Hot News Flash: Second Circuit Holds Hot News Misappropriation Claim Preempted

The Second Circuit has revisited the issue of New York “hot news” misappropriation claims, and the extent to which such claims are preempted by the Copyright Act.  The plaintiffs in Barclays Capital case were major financial institutions that not only provide securities brokerage services, but also provide research and recommendations concerning the purchase and sale of securities.  The plaintiffs distribute these recommendations largely to encourage transactions, and make their money on the transactions (not the recommendations themselves).  The defendant, flyonthewall.com, provides an electronically distributed news service and, among other things, uses various means to obtain the plaintiffs’ securities recommendations and then reports them. The plaintiffs sued flyonthewall.com for “hot news” misappropriation. [Read more…]