New Cause of Action for Misappropriation of Hot News
The “hot news” doctrine is a cause of action under state law that allows purveyors of time-sensitive factual information to prevent competitors from free riding on their efforts. It is an offshoot of a 1918 Supreme Court decision, International News Service v. Associated Press, and has become a critical element of our intellectual property regime. While some commentators have characterized it as obsolete, the doctrine remains viable and has relevance to modern digital business models.
In the past, the discovery and reporting of hot news benefited from the existence of lead time. Even in a highly competitive environment, the reporter could rely on a few hours of exclusive use, during which they were the sole source, to give their publication value and generate profits. But, in the modern world of the 24-hour news cycle, lead time is virtually nonexistent. It is now possible to reproduce even the most painstakingly gathered and expensive fact-based research from other sources within minutes of the original report. This dramatically decreases the incentive to invest in original reporting.
As a result, the emergence of new digital content platforms has put intense pressure on traditional news organizations to adapt their business models and to compete with each other. Attempts to resolve the problem through complex intellectual property rights have been disappointing. While the development of a self-enforcing contract for fair play is in the public interest, the solution must be one that does not add to the legal complexity that has already undermined the effectiveness of copyright law at protecting the time value of news.
To address the challenge, this Article proposes that a new cause of action for misappropriation of hot news should be added to state law. This action should be based on the idea that news has asset-like qualities similar to intellectual property, and therefore should be protected against misappropriation in the same way as other such property. In this way, the doctrine would help to preserve the incentive to invest in newsgathering and avoid free-riding by competitors that would reduce the value of the news.
The creation of this new cause of action will require the realignment of norms in the news industry, and the development of a new legal regime that balances the Internet’s potential for free access to news with the realization that free-riding as a business model is bad for everyone in the long run. If we do not act soon, it is likely that the time-sensitive news that defines our daily lives will cease to exist. That would be a tragedy for all.