Are numbers protected expression?
No. At least not according to three judges of the Second Circuit. And as a result, one company’s valuable market estimates expressed in numerical form were subject to comprehensive misappropriation by a competitor. But the court allowing this result forgot that numbers can be as expressive as words and sometimes are much more communicative.
The broad issue is whether a publication or database that consists primarily of numbers can be protected not only as to the arrangement or selection of the subject matter as a whole, but as to the individual numbers themselves. This issue is important for any database of estimated or summarized market values of products or commodities.
For example, if I examine four hundred technology stocks and publish my estimates in numerical form of the price the stocks will be one month from today, can you copy those estimates and publish them in competition with me? Contracts solve some issues. But we are talking about copyright. In copyright, the issue turns on whether the numbers are protected expression and, if so, whether the manner of the defendant’s taking of them constitutes infringement or (for example, fair use). They are not protected expression if they constitute facts or if the number is merged with the idea it expresses.
So, what is a fact and what is expression?
This question has tantalized generations of copyright law scholars. But in our context, the answer seems simple. Information in “print” cannot be a “fact” unless it describes or purports to describe something that exists in the real world. “Facts” and “fiction” (or estimates) are opposites.
The Second Circuit has held that predictions of market value for automobiles were expression when based on the estimators’ judgment and not summarizing actual sale prices.
This is the right approach. A numerical database is like to a textual work containing various expressive words and phrases. This leaves ordinary doctrines such as “fair use” or “substantial similarity” the task of determining whether a specific appropriation of the numerical text is infringement. It thus protects against substantial copying for competitive purposes while not precluding references to any aspect of the numerical text.
But, in New York Mercantile Exchange v. Intercontinental Exchange, 497 F.3d 109 (2nd Cir. 2007), the Second Circuit muddied the waters in what was admittedly unnecessary dicta. The case involved estimated “closing” prices for commodities future contracts on the Exchange. The estimates did not rely on the price of the last recorded trade. Indeed, for many futures contracts on many days, there were no trades. Yet, the court suggested that it was a close question of whether the estimates were “facts.” This was supposedly true for estimates on days where many trades had occurred and, thus, the estimated price was grounded in substantial data. But of course that is nonsense. Regardless of how much data were used, an estimated price is just that – an estimate, not a fact. The court also suggested that on heavily traded days for particular contracts, the might be only one “correct” estimate. But, again, that is nonsense.
At worse, New York Mercantile undermines prior law. At best, its dicta suggest a line difficult if not impossible to draw in practice.
The better rule is that expression of estimates in numerical form are protected expression and that whether infringement occurred when some or all estimates are copied hinges on issues of fair use, which in this case were unlikely to protect the defendant.
After rambling about facts and expression, the court decided the case on a different basis, holding that the numerical expression merged with the idea being expressed; thus, it could not be protected under copyright law. If expression is so “merged” with the idea that protecting the expression effectively precludes others from expressing the same idea, then the copyright statute precludes protection of the expression.
But what was the “idea” expressed? The court never defined it. Let me try.
· Perhaps the idea is that: “an estimated closing price can be stated in numerical terms.”
· Alternatively, the idea is: “providing guidance for persons who will engage in commercial transactions regarding futures contracts.”
If either of these or many other “ideas” apply, they can be expressed in thousands of ways in numerical form. The expression does not merge with the idea.
But the court revealed its true purpose – to deny protection of the numerical estimates. Why? Because the court did not think that protection was appropriate since the database producer would continue to produce the data regardless of copyright protection.
Bad law for a bad purpose. Copyright law seeks to create incentives for creative authors, but it does so in general terms. The analysis is any particular case is not whether the particular author will continue to produce its works without copyright, but whether denying copyright to an entire set of works will reduce the incentive and the production generally for works of the type.
Professor Nimmer nailed this one. I could not agree more. This case narrows copyright protection through misplaced logic that is inconsistent with the public policy principles underlying copyright law.
i have read this artical it is quit informatic and i will wait fopr nextone