Why Is That 17-Year-Old’s $30 Million News App Even Legal?

One news aggregator just lost a copyright-infringement lawsuit to the Associated Press. Could an app like Summly be next?

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Nick D'Aloisio
Elizabeth Renstrom for TIME

Nick D’Aloisio has officially earned his seat at the cool kids’ table. The 17-year-old high school student this week sold his news-aggregator app Summly to tech giant Yahoo for a reported $30 million in cash and stock. While he’s finishing up his diploma, he’ll also start work at Yahoo’s London office. Meanwhile, Yahoo plans to enhance its own mobile apps with the technology developed for Summly, which uses an algorithm to automatically produce easily digestible summaries of news stories.

The issue now isn’t what fancy car the teenager plans to buy with his millions. The real question is whether Summly, and now Yahoo, can take news stories from around the Web, present altered versions of them, and not run afoul of copyright law.

A court ruling last week in New York against a Norway-based news aggregator has brought the issue of copyright infringement in the media world back to the fore. The Associated Press sued and defeated Meltwater, a subscription-based media-monitoring service, for providing snippets of news stories to clients without licensing the content from AP. Meltwater argued that posting a headline, lead paragraph and one or two other relevant sentences of a story constituted fair use under copyright law and was not so different from what Google provides when a user types a query into its search bar. But U.S. District Judge Denise Cote did not agree, writing in her decision:

The news reporting and research upon which Meltwater relies was not done by Meltwater but by the AP; the copyrighted material that Meltwater has taken is the news reporting and research that AP labored to create … Permitting Meltwater to take the fruit of AP’s labor for its own profit, without compensating AP, injures AP’s ability to perform this essential function of democracy.

(PHOTOS: Nick D’Aloisio, a $30 Million Life in Pictures)

AP’s win marks a significant victory for media companies that feel they’ve lost control of their content in the digital age. News-industry heavyweights have tussled with aggregators before, but usually through threatening words or private settlements. In 2008 the Associated Press sued All Headline News, a now defunct website that was rewriting AP stories without attribution. The site ended up paying AP an undisclosed sum in a settlement. In 2009, Rupert Murdoch, owner of News Corp., said Google and Yahoo were stealing the news by aggregating it and profiting from it on their own websites. The New York Times Co. also settled in a 2008 case where a hyperlocal news site run by the Times-owned Boston Globe was sued for aggregating another local site’s links and headlines.

Now Meltwater could be on the hook for as much as $150,000 for each of the 33 articles for which they violated copyright law. Still, it’s not clear that AP or any other media company will have the ability — or the desire — to piggyback off this decision to target mobile news aggregators like Summly and Flipboard. “Fair use is a very fact-specific test,” says David Ardia, co-director of the University of North Carolina Center for Media Law and Policy. “Each of these decisions is a tree within a forest that is growing slowly, especially as technology changes.”

Meltwater mostly stands apart from everyday aggregators in its approach. The company charges its business clients thousands of dollars annually for access to its database of news snippets, a key difference from most services that Ardia says played heavily into the judge’s decision. Another difference: Summly doesn’t actually use the language of the articles it’s lifting from. Instead, a computer algorithm automatically rewrites and summarizes the pertinent points. By using fresh phrasing, the app skirts some copyright concerns. “If you take a story and you pull out the facts and you rewrite the story to contain those facts, what you are doing is not copyright infringement,” explains Andy Sellars, a staff attorney for the Digital Media Law Project housed at Harvard University. “When people complain about websites that are doing really sloppy rewrites of other people’s stories and posting them online … it’s not a copyright concern that they’re raising.”

(MORE: Q&A With the 17-Year-Old Who Sold an App to Yahoo for $30 Million)

Perhaps most critically, Meltwater wasn’t bringing AP much traffic. Meltwater links had a 0.08% click-through rate to AP websites, a number that the ruling judge thought was paltry. In the decision the judge reasoned that Meltwater was leveraging AP’s copyrighted material to act as a competitor instead of as a source driving traffic back to AP. But low click-through rates are common online, Sellars says. Using that as a basis for judgment “is not grounded in the reality of the Internet,” he says.

In evaluating digital platforms like Meltwater or Summly the courts seek to strike a balance between protecting technological innovation and quality journalism, two sectors that can provide a public good. The AP ruling hardly sets a definitive precedent, though, and is likely to be appealed later this year. Expect the fights between old and new media paradigms to continue — and to potentially reach more mainstream products.

“Good journalism is expensive and the Associated Press ought to be able to ensure that its members can continue to produce good, high-quality journalism,” Ardia says. “What we want to make sure, however, is that the law doesn’t enshrine a certain business model for doing so, where innovation can give us new ways of producing news. That’s a tension that gets worked out in these individual cases, but it’s one that society has great interest in seeing resolved.”

(MORE: Is Facebook Losing Its Cool? Some Teens Think So)

138 comments
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Cornerss
Cornerss

 "news written for you, by a pc"

pjerky1
pjerky1

Wow, this is highly slanted by the media. The question shouldn't be whether or not it is legal (and it most certainly is and should be) but why the news organizations are completely inept to the point where they don't recognize the benefit of apps and services that link to their own news sites.

These apps as well as Google News and other aggregators actually drive traffic to their websites. It is a complete win-win. But no, they have to whine, loudly, about them because they don't have full control of the user from end to end. I am sick and tired of the media prattling on and on about their loss of control (a control they abuse and rarely ever deserved in the first place) and claiming damages.

Seriously what damages? These tools are driving customers to news sites thereby increasing the revenue of the whining news companies. And yet these companies seem to think that the creators/owners of these tools owe them something? What a bunch of ungrateful idiots. This arrogance and sense of entitlement and excessive amounts of control are the reasons why the major media companies are now struggling. Because people recognize that things can be better and will go to the sources that treat them like customers, not criminals.

These old timers running the organizations need to retire and let the younger, wiser, less corrupt generations take over already. The old timers are the ones destroying the businesses.

AllisonDeJordy
AllisonDeJordy

I don't really understand why anyone would want an app that shows you badly-written news stories. I don't think what Yahoo wanted was the app, but rather some portion of code IN the app.

senasstasys
senasstasys

It ia money laundering. App is worth few thousands. U can pay for hooker 30m. it does not mean she is worth it. No offence to hokers.

HeinrichBattenb
HeinrichBattenb

i don't really understand all the hype about this app....don't RSS subscription feeds almost satisfy this app's perceived functions? The RSS format is widespread and common and it's been around for forever. It also summarises news articles, blog posts into feeds linked to the complete articles.

while i can't comment on how the content analytics + summarisation dynamics within Trimit/Summly compares to that of the RSS (never used or heard of Summly before), i assume it is more intricate and elaborate & condenses texts holistically? 

TronSheridan
TronSheridan

If I were a Yahoo shareholder I would not be happy right now.  $30 million for a news summarizer, that uses someone else's licensed technology.  Really Yahoo, really?

whereisjon
whereisjon

why not make it a plugin for your browsers, so whenever you visit any websites, it automatically sums up the articles you wanna read, so by doing so users agreed to use that program for easy viewing at the same time summly is not liable for the websites they sum up for u, as readers are the end user visiting the sites, thus avoiding the need to pay AP for the bull****

zarko.zachary
zarko.zachary

When I was a public relations officer in the military, I used to prepare summaries of pertinent news stories for senior executives. In other words - I did the exact same job that D'Aloisio's application does. The only difference is that it cost more and took longer.

Yahoo should pay the Associated Press a reasonable fee for using AP's intellectual property. There's still plenty of money to go around.  

ScatmanAsh
ScatmanAsh

It's not re-posting the news as their own, is it? Surely it also contains the by-line of original reporter/source? If so, no foul.

NathanBerg
NathanBerg

c'mon, really?  the young man has made a remarkable contribution at his age, and all we're going to do is discourage his efforts?  if he had gone out and murdered someone, he would surely be tried as an adult.  isn't it time that we begin promoting this kind of action instead of condemning it at every turn?  on my behalf, keep up the good work young man!

Mushytaco2016
Mushytaco2016

Wait, so facts about something in the world are now able to be copyrighted? Am I hearing that right? I can't repeat facts or else I get cited for copyright infringement  That was totally not the intention of the law, which is why this whole entire debate is flawed, because the law is flawed, and needs to be totally rewritten. and yes, it should include piracy laws.

Gol1ath
Gol1ath

If it is OK to suck content from a website and post it on ours, then let's all do this ladies and gentlemen!!!  Suck CNN completely, suck Yahoo! completely for their content, put your own ads in your website and make money off their content...see if they yell...

Gol1ath
Gol1ath

It's 100% illegal what they are doing.  They suck content other companies worked to write and post, recreate the content in the app without given credit to the source.  Also, the reason why Yahoo paid this non-sense amount of money is because it could get money for ads.  Well, what about the companies who created those content and have paid ads on their website, they are losing out for their work???  Don't be a fool and think this is OK...

kvizena
kvizena

Yahoo doesn't care about the companies application or its capabilities, they were bought due to their patent (pending) ownership of a couple of key patents. The company has patents and can provide prior art to gesture based navigation on a touchscreen computer. The company in itself was groovy, but the fact they have legally verifiable proof of gesture based controls with source control registration well before a popular "Patent Troll" did, should allow Yahoo to cross licenses patents and have leverage. 

The Motorola, Google, HTC and Samsung coalition will likely be using cross licensing as leverage to stop the "Patent Troll" from consistently using patent litigation to maintain their market share. If you get bored look up the patents I speak of specifically covering gesture based controls, scrolling bounce and linear menu systems using gestures as an input action. 

It should be interesting that Yahoo will shutdown the service, hint hint. 

BartHawkins
BartHawkins

This is entirely legal, and is done by millions of students each and every single day....note the algorithm selects an article (say, Obesity Caused by Fast Food) and re-writes the content as Overweight?  Quick Serve Meals the Cause?

In no way should this young man be challenged for his ingenuity...in fact, most "articles," are simply rehashes of one another, in any case.

Frankly, such an algorithm would be relatively easy to defeat, simply by writing any such content clearly, cogently, and succinctly - using language that cannot be readily replicated in synonym all that easily (but give it a year or two).

stevencravis
stevencravis

I bet the parents are glad they got him that computer when he was younger.

TomSargeant
TomSargeant

they must think that Iphones are the ONLY smart phones.

Flipider.com
Flipider.com

What about Flipider ?

Flipider in part is RSS reader website that directs client to news, products, entertainment sources on the internet. I don't represent any of the information as a source from me. 

I try to get clients to stay longer at trusted fabulous content from websites like Time, CNN, Fox News.....

Rob :-)


CindyShort
CindyShort

A 17 year old with $30m?  Don't worry it will be gone in less than 5 years.  You can buy a lot of iPhones and video games with $30m.

meganadriana
meganadriana

@indmix I watched a press conference for that and the kid looks like a robot. No emotion whatsoever

yemightyanddespair
yemightyanddespair

"These apps as well as Google News and other aggregators actually drive traffic to their websites. It is a complete win-win."

If you read the story you would see that that is not true. Less than .1% of people who read an AP blurb clicked through to the AP site--essentially, these news sites are "whining" because other people are stealing their stories and NOT driving traffick to their sites.

JerryGreenberg
JerryGreenberg

@HeinrichBattenb  

I am under the impression this young man wrote a code set or program that does the type of function Yahoo wants very badly, and they like how his code set functions. I am sure they are looking to expand on it. To pay this amount of money this code set must be very special, and the way it was written the young man who wrote it must have it well protected. There are many programmers working on basic salary who can write very complex code and make things work.

By employing the author they can have his support as the author and employee since he would be familiar with the code structure. This also makes it easier for them to deal with copyrights and other legal matters in dealing with software authoring.

I don't have a detailed understanding of the exact function of this code from the news articles that I read. I am sure Yahoo must see a huge value in what it can do. 

As for reading news, I have for my smart phone desktop links that allow me to read news from major news sites. When I connect I can select to see the full version or the mobile version of the news site. 

In time we will see the new options with Yahoo and the others. They are all in competition with each other. 


JohnRoss1
JohnRoss1

@zarko.zachary No they should not. This does NOT violate copyright laws. PERIOD.

And don't start giving any industry $$$ they do not deserve or they will get used to it and demand it all of the time until they decide they deserve even more.

yemightyanddespair
yemightyanddespair

This boy's achievement was making millions off of copyright infringement. That's not something to celebrate.

yemightyanddespair
yemightyanddespair

It isn't illegal to make an app that covers the same stories. It is copyright infringement to steal someone else's article about the story, with their original wording.

JohnRoss1
JohnRoss1

@Mushytaco2016 You can still NOT copyright things like facts, or list.

BTW KFC can not even copyright their "Secret Recipe" which is why it is a Trade secret. But trade secrets are not enforceable.

zarko.zachary
zarko.zachary

@Mushytaco2016 Correct. If you read a story in the newspaper, online, or see it on a TV news report - you can't discuss it with anyone or else you are violating copyright laws.

Just kidding.

JohnRoss1
JohnRoss1

@Gol1ath Wrong wrong wrong. They are not "Sucking" anything . If they just simply copied and pasted the whole article then perhaps they would have some problems. But you can NOT copyright FACTS.

So if I tell you it is 85 degrees where I live and its raining. Those 2 facts are not illegible for copy right protection.

The stories in total is copy right protected, the facts of the matter are not. If CNN writes a story about 2 guys robbing a store the story is copyright protected. However the facts, such as the fact that there were 2 men, the facts regarding the robbery such as location, time, were the robbers caught, was anyone hurt ect ect ect can NOT be copy right protected. So anyone can take the facts of a story and write a story of their own using those same facts.

zarko.zachary
zarko.zachary

@BartHawkins Non-profit academic fair use rules are much different than for-profit commercial fair use rules.

zarko.zachary
zarko.zachary

@MarcoPerches Huffington pays AP to use their stories. AP is a wire service that provides news to newspapers and websites around the world. So is Reuters.

JohnRoss1
JohnRoss1

@meganadriana @indmix Yehaa A cute redheaded Texas gal Nothing can beat that.

Try to give the kid a break, he's just 17 years old has a world of reporters flooding into his life and 30 MILLION dollars dumped into his lap (Dear Lord why cant I have those kind of problems) He was probably still in a little shock and just try to what what he was doing so he didn't look like a total nerd on TV

yemightyanddespair
yemightyanddespair

How on earth is posting someone else's content to your own app not copyright infringement?

I suppose, if you write a book, I'm allowed to make an app that provides the text of your book without paying you?

JacobKral
JacobKral

@JohnRoss1 @Mushytaco2016 Knowledge itself is not copyrightable, I think the line is really drawn where and if someone acts as if the idea is uniquely their own and gives no credit to the true creator.

Which makes it interesting that some things can be copyrighted at all - like disney owning the happy birthday song..

yemightyanddespair
yemightyanddespair

If Yahoo! wants to go collect its own facts and write its own stories on the same events, that’s fine. But what they are doing is taking what someone else already wrote about an event, and posting it themselves. They are not just taking the facts (date, time, people), Yahoo! is taking the wording itself.

If you’ve ever produced any intellectual property, you’ll understand what’s wrong with that. How would you feel if you wrote an article, or a book, or a song, and someone else started hosting it on their own site so people didn’t have to come to you for it? And then they just said, “hey, it’s not like you own all of the notes in that song, it’s not like you own the events you wrote about, so it’s fair game.” If I write a poem about flowers, do I not own the poem because I don’t own the flowers? If I write a book about WWII, do I not have a right to control it because I don’t own WWII?

When people and companies aren’t allowed to protect and own the things they write and create, then there’s no incentive to create them. Why would I bother writing a news article if anyone can host it anywhere they like?

In short, you know nothing about copyright law.

Blasthoff
Blasthoff

@JohnRoss1 @Gol1ath Wrong!  This is NOT about just gathering facts. This is a "machine" that ingests copyright material, butchers it, then spits it out WITHOUT giving proper source credit. Without the copyrighted material to "feed" it, it doesn't exist. No human fact gathering is involved in the process, it is totally mechanized and dependent on copyrighted material..