A federal judge has ruled for The Associated Press in its lawsuit challenging the use of story excerpts by Meltwater U.S. Holdings Inc. and its Meltwater News Service.
The AP sued the company, which monitors the media for corporate customers, last year, alleging that it copies AP content and sells it to clients without paying AP licensing fees.
"This ruling makes it crystal clear that Meltwater wrongly used news content from AP to create its own content, while paying none of the costs associated with creating original news content," said Gary Pruitt, AP's president and CEO.
"This is an important ruling for AP and others in the news business who work so hard to provide high-quality original news reports on which the public relies," Pruitt said.
In a statement issued Thursday, San Francisco-based Meltwater said it was disappointed.
"Meltwater believes the ruling misapplies the fair use doctrine and is at odds with a variety of prior decisions that have paved the way for today's Internet. Meltwater is especially troubled by the implications of this decision for other search engines and services that have long relied on the fair use principles for which Meltwater is fighting," the company said.
The statement included comments by Jorn Lyseggen, Meltwater's founder and chief executive, who promised an appeal.
"We're disappointed by the court's decision and we strongly disagree with it," he said. "We're considering all of our options, but we look forward to having this decision reviewed by the Court of Appeals, which we are confident will see the case a different way."
The company is a 12-year-old electronic news clipping service that helps its clients monitor how they are covered in the press.
In its lawsuit, the AP alleged that Meltwater News had been pilfering current and past material from the AP and other news providers.
U.S. District Judge Denise Cote announced her decision in the case Wednesday, but its details were not immediately released publicly. She said in an order that the AP's request for a decision in its favor before any trial had been granted, "with one exception" that she did not specify.
Earlier this year, The New York Times, USA Today publisher Gannett Co. Inc., the McClatchy Co. and Advance Publications Inc. said in court papers that their businesses would be jeopardized if Meltwater was permitted to continue as it had.
The publishers said the ability of companies to distribute their content without paying licensing fees jeopardized their websites and other digital businesses that generate revenue through advertising, subscriptions and licensing fees.
Even one of Meltwater's competitors, BurrellesLuce, joined in a friend-of-the-court brief to say that it operates at a disadvantage because it pays to license content that Meltwater takes for free.
Meltwater was founded in 2001 in Oslo, Norway. According to the company's website, it has more than 800 employees working in 55 offices around the world. The company says it monitors more than 162,000 online publications for its clients.