INS: 3
Remember from last time
• We were about to start Cheney v Doris
Silk
• But first, the other judgments in INS v AP
• Why more than one judgment?
Dissenting judgments
• In common law systems, judges tend to
be individual rather than collegial
• Courts consist of one judge only, except
for appeals
• In appeal courts, judges do not share in a
single judgment. Each may write his own
Dissenting judgments
• If necessary, courts decide by a majority
• Judges who disagree with the majority
are said to dissent. They may still deliver
judgment, explaining why they dissent.
Dissents are reported
• Why? What effect does this have?
Dissenting judgments
• The US Supreme Court is very frequently
divided, sometimes on a political or
ideological basis. It may even reverse its
own decisions
• Judges who have made up their minds
will write and circulate judgments to
influence their undecided brethren. One
will prevail, other will dissent
INS v AP
• So far, we have only looked at judgment
of Justice Pitney. He delivered the
opinion of the Court (i.e. the majority)
• Two more Justices concurred, but on
different reasoning
• Justice Brandeis dissented
Justice Brandeis
• See Report
Cheney v Doris
• Case in the Second Circuit Court of Appeals.
(1929) 35 F.2d 279
• Cheney were silk fabric manufacturers, every
season they would introduce new designs. Only a
few of these were successful, the rest flopped. This
was too unpredictable to make protecting each
design individually cost-effective
• Doris copied only the best-selling designs
Cheney v Doris
• ‘Of the cases on which the plaintiff relies, the chief
is International News Service v Associated Press,
…. Although that concerned another subjectmatter—printed news dispatches—we agree that, if
it meant to lay down a general doctrine, it would
cover this case; at least, the language of the
majority opinion goes so far.’
Remember?
• Two formulations of INS v AP
• Protection of ‘hot news’ under law of
unfair competition
• General basis for doctrine of
‘misappropriation’ in common law
Cheney v Doris
• ‘We do not believe that it did. While it is of course true that
law ordinarily speaks in general terms, there are cases
where the occasion is at once the justification for, and the
limit of, what is decided. This appears to us such an
instance; we think that no more was covered than situations
substantially similar to those then at bar. The difficulties of
understanding it otherwise are insuperable. We are to
suppose that the court meant to create a sort of commonlaw patent or copyright for reasons of justice. Either would
flagrantly conflict with the scheme which Congress has for
more than a century devised to cover the subject-matter.’
Post-INS timescale
• INS to Cheney
• Cheney to Erie v Tomkins
• Erie to Sears/Compco
• Sears to California v Goldstein
• Goldstein to 1976, and present
Erie v Tompkins
• Seems very remote from INS: case
concerned injuries to Mr Tompkins, who
was hit by a train
• Liability governed by ‘common law’.
Problem was, whose common law?
US Court System
• Recall, US has Federal and State courts
• Prior to Erie, Federal Courts applied a
common law of their own
• State courts applied the common law of
that state
• Result: in theory, 50+1 common laws!
Erie
• Pratical effect was that if plaintiff could
chose between Federal and State courts,
he had choice of 2 x laws
• Example: Federal ‘diversity’ jurisdiction if
parties from different states, as in Erie
Erie
• Erie abolished this. Decided there was no
‘Federal common law’
• All common law is state law. Federal
courts can apply state law, but must do
so by reference to state precedent
Erie and INS
• Still seems a long way from INS?
• INS was originally a decision of a Federal
Court (SDNY) exercising diversity
jurisdiction
• All courts in INS thought they were
applying Federal common law, but Erie
said no such law existed
Does this abolish INS?
• Not as an individual decision, result
stands even though fundamentally
mistaken
• As a precedent? Cannot stand as a
statement of Federal law. Can only
remain as a statement of state law (New
York) by a Federal Court
INS post-Erie
• Value of INS as precedent already much
reduced by Cheney v Doris
• Further reduced by Erie
• Further reduced by ‘Shredded Wheat’
case in Supreme Court, in which Justice
Brandeis wrote opinion
Sounds confusing?
• Cheney-Erie-Shredded Wheat cases reopened whole argument
• Cheney had been exercise in interpreting
a binding S Ct authority
• After Erie, INS not binding: up to courts in
each state to decide how far to go
Any limits on the states?
• Just becuase ‘Federal common law’
abolished, does not mean federal courts
drop out of the picture
• Federal courts continue to exercise
diversity jurisdiction, but must apply
relevant state law
Any limits on the states?
• And Federal courts continue to apply
Federal statute law and the Constitution
• In particular, the Copyright Act is a
Federal Act, so its interpretation is under
the control of the Federal courts
Remember pre-emption?
• Pre-emption is the doctrine that the
states and Federal Government cannot
both exercise their powers in the same
field
• To the exent that the Federal
Government has acted, the states must
keep out (similar to EU)
Copyright pre-emption
• For copyright, pre-emption works two
ways:
• States must respect Federal decision to
grant copyright, but ...
• ... state law must also respect Federal
policy decision of circumstances where
copyright not to be available
Pre-emption and INS
• Look at this two ways:
• Bottom-up: from the point of view of
state law first
• Top-down: from the point of view of
Federal law first
Bottom-up (State court)
• Ask ourselves: do we protect ‘hot news’
or other ‘intangibles’ in this state? This is
question for state law
• So: are there any local (state)
precendents? Are there any non-local
‘persuasive’ authorities? If we have
freedom of action, what are the relevant
principles and conclusions?
Bottom-up (2)
• Suppose we do want to protect news,
etc. Is this the end?
• No. We must ask if this infringes the
Federal-State relationship
• In particular, is the step we want to take
pre-empted? This depends on Federal
law, and is out of our hands
Top-down (Federal Court)
• We cannot make up state law ourselves.
We must accept what the relevant state
courts say it is.
• If the state court precedents say there is
no state-law protection in INS situations,
that is conclusive
Top-down (2)
• If the state court authorities say there is
protection, we must accept that as
accurately declaring state law
• However, as a Federal court, we decide
for ourselves on matters of Federal law,
including the Copyright Act. In this
respect, including pre-emption, we follow
Federal precedents
Either route
• Three possible outcomes:
• State law does not afford protection
• State law protects and is consistent
with Federal copyright pre-emption
• State law would protect, but is
inconsistent, and over-ruled
Why it matters for INS
• Starting position. No copyright in ‘hot
news’ because:
• No registration/notice
• No copyright in facts as such
• (Maybe) News items not substantial
Pitney vs Brandeis
• Remember two views of relation of
copyright to INS doctrine, in INS
• Pitney and Brandeis agree that the courts
(even the Supreme Court) must not
create copyright in situations where
Congress has decided no copyright
should exist
Pitney vs Brandies
• Pitney: We are OK, because what we are
making up is not a copyright, but an
unfair competition right
• Brandeis: This is really copyright in
disguise. Congress has decided news is
public property, we should not contradict
them
INS and pre-emption
• This is very nearly the same as the preemption question:
• Did Congress intend news to be free
for all?
• Or did it simply exclude it from
copyright, while allowing it to find a
‘home’ elsewhere?
News and other values
• Repeat this exercise for any other kind of
‘valuable intangible’
• Supreme Court has done so
• Sears/Compco: very strict
• Goldstein v California: much more
relaxed
What about INS itself?
• Does INS have any value as a precedent
after all this?
• INS MUST be taken as deciding that
short-term protection for ‘hot news’ under
(state) unfair competition law was not
pre-empted by 1909 Copyright Act. That
may be all
What’s left?
• INS does not decide that ‘hot news’
protection is required, because that (Erie)
is for state law/state courts
• INS does not decide how far the ‘hot
news’ doctrine extends to other kinds of
‘misappropriation’
Two opposing views
• New York, Second Circuit
• NBA v Motorola
• Chicago, Illinois State Courts
• Dow Jones v Chicago Board of Trade
NBA v Motorola
• ‘[T]he surviving “hot-news” INS-like claim is limited to
cases where: (i) a plaintiff generates or gathers
information at a cost; (ii) the information is timesensitive; (iii) a defendant’s use of the information
constitutes free-riding on the plaintiff’s efforts; (iv) the
defendant is in direct competition with a product or
service offered by the plaintiff; and (v) the ability of other
parties to free-ride on the efforts of the plaintiff or others
would so reduce the incentive to produce the product or
service in question that its existence or quality would be
substantially threatened.’
Dow Jones
• Board of Trade of the City of Chicago v Dow Jones &
Co: the INS doctrine was held to apply to prevent the
Chicago Board of Trade trading a futures contract based
on the Dow Jones Index.
• So at one end of the scale we have an action which is
crucially dependent not only on actual competition, but
on the imminent prospect of destruction of the very
product or service copied; whereas at the other (Dow
Jones) end there is neither competition nor damage,
and we seem to be dealing with unjust enrichment pure
and simple.
End of class 3