AP v. Meltwater – A Decision Heard Around the Content Ecosystem

By  Molly   |   April 12, 2013

Molly Siems, Esq. / Director of Legal and Business Affairs, NewsCred -

In February of 2012, the Associated Press sued one of the largest media monitoring firms in the world, Norwegian company Meltwater. After duking it out in New York federal court for more than a year, the case was finally decided in favor of the AP on Thursday, March 21. The case is reflective of an ongoing battle between traditional news publishers and digital news aggregators. Such a prominent test case garnered significant attention on both sides of the dispute from such high-profile organizations as the Electronic Frontier Foundation and the Center for Internet and Society, both of which filed briefs in support of the defendant. Adversely, the New York Times, Gannett, McClatchy, and the Newspaper Association of America filed briefs in support of the plaintiff. The following blog post summarizes the details of the case and addresses some of the projected consequences of the decision with respect to content on the web.*

What Does Meltwater Do, Exactly?

Meltwater provides consumers with a media monitoring system called Meltwater News. The software enables users to track in real-time when their company is mentioned in breaking news, social media channels or in certain keywords of interest, thereby allowing them to measure buzz, decipher industry trends and identify competitor activity.

The Meltwater News service scans and scrapes articles, indexes them and delivers excerpts to customers with the following information: a) the article headline; b) the link to the where the article was originally published; c) pertinent source information (such as publisher and country of origin); d) up to 300 characters of the opening text and e) the “hit sentence” (i.e. approximately 140 characters surrounding the algorithmically chosen keyword). This presentation saves users time by allowing them to browse targeted news stories quickly and efficiently as opposed to searching, and reading through full-text articles.

What Did AP Sue Meltwater For?

In its complaint, AP asserted, among other claims, 33 counts of copyright infringement. AP argued that they did not give Meltwater permission to scrape their new articles, and that displaying snippets of their articles in its news monitoring service was an infringement of the AP’s copyrights. Furthermore, they asserted that Meltwater unfairly profited from news stories that the AP had expended great resources to create.

What Was Meltwater’s Counterargument?

Meltwater claimed the fair use defense, which, under the law, allows use of a copyrighted work for limited purposes. Meltwater compared its product to Google News, and argued that the use of the AP articles was fair due to the fact that its service functions as an Internet search engine by simply pointing users to article sources. Meltwater advanced their defense by arguing that their use of AP articles was transformative, or different than the AP’s usage of the works, and therefore should be allowed.

What The Court Decided

The court agreed with the AP that the fair use defense does not apply, and found copyright infringement. In deciding whether infringement has occurred, courts consider, among other factors, the purpose and character of the use, the amount copied, and the effect of the use on the potential market for the work.

Here, the court decided that the purpose and character of the use was not transformative, as Meltwater argued. In its analysis, the court distinguished the Meltwater News service from Google News in that the Meltwater product is not really a search engine, but an expensive subscription service that markets itself as a news clipping service. Moreover, Meltwater did not add commentary or transform the work in a meaningful way.

Furthermore, as I explained more in-depth in my Wired article, the amount and substantiality of the copying factors into the infringement analysis. Here, the court agreed with AP that the lede is the most expressive part of an article; thus, although the lede is only a small portion of the article from a quantitative standpoint, the copying of a lede is qualitatively more substantial. Moreover, the court found that Meltwater copied too much of the articles, given the fact that Google News excerpts are usually half the length of Meltwater’s excerpts.

Lastly, the court found that the effect of Meltwater’s use of the works was harmful to the potential market for AP articles. Instead of driving traffic to AP properties like Google News, Meltwater News acts as a substitute for AP. In fact, evidence demonstrated that the click-through rate to actual AP articles is abysmal, and that users typically stay within the portal and read article summaries. Furthermore, the AP has existing licensing arrangements in place with other publishers who pay to access “snippets” of articles, including headlines and up to 140 characters. Thus, Meltwater was scraping such content free of charge, when other companies, including its competitors, were paying for access.

What Does This Case Mean for Aggregators?

This case has certainly tipped the scale in favor of online news publishers. If you are scraping or aggregating news content without a license to do so, the original news publishers could potentially succeed in a lawsuit against you, using the AP case as ammunition. Although the court would still have to weigh several factors – - i.e. how much of the articles you are copying, what part of the articles, and whether your use is transformative, among others – - the decision in Associated Press v. Meltwater has made the commercial use of aggregated news content without a license a very risky business. While it’s possible that the Meltwater decision could be overturned on appeal, that could take years and may never even happen. So, in the meantime, you should follow the ruling and abide by the guidelines set forth by the court.

*This post is for informational purposes only and should not be considered legal advice.

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