Better Swatch What You Say

Earlier this year, Bloomberg reporters sneaked onto a conference call that Swatch held with invited securities analysts.  The reporters taped Swatch executives’ two-hour exchange with the analysts, even though the call-in preliminaries included warnings that the call would be recorded for Swatch and that no other recordings should be made. When Bloomberg started selling its own transcript of the call, Swatch sued.

swatch logoYou might think that Swatch had some sort of privacy claim – that Bloomberg violated the wiretap or computer hacking laws.  In fact, though, Swatch registered its recording of the call with the US Copyright Office and sued Bloomberg for infringement.

Bloomberg’s actions are controversial, for sure.  But how can copyright extend this far?  We live in a world where more or less everything can be recorded. If Swatch has a copyright claim here, what about former Senator George Allen? Having learned from his macaca moment six years ago, can he announce that he’s recording all his campaign events, so no one else can?  What about a police officer who objects to bystanders using their phones to film him in action?  Can he point to his cruiser-cam and accuse the bystanders of infringing copyright?

That seems to be the view of Manhattan federal judge Alvin Hellerstein, 78, who approved Swatch’s copyright claim with little display of concern about its implications.  Denying the motion to dismiss, Judge Hellerstein blandly found that Swatch had met the requirements for claiming copyright: (1) the call was “fixed” on tape and (2) Swatch executives had exercised creativity during the call.  (Point 2 might give Swatch investors pause, of course, but that’s a different question.)

Bloomberg will be free to assert a “fair use” defense at trial, but that’s cold comfort, especially if, as I suspect, Swatch’s registration of copyright allows it to seek massively punitive statutory damages.

You might think that Judge Hellerstein was forced into this unappetizing precedent by a broadly written copyright law.  But he wasn’t.  In fact, the statute as written seems to require that Swatch give Bloomberg and everyone else 48 hours’ notice before Swatch could turn the call into a copyrighted performance.  But the court adopts Nimmer’s view and refuses that reading of the statute because limiting copyright damages claims “would serve no purpose.”

And I suppose that’s true, as long as you can’t imagine the law serving any purpose other than enforcing copyright.

UPDATE:  Corrected typo; with thanks to “great unknown.”