Hot News, Hot Legal Topic

First year property law profs everywhere are surely revising their casebooks as a result of Barclays Capital et al. v. Theflyonthewall.com, a case decided in March by the U.S. District Court in the Southern District of New York, particularly now that Google and Twitter have filed amicus briefs in the on-going matter. The nub of the story, which is nicely expounded in a series of Ars Technica Law and Disorder columns (1, 2, 3), is that The Fly, in the business of promulgating market information and rumours, would as a matter of routine obtain and publish recommendations made by the research team at Barclays to its favoured clients, thus reducing their value as exclusive pieces of information.

The lawsuit, which also involved some breach of copyright, argued that Barclays had a form of property right in the “hot news” worthy of protection from The Fly; and the judge, after a discussion of the classic U.S. case of INS v. AP 248 U.S. 215 (1918), agreed, issuing an injunction

. . . forbidding the dissemination of the Firms’ Recommendations until one half-hour after the opening of the New York Stock Exchange or 10:00 a.m., whichever is later. As a practical matter, this will give the Firms one-and-a-half hours to reach the clients who are most likely to trade upon the knowledge of the Recommendation alone and to give the Firms an opportunity to have any trading by clients based on those Recommendations placed through the Firms and to have those trades executed.

For Recommendations issued while the market in New York is open for trading, the defendant will be enjoined from publishing the Recommendations until two hours after their release by the Firms. . . .

The decision has been appealed and an application has been made that the injunction be lifted pending the outcome of that appeal. Google and Twitter have filed briefs in connection with the application, challenging the concept of “hot news” as quasi-property.

What would the outcome be in Canada?

Clearly there is no copyright in facts or ideas. Would taking another’s work product, where that product is information, be enjoined here as some form of tort? The unfairness of free loading on others’ effort is easy to see, but “free riders” are everywhere in our capitalist economy. The difficulty of the question is to an extent revealed by the awkward and ad hoc nature of the remedy, crafted here as a matter of minutes or hours, with this and that caveat. Is the court simply getting too embroiled in the competitive fray? Is this “quasi property” no longer a workable notion in this age of near instant digital dissemination?