Sidebilder
PDF
ePub

•235

[5] But the news element-the information respecting current events contained in the literary production—is not the creation of the writer, but is a report of matters that ordinarily are publici juris; it is the history of the day. It is not to be supposed that the framers of the Constitution, when they empowered Congress "to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries" (Const. art. 1, 8, par. 8), intended to confer upon one who might happen to be the first to report a historic event the exclusive right for any period to spread the knowledge of it.

[ocr errors]

tions "periodicals, including newspapers." The parties are competitors in this field; and, Act of March 4, 1909, c. 320, §§ 4 and 5, 35 on fundamental principles, applicable here Stat. 1075, 1076 (Comp. St. 1916, §§ 9520, as elsewhere, when the rights or privileges of 9521). Evidently this admits to copyright the one are liable to conflict with those of a contribution to a newspaper, notwithstand- the other, each party is under a duty so to, ing it also may convey news; and such is the conduct its own business as not unnecessaripractice of the copyright office, as the news- ly or unfairly to injure that of the other." papers of the day bear witness. See Copy- Hitchman Coal & Coke Co. v. Mitchell, 245 right Office Bulletin No. 15 (1917) pp. 7, 14, U. S. 229, 254, 38 Sup. Ct. 65, 62 L. Ed. 200, 16, 17. L. R. A. 1918C, 497, Ann. Cas. 1918B, 461. [7, 8] Obviously, the question of what is unfair competition in business must be determined with particular reference to the character and circumstances of the business. The question here is not so much the rights of either party as against the public but their rights as between themselves. See Morison v. Moat, 9 Hare, 241, 258. And, although we may and do assume that neither party has any remaining property interest as against the public in uncopyrighted news matter after the moment of its first publication, it by no means follows that there is no remaining property interest in it as between themselves. For, to both of them alike, news matter, however little susceptible of ownership or dominion in the absolute sense, 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, as for any other merchandise. Regarding the news, therefore, as but the material out of which both parties are seeking to make profits at the same time and in the same field, we hardly can fail to recognize that for this purpose, and as between them, it must be regarded as quasi property, irrespective of the rights of either as against the public.

[6] We need spend no time, however, upon the general question of property in news matter at common law, or the application of the copyright act, since it seems to us the case must turn upon the question of unfair competition in business. And, in our opinion, this does not depend upon any general right of property analogous to the common-law right of the proprietor of an unpublished work to prevent its publication without his consent; nor is it foreclosed by showing that the benefits of the copyright act have been waived. We are dealing here not with restrictions upon publication but with the very facilities and processes of publication. The peculiar value of news is in the spreading of it while it is fresh; and it is evident that a valuable property interest in the news, as news, cannot be maintained by keeping it secret. Besides, except for matters improperly disclosed, or published in breach of trust or confidence, or in violation of law, none of which is involved in this branch of the case, the news of current events may be regarded as common property. What we are concerned with is the business of making it

[9] In order to sustain the jurisdiction of equity over the controversy, we need not affirm any general and absolute property in the news as such. The rule that a court of equity concerns itself only in the protection of property rights treats any civil right of a pecuniary nature as a property right (In re Sawyer, 124 U. S. 200, 210, 8 Sup. Ct. 482, 31 L. Ed. 402; In re Debs, 158 U. S. 504, 593, 15 Sup. Ct. 900, 39 L. Ed. 1092); and the right to acquire property by honest labor or the conduct of a lawful business is as much entitled to protection as the right

known to the world, in which both parties to guard property already acquired (Truax v. to the present suit are engaged. That busi- Raich, 239 U. S. 33, 37-38, 36 Sup. Ct. 7, CO ness consists in maintaining a prompt, sure, L. Ed. 131, L. R. A. 1916D, 545, Ann. Cas. steady, and reliable service designed to place 1917B, 283; Brennan v. United Hatters, 73 N. the daily events of the world at the break- J. Law, 729, 742, 65 Atl. 165, 9 L. R. A. [N.

fast table of the millions at a price that, while of trifling moment to each reader, is sufficient in the aggregate to afford compensation for the cost of gathering and distributing it, with the added profit so necessary as an incentive to effective action in the commercial world. The service thus performed for newspaper readers is not only innocent but extremely useful in itself, and indubitably constitutes a legitimate business.

S.] 254, 118 Am. St. Rep. 727, 9 Ann. Cas. C98; *Barr v. Essex Trades Council, 53 N. J. Eq. 101, 30 Atl. 881). It is this right that furnishes the basis of the jurisdiction in the ordinary case of unfair competition.

The question, whether one who has gathered general information or news at pains and expense for the purpose of subsequent publication through the press has such an inter

est in its publication as may be protected due to the earth's rotation, the distribution from interference, has been raised many of news matter throughout the country is times, although never, perhaps, in the pre-principally from east to west; and, since in cise form in which it is now presented. speed the telegraph and telephone easily outstrip the rotation of the earth, it is a simple matter for defendant to take complainant's news from bulletins or early editions of complainant's members in the eastern cities and at the mere cost of telegraphic transmission cause it to be published in western papers issued at least as early as those served by complainant. Besides this, and irrespective of time differentials, irregularities in telegraphic transmission on different lines, and the normal consumption of time in printing and distributing the newspaper, result in permitting pirated news to be placed in the hands of defendant's readers sometimes simultaneously with the service of competing Associated Press papers, occasionally even earlier.

Board of Trade v. Christie Grain & Stock Co., 198 U. S. 236, 250, 25 Sup. Ct. 637, 49 L. Ed. 1031, related to the distribution of quotations of prices on dealings upon a board of trade, which were collected by plaintiff and communicated on confidential terms to numerous persons under a contract not to make them public. This court held that, apart from certain special objections that were overruled, plaintiff's collection of quotations was entitled to the protection of the law; that, like a trade secret, plaintiff might keep to itself the work done at its expense, and did not lose its right by communicating the result to persons, even if many, in confidential relations to itself, under a contract not to make it public; and that strangers should be restrained from getting at the knowledge by inducing a breach of trust.

In National Tel. News Co. v. Western Union Tel. Co., 119 Fed. 294, 56 C. C. A. 198, 60 L. R. A. 805, the Circuit Court of Appeals for the Seventh Circuit dealt with news matter gathered and transmitted by a telegraph company, and consisting merely of a notation of current events having but a transient value due to quick transmission and distribution; and, while declaring that this was not copyrightable although printed on a tape by tickers in the offices of the recipients, and that it was a commercial not a literary product, nevertheless held that the business of gathering and communicating the news-the service of purveying it—was a legitimate business, meeting a distinctive commercial want and adding to the facilities of the business *world, and partaking of the nature of property in a sense that entitled it to the protection of a court of equity against piracy.

Other cases are cited, but none that we deem it necessary to mention.

Not only do the acquisition and transmission of news require elaborate organization and a large expenditure of money, skill, and effort; not only has it an exchange value to the gatherer, dependent chiefly upon its novelty and freshness, the regularity of the service, its reputed reliability and thoroughness, and its adaptability to the public needs; but also, as is evident, the news has an exchange value to one who can misappropriate it.

Defendant insists that when, with the sanction and approval of complainant, and as the result of the use of its news for the very purpose for which it is distributed, a portion of complainant's members communicate it to the general public by posting it upon bulletin boards so that all may read, or by issuing it to newspapers and distributing it indiscriminately, complainant no longer has the right to control the use to be made of it; that when it thus reaches the light of day it becomes the common possession of all to whom it is accessible; and that any purchaser of a newspaper has the right to communicate the intelligence which it contains to anybody and for any purpose, even for the purpose of selling it for profit to newspapers published for profit in competition with complainant's members.

The fault in the reasoning lies in applying as a test the right of the complainant as against the public, instead of considering the rights of complainant and defendant, competitors in business, as between themselves. The right of the purchaser of a single newspaper to spread knowledge of its contents gratuitously, for any legitimate purpose not unreasonably interfering with complainant's right to make merchandise of it, may be admitted; but to transmit that news for commercial use, in competition with complainant-which is what defendant has done and seeks to justify-is a very different matter. In doing this defendant, by its very act, admits that it is taking material that has [10, 11] The peculiar features of the case been acquired by complainant as the result of arise from the fact that, while novelty and organization and the expenditure of labor, freshness form so important an element in the skill, and money, and which is salable by success of the business, the very processes of complainant for money, and that defendant distribution and publication necessarily oc-in appropriating it and selling it as its own cupy a good deal of time. Complainant's is endeavoring to reap where it has not sown, service, as well as defendant's, is a daily service to daily newspapers; most of the foreign news reaches this country at the Atlantic seaboard, principally at the city of New York, and because of this, and of time differentials

and by disposing of it to newspapers that are competitors of complainant's members is ap propriating to itself the harvest of those who' have sown. Stripped of all disguises, the process amounts to an unauthorized interfer

*239

ence with the normal operation of complain-, members of their reasonable opportunity to ant's legitimate business precisely at the obtain just returns for their expenditures. point where the profit is to be reaped, in or- It is to be observed that the view we adopt der to divert a material portion of the profit does not result in giving to complainant the from those who have earned it to those who right to monopolize either the gathering or have not; with special advantage to defend the distribution of the news, or, without ant in the competition because of the fact complying with the copyright act, to prevent that it is not burdened with any part of the the reproduction of its news articles, but only expense of gathering the news. The trans- postpones participation by complainant's action speaks for itself and a court of equity competitor in the processes of distribution ought not to hesitate long in characterizing and reproduction of news that it has not it as unfair competition in business. gathered, and only to the extent necessary to prevent that competitor from reaping the fruits of complainant's efforts and expenditure, to the partial exclusion of complainant, and in violation of the principle that underlies the maxim "sic utere tuo," etc.

The underlying principle is much the same as that which lies at the base of the equitable theory of consideration in the law of trusts that he who has fairly paid the price should have the beneficial use of the property. Pom. Eq. Jur. § 981. It is no answer to say that complainant spends its money for that which is too fugitive or evanescent to be the subject of property. That might, and for the purposes of the discussion we are assuming that it would furnish an answer in a common-law controversy. But in a court of equity, where the question is one of unfair competition, if that which complainant has acquired fairly at substantial cost may be sold fairly at substantial profit, a competitor who is misappropriating it for the purpose of disposing of it to his own profit and to the disadvantage of complainant cannot be heard to say that it is too fugitive or evanescent to be regarded as property. It has all the attributes of property necessary for determining that a misappropriation of it by a competitor is unfair competition because contrary to good conscience.

[13] It is said that the elements of unfair competition are lacking because there is no attempt by defendant to palm off its goods as those of the complainant, characteristic of the most familiar, if not the most typical, cases of unfair competition. Howe Scale Co. v. Wyckoff, Seamans, etc., 198 U. S. 118, 140, 25 Sup. Ct. 609, 49 L. Ed. 972. But we cannot concede that the right to equitable relief is confined to that class of cases. In the present case the fraud upon complainant's rights is more direct and obvious. Regarding news matter as the mere material from which these two competing parties are endeavoring to make money, and treating it, therefore, as quasi property for the purposes of their business because they are both selling it as such, defendant's conduct differs from the ordinary case of unfair competition in trade principally in this that, instead of selling its own goods as those of complainant, it substitutes misappropriation in the place of misrepresentation, and sells complainant's goods as its own.

Besides the misappropriation, there are elements of imitation, of false pretense, in defendant's practices. The device of rewriting complainant's news articles, frequently resorted to, carries its own comment. The habitual failure to give credit to complainant for that which is taken is significant. Indeed, the entire system of appropriating complainant's news and transmitting it as a commercial product to defendant's clients and patrons amounts to a false representation to them and to their newspaper readers that the news transmitted is the result of defendant's own investigation in the field. But these elements, although accentuating the wrong, are not the essence of it. It is something more than the advantage of celebrity of which complainant is being deprived.

[12] The contention that the news is abandoned to the public for all purposes when published in the first newspaper is untenable. Abandonment is a question of intent, and the entire organization of the Associated Press negatives such a purpose. The cost of the service would be prohibited if the reward were to be so limited. No single *newspaper, no small group of newspapers, could sustain the expenditure. Indeed, it is one of the most obvious results of defendant's theory that, by permitting indiscriminate publication by anybody and everybody for purposes of profit in competition with the news-gatherer, it would render publication profitless, or so little profitable as in effect to cut off the service by rendering the cost prohibitive in comparison with the return. The practical needs and requirements of the business are reflected in complainant's by-laws which have been referred to. Their effect is that publication by each member must be deemed not by any means an abandonment of the [14] The doctrine of unclean hands is innews to the world for any and all purposes, voked as a bar to relief; it being insisted but a publication for limited purposes; for that defendant's practices against which comthe benefit of the readers of the bulletin or plainant seeks an injunction are not different the newspaper as such; not for the purpose from the practice attributed to complainant, of making merchandise of it as news, with of utilizing defendant's news published by the result of depriving complainant's other its subscribers. At this point it becomes

was

"not entitled to take one word of the information previously published without independently working out the matter for himself, so as to arrive at the same result from the same common sources of information, and the only use that he can legitimately make of a previous publication is to verify his own calculations and

results when obtained."

This was followed by Vice Chancellor Giffard in Morris v. Ashbee, L. R. 7 Eq. 34, where he said:

necessary to consider a distinction that is dealing with such a case, said that defendant drawn by complainant, and, as we understand it, was recognized by defendant also in the submission of proofs in the District Court, between two kinds of use that may be made by one news agency of news taken from the bulletins and newspapers of the other. The first is the bodily appropriation of a statement of fact or a news article, with or without rewriting, but without independent investigation or other expense. This form of pirating was found by both courts to have been pursued by defendant systematically with respect to complainant's news, and against it the Circuit Court of Appeals granted an injunction. This practice complainant denies having pursued and the denial was sustained by the finding of the District Court. It is not contended by defendant that the finding can be set aside, upon the proofs as they now stand. The other use is to take the news of a rival agency as a "tip" to be investigated, and if verified by independent investigation the news thus gathered is sold. This practice complainant admits that it has pursued and still is willing that defendant shall employ.

Both courts held that complainant could not be debarred on the ground of unclean hands upon the score of pirating defendant's news, because not shown to be guilty of sanctioning this practice.

"In a case such as this no one has a right to take the results of the labour and expense incurred by another for the purposes of a rival publication, and thereby save himself the expense and labour of working out and arriving at these results by some independent road."

A similar view was adopted by Lord Chancellor Hatherly and the former Vice Chancellor, then Giffard, L. J., in Pike v. Nicholas, L. R. 5 Ch. App. Cas. 251, and shortly afterwards by the latter judge in Morris v. Wright, L. R. 5 Ch. App. Cas. 279, 287, where he said, commenting upon Pike v.

Nicholas:

"It was a perfectly legitimate course for the defendant to refer to the plaintiff's book, and if, taking that book as his guide, he went to the original authorities and compiled his book from them, he made no unfair or improper use of the plaintiff's book; and so here, if the fact be that Mr. Wright used the plaintiff's *book in order to guide himself to the persons on whom it would be worth his while to call, and for no other purpose, he made a perfectly legitimate use of the plaintiff's book."

A like distinction was recognized by the Circuit Court of Appeals for the Second Circuit in Edward Thompson Co. v. American Law Book Co., 122 Fed. 922, 59 C. C. A. 148, 62 L. R. A. 607 and in West Pub. Co. v. Edward Thompson Co., 176 Fed. 833, 838, 100 C. C. A. 303.

As to securing "tips" from a competing news agency the District Court (240 Fed. 991, 995), while not sanctioning the practice, found that both parties had adopted it in accordance with common business usage, in the belief that their conduct was technically lawful, and hence did not find in it any sufficient ground for attributing unclean hands to complainant. The Circuit Court of Appeals (245 Fed. 247, 157 C. C. A. 436) found that the tip habit, though discouraged by complainant, was "incurably journalistic," and that there was "no difficulty in discriminating between the utilization of tips and the bodily appropriation of another's labor in accumulating and stating information." We are inclined to think a distinction may be drawn between the utilization of tips and the bodily appropriation of news matter, either in its original form or after *rewriting and without independent investigation and verification; whatever may appear at the final hearing, the proofs as they now stand recognize such a distinction; both parties avowedly recognize the practice of taking tips, and neither party alleges it to be unlawful or to amount to unfair competition in business. In a line of English cases a some what analogous practice has been held not to amount to an infringement of the copyright There is some criticism of the injunction of a directory or other book containing com- that was directed by the District Court upon piled information. In Kelly v. Morris, L. R. the going down of the mandate from the Cir1 Eq. 697, 701, 702, Vice Chancellor Sir Wil-cuit Court of Appeals. In brief, it restrains liam Page Wood (afterwards Lord Hatherly), any taking or gainfully using of the com

In the case before us, in the present state of the pleadings and proofs, we need go no further than to hold, as we do, that the admitted pursuit by complainant of the practice of taking news items published by defendant's subscribers as tips to be investigated, and, if verified, the result of the investigation to be sold-the practice having been followed by defendant also, and by news agencies generally-is not shown to be such as to constitute an unconscientious or inequitable attitude towards its adversary so as to fix upon complainant the taint of unclean hands, and debar it on this ground from the relief to which it is otherwise entitled.

plaintiff and that it is thought undesirable that an advantage should be gained in that way. Apart from that the defendant may use such unpatented devices and uncopyrighted combinations of words as he likes. The ordinary case, I say, is palming off the defendant's product as the plaintiff's but the same evil may follow from the opposite falsehood-from saying whether in words or by implication that the plaintiff's product is the defendant's, and that, it seems to me, is what has happened here.

plainant's news, either bodily or in substance from bulletins issued by the complainant or any of its members, or from editions of their newspapers, "until its commercial value as news to the complainant and all of its members has passed away." The part complained of is the clause we have italicized; but if this be indefinite, it is no more so than the criticism. Perhaps it would be better that the terms of the injunction be made specific, and so framed as to confine the restraint to an extent consistent with the reasonable protection of complainant's newspapers, each in its own area and for a specified time after its *publication, against the competitive use of pirated news by defendant's customers. But the case presents practical difficulties; and we have not the materials, either in the way of a definite suggestion of amendment, or in the way of proofs, upon which to frame a specific injunction; hence, while not express-porting that credit; and that such a repreing approval of the form adopted by the District Court, we decline to modify it at this preliminary stage of the case, and will leave that court to deal with the matter upon appropriate application made to it for the pur

[blocks in formation]

Fresh news is got only by enterprise and expense. To produce such news as it is produced by the defendant represents by implication that it has been acquired by the defendant's enterprise and at its expense. When it comes from one of the great news collecting agencies like the Associated Press, the source generally is indicated, plainly im

sentation is implied may be inferred with some confidence from the unwillingness of the defendant to give the credit and tell the truth. If the plaintiff produces the news at the same time that the defendant does, the defendant's presentation impliedly denies to the plaintiff the credit of collecting the facts

and assumes that credit to the defendant. If the plaintiff is later in Western cities it naturally will be supposed to have obtained its information from the defendant.

The

Mr. Justice CLARKE took no part in the falsehood is a little more subtle, the injury, consideration or decision of this case.

a little more indirect, than in ordinary cases
of unfair trade, but I think that the princi-
ple that condemns the one condemns the oth-
er. It is a question of how strong an infusion
of fraud is necessary to turn a flavor into a
poison. The dose seems to me strong
*enough here to need a remedy from the law.
But as, in my view, the only ground of com-
plaint that can be recognized without legis-
lation is the implied misstatement, it can be
corrected by stating the truth; and a suit-
able acknowledgment of the source is all
that the plaintiff can require. I think that
within the limits recognized by the decision
of the Court the defendant should be en-
joined from publishing news obtained from
the Associated Press for
hours after
publication by the plaintiff unless it gives ex-
press credit to the Associated Press; the
number of hours and the form of acknowl-
edgment to be settled by the District Court.

Mr. Justice HOLMES, dissenting. When an uncopyrighted combination of words is published there is no general right to forbid other people repeating them-in other words there is no property in the combination or in the thoughts or facts that the words express. Property, a creation of law, does not arise from value, although exchangeable-a matter of fact. Many exchangeable values may be destroyed intentionally without compensation. Property depends upon exclusion by law from interference, and a person is not excluded from using any combination of words merely because some one has used it before, even if it took labor and genius to make it. If a given person is to be prohibited from making the use of words that his neighbors are free to make some other ground must be found. One such ground is vaguely expressed in the phrase unfair trade. This means that the words are repeated by a competitor in business in such a way as to convey a misrepresentation that materially injures the person who first used them, by appropriating credit of some kind *which the first user has earned. The ordinary case is a representation by device, appearance, or other indirection that the defendant's goods come from the plaintiff. But the only reason why it is actionable to make such a representation is that it tends to give the defendant See American Newspaper Annual and Directory an advantage in his competition with the¦ (1918) pp. 4, 10, 1193-1212.

Mr. Justice MCKENNA concurs in this opinion.

Mr. Justice BRANDEIS, dissenting.

There are published in the United States about 2,500 daily papers.1 More than 800 of them are supplied with domestic and foreign news of general interest by the Associated Press-a corporation without capital stock

« ForrigeFortsett »