• by Wendy Davis  @wendyndavis, April 18, 2012

Two months ago, The Associated Press sued the paid clipping service Meltwater for copyright infringement and misappropriating "hot news" by allegedly copying articles and selling them to subscribers.

Now Meltwater has fired back with a countersuit for libel based on statements the AP made to the press when it filed the lawsuit. Specifically, Meltwater takes issue with a press release accusing it of having "a significant negative impact on the ability of AP to continue providing the high-quality news reports on which the public relies" and of refusing to license content, among other allegations.

"AP made these false and misleading statements about Meltwater and its operations specifically intending to harm Meltwater’s ability to do business with existing and prospective customers," Meltwater alleges in court papers filed recently with the federal district court in Manhattan. "Some existing Meltwater customers cited the AP’s accusations as a basis for canceling their Meltwater News subscriptions. Likewise, some prospective Meltwater customers cited AP’s statements as a basis for declining to subscribe to Meltwater News," the company adds.

The AP said in its lawsuit 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 AP also alleged that Meltwater allows subscribers to search its database for AP articles, including ones that are no longer available for free online.

But Meltwater says it performs a similar service to other news aggregators. "Meltwater News provides a more sophisticated and specialized version of the news monitoring services offered by companies such as Google and Yahoo," the company says in its court papers.

It also says it provides snippets of news articles, but not the entire text. However, Meltwater adds that it allows users to save articles in an "archive" on the service, and that some customers have stored entire articles on that archive. The company says that those customers represented to Meltwater that they independently licensed the articles.

The AP said in its lawsuit that Meltwater misappropriates "hot news" -- that is, its time-sensitive scoops -- by distributing article headlines, excerpts and other material.

Meltwater says in its answer that the AP's claims about hot news stretch the bounds of the law. "AP seeks not merely to resurrect, but to dramatically expand the so-called 'hot news' doctrine," Meltwater argues.

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.

The idea of hot news is controversial today, given that scoops rarely remain exclusive for longer than a few minutes online. In one recent case, the 2nd Circuit Court of Appeals sided with the Web site TheFlyOnTheWall.com, which was accused of misappropriating hot news by publishing banks' stock recommendations. The appellate court said in that case that the site 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.