Opinion ID: 219099
Heading Depth: 1
Heading Rank: 3

Heading: Theflyonthewall com

Text: The defendant-appellant Theflyonthewall.com, Inc. (Fly) is, among other things, a news aggregator. For present purposes, [a]n aggregator is a website that collects headlines and snippets of news stories from other websites. Examples include Google News and the Huffington Post. Tony Rogers, Aggregator, About.com Guide, available at http://journalism.about.com/od/journalismglossary/g/aggregatordefinition.htm (latest visit Jan. 4, 2011). Understanding that investors not authorized by the Firms to receive the reports and Recommendations are interested in and willing to pay for early access to the information contained in them  especially the Recommendations, which are particularly likely to affect securities prices  several aggregators compile securities-firm recommendations, including the Recommendations of the Firms, sometimes with the associated reports or summaries thereof, and timely provide the information to their own subscribers for a fee. Fly is one such company. It employs twenty-eight persons, about half of whom are devoted to content production. It does not itself provide brokerage, trading, or investment-advisory services beyond supplying that information. Typical clients of the Firms are hedge funds, private equity firms, pension funds, endowments, and wealthy individual investors. By contrast, Fly's subscribers are predominately individual investors, institutional investors, brokers, and day traders. These customers purchase one of three content packages on Fly's website, paying between $25 and $50 monthly for unlimited access to the site. In addition to maintaining its website, Fly distributes its content through third-party distributors and trading platforms, including some, such as Bloomberg and Thomson Reuters, that also separately provide authorized dissemination of the Firms' Recommendations. Fly has about 3,300 direct subscribers through its website, and another 2,000 subscribers who use third-party platforms to receive the service. Fly characterizes itself as a source for breaking financial news, claiming to be the fastest news feed on the web. Fly I, 700 F.Supp.2d at 322 (internal quotation marks omitted). It advertises that its quick to the point news is a valuable resource for any investment decision. Id. Fly has emphasized its access to analyst research, saying that its newsfeed is a one-stop solution for accessing analyst comments, and brags that it posts breaking analyst comments as they are being disseminated by Wall Street trading desks, consistently beating the news wires. Id. at 322-23 (internal quotation marks omitted). The cornerstone of Fly's offerings is its online newsfeed, which it continually updates between 5:00 a.m. and 7:00 p.m. during days on which the New York Stock Exchange is open. The newsfeed typically streams more than 600 headlines a day in ten different categories, including hot stocks, rumors, technical analysis, and earnings. One such category is recommendations. There, Fly posts the recommendations (but not the underlying research reports or supporting analysis) produced by sixty-five investment firms' analysts, including those at the plaintiff Firms. A typical Recommendation headline from 2009, for example, reads EQIX: Equinox initiated with a Buy at BofA/Merrill. Target $110. Id. at 323. Fly's headlines, including those in the recommendations category, are searchable and sortable. Users can also subscribe to receive automated e-mail, pop-up, or audio alerts whenever Fly posts content relevant to preselected companies' securities. Fly publishes most of its recommendation headlines before the New York Stock Exchange opens each business day at 9:30 a.m. Fly estimates that the Firms' Recommendation headlines currently comprise approximately 2.5% of Fly's total content, down from 7% in 2005. According to Fly, over time it has changed the way in which it obtains information about recommendations. Some investment firms, such as Wells Fargo's investment services, will send Fly research reports directly as soon as they are released. Others, including the plaintiff Firms, do not. Until 2005, for recommendations of firms that do not, including the plaintiff Firms, Fly relied on employees at the investment firms (without the firms' authorization) to e-mail the research reports to Fly as they were released. Fly staff would summarize a recommendation as a headline (e.g., EQIX initiated with a Buy at BofA/Merrill. Target $110.). Sometimes Fly would include in a published item an extended passage taken verbatim from the underlying report. Fly maintains that because of threats of litigation in 2005, it no longer obtains recommendations directly from such investment firms. Instead, it gathers them using a combination of other news outlets, chat rooms, blast IMs sent by people in the investment community to hundreds of recipients, and conversations with traders, money managers, and its other contacts involved in the securities markets. [9] Fly also represents that it no longer publishes excerpts from the research reports themselves, and now disseminates only the Recommendations, typically summarizing only the rating and price target for a particular stock.