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Newspaper’s motion to dismiss in unfair practices case denied

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    NMU         MASSACHUSETTS         Copyrights & Trademarks         Jan 29, 2001    

Newspaper’s motion to dismiss in unfair practices case denied

  • A lawsuit brought by freelancers who balked at signing broad licensing agreements with the Boston Globe could be valid if the newspaper modified its agreement in bad faith, a judge ruled.

A Massachusetts superior court denied a Globe Newspaper Co. motion to dismiss on Jan. 18 in an unfair business practices lawsuit brought by freelancers who claim they were forced to sign a licensing agreement covering material already accepted by the Boston Globe.

The freelancers claimed that the Boston Globe gave them a business ultimatum: sign an agreement which waived potential rights to material the Globe previously accepted from them or it would no longer accept their work.

The ultimatum likely arose in response to a copyright lawsuit brought by freelancers against The New York Times and other media outlets which sold freelancers’ work to digital archiving companies, such as NEXIS, without sharing those payments with the freelancers. In September 1999, the U.S. Court of Appeals in New York (2nd Cir.) decided that the publishers’ sale of the material to the archival companies violated the freelancers’ copyrights. The case has been accepted for review by the U.S. Supreme Court.

After the Second Circuit made its ruling, the Globe, owned by the New York Times Co., gave the freelancers an ultimatum: sign a new licensing agreement which gave it “a non-exclusive, fully-paid up, worldwide license to use all of the Works that the Globe has previously accepted” from the freelancer, or it would no longer accept work from the freelancer.

The Globe argued that the complaint, which alleged an unfair business practice under Massachusetts law, failed to state a claim. Suffolk Superior Court Judge Ralph D. Gants disagreed and ruled that the claim may be actionable if based on a theory of bad faith.

“The modification of a contract may be in bad faith when it is procured through an ultimatum in which a company threatens an independent contractor . . . with termination unless that independent contractor agrees to waive any claim to a benefit the independent contractor has earned,” Gants wrote in his opinion. –DB

(Marx v. The Globe Newspaper Co.) DB

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