'Fair Use' Spares Bloomberg in Swatch Copyright Dispute

, New York Law Journal

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Swatch store at 666 5th Avenue
Swatch store at 666 5th Avenue

Bloomberg L.P. violated no copyright laws when it posted an unauthorized recording of a conference call about the Swatch watch company's earnings report on a data service for financial investors, a federal appeals panel ruled Monday.

"Fair use" exemptions protect Bloomberg from having violated federal copyright laws for posting the recording on the Bloomberg Professional service within minutes of the call's completion in February 2011, a panel of the U.S. Court of Appeals for the Second Circuit decided unanimously.

The judges concluded in Swatch Group Management Services v. Bloomberg, 12-2412-cv and 12-2645-cv, that the factors they must consider when evaluating whether a possible copyright infringement took place weigh in Bloomberg's favor.

Adapting the language of the Second Circuit's ruling in Castle Rock Entm't v. Carol Publi'g Grp, 150 F.3d 132 (1998), the court concluded that "promoting the Progress of Science and useful Arts would be better served by allowing [Bloomberg's] use than by preventing it."

"Bloomberg's use is fair use," Chief Judge Robert Katzmann (See Profile) wrote for the court. Judges Amalya Kearse (See Profile) and Richard Wesley (See Profile) joined in the ruling.

The recording of the 132-minute conference call involving Swatch executives and financial analysts appeared on Bloomberg Professional soon after the call originating from Switzerland ended on Feb. 8, 2011.

In it, executives of the Swiss watchmaker discussed a seven-page financial report they also released for 2010. The Second Circuit said company officials did not reveal any "non-public, significantly price-sensitive facts during the call" that were not in the written materials the company released at the same time, nor in a 26-minute question-and-answer session with analysts at the end of the call.

At the beginning of the call, participants were told by the company's audio vendor that, "This call must not be recorded for publication or broadcast," the court noted Monday.

Neither Bloomberg nor other news organizations were invited to take part in the call.

Of the more than 300 financial analysts invited to take part, 132 joined in, according to the court.

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