AP Sues Aggregator Over ‘Parasitic Business Model’

The Associated Press is suing a paid news subscription company, alleging Tuesday that repackaging the wire service’s news content is a “parasitic business model.”

The suit (.pdf) blasts the Meltwater Group of San Francisco, saying the 10-year-old company’s subscription service charges a fee for “content created at the expense and through the labor of others.”

Meltwater has about 18,000 customers, who pay at least $5,000 annually for searchable content Meltwater acquires by scraping the 162,000 online news sources it monitors, the AP said. Meltwater also includes a “hot off the wire” database “to attract potential customers,” the AP said.

New York-based AP is demanding a federal judge block the service from continuing operation, and is seeking damages of up to $150,000 an infringement.

Meltwater, which was not immediately prepared to comment, said in a statement that the company “respects copyright and operates a complementary service that directs users to publisher websites, just like any other search engine.”

The company said it was performing the services of a search engine, but customized for paying customers who want it to track stories via keywords across 190 countries in 100 languages. “We are confident that our service is compliant with U.S. copyright law, with the U.S. courts having repeatedly held that internet search is legal,”  the company said.

The AP countered that Meltwater, which posted $114 million in revenue for 2011, “does not enter into licensing arrangements with any of these news sources to deliver their original content to its own paying customers.”

Meltwater is also accused of archiving articles as far back as 2007, and providing news “no longer freely available on the internet — either because of the original article has been removed from the internet or placed behind an archive paywall by the hosting website.”

The AP, which is a news cooperative counting many of the nation’s major media outlets as its members, said the suit was not an attack on aggregation blogs in general. Meltwater, according to the suit, “most notably is a closed system sold only to subscribers for a fee, and not a means of expanding public access.”

In 2009, the AP beat All Headline News in court in a similar suit. The site had repurposed AP content for AHN subscribers for a fee.

And last year, the wire service settled out of court with Shepard Fairey over who owned the rights to the iconic Obama “Hope” poster. According to the settlement’s terms, the two sides agreed “to work together going forward with the Hope image and share the rights to make the posters and merchandise bearing the Hope image and to collaborate on a series of images that Fairey will create based on AP photographs.”