International News Service v. Associated Press

International News Service v. Associated Press, 248 U.S. 215 (1918), also known as INS v. AP or simply the INS case, is a 1918 decision of the United States Supreme Court that enunciated the misappropriation doctrine of federal intellectual property common law: a "quasi-property right" may be created against others by one's investment of effort and money in an intangible thing, such as information or a design. The doctrine is highly controversial and criticized by many legal scholars, but it has its supporters.

The INS decision recognized the doctrine of U.S. copyright law that there is no copyright in facts, which the Supreme Court later greatly elaborated in the Feist case in 1991, but INS nonetheless extended the prior law of unfair competition to cover an additional type of interference with business expectations: "misappropriation" of the product of "sweat of the brow." The case was decided when a body of federal common law existed for business practices and torts, which the Supreme Court had power to declare or create, but two decades later, the Supreme Court abolished that body of substantive law and held that state law must govern the field henceforth. Accordingly, the INS case no longer has precedential force although state courts are free to follow its reasoning if they so choose.

Contents

• 1 Background

• 2 Ruling

  • 2.1 Power to rule on issues

  • 2.2 Previous state of unfair competition law

  • 2.3 Majority opinion

  • 2.4 Holmes's dissent

  • 2.5 Brandeis's dissent

• 3 Implications and aftermath

  • 3.1 "Hot news" cases

  • 3.2 Other copying cases

  • 3.3 Kellogg case

  • 3.4 Sears and Compco cases

• 4 See also

• 5 References

• 6 Further reading

• 7 External links

Background

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Two competing United States news services (INS and AP ) were in the business of reporting in the U.S. on World War I . Their businesses hinged on getting fast and accurate reports published. After reporting that was perceived by the Allied Powers (Britain and France) as unduly favorable to the Central Powers (Germany and Austria) by William Randolph Hearst 's INS, the Allies barred INS from using Allied telegraph lines to report news, which effectively shut down INS's war reporting.

To continue publishing news about the war, INS gained access to AP news by examination of AP news bulletin boards and early editions of newspapers affiliated with AP. INS members would rewrite the news and publish it as their own without attribution to AP. Although INS newspapers had to wait for AP to post news before they went to press, INS newspapers in the West had no such disadvantage relative to their AP counterparts. The AP brought an action seeking to enjoin INS from copying AP-gathered news.

Ruling

(https://en.wikipedia.org/w/index.php?title=International_News_Service_v._Associated_Press&action=edit&section=2 "Edit section: Ruling")

Power to rule on issues

(https://en.wikipedia.org/w/index.php?title=International_News_Service_v._Associated_Press&action=edit&section=3 "Edit section: Power to rule on issues")

In 1918, the federal courts, particularly the Supreme Court, had the power to declare and create binding law in commercial matters such as bills and notes and torts such as negligence and business interference. This was under the doctrine of _Swift v. Tyson _, 41 U.S. 1 (1842), which had held that the federal courts, when deciding matters not specifically addressed by the state legislature, had the authority to develop a federal common law. In 1938, in _Erie Railroad Co. v. Tompkins _, 304 U.S. 64 (1938), the Supreme Court overruled Swift v. Tyson. As Justice Brandeis wrote:

Congress has no power to declare substantive rules of common law applicable in a state whether they be local in their nature or "general," be they commercial law or a part of the law of torts. And no clause in the Constitution purports to confer such a power upon the federal courts.

However, because the INS case had been decided in 1918, the Supreme Court could declare or create applicable tort law to govern the controversy between INS and AP.

Previous state of unfair competition law

(https://en.wikipedia.org/w/index.php?title=International_News_Service_v._Associated_Press&action=edit&section=4 "Edit section: Previous state of unfair competition law")

The White Court .

Before the INS case, unfair competition was generally considered to be limited to cases of "palming off" in which the defendant deceived customers by causing them erroneously to believe that the defendant's product emanated from the plaintiff and as a result diverted trade from the plaintiff to the defendant.

Majority opinion

(https://en.wikipedia.org/w/index.php?title=International_News_Service_v._Associated_Press&action=edit&section=5 "Edit section: Majority opinion")

The Court held in favor of AP, with Justice Pitney writing the majority opinion. Justices Holmes and Brandeis wrote dissenting opinions.

Justice Pitney

The majority opinion recognized that the information found in the AP news was not copyrightable as "the information respecting current events contained in the literary production is not the creation of a writer but is a report of matters that ordinarily are _publici juris _; it is the history of the day." Instead, Pitney approached the issue from the perspective of unfair competition. He found that there was a quasi-property right in the news as it is "stock in trade to be gathered at the cost of enterprise, organization, skill, labor and money, and to be distributed and sold to those who will pay money for it." Because of the "economic value" of the news, a company can "therefore" have a limited property interest in it against a competitor but not the general public that attempted to take advantage of the information.

The Court characterized INS's behavior as misappropriation . The tenuous value of "hot" news made Pitney narrow the period for which the proprietary right would apply: the doctrine "postpones participation by complainant's competitor in the processes of distribution and reproduction of news that it has not gathered, and only to the extent necessary to prevent that competitor from reaping the fruits of complainant's efforts and expenditure."

The Court justified its creation of a "quasi-property right" in these terms:

[INS] is taking material that has been acquired by AP as the result of organization and the expenditure of labor, skill, and money, and which is salable by AP for money, and that INS in appropriating it and selling it as its own is endeavoring to reap where it has not sown, and by disposing of it to newspapers that are competitors of AP's members is appropriating to itself the harvest of those who have sown.

Stripped of all disguises, the process amounts to an unauthorized interference with the normal operation of AP'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

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