Newspapers are going bust not because of inadequate demand for news; they are going bust because readers and advertisers are abandoning print for the Internet, including so-called aggregator Web sites that pull together stories from newspapers and other sources, and do so at little cost to them.
"I do not have an answer on how to save newspapers," Balganesh says. But he does believe he knows what will not work: reinvigorating the doctrine of hot news misappropriation. "The newspaper industry should be looking elsewhere for its Nirvana," he says. "The solution has to be much broader than tinkering with intellectual property regimes."
In a forthcoming paper titled "'Hot News:' The Enduring Myth of Property in News," Balganesh recounts that in 1884 the newspaper industry failed to convince Congress to expand copyright to cover an eight-hour window of exclusivity for published news. A 1918 Supreme Court decision, International News Service v. Associated Press, did find what it called a "quasi-property" right in news, holding that news stories could not be copied or rewritten by a competitor in the same market for a short period of time in which the information had significant commercial value. That "hot news" doctrine was reaffirmed by New York's Second Circuit in 1997, when it ruled that competitors could not free-ride on another's news gathering when the original reporting involved significant expenditure and the information was time-sensitive.
Today, some in the newspaper industry are running toward the "hot news doctrine" as the panacea that will allow them to license their online content, charging any Web site or blogger who uses or links to its news. The Associated Press, for example, is building a database that would let it charge a fee each time one of its headlines is used.
But "using property to protect the news has been rejected for the past century," Balganesh says. Anyone relying on the "hot news doctrine" is misreading the history. "There's this folklore that 'hot news' created a property right in news," he explains. "In reality, it clearly was directed against the idea of property in news; it focused on unfair competition and unjust enrichment without propertizing the news. Few recognize the importance of this distinction."
No one "owns" the news, Balganesh says. Instead of trying to use intellectual property to increase revenue by charging others, the newspaper industry should focus instead on reducing and sharing the costs of newsgathering. Suggestions made to a Federal Trade Commission committee on the future of newspapers included relaxing antitrust exemptions, taxing e-readers with revenue allocated to the news and book publishing industries, creating an AmeriCorps type of fund to pay young people to go into journalism, turning newspapers into nonprofits, and more. Any of which, Balganesh argues, would be more appropriate than "hot news."
So why the confusion? Balganesh says it goes back to the use of the word "quasi-property" in that 1918 Supreme Court decision. Too many people focus on the word "property" and too few focus on the word "quasi," he explains. "In the process, they completely ignore the nuanced wisdom of the common law that the Court's 1918 solution recognized."