Merrill Lynch to Financial Blogger: Don't Quote Our Bearish Reports

Felix Salmon of Reuters reports that the pseudonymous lead blogger behind the financial blog Zero Hedge received DMCA takedown notices for six posts that cited or excerpted from Merrill Lynch reports authored by Merrill's former chief economist, David Rosenberg.  According to Salmon, Zero Hedge is "an insider financial blog whose writers believe the worst of the meltdown is yet to come," and the Rosenberg reports jive with this bearish view of the economy:

Rosenberg's reports are different than those of the typical investment bank economist. The bearish, even cynical reports issued from his desk have been serving as a rallying cry for financial bloggers who don't believe that the economy is recovering as fast as financial cable networks, the mainstream media, the Obama administration, and, indeed, the investment banks themselves seem to suggest. . . .

Rosenberg's reports are known for gems like this one: "We don't really share the view that the recovery, if and when it comes, will be sustained. We understand the historical record that even in the face of monumental fiscal and monetary easing, it takes a good four years for the economy to work through the aftershocks of a collapse in credit and asset values. While most economists are now waving the pom-poms, we find very few marketmakers who share their enthusiasm." (Reuters)

The blogger, who goes by the scrappy moniker "Tyler Durden" (yes, from Fight Club), characterized the disputed posts as "all those David Rosenberg posts Zero Hedge has published, that seek to educate and provide some color to otherwise confused and CNBC abused readers and investors." Tyler Durden announced on Tuesday that he would take down the posts, primarily out of concern over the cost of hiring a lawyer, but he told Salmon that he hasn't yet ruled out consulting a lawyer.

Because the disputed posts are down (I had no luck on Internet Archive), it's hard to say for sure who has the better legal position.  It sounds like Merrill Lynch is using copyright law to achieve a non-IP end -- to distance itself from the "downer" views of its former chief economist. (One commenter to Durden's post expressed this concern well: "The DMCA, with the original intent of making a dent in the pirating of music and software, seems to reach a lot farther than I thought.")  And, more importantly, Tyler Durden's use of the Rosenberg reports was likely a fair use if he stuck to the ordinary protocols of quotation and commentary that you find on most conscientious blogs.

On the other hand, Durden may have posted the reports in their entirety, or maybe he quoted substantially more than was necessary to comment on them or the underlying economic events to which they referred.  From a quick perusal of Zero Hedge, however, this doesn't look like his style.  If anyone has a copy of the disputed posts, please enlighten us in the comments.

One last, rather technical point: I'm a little confused by both Durden's and Salmon's references to the DMCA.  The notice-and-takedown procedures of the DMCA apply to online service providers that host content at the direction of users or provide links to third-party content, not to just anyone who allegedly commits an act of infringement. (For more background on the notice-and-takedown process, see our legal guide page, Protecting Yourself Against Copyright Claims Based On User Content.) It doesn't make sense that Durden would get a DMCA takedown for his own content.

This could be just an issue of terminology -- the DMCA gets a lot of press attention, and many assume that any letter threatening legal action and mentioning copyright is necessarily a DMCA notice. But as I've said before in a different context, not every cease-and-desist letter is a DMCA takedown notice. Alternatively, maybe Merrill's lawyers used the term by accident. Alas, even lawyers are human. Or maybe Merrill's lawyers sent a DMCA takedown to the right party -- Blogger, which hosts Zero Hedge -- and Durden and Salmon just didn't mention it in their posts because they don't care about legal minutiae like I do.  Again, a chance to look at the original documents could clear up a whole lot.  (As far as I can tell, Durden hasn't posted them on the blog yet, despite pleas in the comments to do so.) 

We'll monitor developments, if any, in our database entry, Merrill Lynch v. "Tyler Durden".  Hat tip to The Blogging Journalist.