Barclays Capital Inc. v. Theflyonthewall.Com, Inc.

650 F.3d 876 (2nd Cir. 2011)

Purchase the Printed Copy at bsmsphd.com

Nature of the Case

To access this section all you need to do is click here and register.

Facts

Ps provide securities brokerage services to members of the public. Typical clients of Ps are hedge funds, private equity firms, pension funds, endowments, and wealthy individual investors. Ps engage in extensive research about the business and prospects of publicly traded companies, the securities of those companies, and the industries in which those companies are engaged. Ps publish the recommendations from that research. Each morning before the markets open, Ps circulate their reports and recommendations for that day to clients and prospective clients. This is supposed to give those getting the reports an advantage over non-recipients with respect to possible demand for certain stocks during the day. The reports are likely to result in purchases or sales of the securities in question by client and non-client alike, and a corresponding short-term increase or decrease in the securities' market prices. D is a news service distributed electronically, for a price. D has obtained information about Ps' recommendations before they are made available to the general public and before exchanges for trading in those shares open for the day. D's subscribers are predominately individual investors, institutional investors, brokers, and day traders. These customers purchase one of three content packages on D's website, paying between $25 and $50 monthly for unlimited access to the site. This preview of the recommendations has a tendency to put a big hole in Ps’ marketing plans and efforts and in the long term makes publishing such reports not a lucrative. Ps have attempted to close the door on the sources that D gets information from. Ps instituted this litigation as part of their attempts to close the door. Ps instituted this litigation as part of their attempts to close the door. same endeavor. The first set of claims against D sounds in copyright and is based on allegations of verbatim copying and dissemination of portions of the reports by Ds. Ps won these claims hands down. The second set of claims alleges that D’s early republication of their hot news is tortious under the New York State law of misappropriation. The court agreed and granted carefully measured injunctive relief. D appealed from the ruling on the second set of claims.