Skip to main content
05.24.2012 Blog

Bloomberg, L.P.’s “Fair Use” Defense Defeats Swatch Group’s Copyright Claims

Bloomberg, L.P. (“Bloomberg”), a leading provider of business and financial news, successfully raised a “fair use” defense to defeat a claim of copyright infringement arising from Bloomberg’s publication of a recorded conference call between securities analysts and Swatch Group Management Services senior executives. On May 17, 2012, the U. S. District Court for the Southern District of New York granted summary judgment for Bloomberg in The Swatch Group Management Services, Ltd. v. Bloomberg, L.P., No. 11 Civ 1006 (S.D.N.Y. 2012).


The Swatch Group Management Services Ltd. (“Swatch”) owns the intellectual property in many well-known watch brands. Swatch’s parent company, Swatch Group, Ltd., produces the watches and is a public company whose stock is traded on the Swiss Exchange. In February 2011, Swatch Group hosted a telephone conference with invited securities analysts, in which the analysts could discuss Swatch Group’s recent financial results with Swatch Group senior executives. Swatch Group informed all persons on the call that Swatch Group was recording the call and no one else should do so for publication or broadcast.


Bloomberg was not invited to the telephone conference, but a third party “transcript service” accessed the call, made a recording of it, and provided that recording to Bloomberg. Bloomberg then made the recording available online to Bloomberg’s paid news subscribers.


Swatch asserted that the recording of the conference call was an original work fixed in a tangible medium and thus qualified for U. S. copyright protection. Swatch registered the recording in the U. S. Copyright Office and filed suit against Bloomberg on the ground that Bloomberg’s publication of the recording online was an infringement of Swatch’s copyright.


The district court agreed with Bloomberg that the online publication of the recording was “fair use” under the Copyright Act and therefore Bloomberg committed no infringement. Applying the analysis required under Section 107 of the Copyright Act, the court ruled that:


  • The purpose and character of Bloomberg’s use favored a finding of “fair use”. Bloomberg is a prominent gatherer and publisher of business and financial information, and its use of the recording advanced the public interest in furthering full, prompt and accurate dissemination of business and financial news. The fact that Bloomberg had a profit-making purpose for the use was not decisive in determining “fair use”.


  • The court also did not find that Bloomberg’s failure to “transform” the recording by adding something new, such as commentary, defeated a “fair use” defense. Such “transformative” use was not necessary for “fair use”. Neither was good faith on the part of Bloomberg; the court recognized that news organizations frequently publish information obtained clandestinely and even in breach of conditions of confidentiality; the First Amendment role played by news organizations favored Bloomberg’s ability to make “fair use” of the recording. 


  • The nature of the recorded conference call did not weigh strongly against “fair use”. There was little in the conference call discussion that was original, and the factual content of the remarks and responses by Swatch Group’s executives was not copyrightable. Moreover, the comments and questions by the securities analysts were not copyrightable by Swatch, and in fact Swatch disclaimed copyright in them. What was left for copyright protection was therefore at best a “thin” copyright. Generally, “fair use” has greater scope where, as here, the nature of the copyrighted work is factual rather than non-factual.


  • Bloomberg did use all of the recording, and this argued against a “fair use” defense. However, that single factor was not decisive in the “fair use” analysis.


  • Finally, Bloomberg’s publication of the recording did not have a substantially adverse impact on the commercial value of the recording to Swatch. The court found no effect from Bloomberg’s publication on any market for the original expression of Swatch Group’s executives on the conference call.

The Swatch Group opinion does not declare an unfettered “fair use” right to publish all such conference call recordings, even for business news organizations such as Bloomberg. However, the extent to which publication of the factual content of such closed conferences can be “fair use” under the Copyright Act is sometimes very broad indeed, as this case illustrates.