally, the study also sent a strong message to parents and caretakers, that they are the first line of defense in protecting children from objectionable content:

Parents and caregivers should: educate themselves about the Internet and the ways in which their children use it, as well as about technology in general; explore and evaluate the effectiveness of available technological tools for their particular child and their family context, and adopt those tools as may be appropriate; be engaged and involved in their children's Internet use; be conscious of the common risks youth face to help their children understand and navigate the technologies; be attentive to at-risk minors in their community and in their children's peer group; and recognize when they need to seek help from others.

Jeffrey D. Neuburger is a partner in the New York office of Proskauer Rose LLP, and co-chair of the Technology, Media and Communications Practice Group. His practice focuses on technology and media-related business transactions and counseling of clients in the utilization of new media. He is an adjunct professor at Fordham University School of Law teaching E-Commerce Law and the co-author of two books, "Doing Business on the Internet" and "Emerging Technologies and the Law." He also co-writes the New Media & Technology Law Blog.