The Second Circuit Court of Appeals has ruled that Bloomberg’s unauthorized publication of a recording of an earnings call was fair use under UScopyright law.
The case involved an earnings call for the Swatch Group, the watch company, which is traded on the Swiss stock exchange.
In February of 2011, Swatch hosted a telephone conference and invited hundreds of securities analysts to discuss the company’s financial performance. Swatch arranged with a third party transcript service to record the call.
Swatch asserted that the recording was “an original work fixed in a tangible medium” and thus that it qualified for copyright protection. The company registered the recording with the US Copyright Office.
Bloomberg obtained an unauthorized copy of the recording and made it available via its news service. Swatch asked Bloomberg to remove the recording. When Bloomberg refused, Swatch sued for copyright infringement.
A district court granted summary judgment for Bloomberg, finding fair use as a matter of law.
The Second Circuit affirmed, finding that the first fair use factor – “the purpose and character of the use” – favored Bloomberg.
The court accepted that Bloomberg was a “commercial enterprise” providing information to paying users, and that it had obtained the recording using “clandestine methods.” The court held that whether or not Bloomberg’s service was providing “news” or something else, publishing the Swatch recording provided an important public service in disseminating “newsworthy financial information.”
Although Bloomberg had obtained the recording without Swatch’s authorization, the court held that dissemination of information “would be crippled if the news media and similar organizations were limited to authorized sources of information.”
The court also held that Swatch’s copyright interest in the recording was “thin,” given its factual nature.
The court noted that Bloomberg’s publication of the call did not deprive Swatch of any revenue. Bloomberg merely “widened the audience of the call, which [was] consistent with Swatch Group’s initial purpose.”