A federal court last week rejected a copyright infringement lawsuit against Bloomberg L.P. for its unauthorized publication of a conference call between a corporation's senior executives and a group of securities analysts, finding that the business and financial news publisher was protected from liability by the fair use doctrine.
Swatch Group Management Services, Ltd., a Swiss corporation, sued after Bloomberg obtained a recording of the invitation-only conference call to which it was not invited, then made it available online to its paid subscribers. Swatch had advised the participants that they were being recorded, but that they should not record it for broadcast or publication.
In its opinion, the U.S. District Court for the Southern District of New York emphasized that while Bloomberg's use was commercial, it was "crucial" that its use "served an important public interest in disseminating business-related information promptly and fully."
In evaluating Bloomberg's fair use defense to copyright infringement, the court examined four factors.
In first looking to the purpose and character of the use, the court emphasized that news reporting — while "generally conducted by for-profit entities" — is listed in the Copyright Act as an example of a potential fair use of a copyrighted work. The company argued that Bloomberg's lack of good faith in acquiring and distributing the recording without authorization or failure to transform the work in any way weighed against fair use.
The court dismissed these arguments, finding that such requirements would undermine the practice of news reporting.
News organizations often "publish information obtained clandestinely and in breach of the conditions of confidentiality," and to confine them to authorized sources would compromise "[t]he robust quality of the First Amendment," the court ruled. Furthermore, it noted that "news reporting requires accuracy, which may be undermined by transformation."
Second, in looking to the nature of the work, the court accepted that the recording might contain some copyright-protected material — the original expressions of Swatch executives — but such protection did not extend to facts, or comments made by outside participants.
The court found the copyright protection to be weak, since the call was "manifestly factual" — a presentation of the company's finances and business — rather than creative.
"Although Plaintiff claims . . . copyright on the original expressions of Swatch Group's senior executives, there is very little of the [conference call] that could qualify," the court stated. "What we have left is at best a 'thin copyright.'"
For that reason, Bloomberg counsel John M. DiMatteo feels the court's willingness to recognize portions of such a conference call as copyrightable will have a small impact in practical terms. Following the court's decision, these discussions will always be available for publication, he said.
"[N]ews value far outweighs the copyright[able] expression [in financial reports]. There may be an extreme example we can pontificate about. If we hired Steven Martin to give financial reports for some company, maybe there would be something that's protectable there," DiMatteo said in an interview.
Third, the court noted that while a defendant has a stronger fair use claim when it uses only as much of the copyrighted work as is necessary, the court found Bloomberg's use of the entire call justified in the light of its purpose — to disseminate information. It found this public interest would be "better served by the dissemination of that information in its entirety, including the incidents of oral speech that do not translate onto the page but color the purely factual content."
Last, the court examined the effect of Bloomberg's publication on the potential market value of the copyrighted material to the company, looking only to the small amount of copyrightable material, rather than the whole recording, as the company urged.
"Nothing in the record suggests any possible market effect stemming from defendant's use of such a limited portion of the recording of the [call]. Nor does common sense," the court stated.
The court weighed the "substantial benefit on the public" conferred by Bloomberg's use against the value of the call to Swatch in disseminating information in such a way as "to create a perception of its financials and business performance," and found the interest in publication to be greater.
Swatch attorney Joshua Paul declined to comment on the ruling.
Related Reporters Committee resources:
· The First Amendment Handbook: How to avoid copyright infringement — Legal action to protect a copyright