Energy Intelligence Group, the publisher of 15 newsletters for the oil and gas industry, has sued more than a dozen energy companies and investment houses in Houston for violating federal copyright law by buying a handful of subscriptions of its pricey publications and passing them around the office to non-subscribers. With settlements reached in nearly all the cases, one is left.
That case is scheduled to go to trial Monday in U.S. District Court in Houston. The publishing company, which is based in New York City and London, accuses Kayne Anderson Capital Advisors of sharing its five subscriptions of "Oil Daily" with others in the investment firm who did not have their own subscriptions.
Like several other cases, the publishing company was inadvertently tipped off by an employee at Kayne Anderson who revealed passing along copies to others who did not have their own subscriptions.
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Kayne Anderson says that it did not violate copyright laws and disputes Energy Intelligence Group's' claims of financial loss, according to court filing. The firm manages $24.5 billion in assets and its specialties include investing in upstream oil and gas companies and energy infrastructure.
"This is a matter that should have been resolved three years ago but hasn't because of their unrealistic and unreasonable position," said Kayne Anderson spokesman Paul Blank.
Energy Intelligence Group alleges the forwarding copies of its publications distributed via email violates copyright laws. The practice is a vexing problem for publications that don't receive advertisements and rely strictly on subscriber sale
When a single copy is passed around —something easy to do with email —the publication loses that revenue.
"It kind of eats your lunch and takes your milk and bread off the dinner table," said John Hitchcock, managing director and vice president of the Energy Intelligence Group.
The company sells individual articles of "Oil Daily" for $9 and individual issues for $95.
The Energy Intelligence Group uncovered the alleged unauthorized distribution of copies when it received an email from an Kayne Anderson employee who is not on the subscriber list complaining the company did not receive its Feb. 5, 2014 issue of "Oil Daily," according to court documents. Soon after, the employee sent another email saying she received a copy from a co-worker so there was no need to send another.
The publishing company called to follow-up and discovered that one subscription of "Oil Daily" was routinely distributed to 20 or more individuals in the office, according to court documents.
The publishing company settled confidentially with other companies, including Enterprise Partners, Deutsche Bank Securities and Cheniere Energy.
Hitchcock said the settlements typically include an agreement to buy more subscriptions. "We manage to get people to see this is fair and to actually pay for it," he said.
Kayne Anderson began subscribing to "Oil Daily" in 2004, paying for one executive to receive the newsletter. In 2013, the company bought a multi-user license so five employees received the daily bulletin, according to court records.
But Energy Intelligence Group alleged that Kayne Anderson distributed unauthorized copies and sued Kayne for copyright infringement in 2014.
In May, Kayne challenged Energy Intelligence Group's underlying copyright by arguing that the publishing company's copyright registration certificates are invalid because the publishing company used the wrong copyright forms. Kayne asked the court to move the dispute to the federal Copyright office.
Energy Intelligence is seeking unspecified damages, including all profits Kayne Anderson made from using the information it gained by reading "Oil Daily."