NAB reports (Jan-Dec 1935)

remain confidential and secret until publication of its news has been fully accomplished by all of complainant’s members, in order that competing newspapers and news agencies shall not receive the benefit of complainant’s service without paying therefor; that news received through complainant’s service is, by complainant’s by-laws, received exclusively for publication in member newspapers and upon the condition that members shall make no other use of such news and that members and their employees will not furnish com¬ plainant’s news in advance of publication to any non-member and will not permit any one else to furnish such news, including local news gathered by any member, to non-members. “That the defendant KVOS conducts a radio station in the city of Bellingham, Washington, which makes daily broadcasts from 7 o’clock in the morning to 11 o’clock in the evening, consisting of programs of substantially the same kind as commonly given by radio broadcasting stations; that the defendant radio station, as a part of its daily programs, conducts three times daily news broad¬ casts, commonly called “Newspaper of the Air’’; that the first of such news broadcasts is from 9:IS to 9:45 o’clock A. M., the second from 12:15 to 12:45 during the noon hour, and the third and last is from 7 to 7:45 o’clock in the evening; that defendant claims and the fact usually is that such radio news broadcasts com¬ prise the reading of the most important and most interesting news events of the day. “That three of complainant’s member newspapers, to-wit: the Bellingham Herald, published at Bellingham, Washington; the Seattle Post-Intelligencer and the Seattle Daily Times, both of Seattle, Washington, about 93 miles distant from Bellingham, pub¬ lish and distribute daily newspapers, including news furnished and controlled by complainant’s news service, in the territory served by defendant’s radio broadcasting station; that for each morning broadcast from 9:15 to 9:45 o’clock defendant radio station obtains copies of the morning editions of the Bellingham Herald and Seattle Post-Intelligencer and systematically reads therefrom the whole or most important paragraphs or parts, sometimes verbatim and some¬ times slightly rearranging the wording, of the most important and most interesting news items in those newspapers, including the items furnished to such newspapers by complainant and including news items gathered by its member newspapers as local news and belong¬ ing to complainant; that for defendant’s evening broadcast of each day, except Sunday, from 7 to 7:45 o’clock, defendant regularly obtains copies of the latest editions of the Bellingham Herald, evening edition, and the Seattle Daily Times, and systematically reads therefrom such news items; that the morning edition of the Bellingham Herald, so used by defendant, goes to press at approxi¬ mately 3:30 o’clock A. M. of each day; that the morning edition of the Seattle Post-Intelligencer, so used by defendant, includes all of the news furnished by complainant to it up until 11:30 o’clock in the evening of the day before; that the evening edition of the Bellingham Herald, so used by defendant, includes all of the news furnished by complainant to it up to 4 o’clock of the afternoon of each day; that the evening edition of the Seattle Daily Times, so used by defendant, includes all of the news furnished by com¬ plainant to it up to 10 o’clock in the forenoon of the day it is published; that each one of these newspapers label local news items as ‘local news,’ which as to republication is controlled by com¬ plainant. “That in respect to publishing of such news items the defendant radio station is in competition with those three newspapers; that defendant conducts such news broadcasts as a part of its business of operating its radio station; that its radio station is a business enterprise conducted for profit, the profit being derived from sale of time over its radio station for advertising purposes to persons, firms and corporations desiring to advertise their businesses or products and desiring to purchase time from defendant radio station in which to advertise and promote their businesses or products; that the value of such time for advertising purposes of defendant’s radio station depends practically entirely upon the popularity of its sta¬ tion, that is, upon the number of persons who usually listen to defendant’s radio programs; that the object and purpose of such radio news broadcasts over the defendant’s station is to popularize its station by making its programs interesting through news broad¬ casts and thereby inducing a greater number of persons to listen to defendant’s programs, whereby the value of time over defendant’s broadcasting station for such advertising purposes is enhanced. “That the major portion of revenue derived by complainant’s newspaper members is derived from the sale of space in those news¬ papers for advertising purposes; that the value of such newspaper advertising space depends largely upon the number of readers of the newspapers and the number of such readers depends practically entirely upon the freshness and interest of the news, intelligence and information contained in the newspapers; that such news ceases to be fresh and interesting after it has become generally known and that the ‘news value’ of such news is practically destroyed as soon as, or shortly after, the same becomes generally known; and that by virtue of the matters aforesaid defendant has become and is a competitor of complainant and its newspaper members in the ob¬ taining and distribution of news, and such competition necessarily involves rivalry and business competition in being the first to obtain and distribute such news for the purpose of popularizing and making more attractive the respective advertising mediums of the defend¬ ant’s radio station and complainant and its newspaper members. “That the defendant radio station does not have any organiza¬ tion of its own for the purpose of gathering or obtaining news except as to some local items not complained of and does not purchase news from any news agency, but on the contrary regularly and continuously follows the practice of ‘pirating’ the news, intelligence and information gathered at great expense by complainant and its members as mentioned above; that such practice of defendant con¬ stitutes unfair competition by defendant against complainant and its members, depriving them of the just benefits of their labors and expenditures, and causing dissatisfaction among complainant’s news¬ paper members, due to the fact that defendant is thus able to spread and disseminate, throughout the territory served by its station, in advance of dissemination by complainant’s members, the same identical news which is paid for and obtained by the members from complainant; that, in effect, if defendant radio station continues such practice of pirating complainant’s news in the future, com¬ plainant and its members will suffer irreparable injury and damage therefrom and complainant’s efforts and expenditures to gather and obtain news will be rendered largely without reward or value so far as concerns the territory served by defendant radio station; that complainant is without speedy, complete or adequate remedy at law or otherwise except through injunction, and an appropriate prayer for injunction relief is set out in complainant’s bill of complaint. “Upon filing its bill of complaint and upon application of com¬ plainant supported by affidavits, the court issued the above men¬ tioned show cause order directing the defendant to show cause why a temporary injunction should not issue pending trial on the merits and restraining defendant from such alleged pirating of news pend¬ ing the hearing on show cause order. Thereupon defendant ap¬ peared by motion to dismiss the bill of complaint on the grounds, among others, that the bill does not recite facts sufficient to entitle plaintiff to the relief prayed for and is without equity; that in fact the amount in controversy does not exceed the sum of $3,000 ex¬ clusive of interest and costs; and that the Bellingham Herald, a local corporation, is a necessary party complainant and that the failure to join the Bellingham Herald is the result of collusion be¬ tween complainant and the Bellingham Herald, designed to avoid appearance of the fact stated in defendant’s motion that by reason of the absence of the Bellingham Herald as a party complainant, there does not exist in reality the requisite diversity of citizenship. De¬ fendant also filed affidavits in response to the show cause order, and to defendant’s affidavits complainant filed rebuttal affidavits. The matter was argued on the questions raised by the show cause order and motion to dismiss, and submitted to the court on briefs. “Plaintiff cites: International News Service v. Associated Press, 248 U. S. 215; Chamber of Commerce v. Federal Trade Commission, 13 F. (2d) 673; Miles v. Wasmer, Inc., 172 Wash. 466; The Asso¬ ciated Press V. Sioux Falls Broadcast Association, decided by Judge Jas. D. Elliott of the United States District Court of South Dakota at Sioux Falls, on March 14, 1933, being cause No. 377, S. D. Eq.; Times Picayune Publishing Co. v. Ohalt, District Court for the Parish of New Orleans, Louisiana, decided June 29, 1933; Unfair Competition and Trademarks (2nd ed.), by Henry Nims (intro.) ; Hopkins on Trademarks, Tradenames and Unfair Competition (3rd ed.), pages VHI and 365; Unfair Competition and Trademarks (2nd ed.), by Henry Nims, page 739; Board of Trade v. Christie Grain & Stock Co., 198 U. S. 236; National Teleg. News Co. v. Western U. Teleg. Co., 119 Fed. 294; Moore v. New York Cotton Exchange, 296 Fed. 61; Coca-Cola Company v. The Old Dominion Beverage Company, 271 Fed. 600; Hoffman Brewing Company v. M’Elligott, 259 Fed. 321; Connecticut Tel. & Electric Co. v. The Automotive Engineering Company, 14 F. (2d) 957; Marucci v. United Can Company, 278 Fed. 741; Kinney-Rome Company V. Federal Trade Commission, 275 Fed. 665; Milliken v. Stone, 16 F. (2d) 981; Produce Reporter Company v. Fruit Produce Rating Agency, 1 F. (2d) 58; Jeweler’s Circular Publishing Company v. Keystone Publishing (Company, 281 Fed. 83; Hubbell v. General Electric Company, 262 Fed. 155; Cleveland Cliffs Iron Company V. Kinney, 262 Fed. 980; Criterion Advertising Company v. Seely, 4 Fed. (2d) 932; Vick (Chemical Company v. Vick Medical Com¬ pany, 8 F. (2d) 849; Reichelderfer v. (juinn, 287 U. S. 315; Cheney Bros. v. Doris Silk Corporation, 35 F. (2d) 279; 47 U. S. C. A., • Pag* 667 •