IP Law Daily, COPYRIGHT—D.D.C.: Copyright suit proceeds in investigative news case, (Mar 27, 2023)

By Ursula Furi-Perry, J.D., MBA

Plaintiff’s identification of two specific examples of allegedly infringing work was enough for direct infringement claim to proceed where defendant’s reports contained identical wording and structure to the originals.

Where an investigative news and legal analysis company sued a financial services broker that provides advisory financial reports to its clients, alleging that the defendant used the plaintiff’s reports as one of its sources for its own reporting, repackaging, copying, and quoting Capitol Forum’s original analysis, without any creative or journalistic efforts of its own, the D.C. federal district court held that the plaintiff’s identification of two specific examples of allegedly infringing work was enough for a direct infringement claim to proceed where defendant’s reports contained identical wording and structure to the originals. However, the plaintiff failed to state claims for contributory copyright infringement and misappropriation of proprietary information (DBW Partners, LLC v. Market Securities, LLC, March 23, 2023, Howell, B.).

Background. The plaintiff Capitol Forum, an investigative news and legal analysis company, provides subscription-based reports regarding the effect of government policy on publicly traded corporations and market competition. While those reports often contain publicly available information, they also provide original writing and analysis to paid subscribers and other authorized recipients. The defendant Market Securities is a financial services broker that provides advisory financial reports to its clients. The plaintiff alleged that Market Securities used its reports as one of its sources for its own reporting, repackaging, copying, and quoting Capitol Forum’s original analysis, without any creative or journalistic efforts of its own. As a result, Capitol Forum argued, the Market Securities reports often contain identical turns of phrase to the Capitol Forum originals and structure their analysis in the same way.

Capitol Forum sued Market Securities in the U.S. District Court for the District of Columbia, alleging claims for direct copyright infringement, contributory copyright infringement, and misappropriation of proprietary information, requesting both injunctive and monetary relief. The defendant filed a motion to dismiss each of the plaintiff’s claims.

The federal district court addressed the procedural issue under Rule 12(b)(6) of the Federal Rules of Civil Procedure, reviewing whether there was a prima facie claim upon which relief could be granted.

Direct copyright infringement. The plaintiff successfully proved that it owned valid copyrights in each of its reports, including those published during the period in question when Market Securities was alleged to have been copying those reports, the court held. Moreover, the plaintiff successfully proved that the defendant had access to the copyrighted work by obtaining them from a Capitol Forum subscriber, and that several of defendant’s reports contained identical wording and structure to the Capitol Forum originals. The court noted that Market Securities’ reports are not publicly available, and that the plaintiff’s identification of two specific examples of allegedly infringing work was enough for this claim to proceed. The court rejected Market Securities’ argument that there wasn’t substantial similarity between the various reports, noting that by pinpointing the use of precise turns of phrase, analytical frameworks, and subjective conclusions by the defendant, the plaintiffs have done enough to avoid a motion to dismiss the direct infringement claim.

Contributory copyright infringement. On the contributory copyright infringementt claim, on the other hand, the court held that the plaintiff’s pleading was insufficient. Alleging that a third party transmitted copyrighted information to the defendant was only speculation, the court stated, and merely amounted to a conclusory assertion that contributory copyright infringement has occurred. Absent any factual evidence of that transmission, the plaintiff’s claim failed.

Misappropriation of proprietary information. The court also dismissed the misappropriation of proprietary information claim, holding that the District of Columbia is not one of the jurisdictions that recognizes the hot news misappropriation claim alleged by the plaintiff. Even if this tort were recognized in the District, the court noted that the plaintiff’s claim falls short, as the tort would not protect information that the defendant is not attempting to sell as its own.

Conclusion. The federal district court granted the motion to dismiss in part and denied it in part.

The Case is No. 1:22-cv-01333-BAH.

Attorneys: John B. Williams (Williams Lopatto PLLC) for DBW Partners, LLC. Jason M. Drangel (Epstein Drangel LLP) for Market Securities LLC.

Companies: DBW Partners, LLC; Market Securities LLC

Cases: Copyright DistrictofColumbiaNews