Bloomberg LP lost a bid to dismiss a lawsuit by Swatch Group AG that accused the news service of secretly recording an earnings conference call with securities analysts and giving a transcript to clients.
U.S. District Judge Alvin Hellerstein in Manhattan ruled that the watchmaker's claim of copyright infringement was sufficiently pleaded because the recording met the standard of being fixed, independently created and possessing requisite creativity.
Because the authorized audio recording is entitled to copyright protection, and because the copyright claim is properly registered, I deny the motion in full, the judge wrote.
He directed both parties to appear in court on September 16 to discuss how to proceed.
We believe that if a public company discloses financial performance information to a select group of analysts, that company has a responsibility to be transparent and provide that information to everyone.
The investing public has a right to know and we remain confident that when all the facts come out the Court will agree that we acted fairly in doing so, a Bloomberg spokesman told Reuters.
Swatch accused Bloomberg of tapping into its February 8 earnings call and providing a transcript that day to online subscribers, without permission in both cases.
The world's largest watchmaker said this occurred after it told listeners at the beginning of the call not to record it for publication or broadcast.
Swatch sought a court order directing Bloomberg to destroy its copies of the recording and transcript, as well as damages and other remedies for alleged willful infringement.
Bloomberg countered that Swatch had an obligation to be transparent and disclose financial performance information to everyone rather than select analysts.
Based in Bienne, Switzerland, Swatch is best known for its colorful plastic namesake watches, but also owns higher-end brands, including Breguet, Longines and Omega.
Thomson Reuters StreetEvents competes with Bloomberg in providing transcripts of corporate teleconferences.
The case is Swatch Group Management Services Ltd v. Bloomberg LP, U.S. District Court, Southern District of New York, No. 11-01006.
(Reporting by Moira Herbst and Jonathan Stempel; Additional reporting by Sakthi Prasad in Bangalore; Editing by Andre Grenon and Muralikumar Anantharaman)