Financial Information v. Moody's Investors Service

• Decision Date: 23 May 1983
• Docket Number: No. 81 Civ. 6001 (RLC).,81 Civ. 6001 (RLC).
• Citation: 599 F. Supp. 994
• Parties: FINANCIAL INFORMATION, INC., Plaintiff, v. MOODY'S INVESTORS SERVICE, INC., Defendant.
• Court: U.S. District Court — Southern District of New York

599 F. Supp. 994

FINANCIAL INFORMATION, INC., Plaintiff, v. MOODY'S INVESTORS SERVICE, INC., Defendant.

No. 81 Civ. 6001 (RLC).

United States District Court, S.D. New York.

May 23, 1983.

Lieberman, Rudolph & Nowak, New York City, for plaintiff; David A. Kalow, New York City, of counsel.

Satterlee & Stephens, New York City, for defendant; Robert M. Callagy, New York City, of counsel.

OPINION

ROBERT L. CARTER, District Judge.

This is a copyright action in which the plaintiff, Financial Information, Inc. ("FII"), charges the defendant, Moody's Investors Service, Inc. ("Moody's"), with copying the information that FII gathers and publishes each day on bonds called for redemption.¹ Moody's has moved for summary judgment pursuant to Rule 56, F.R. Civ.P., alleging, first, that the daily bond data that FII publishes are individual facts and therefore not copyrightable as compilations and, second, that FII has not registered its daily called bond service with the United States Copyright Office.²

FII, a publisher of financial information incorporated and with its principal place of business in New Jersey, distributes a daily called bond service to subscribers. Sheekey Aff. ¶ 2. As part of this service, FII sends its subscribers notices, in the form of index cards, of approximately ten called bonds each business day. Id. On each card, FII publishes the name of the issuer of the bond, the type and interest rate of the bond, the redemption price, the redemption date, the redemption agent, and the serial numbers of the bonds called. Exh. 1 to Complaint. At the end of each year, FII publishes a cumulative volume of these called bonds by editing, alphabetizing and pasting together the index cards for each year. Sheekey Aff. ¶ 2.

Moody's, a Delaware corporation with its principal place of business in New York, is also a financial publisher. Complaint ¶¶ 2, 10. Among defendant's publications is its Municipal & Government Manual, which contains, inter alia, listings of bonds called for redemption. Callagy Aff. ¶ 3. Moody's supplements this manual with semiweekly fact sheets that contain updating information about called bonds and other matters. Id.

FII and Moody's are clearly competitors, and Moody's subscribed to FII's called bond service until this action was brought on September 28, 1981. Sheekey Aff. ¶ 2.

When a municipality or other government body calls a bond for redemption, it publishes a notice of the call in one or more newspapers. Id. ¶ 3. Since all such notices are not published in a single place or journal and since issuers stop paying interest on bonds after the redemption date, financial institutions, which are ill-equipped to keep track of the thousands of call notices each year, subscribe to called bond services. These services keep tabs on and report all relevant calls. Id.

FII asserts that it undertakes considerable effort and expense in collecting, assembling and rewriting its notices on called bonds. Sheekey Aff. ¶ 4. FII says it obtains call information by subscribing to many newspapers and financial publications around the country, by placing itself on the mailing lists of many issuers and redemption agents and by following up reported calls by telephone and through correspondence. Id. According to FII, its personnel regularly check public notices and advertisements in at least 20 publications, including the Bond Buyer, the Boston Herald American, the Toronto Globe, the Lake Tahoe News, the Pittsburgh Post Gazette, and the New Orleans Times Picayune. Exh. D to Callagy Aff. Although FII has not stated how much it spends collecting call information, it says a subscription to its daily called bond service costs almost $300 per year. Sheekey Aff. ¶ 4.

FII asserts that since 1974, defendant's Municipal & Government Manual, rather than obtaining its call information by perusing newspapers, financial publications and municipalities' mailed announcements, has simply copied its call notices from FII's daily cards. Complaint ¶ 13. In 1980, when FII first suspected that Moody's was copying FII's data on called bonds, FII inserted intentional errors into its daily cards. Id. ¶ 14. Moody's evidently copied FII's deliberate errors. Exh. 1 to Complaint. FII next checked to see whether Moody's had copied accidental errors that had appeared in its daily cards, and FII discovered that Moody's had copied such accidental errors since 1974. Complaint ¶ 16. A mathematician hired by FII estimated that the eight instances in which FII found that Moody's had reproduced its errors indicated that at least 50 percent of the municipal and government bond information published by Moody's was copied from FII's bond service. Robbins Aff. ¶¶ 5-6.³

All of FII's daily call cards carry a notice of copyright. Complaint ¶ 17. FII says that it has registered its yearly compilations with the Copyright Office, id. ¶ 18, and asserts that the certificates of registration that it has received cover not only the annual volumes, but also each day's cards, which are ultimately incorporated into the cumulative volumes. While acknowledging that the annual compilations were registered, Moody's notes that FII never registered its daily cards with the Copyright Office. Callagy Aff. ¶ 9. It maintains that because this is so and because, in its view, the certificates for the annual volumes do not cover the cards published each day, the daily cards are not protected by the copyright laws. Furthermore, Moody's argues that the daily cards are not copyrightable.

DETERMINATION

Moody's makes two basic arguments why in its view the called bond data that FII publishes each day cannot receive copyright protection: first, that the daily data are facts and therefore not copyrightable and, second, that the daily data are not compilations and are therefore not copyrightable as such.

Moody's is certainly correct in maintaining that facts are not copyrightable. See, e.g., Miller v. Universal City Studios, Inc., 650 F.2d 1365, 1368 (5th Cir.1981); Hoehling v. Universal City Studios, Inc., 618 F.2d 972, 974, 979 (2d Cir.), cert. denied, 449 U.S. 841, 101 S.Ct. 121, 66 L.Ed.2d 49 (1980); Rosemont Enterprises, Inc. v. Random House, Inc., 366 F.2d 303, 309 (2d Cir.1966), cert. denied, 385 U.S. 1009, 87 S.Ct. 714, 17 L.Ed.2d 546 (1967). In Hoehling, the Second Circuit rejected the appeal of the author of a history about the Hindenberg dirigible who asserted that his copyright was infringed by a television studio that used his book as one of its historical sources in making a show about the dirigible. Judge Kaufman wrote that "factual information is in the public domain," 618 F.2d at 979, and that "the protection afforded the copyright holder has never extended to history, be it documented fact or explanatory hypothesis." Id. at 974. What is of course protected is "the author's original expression of particular facts." Id.

While facts have not been given copyright protection, compilations of such facts traditionally have been. See, e.g., Schroeder v. William Morrow & Co., 566 F.2d 3 (7th Cir.1977) (directory of nurseries); Leon v. Pacific Telephone & Telegraph Co., 91 F.2d 484 (9th Cir.1937) (telephone directory); Jeweler's Circular Publishing Co. v. Keystone Publishing Co., 281 F. 83 (2d Cir.), cert. denied, 259 U.S. 581, 42 S.Ct. 464, 66 L.Ed. 1074 (1922) (jeweler's directory); List Publishing Co. v. Keller, 30 F. 772 (C.C.S.D.N.Y.1887) (social register); see also 1 Nimmer on Copyright § 2.04B (1982). In a landmark copyright case, the Second Circuit succinctly stated the rule:

`A man's name, his occupation, his place of business, and his residence are none of them subjects of copyright.'

But, if a man compiles a book containing such information about the residents of a particular place, he may ... copyright it as a whole, notwithstanding the fact that the separate parts of which it is composed are not copyrightable.

Jeweler's Circular Publishing Co., supra, 281 F. at 87; see also Schroeder v. William Morrow & Co., supra, 566 F.2d at 5 ("An original compilation of names and addresses is copyrightable even though the individual names and addresses are in the public domain and not copyrightable"). Indeed, the Copyright Act of 1976 expressly provides for the protection of compilations, 17 U.S.C. § 103(a), which the Act defines as works

formed by the collection and assembling of preexisting materials or of data that are selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an original work of authorship.

17 U.S.C. § 101.

Thus, the pivotal question becomes whether FII's daily called bond data can be considered a compilation. Although it acknowledges that FII's annual volumes of called bond data are copyrightable compilations, Moody's asserts that the daily data are merely individual facts that cannot be considered compilations. Moody's argues that the ten or so index cards containing bond data that are published each day are not such a "collection and assembling of preexisting ... data ... that the resulting work as a whole constitutes an original work of authorship." 17 U.S.C. § 101. Moody's relies most heavily on Triangle Publications, Inc. v. New England Newspaper Publishing Co., 46 F.Supp. 198 (D.Mass.1942), in which then District Judge Wyzanski stated:

To constitute a copyrightable compilation, a compendium must ordinarily result from the labor of assembling, connecting and categorizing disparate facts which in nature occurred in isolation. A compilation, in short, is a synthesis. It is rare indeed that an analysis of any one actual occurrence could be regarded as a compilation. For an account of a single event to be subject to copyright, it must have individuality of expression or must reflect peculiar skill and judgment.

Id. at 201. Defendant's argument is, in essence, that FII, in publishing its bond data index cards, records only public information about single public occurrences, i.e., bond calls, and does...