• by Wendy Davis  @wendyndavis, January 27, 2009

In a case closely watched by online publishers, The New York Times Co. agreed to settle a lawsuit by GateHouse Media by removing headlines and first sentences of GateHouse articles from Boston.com.

A preliminary version of the settlement, filed with the court Sunday on the eve of trial, also provides that Boston.com will respect GateHouse's technological measures designed to stop the "copying of any original content." The three-page preliminary settlement between Boston.com and GateHouse provides that Boston.com can still link to GateHouse stories.

Neither side is paying monetary damages, but the settlement is viewed as more favorable to GateHouse than the Times. "In my mind, this is GateHouse getting everything it wants," said David Ardia, director of the Citizen Media Law Project.

He added that the resolution could affect a broad swath of online media companies that link to others' articles. "Media properties are going to ask: 'How did GateHouse and the New York Times work it out?'" Ardia said.

The settlement agreement did not specify what technological measures GateHouse will employ, but by Monday afternoon, GateHouse was blocking traffic from IP addresses associated with The Boston Globe, which runs Boston.com.

Some observers are questioning whether GateHouse's objections made business sense, given that Boston.com was sending traffic to GateHouse sites. "Congratulations, GateHouse, you won. Now, no one's going to know you exist," said cyberlaw expert Eric Goldman, director of the High Tech Law Institute at Santa Clara University.

The dispute between GateHouse and Boston.com began brewing late last year, when Boston.com launched a "hyperlocal" site for the town of Newton--the first of a series of planned neighborhood portals. The site included headlines and first sentences of articles from GateHouse, a Fairport, N.Y.-based company that publishes 125 local news sites in Massachusetts.

Other online publishers, ranging from the left-wing Drudge Retort (an alternative to the conservative Drudge Report) to The Huffington Post to Google News, have gotten into disputes with media companies by reprinting excerpts of their articles. But while flare-ups have occasionally drawn media attention or landed in court, there's little case law addressing whether snippets infringe on copyright.

A lawsuit by Agence France Presse against Google News for aggregating headlines and posting excerpts of news articles settled before trial. The Associated Press also complained about Google's use of excerpts, but the two companies struck a licensing agreement.

The New York Times Co. has until March 1 to purge previous headlines and first sentences of GateHouse articles from Boston.com. The companies are expected to reach a more detailed settlement agreement by Friday.