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Friday, 13 September 2013

Batting with a straight Bhat: "hot news" doctrine on a sticky wicket

From the pen of Katfriend Latha Nair comes this guest post on a piece of fascinating, and decidedly hot, legal news from India. It addresses a familiar theme: the extent to which the law protects investment and/or property in information with news value.  The context of this piece is an attempt to control real-time information concerning cricket matches by preventing an internet service provider, Akuate, from distributing unlicensed information.  Given the fact that most of the Indian public is rightly besotted with cricket -- a sport in which it excels -- and that a fully-grown cricket match can last five whole days, the commercial significance of the outcome of the Akuate litigation is a matter of considerable significance.  Writes Latha:
Legal protection for news: what's hot, and what's not? 
Can there be a copyright, or any other kind of right, such as a right to protect ‘hot news’, in the scores in a cricket match? This was the primary question in an appeal (Akuate Internet Services Pvt. Ltd & Another v Star India Pvt. Ltd & Another), decided by a Division Bench of the Delhi High Court on 30 August 2013. 
The bone of contention in the case was the “mobile distribution right” granted in 2012 by the Board of Cricket Control of India (BCCI) to Star TV as part of the exclusive broadcasting rights and other related rights in respect of certain cricket matches, including the right to record, reproduce and broadcast these events. At issue was the defendants’ dissemination of ball-by-ball and minute-by-minute match information and alerts through live score cards, match updates and score alerts, all for valuable consideration.  
Before a single judge of the Delhi High Court, Star claimed that these acts of the defendants violated the bouquet of rights assigned to Star by BCCI.  BCCI, though a defendant in the matter, supported Star and argued that, as the organizer of cricketing events in India, it owned exclusive rights in the content generated during a cricket match, which it had granted to Star. Together, BCCI and Star claimed that the defendants were exploiting the plaintiff’s rights with respect to mobile and internet platforms without sharing any gains with them, thereby engaging in unfair competition and unjust commercial enrichment. Distinguishing between audiences having access to the match status in real-time through television or radio from those who did not, Star underlined the need to protect such time-sensitive information for a reasonable interval until it enters the public domain.    


The defendants countered the arguments by pointing out that the Indian Copyright Act only recognizes rights explicitly provided for under it to Star. Thus, while Star and BCCI could legitimately claim broadcasting rights and copyright in the cinematograph film of the match or sound recording of the commentary, score updates and match alerts were mere ‘facts’ over which there could not be any claim of exclusive rights.  
The defendants relied on the dissenting opinion of Justice Brandeis in the famous 1918 United States Supreme Court INS case (International News Service v Associated Press), and subsequent US court decisions that departed from the ‘hot-news doctrine’ enunciated in INS. The majority in INS (relied on by Star and BCCI) held that one who paid the price should have beneficial use of the property. However, Justice Brandeis’s dissenting opinion voiced concerns about creation or recognition by courts of a new private right that may work serious injury to the general public, unless the boundaries of such a right were definitely established and wisely guarded. 
Brushing aside the defendants’ argument that match information was in the public domain, the judge granted an interim order in March 2013, restraining the defendants from disseminating contemporaneous match information for payment, without licence from Star.  The judge made clear that there was no requirement for a licence if the defendants offered the match information gratuitously or after a time lag of 15 minutes.  
On appeal, in a 75-page order,  the erudite Justice Bhat looked at four issues: (i) preclusion of Star’s claim by Section 16 of the Copyright Act, (ii) applicability of  the ‘hot news’ doctrine in India, (iii) Star’s claim of unfair competition and (iv) Star’s claim of unjust enrichment. 
Preclusion of Star’s claim by Section 16 of the Copyright Act 
The Court found that all those limitations that applied to copyrights applied to broadcast rights as well and that, if the intention of the Parliament was to give protection to facts, ‘time sensitive information’ or events such as match information, it would have expressly provided so. No such provisions were contained in the Copyright Act. 
Applicability of ‘hot news’ doctrine in India 
The Court noted that INS, which propounded the ‘hot news’ doctrine,  had three dissenters and has been subject of broad judicial skepticism ever since. The Court made particular note of US decisions such as NBA and Flyonthewall, which held that free-riding or misappropriation claims survived only if the plaintiff was able to show that the defendants were in direct competition with it in the same activity. Creating property rights in information by judicial decision, stood to upset the statutory balance created by the legislature through the Copyright Act. 
Star’s claim of unfair competition 
The Court expressed difficulty in accepting this claim because, in doing so, it would be in effect granting protection to certain intangibles (in this case, match information) that are not covered under any specific statutory regime. The Court was of the view that, if it were to hold that the doctrine of unfair competition prohibited the misappropriation of match information, it would either mean that misappropriation under common law could supplant the Copyright Act or that copying and misappropriation referred to two distinct acts which would be a distinction without any difference.  Thus the tort of unfair competition could not aid Star in its effort to seek equitable relief. 
Star’s claim for unjust enrichment 
This claim was also rejected by the Court, which pointed out that a claim for unjust enrichment rested on three prongs: (a) enrichment of the defendant, (b) at the expense of the plaintiff and (c) existence of an unjust factor in allowing the retention of such benefit. Though the defendants undeniably benefited, such benefits were purely from resources invested by them in their respective businesses. Since Star had not demonstrated that the enrichment of the defendants was at its expense, a claim of unjust enrichment was not tenable. 
Appeal before the Supreme Court? 
It is rumoured that this may not be the last word in this matter and that Star may appeal to the Supreme Court of India.

 Thanks, Latha!  The Kats will be following subsequent events closely.

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