A federal appeals court cleared the way Monday for a financial-news website to publish stock market analysts' private buy and sell recommendations in near-real time, striking a blow to a century-old legal doctrine that gave media companies control over the time-sensitive news they report.

The 4-year-old litigation, brought by Barclays Capital, Merrill Lynch, Morgan Stanley and others, was premised on the so-called "hot news" doctrine the Supreme Court first recognized in 1918, in a lawsuit over the unauthorized and immediate republication of wire service reports. Monday's ruling could deprive control-happy news outlets of a legal weapon against websites that rewrite or summarize their breaking news.

The ruling overturns an injunction handed down by a lower court in 2010, that forced the site Theflyonthewall to delay posting leaked stock market buy and sell recommendations. The recommendations were intended for bank clients that earn the banks at least $50,000 to $100,000 in trading commissions yearly; by making them available to the masses in near real-time, Theflyonthewall was violating its intellectual-property rights, that court ruled.

The 2nd U.S. Circuit Court of Appeals, though, found on appeal that Theflyonthewall was within its rights.

"We conclude that in this case, a firm's ability to make news – by issuing a recommendation that is likely to affect the market price of a security – does not give rise to a right for it to control who breaks that news and how," the appeals court ruled 3-0. The appellate court had stayed the lower court's decision last year pending the outcome of oral arguments.

Invoking the "hot news" doctrine two years ago, The Associated Press defeated All Headline News in a court battle that forced the aggregator to stop rewriting and publishing AP stories.

Theflyonthewall, which has deals with Bloomberg, Thomson Reuters and more than 5,000 paying clients in all, also claimed it obtained the banks' research through reporting, by having "hefty relationships with people in the know" and was not "free riding" as the banks charged.

The lower court's order that was reversed required that, for research acquired before the market’s 9:30 a.m. Eastern time opening, Theflyonthewall must wait until at least 10 a.m. before it publishes that information. The lower court also ordered it to wait two hours to publish the banks' buy and sell reports it obtained during the intraday trading cycle.

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