TechCrunch Publishes Confidential, Internal Twitter Documents

Techno/news website TechCrunch today published confidential, internal documents from Twitter, including Twitter’s financial projections (o.k., while it may be unseemly to repeat: Twitter projected it would bring in $400,000 in revenue this quarter and $4 million during the fourth quarter), and a document showing an internal discussion about a proposed reality television show (do we really need another? How about one in which we watch an over-worked lawyer typing out his blog in between sips of coffee and hoping to finish before his wife calls and says “If you’re not billing, come home!”).

Why would TechCrunch do this? Well, it’s fabulous publicity. It’s snarky, it’s quasi-newsworthy, it’s provoking. It will drive up traffic to their site, and thus increase (dramatically) their relevance and their value. Bingo! But, when the dust settles and the news moves to something more relevant (FLASH: Michael Jackson NOT Really Dead; Spotted at Disneyland’s Toontown), I suspect there will be some legal bills to pay.

As I’ve said before, stuffing your site with high quality, original content is an excellent way to increase readership and web traffic. Stuffing it with content poached from another site will only lead to trouble (or, as the case may be, increased readership and web traffic). Copyright protects a wide range of works being reproduced without the permission of the copyright owner. 17 U.S.C. § 102. This would include many of the internal documents TechCrunch decided to republish. Perhaps they’ve forgotten that the owner of the copyright has the sole right to authorize a reproduction of the work, distribute copies, or display it publicly. 17 U.S.C. § 106.

Or maybe they’ve decided to test the limit of a fair use defense. Remember the fair use doctrine? As the U.S. Supreme Court observed in Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, “some opportunity for fair use of copyrighted materials [is] necessary to fulfill copyright’s very purpose, ‘[t]o promote the Progress of Science and useful Arts. . .’.” I’ll bet my bonus that TechCrunch will argue that the fair use doctrine permits its republication because it was intended to spur discussion and debate (under that doctrine, as codified in 17 U.S.C. § 107, short quotations used “for purposes such as criticism, comment, news reporting, teaching … scholarship or research [are] not an infringement of copyright”).

Uh-huh.

But the analysis doesn’t stop there. Courts evaluate fair use by considering four factors: (1) the purpose and character of the use; (2) the nature of the copyrighted work; (3) the amount and substantiality of copying, and (4) the market effect. The most significant is the last one. If the copy lessens the demand for the original work, it’s difficult to claim fair use. On the other hand, if the copy is used strictly for purposes of parody, criticism, or news reporting, it’s more likely to be deemed “fair.” So if you happen to receive confidential, internal Twitter documents, and truly believe that they are news worthy, wouldn’t it be best to discuss them generally, quote selectively, and adhere to the principal that “less is more,” rather than “more and more and more”? Well, maybe. I suppose TechCrunch could still argue that what it took had no effect on the market, so taking more (ok, all) of the material didn’t reduce it’s value, but the better approach might have been to exercise some restraint from the get go.

Moreover, even if TechCrunch avoids liability on copyright grounds, it could still face a claim for misappropriation of trade secrets or unfair competition under California Business and Professions Code §17200 (which broadly applies protect against unfair and “unethical” conduct).

And notably, it does not appear that TechCruch would have much of a defense these claims under the Telecommunications Act of 1996, 47 USC § 230(c). As we’ve seen recently, that is a fairly robust Section that makes providers of interactive computer services immune from liability for content created by third parties. That is, the service providers are immune when sued “as the publisher or speaker of any information provided by” someone else. 47 U.S.C. § 230(c). For example, courts have found that this Section shielded the publisher where third party content was posted on a roommate matching site (See Fair Housing Council v. Roommate.Com, 489 F.3d 921 (9th Cir. 2007)); an on line newsletter (Batzel v. Smith, 333 F.3d 1018, 1031 (9th Cir. 2003)); and a blog entitled “ripoffreport.com” that warned consumers about unscrupulous practices and bad service. Certainly, Section 230(c) has also been used as a defense to claims of negligent misrepresentation, interference with prospective advantage, unfair business practices. But Section 230(c) loses its shielding strength where the service provider itself is deemed the speaker/poster of the content.

By the way, this is what Twitter posted on its blog about this: “We are in touch with our legal counsel about what this theft means for Twitter, the hacker, and anyone who accepts and subsequently shares or publishes these stolen documents. We’re not sure yet exactly what the implications are for folks who choose to get involved at this point but when we learn more and are able to share more, we will.”

Oh, I’m sure of it.

On the horizon (or so I predict): Twitter sends TechCrunch a “take down notice” pursuant to the Digital Millennium Copyright Act (17 U.S.C. §§ 512(c)), and then possibly sues; TechCrunch sees a big up tic in hits, and enjoys its time in the spotlight.