Meltwater operates a "for pay" news aggregate (also known as a clipper service) in which a computer algorithm selects news articles from the Internet, including ones from the AP. Large portions and in some cases, virtually entire web items are reproduced on the Meltwater site. Meltwater defends its actions as "fair use" insisting that it is merely reporting the news. However, the judge found that Meltwater's marketing materials imply that its service is a substitute for AP's new service. Basically, the judge determined that Meltwater wanted to have its cake and eat it too. Paraphrasing the Soup Nazi (Seinfeld), the judge found, "No fair use for you! Next."
What doomed Meltwater's fair use defense claim to copyright infringement? Summarizing the verbose almost 100 page opinion in a Twitter-friendly, less than 140 characters, Meltwater reproduced too much of AP's content and its service was a substitute for the original.
One might wonder how others may avoid the same fate at Meltwater. For example, should Yahoo, estimated 30 million purchaser of a 17 year old's app, Summly, be concerned? Summly is an app which uses an algorithm to automatically summarize news stories posted online, and then present news summaries to its app users. Since the app does not reproduce the news items it distributes verbatim (or even portions verbatim), it seems unlikely that the Summly app's use infringes another's copyright. It should be noted that "facts" and the "information" of news stories are not protectable by copyright, just the "expression" of the facts (i.e. word selection, phrases, etc.)
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