• by Wendy Davis  @wendyndavis, February 14, 2012

The Associated Press on Tuesday took aim at Meltwater, a company that offers a paid clipping service to clients including the U.S. Department of Homeland Security.

"Meltwater has built its business on the willful exploitation and copying of the AP's and other publishers' news articles for profit," the AP alleges in a lawsuit accusing Meltwater of infringing copyright and misappropriating so-called "hot news."

"Meltwater contributes no creative content and provides no editorial commentary," states the complaint, which was filed in the Southern District of New York. "Its business serves no independent purpose other than the distribution of news created by others."

The lawsuit accuses Meltwater of infringing copyright by "routinely copying verbatim the heart of the AP's and other publishers' news stories and selling that content to its subscribers for a profit."

Meltwater said in a statement that it was "surprised" by the lawsuit. "It is unfortunate that the AP did not seek to discuss this with us prior to taking this wholly unnecessary step," the company stated.

Meltwater added that it is "confident" its service doesn't violate copyright law. "Meltwater respects copyright and operates a complementary service that directs users to publisher websites, just like any search engine," the company stated.

The AP asserts in its complaint that Meltwater scrapes news sites, indexes articles to make them searchable and also keeps copies of articles dating back to 2007 in its own database. The company also allegedly allows subscribers to search its database for AP articles, including ones that are no longer available for free online.

The AP argues that Meltwater differs from other news aggregators because it's only available to paid subscribers and therefore is "not a means of expanding public access."

Elizabeth McNamara, a lawyer for the AP, adds that the company is not seeking to restrict other publishers' right to link to AP content. "What distinguishes Meltwater is the entire business model, which provides no content, no commentary, and is simply built on the backs of news organizations," she tells Online Media Daily.

But many of the arguments put forward by the AP in its complaint seem applicable to other aggregators. For instance, the AP says in its complaint that online aggregators are partly responsible for the financial problems facing newspapers today by "taking subscriptions, licensing revenue and advertising dollars away from traditional news organizations and wire services, leaving the news content providers unable to continue bearing their high costs of creating content."

The AP says that it has lost clients like the Department of Homeland Security to Meltwater, and also has lost licensing fees from Lexis Nexis and Factiva due to Meltwater.

The wire service also argues that Meltwater is misappropriating the AP's "hot news" -- that is, its time-sensitive scoops -- by sending out article headlines, excerpts and other material. The hot-news concept dates to a 1918 U.S. Supreme Court decision establishing that rewriting another publication's scoops is actionable as a hot-news misappropriation.

That ruling stemmed from a lawsuit by the Associated Press against a competing wire service that rewrote AP stories. Tech companies like Google and Twitter have said that principle is no longer valid given the speed with which news travels online.

Recently, the 2nd Circuit Court of Appeals sided with a Web site that was accused of misappropriating hot news by publishing banks' stock recommendations. In that case, the appellate court said that the site TheFlyOnTheWall.com had the right to collect and publish factual information, despite the banks' "understandable desire to protect their business model" by restricting that data to their clients.

The AP is seeking an injunction against Meltwater and monetary damages.