The New York Law Journal has an excellent, detailed article by Stephen M. Kramarsky on a recent 2nd Circuit opinion:

An overly narrow view of the scope of copyright protection risks harming the commercial market for entire classes of works; an overly broad view risks chilling creativity and creating impermissible monopolies on facts. Courts examining the line between fact and expression must keep these concerns in mind, particularly when considering cases that lie entirely outside of the traditional scope of copyright protection, as the court did recently in Associated Press v. All Headline News Corp.

The [Associated Press] asserts that it is particularly focused on providing reports of "breaking" news. Among other things, the AP makes its stories available to clients for use on their Web sites. Each story contains written copyright information that identifies the AP as author and/or owner of the story, and the AP registers copyrights in its news stories and photographs (a prerequisite to suit and certain kinds of statutory damages).

All Headline News Corp., according to the complaint, does not undertake any original reporting. Instead, its employees search the Internet for stories that they rewrite or repackage for republication (either in full or as excerpts). Some of AHN’s stories are based on AP articles, but they are marketed to AHN’s clients as originating with AHN. AHN distributes its articles to paying clients who publish them on their sites.

AP filed suit against AHN based on its alleged "free riding" on AP’s original reporting, asserting claims for copyright infringement, violations of the Digital Millennium Copyright Act, misappropriation of "hot news" and various Lanham Act violations.

If you’re interested in New York law, read the article for the scoop on the "hot news" state law tort, which has surprisingly thrived this long without being ruled as completely pre-empted by Congress’ copyright legislation. Kramarsky concludes:

All of this aggregation and customization is becoming mainstream precisely because the Internet has greatly increased the number of information sources available, and consumers are struggling to work out how to package it.

Any limitations on that conduct are likely to harm not only consumers, but their information suppliers as well. Although the Associated Press court can hardly be faulted for its reading of New York law, its careful decision may have considerable unintended repercussions.

Keep in mind the facts of that case, which a respected practitioner in a nationally-published law journal has argued nonetheless goes too far, and focus on the bigger picture here, the federal copyright and DMCA issues (the DMCA, Kramarsky notes, "prohibits intentionally removing or altering any "copyright management information" or trafficking in works with removed or altered copyright management information." There’s almost no case law on that section.).

A month ago Whet Moser at the Chicago Reader’s Chicagoland bemoaned the "aggregation" done by Huffington Post, which exploited the inverted triangle followed by reporters:

On the left side [of HuffPo] there is a blog. Aside from the generic complaint about people who write for free, most people have come to accept that there are bloggers who quote things and link to them.

On the right side there are headlines. Here’s where it gets tricky so pay attention and hopefully I won’t have to explain this ever again. If you click on the headline, you go to another site–fine. If you click on "Quick Read," you get a piece of the article that the headline goes to, with an ad. If you click on "comment" you get that piece of the article with a comment box. …

Those first couple paragraphs are written by a person who is paid to write that, often at great expense and with generous health benefits.

So: why do I think bloggers should get away with that? Why is the left side of ChuffPo fine and the right side questionable? People should be able to write about things. They should have the right to use them for: "purposes such as criticism, comment, news reporting, teaching." The person blogging about news things at ChuffPo is doing something unique, whether that person is insightful or an idiot. There’s societal value to both. It’s a tremendously important freedom and it’s why the blogosphere is so rich. On the other hand, just slapping up a quote above a comments section–which, odds are, the other site has as well–feels cheap (and, technically, is cheap, that’s the business model).

I don’t know of anyone who says authors shouldn’t be able to sue those who simply cut-and-paste without adding value, as is apparently the case with the "right side" of those Huffington Post "blogs." The issue there is one of degree.

The bigger question for bloggers (the "left side"), all of whom strive to add more value than they copy in their quest for credibility, is: does quoting some of an article as part of my larger work trigger copyright liability?

Just nine months ago the Associated Press tried to answer "yes," started enforcing per-word quotation licensing on bloggers, and got trashed everywhere. So they gave up.

The market has moved — we’re almost 15 years into the attention economy — and there’s no stopping it now. The AP’s policy nominally requires paid licensing for quotes shorter than a tweet on twitter.

That won’t do these days. Not when information is everywhere, when the best way you can make money is through permission marketing, getting the people who other people trust to say they trust your product or service. Not when Robert Scoble is arguing that even Twitter isn’t the future of business advertising, that you need to get closer and more personal with people.

The big content producers "know" that, or at least know what they’re doing isn’t going to work much longer, and they’re slowly getting it. Lawsuits won’t "protect" their content, it will render that content invisible.

Which is why blogs will be fine, even with laws on the books that, arguably, permit a cause of action against them defended only by a vague "fair use" exception. A right with a "remedy" worse than the harm is not a right anyone will enforce.

[UPDATE: Just a few days after this post, the Associated Press announced it would "take legal action against Web sites that use newspaper articles without legal permission, the group said on Monday, in a clear shot at aggregators like Google." I do not think their chances of success are very high, for the reasons above. Moreover, this strategy — going for the 800-lbs gorilla first, instead of low-hanging fruit — is more evidence of a conscious decision not target bloggers, who are more likely to cause controversy.]