It’s going to take some time to think through the implications of the settlement (PDF link) announced today between the New York Times Co. and GateHouse Media, over the issue of NYT’s Boston.com site aggregating content from local sites belonging to GateHouse, but my first instinct is that it is almost unrelentingly bad. Why? Because while the settlement is not a legally-binding precedent — the one piece of what might be called good news — it still involves the New York Times voluntarily refraining from what many would argue is perfectly defensible behaviour. As Joshua Benton notes in his post here, that could well embolden other publications to launch similar cases, on the assumption that if the NYT caved then someone else might too.

The Times tries to argue that this settlement does nothing to change the way it approaches linking to or even quoting from external sources on its websites, but that clearly isn’t the case at all. It completely changes the way the paper does that, but only when the content involves a GateHouse website. The NYT claims that it will continue to link to and quote from external sources whenever it wants, but will no longer do so with GateHouse content (under the agreement it can continue to link, but can no longer aggregate content in an automated way, and has agreed not to quote from a GateHouse site).

This kind of dual status for linking and quoting is going to be virtually impossible to defend, I would argue. What possible rationale could the NYT create for taking one approach to GateHouse content and another to content from everywhere else? The only obvious reason is that one sued the company and the others haven’t. That’s an invitation to further court cases.

My biggest fear (and I don’t think I’m alone) is that every settlement like this one weakens the defences around the entire structure of the Web, in which linking and quoting — in some limited, representative way — is a fundamental principle. Not only that, but doing so is a right that is enshrined in the U.S. copyright principle of “fair use.” It’s true that there are all sorts of limits placed by the courts on that principle (although the simple fact that a site is run by a commercial entity is not a de facto exclusion from fair-use protection), but I would argue that it is still a vitally important principle, and one we shouldn’t be too quick to give up.

I recognize that the NYT has corporate responsibilities to consider, and that it probably didn’t want to engage in a protracted legal battle over this issue — particularly during tough economic times — but I think the agreement it has entered into is a major step backward for media and the Web.