International News v
Associated Press
A theme and variations over four days
Trier, December 2008
Christopher Wadlow
University of East Anglia
1: INS: the facts, and
some of the fiction
International News Service v
Associated Press
(1918) 248 US 215, 39 SCt 68, 63 LEd 211
INS: The cast
• William Randolph Hearst, Press Baron
and politician, the original for Orson
Wells’ Citizen Kane
• Melville Stone, Managing Director of
Associated Press. Hated Hearst.
Convinced news was ‘property’
INS v AP, the background
• AP was a cartel of 1000 US newspapers
pledged to mutual local exclusivity
• It was dominant by virtue of size, network
effects, natural monopoly, and exclusivity with
members and non-US agencies
• News was almost free at source, but costly to
disseminate. Costs were mainly fixed, tied to
AP’s cable network
INS v AP, October 1916
• INS was owned by William
Hearst. Hearst owned
three major papers within
AP, but AP resisted further
Hearst memberships
• INS had been excluded
from access to war news in
UK and France, ostensibly
for inaccuracy, in reality for
strongly anti-war stance
AP’s three complaints
• Bribing a telegraph operator at an AP paper
• Taking bulletins from Hearst’s own AP
subscription, and passing them to INS in breach
of his terms of membership
• Taking news items from published AP editions in
New York, and telegraphing them to INS
subscribers in the mid-west and west
The one which stuck
‘[M]ost of the foreign news reaches this country at the Atlantic
seaboard ... and because of this, and of time differentials due
to the earth’s rotation, the distribution of news matter
throughout the country is principally from east to west; and,
since in speed the telegraph and telephone easily outstrip the
rotation of the earth, it is a simple matter for defendant to take
complainant’s news from bulletins or early editions of
complainant’s members in the eastern cities and, at the mere
cost of telegraphic transmission, cause it to be published in
western papers issued at least as early as those served by
complainant.’
INS v AP, Pitney J:
‘The right of the purchaser of
a single newspaper to
spread knowledge of its
contents ... may be admitted;
but to transmit that news for
commercial use, in
competition with
complainant—which is what
defendant has done and
seeks to justify—is a very
different matter.’
INS v AP, Pitney J
‘[D]efendant ... is taking material that has been
acquired by complainant as the result of
organization and the expenditure of labor, skill,
and money, and which is salable by complainant
for money, and ... is endeavoring to reap where
it has not sown, and by disposing of it to
newspapers that are competitors of
complainant’s members is appropriating to itself
the harvest of those who have sown.’
INS v AP, Pitney J
‘Stripped of all disguises, the process amounts to
an unauthorized interference with the operation of
complainant’s legitimate business precisely at the
point where the profit is to be reaped, in order to
divert a material portion of the profit from those
who have earned it to those who have not; with
special advantage to defendant in the competition
because of the fact that it is not burdened with any
part of the expense of gathering the news.’
INS summed up
• No absolute ‘property’ exists in news
• Action lay against INS because it was a
competitor, hence action is for ‘unfair
competition’
• Misappropriation of news, in competition
with its originator, was actionable despite
absence of misrepresentation
The (simplified) issue
• Two formulations
• Protection of ‘hot news’ under law of
unfair competition
• General basis for doctrine of
‘misappropriation’ in common law
Questions for us
• Basically, three central ones:
• How did the court get there?
• What does it all mean?
• What effect has the INS case had
since?
Unfair competition?
• So it’s four days about unfair
competition? Not really.
• Pre-existing Anglo-US U/C law almost
entirely dependent on misrepresentation
(passing-off)
• INS has NOT led to any systematic law of
U/C by misappropriation
INS as a dead end?
• In some respects. Certainly not the basis
of a whole new law (or new half-law) of
unfair competition
• Meanwhile, here are some of the issues I
propose to use the INS case to illustrate
over the next few days
Code and common law
• There is no statute or code in the USA
dealing with unfair competition
• There is not even a general code or
statute for torts, or even for property
• Law of U/C is entirely defined by cases; it
is judge-made
How common law is made
• Which judges make it?
• In England, fairly simple hierarchy of
courts: House of Lords (top), Court of
Appeal (middle), High Court (trial)
• In US: much more complicated
Federal/state law
• US consists of 50 states. Each state has
a legislature and courts
• US has own Federal legislature
(Congress) and federal court system
• US Supreme Court tops both systems
The common law
• So think of this week as an exercise in
the common law, rather than intellectual
property specifically
• What is ‘common law’?
• Where does it come from?
• How do we know what it is?
• How did it get that way?
And watch out for these
on the way
American legal education
• The casebook method
• INS in the US Law School curriculum
• Hart & Sacks Legal Process Materials
• IP/UC/Regulation casebooks e.g. Kitch
& Perlman
Legal taxonomy
• News as property? Is it? What ‘makes’
property?
• Tort? Specifically unfair competition?
• Restitution for unjust enrichment?
• Something else?
The US Constitution
• The court system, Congress, and the
separation of powers
• The patent and copyright clause
• Federal and state law
• The Supreme Court
Copyright law
• The Constitution: Patents and copyright
clause
• The Copyright Act 1909
• Registration and copyright notice
• No copyright in factual materials
• Federal pre-emption by copyright law
Copyright treaties
• The USA and ‘international copyright’
• The Berne Convention
• The Rome Convention (‘Neighbouring
Rights’)
• Performers’ rights; broadcasting; sound
recordings
Antitrust law
• The constitution of AP
• AP as a ‘trust’, the 1945 decision
• AP as dominant in foreign/war news
• AP’s news as an ‘essential facility’
Freedom of speech
• Two views on press freedom
• The right to receive, as well as impart,
information
• The continued viability of AP vs that of
INS: which is worse, copying or
exclusion?
• Prior restraint and ‘due process’
Unfair competition
• Nature and place in the common law
• Relation to other bodies of IP law
• Forces for development or stasis
• Judicial attitudes towards U/C
• Taxonomy of U/C law
INS in the ‘common law’
• Inside USA
• Outside USA
• Pre-INS UK: copyright, ‘Our Dogs’ case
• Australia: ‘Victoria Park’ case
• UK etc since then
All these to come.
Meanwhile, INS in
more detail
The background
• AP the leading American news agency.
Constituted on basis of territorial
exclusivity. i.e. each AP member was
exclusive for its own city/location.
• AP acted as a co-operative. Members
shared US news. Had exclusive contracts
with main non-US agencies
INS: the history
• Oct 1916: INS banned from UK for
unfavourable news coverage of War
• Jan 1917: AP commence litigation
• April: First instance judgment
• Late 1918: Supreme Court decision
A quick summary
• ‘INS would take AP’s hot news stories about World War I
battles from publicly distributed New York newspapers that
subscribed to the AP service. INS would then telegraph
the story to the West Coast to Hearst newspapers, which
would print the stories, sometimes ahead of the West
Coast AP newspaper subscribers. Thus, INS appropriated
hot news stories that had been gathered by AP at great
expense and effort. There was usually no copyright
infringement, for there was usually no copying of the exact
words of an AP dispatch; rather there was an appropriation
of the underlying factual information.’
What’s wrong with that?
• AP had three complaints, this was only
one of them
• AP did not gather news at great expense
and effort, it just digested press briefings.
Does this affect whether news is
‘property’?
The three complaints
• INS had bribed a telegraph operator to
pass on confidential AP news items
• INS took AP bulletins from a Hearst paper
which subscribed to AP
• INS took published AP news from early
East Coast editions
An adversarial system
• Remember, the common law is
‘adversarial’. Parties present cases proand con- to the judge. Judge does not
take initiative or investigate facts
• But, judge is not bound to choose
between parties’ legal submissions. He
decides legal issues for himself
What did AP want?
• An injunction to stop INS copying in the
future. (An interim injunction).
• A binding precedent that news is
‘property’ or at least that it is protected by
law
• What’s the difference? Why both?
Precedent
• Every decided case contributes to the
body of case law or precedent, but:
• The first case to decide a particular point
is especially important. It is the first
precedent
• Other courts later will probably (perhaps
must) follow it. Depends on status of
previous court in hierarchy
Injunction
• An injunction is binding on a specific
party as a result of a court decision
• INS was subjected to an ‘interim’ or
‘preliminary’ injunction, i.e. pre-trial
• Injunction binds INS specifically, on the
facts of the case. Precedent sets rule of
law binding (in principle) in future cases
against anyone
How to decide case?
• No code, no statute, no (single) source of
law
• What about case law? i.e. ‘precedents’
• First, categorise and analyse the
cause(s) of action, but bear in mind the
ultimate remedies AP sought
1: Bribery
• Criminal law? Perhaps, but are we
interested?
• Not much. Why not? Little point in
prosecuting individuals.
• What we want is: civil c/a; against INS as
such; giving rise to injunction
1 and 2: Interference
• There is a tort of interference with
contract which was well-established
• How useful in complaints 1 and 2?
• What are its shortcomings?
• On the facts of INS v AP?
• In the long term, from AP’s point of
view?
1 and 2: Confidence
• There is also an equitable doctrine of
breach of confidence
• How useful in complaints 1 and 2?
• What are its shortcomings?
• On the facts of INS v AP?
• In the long term, from AP’s point of
view?
1 and 2: Where are we?
• How useful would it have been to win
complaints 1 and 2 individually?
• Would this have stopped INS copying
War news in the near future?
• Would it have delivered the precedent AP
and Stone wanted?
• What can we do about complaint 3?
End of class 1