AP sues Meltwater News claiming copyright offense

NEW YORK (AP) ? The Associated Press is suing a digital news distributor, claiming it infringed on AP copyrights.

The complaint, filed Tuesday in New York federal court, alleges that Meltwater U.S. Holding Inc. and its Meltwater News Service have been illegally selling content created by the AP.

Meltwater News is an electronic news clipping service that helps its clients monitor how they are covered in the press.

The suit alleges that Meltwater News has been pilfering current and past material from the AP and other news providers.

“Meltwater News is a parasitic distribution service that competes directly with traditional news sources without paying license fees to cover the costs of creating those stories,” Tom Curley, AP ‘s president and CEO, said in a statement. “It has a significant negative impact on the ability of AP to continue providing the high-quality news reports on which the public relies.”

No one answered the phone before business hours at Meltwater’s San Francisco headquarters early Tuesday. Messages were not immediately returned.

The AP has complained for years about websites and search engines improperly lifting its content. In 2009, the not-for-profit cooperative threatened to take legal action against Google Inc., whose dominant Internet search engine provides a news section featuring stories from thousands of websites.

The AP now has licensing agreements with Google and websites such as Yahoo and AOL.

Meltwater News has refused to pay licensing fees, despite court rulings in the United Kingdom and Norway declaring that it should be paying for copyrighted material.

Meltwater News began 11 years ago in Oslo, Norway, according to its website.

The AP, which is based in New York, was started by a group of newspapers in 1846 as a way to share news coverage. It now operates news bureaus in more than 100 countries and employs about 3,700 people.

The AP’s revenue has dropped from a peak of $748 million in 2008 to $631 million in 2010. The cooperative hasn’t released its financial results for last year.

The AP alleges Meltwater News can charge lower fees for its service, largely because it doesn’t have to finance a huge news gathering operation. In 2010, the AP’s employee salaries, benefits and news coverage expenses totaled nearly $447 million, which devoured about 71 percent of the cooperative’s revenue.

“Meltwater free-rides on AP’s significant investments in gathering and reporting news,” AP acting general counsel Laura Malone said in a statement.

As its revenue shrinks, the AP has sought to wring more money from the Internet and mobile devices.

To identify copyright offenders, the AP helped develop a service called NewsRight that tracks the use of stories on websites, blogs and other Internet forums. NewsRight was spun off from the AP last July. It’s now backed by the AP and 28 other news organizations, including The New York Times Co. and The Washington Post Co.

The AP’s suit alleges Meltwater News gathers AP stories based on certain words or topics requested by its customers. Meltwater News also has set up a system that enables its customers to store AP stories dating to 2007, according to the lawsuit.