Sorry Fair Use, Court Says News Clipping Service Infringes On AP Copyrights

We were surprised last year when the Associated Press decided to sue Meltwater News -- an online press clipping/news aggregator service. The issue is that Meltwater does index various news articles, just like Google, allowing you to search on them. But it does not deliver the full articles to users instead delivering snippets (just like Google News), and then points them to versions online (increasing traffic to AP stories). It delivers two snippets -- the first is only 300 characters, representing the opening of the article, and the second of less than 140 characters, highlighting the line that triggered the alert itself (i.e., matching keywords). However, Meltwater also has a feature that lets subscribers choose to archive the text of articles they find elsewhere -- like a ReadItLater/EverNote/Instapaper kind of thing. But that's all done at user discretion, not by Meltwater. Not surprisingly, we found Meltwater's response to the lawsuit quite compelling. It argued a strong fair use right, combined with claims of copyright misuse by the AP. Unfortunately, the court did not find them compelling. The district court has sided with the Associated Press in ruling for summary judgment against Meltwater, a ruling that will surely be appealed. The ruling itself has a ton of problems, that hopefully will be fixed by an appeals court. The court seems strongly influenced by the fact that the AP has a service that competes with Meltwater, but that, alone, is no basis for finding infringement. Also, it notes that other "competitors" in the space do have AP licenses, including Google News. But that's misleading. The AP had threatened Google News with a similar lawsuit, but they got around it with a silly agreement by which Google licenses AP news to post full stories as if it were an AP syndication partner. But that's not what Meltwater does. The court doesn't agree with the fair use defense by Meltwater, but does so with some really wacky reasoning. It runs through the standard four factor test, but really has a unique interpretation of what counts as "transformative" use, somehow arguing that the use needs to be an entirely new form of use to be transformative.

Based on the undisputed facts in this record, Meltwater provides the online equivalent to the traditional news clipping service. Indeed, Meltwater has described itself as adding “game-changing technology for the traditional press clipping market.” There is nothing transformative about that function.

I don't think that's what transformative means. No one said it had to be innovative -- just different from the purpose of the original work. Separately, the court argues that because Meltwater competes with one part of the AP's business, then the transformative argument doesn't apply.

Meltwater copies AP content in order to make money directly from the undiluted use of the copyrighted material; this is the central feature of its business model and not an incidental consequence of the use to which it puts the copyrighted material. Thus, it is not surprising that Meltwater’s own marketing materials convey an intent to serve as a substitute for AP’s news service.

That, unfortunately, is confusing two different aspects of the AP's business. There's the reporting side which produces the news, and then there's the "news service" side, which sells the service of providing news alerts to various customers. Meltwater is competing with the latter, but the copyrights in question apply to the former -- and thus Meltwater's use should be seen as transformative since it is not competing with the copyright around the creation and presentation of the news itself, but rather with the service of finding the most relevant news. Furthermore, the court keeps going back to the low rate of clickthrough on Meltwater's clips. But that, too, is misleading. First of all, this could just be because Meltwater's relevance engine isn't very good. If it's not delivering relevant content, then people won't click very much. But that should hardly weigh on the copyright claim. Alternatively, perhaps it's the Associated Press's content that isn't very good. That is, readers see little reason to click on their versions of the story. Again, the actual click through rate on such stories is somewhat meaningless and certainly doesn't suggest that people are using the AP less because of Meltwater. They still may be articles that that people wouldn't see otherwise, it's just that for, whatever reason, people didn't click through them that much. Also, you have