INS: 3

Remember from last time We were about to start Cheney v Doris Silk But first, the other judgments in INS v AP Why more than one judgment?

Dissenting judgments In common law systems, judges tend to be individual rather than collegial Courts consist of one judge only, except for appeals In appeal courts, judges do not share in a single judgment. Each may write his own

Dissenting judgments If necessary, courts decide by a majority Judges who disagree with the majority are said to dissent. They may still deliver judgment, explaining why they dissent. Dissents are reported Why? What effect does this have?

Dissenting judgments The US Supreme Court is very frequently divided, sometimes on a political or ideological basis. It may even reverse its own decisions Judges who have made up their minds will write and circulate judgments to influence their undecided brethren. One will prevail, other will dissent

INS v AP So far, we have only looked at judgment of Justice Pitney. He delivered the opinion of the Court (i.e. the majority) Two more Justices concurred, but on different reasoning Justice Brandeis dissented

Justice Brandeis See Report

Cheney v Doris Case in the Second Circuit Court of Appeals. (1929) 35 F.2d 279 Cheney were silk fabric manufacturers, every season they would introduce new designs. Only a few of these were successful, the rest flopped. This was too unpredictable to make protecting each design individually cost-effective Doris copied only the best-selling designs

Cheney v Doris ‘Of the cases on which the plaintiff relies, the chief is International News Service v Associated Press, …. Although that concerned another subject- matter—printed news dispatches—we agree that, if it meant to lay down a general doctrine, it would cover this case; at least, the language of the majority opinion goes so far.’

Remember? Two formulations of INS v AP Protection of ‘hot news’ under law of unfair competition General basis for doctrine of ‘misappropriation’ in common law

Cheney v Doris ‘We do not believe that it did. While it is of course true that law ordinarily speaks in general terms, there are cases where the occasion is at once the justification for, and the limit of, what is decided. This appears to us such an instance; we think that no more was covered than situations substantially similar to those then at bar. The difficulties of understanding it otherwise are insuperable. We are to suppose that the court meant to create a sort of common- law patent or copyright for reasons of justice. Either would flagrantly conflict with the scheme which Congress has for more than a century devised to cover the subject-matter.’

Post-INS timescale INS to Cheney Cheney to Erie v Tomkins Erie to Sears/Compco Sears to California v Goldstein Goldstein to 1976, and present

Erie v Tompkins Seems very remote from INS: case concerned injuries to Mr Tompkins, who was hit by a train Liability governed by ‘common law’. Problem was, whose common law?

US Court System Recall, US has Federal and State courts Prior to Erie, Federal Courts applied a common law of their own State courts applied the common law of that state Result: in theory, 50+1 common laws!

Erie Pratical effect was that if plaintiff could chose between Federal and State courts, he had choice of 2 x laws Example: Federal ‘diversity’ jurisdiction if parties from different states, as in Erie

Erie Erie abolished this. Decided there was no ‘Federal common law’ All common law is state law. Federal courts can apply state law, but must do so by reference to state precedent

Erie and INS Still seems a long way from INS? INS was originally a decision of a Federal Court (SDNY) exercising diversity jurisdiction All courts in INS thought they were applying Federal common law, but Erie said no such law existed

Does this abolish INS? Not as an individual decision, result stands even though fundamentally mistaken As a precedent? Cannot stand as a statement of Federal law. Can only remain as a statement of state law (New York) by a Federal Court

INS post-Erie Value of INS as precedent already much reduced by Cheney v Doris Further reduced by Erie Further reduced by ‘Shredded Wheat’ case in Supreme Court, in which Justice Brandeis wrote opinion

Sounds confusing? Cheney-Erie-Shredded Wheat cases re- opened whole argument Cheney had been exercise in interpreting a binding S Ct authority After Erie, INS not binding: up to courts in each state to decide how far to go

Any limits on the states? Just becuase ‘Federal common law’ abolished, does not mean federal courts drop out of the picture Federal courts continue to exercise diversity jurisdiction, but must apply relevant state law

Any limits on the states? And Federal courts continue to apply Federal statute law and the Constitution In particular, the Copyright Act is a Federal Act, so its interpretation is under the control of the Federal courts

Remember pre-emption? Pre-emption is the doctrine that the states and Federal Government cannot both exercise their powers in the same field To the exent that the Federal Government has acted, the states must keep out (similar to EU)

Copyright pre-emption For copyright, pre-emption works two ways: States must respect Federal decision to grant copyright, but state law must also respect Federal policy decision of circumstances where copyright not to be available

Pre-emption and INS Look at this two ways: Bottom-up: from the point of view of state law first Top-down: from the point of view of Federal law first

Bottom-up (State court) Ask ourselves: do we protect ‘hot news’ or other ‘intangibles’ in this state? This is question for state law So: are there any local (state) precendents? Are there any non-local ‘persuasive’ authorities? If we have freedom of action, what are the relevant principles and conclusions?

Bottom-up (2) Suppose we do want to protect news, etc. Is this the end? No. We must ask if this infringes the Federal-State relationship In particular, is the step we want to take pre-empted? This depends on Federal law, and is out of our hands

Top-down (Federal Court) We cannot make up state law ourselves. We must accept what the relevant state courts say it is. If the state court precedents say there is no state-law protection in INS situations, that is conclusive

Top-down (2) If the state court authorities say there is protection, we must accept that as accurately declaring state law However, as a Federal court, we decide for ourselves on matters of Federal law, including the Copyright Act. In this respect, including pre-emption, we follow Federal precedents

Either route Three possible outcomes: State law does not afford protection State law protects and is consistent with Federal copyright pre-emption State law would protect, but is inconsistent, and over-ruled

Why it matters for INS Starting position. No copyright in ‘hot news’ because: No registration/notice No copyright in facts as such (Maybe) News items not substantial

Pitney vs Brandeis Remember two views of relation of copyright to INS doctrine, in INS Pitney and Brandeis agree that the courts (even the Supreme Court) must not create copyright in situations where Congress has decided no copyright should exist

Pitney vs Brandies Pitney: We are OK, because what we are making up is not a copyright, but an unfair competition right Brandeis: This is really copyright in disguise. Congress has decided news is public property, we should not contradict them

INS and pre-emption This is very nearly the same as the pre- emption question: Did Congress intend news to be free for all? Or did it simply exclude it from copyright, while allowing it to find a ‘home’ elsewhere?

News and other values Repeat this exercise for any other kind of ‘valuable intangible’ Supreme Court has done so Sears/Compco: very strict Goldstein v California: much more relaxed

What about INS itself? Does INS have any value as a precedent after all this? INS MUST be taken as deciding that short-term protection for ‘hot news’ under (state) unfair competition law was not pre-empted by 1909 Copyright Act. That may be all

What’s left? INS does not decide that ‘hot news’ protection is required, because that (Erie) is for state law/state courts INS does not decide how far the ‘hot news’ doctrine extends to other kinds of ‘misappropriation’

Two opposing views New York, Second Circuit NBA v Motorola Chicago, Illinois State Courts Dow Jones v Chicago Board of Trade

NBA v Motorola ‘[T]he surviving “hot-news” INS-like claim is limited to cases where: (i) a plaintiff generates or gathers information at a cost; (ii) the information is time- sensitive; (iii) a defendant’s use of the information constitutes free-riding on the plaintiff’s efforts; (iv) the defendant is in direct competition with a product or service offered by the plaintiff; and (v) the ability of other parties to free-ride on the efforts of the plaintiff or others would so reduce the incentive to produce the product or service in question that its existence or quality would be substantially threatened.’

Dow Jones Board of Trade of the City of Chicago v Dow Jones & Co: the INS doctrine was held to apply to prevent the Chicago Board of Trade trading a futures contract based on the Dow Jones Index. So at one end of the scale we have an action which is crucially dependent not only on actual competition, but on the imminent prospect of destruction of the very product or service copied; whereas at the other (Dow Jones) end there is neither competition nor damage, and we seem to be dealing with unjust enrichment pure and simple.

End of class 3