Newsletter publishers get their day
Lowry's victory in $20 million copyright lawsuit likely to help protect all newsletter publishers.
October 8, 2003: 3:56 PM EDT
By Myron Kandel, CNN Financial Editor

NEW YORK (CNN) - At the start, let me disclose a personal bias on this issue.

In an earlier incarnation, I wrote and published several newsletters, one of them titled "The Wall Street Letter," about the ins and outs of the securities industry. That one did quite well, but the bane of my existence was that some firms bought just one subscription and then made numerous photocopies, in violation of the copyright laws. But as a small businessman, there wasn't much I could afford to do about it.

Myron Kandel

Now, however, a Baltimore federal jury has struck a blow that could resonate throughout the newsletter field.

The case involves a lawsuit filed against Legg Mason, the big Baltimore-based investment firm, by Lowry's Market Trend Analysis, a highly-regarded daily e-mail report on the stock market.

The suit contended that Legg Mason had distributed the $700-a-year newsletter to some 1,300 of its employees over a period of more than a dozen years. That, while only three of the firm's employees had paid subscriptions.

The jury obviously felt that Legg Mason had violated federal copyright laws and that Lowry's had been damaged -- to the tune of $20 million. Whether that figure will stand, if there's an appeal, remains to be seen. But the precedent is significant.

Paul Desmond, who heads Lowry's, which is based in North Palm Beach, Fla., said the lawsuit had cost his company $1.5 million, but he felt it was important to pursue it for two reasons. First, because of the massive amount of the copying, and also, because, in his words, "I felt a responsibility to all other newsletter publishers."

Lowry's employs theories of technical analysis developed initially 65 years ago by a young banker named Lyman Lowry who studied how the forces of supply and demand related to the stock market. He originated the upside and downside volume statistics that are widely used today, and he has been honored by professionals in the field of technical analysis. The report he founded is used by financial institutions and professional investors. There's even a more elaborate institutional version of the report that costs $14,000 a year.

A Lowry report last Friday discounted fears about an impending market collapse, based on such things as politics, the high jobless rate or the high valuations of many tech stocks. It asserted that major market tops are rarely preceded by bad news or obvious warnings of trouble ahead, but rather "typically occur in an atmosphere of good news and investor euphoria, with no warnings other than those found in the flows of money into and out of stocks."

"The preponderance of the evidence based on the law of supply and demand continues to favor higher prices in the months ahead."

This Baltimore jury's verdict is a huge boon for those who believe in the importance of copyright protection, and I, for one, applaud it very warmly.  Top of page

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