US: Google Inc and Twitter Inc have asked an appeals court to overturn a lower court`s decision to bar Theflyonthewall.com from issuing immediate news on analyst research from several Wall Street banks, court documents showed.
Theflyonthewall.com posted headlines from research reports and press releases on its website, often before banks could share their recommendations with their clients.
In March, U.S. District Judge Denise Cote said Theflyonthewall.com engaged in "systematic misappropriation," essentially getting a "free ride" from its quick publication of upgrades and downgrades that can move stocks higher and lower.
The ruling was made in favor of Bank of America Corp`s Merrill Lynch unit, Barclays Plc and Morgan Stanley, which had earlier sought court intervention to ban Theflyonthewall from using their research reports.
However, in a filing with an appeals court late on Monday, Google and Twitter argued that in the age of Internet and instantaneous communication, banning of Theflyonthewall.com`s immediate news dissemination was "obsolete."
"News reporting always has been a complex ecosystem, where what is `news` is often driven by certain influential news organizations, with others republishing or broadcasting those facts -- all to the benefit of the public," the companies said in the filing.
Google and Twitter argued that upholding the district court`s decision would give those who obtained the news first strong incentives to block others from obtaining the same information.
The companies also said it was tough to implement "any period of exclusivity" for news.
It would be impossible to craft and enforce a rule restricting the dissemination of readily accessible factual information, the companies said. They requested the court to recognize that "hot news" misappropriation could no longer be practically or fairly applied.
"How, for example, would a court pick a time period during which facts about the recent Times Square bombing attempt would be non-reportable by others?" the companies said in the filing.
The case is IN re: Barclays Capital et al v Theflyonthewall.com, Case No. 10-1372, U.S. Court of Appeals for the Second Circuit.