“The Pulse News Reader” app, which Apple CEO Steve Jobs made a special mention of during his keynote speech at the Worldwide Developers Conference (WWDC) on Monday, has been pulled after copyright infringement complaint from The New York Times.

According to All Things D’s report, the iPhone’s fancy RSS reader, created by two Stanford graduate students and launched at the App Store last month, was completely removed from the store Tuesday night.

The confusion about the “Pulse News Reader” app began when, in a June 3 note written to Pulse developers via Apple, The NYT’ senior counsel Richard Samson pointed out that Pulse “makes commercial use of the NYTimes.com and Boston.com RSS feeds, in violation of their terms of use.” 

Further noting that the NYT feed was pre-loaded on the Pulse app, Samson added that the NYT content happened to be a prominent feature of the screen shots that are being used to sell the app on iTunes.

The key issue is that while the Times Company’s RSS feeds are free; the Pulse app is selling the framed and repurposed NYT content on the App Store for $3.99 – thereby implying that with nearly 15,000 Pulse copies sold thus far, developers Akshay Kothari and Ankit Gupta have pocketed almost $40,000 in revenue, after deducting Apple’s 30 percent share.