The High Court has ruled that the end users of an online news-monitoring service needed a web end-user licence from the Newspaper Licensing Agency Ltd, as without one they were infringing newspaper publishers' copyright. (The Newspaper Licensing Agency Ltd and others v Meltwater Holding BV and others  EWHC 3099 (Ch), 26 November 2010.) (Free access.)
The High Court has ruled that the end users of Meltwater News, an online news-monitoring service, needed a web end-user licence from the Newspaper Licensing Agency Ltd (NLA), as without one they were infringing newspaper publishers' copyright. Proudman J rejected the defendants' argument that they were covered by the web database licence between Meltwater, who provided the online service, and NLA, because the end-users made a copy of Meltwater News on their computers when they received it. She held that the some of the headlines from the articles and many of the extracts from the text which were included in Meltwater News were copyright works, following the ECJ's decision in Infopaq International A/S v Danske Dagblades Forening (Case C‑5/08) 16 July 2009. She rejected the defendants' arguments that their use fell within the temporary copy or fair dealing exceptions under the Copyright, Designs and Patents Act 1988. Proudman J's decision confirms that it is possible for copyright to subsist in a newspaper headline, following the ECJ's ruling in Infopaq. Her interpretation of the ECJ's judgment and whether it has changed the English test of quality, when determining whether a substantial part of a work has been copied, will be helpful in future cases. Aside from the key issue of substantiality, Proudman J's judgment will be of general interest to those dealing with the potential infringement of copyright over the internet. (The Newspaper Licensing Agency Ltd and others v Meltwater Holding BV and others  EWHC 3099 (Ch), 26 November 2010.)
NOTE: On 27 July 2011 this judgment was upheld by the Court of Appeal (see Legal update, Court of Appeal upholds ruling that end-users of online news service need NLA licence (www.practicallaw.com/0-507-0610)). On 14 February 2012, the Copyright Tribunal gave an interim on the terms on which online newspaper websites can be used by press cutting agencies and web news aggregators (see Legal update, Copyright Tribunal interim decision in Meltwater v NLA dispute (www.practicallaw.com/3-518-0527)). (See details (www.practicallaw.com/5-383-5104) of PLC IPIT & Communications' policy on annotating case reports.) On 17 April 2013, the Supreme Court decided to refer to the ECJ the question of whether internet browsing is copyright infringement (see Legal update, Supreme Court asks ECJ whether internet browsing is copyright infringement (www.practicallaw.com/4-525-8511)).Close speedread
Copyright subsists in an original literary work under section 1 of the Copyright, Designs and Patents Act 1988 (CDPA).
Copyright in a work is infringed if a person does an act restricted by copyright, which includes:
Copying a work without the consent of the copyright owner (section 17, CDPA).
Issuing copies of a work to the public (section 18, CDPA).
Possessing in the course of business or dealing with an infringing copy of a work, knowing or having reason to believe it is an infringing copy (section 23, CDPA).
Copying includes the storage of the work in any medium by electronic means (section 17(2), CDPA), and the infringement can be in respect of the whole or a substantial part of the work (section 16(3), CDPA).
Section 28A (which reflects Article 5.1 of the Copyright Directive (2001/29/EC)) provides that copyright in a literary work is not infringed by the making of a temporary copy which is transient or incidental, which is an integral and essential part of a technological process and the sole purpose of which is to enable:
"(a) a transmission of the work in a network between third parties by an intermediary; or
(b) a lawful use of the work;
and which has no independent economic significance".
Fair dealing with a work for the purposes of criticism or review, of that or another work (section 30(1)), or the purpose of reporting current events (section 30(2)), is a defence to infringement provided that it is accompanied by sufficient acknowledgement.
Article 2(a) of the Copyright Directive provides that member states shall provide for the "exclusive right to authorise or prohibit direct or indirect, temporary or permanent reproduction by any means and in any form, in whole or in part" of relevant works.
The Newspaper Licensing Agency Limited (NLA), the claimant, managed the intellectual property rights of its members by licensing, and collecting the licensing fees for making copies of newspaper content. The other claimants were publishers of national newspapers and shareholders of NLA (referred to collectively as the Publishers).
NLA had a number of licensing schemes, including two created in response to the increasing number of online media-monitoring services:
A web database licence (WDL), to license media-monitoring organisations, which began in September 2009.
A web end-user licence (WEUL), to license those who receive and use such services, which began in January 2010.
The defendants, Meltwater, provided an online commercial media-monitoring service called Meltwater News to business customers. (The first defendant was the Dutch parent company and the second defendant its UK subsidiary.)
Meltwater monitored a wide range of websites, including those of the Publishers and other members of NLA, using so-called "spider" programs to "scrape" or "read" the content. Following the selection by its customers of certain search terms, it either e-mailed Meltwater News to them or gave them the facility to access it on Meltwater's website.
Meltwater News contained the following three items:
A hyperlink to each relevant article, which was a citation of the headline from the article. A click on the hyperlink took the customer through to the article as it appeared on the pPublisher's website.
The opening words of the article after the headline (referred to as the "opening text").
An extract from the article showing the context in which the search term appeared. This copied the search term and some words immediately preceding and following it. (Together the headline, opening text and the extract were referred to as the "text extract".)
Public Relations Consultants Association Ltd (PRCA), the third defendant, was an incorporated professional association which represented the interests of its members, who were UK public-relations providers using the Meltwater News service.
Meltwater was offered a WDL by NLA to carry out its monitoring activities. It initially declined to do so and referred the matter to the Copyright Tribunal, challenging a number of aspects of the WDL as unreasonable. It subsequently agreed to enter into a WDL for £10,000, although still claimed it did not need one.
NLA brought copyright infringement proceedings against Meltwater and PRCA, although they were subsequently stayed against Meltwater when it took out the WDL.
The key issue in the proceedings was whether PRCA and its members (referred to collectively as the "End Users") required a licence (the WEUL) from NLA to receive and use Meltwater News. NLA argued that without such a licence the End Users were infringing copyright in the Publishers' headlines, articles or databases:
By receiving and reading Meltwater News, whether by e-mail or by accessing it via Meltwater's website, the End User was making a copy of it, and the copyright material contained in it, under section 17 of the CDPA. The End User was also in possession of an infringing copy in the course of business under section 23.
By clicking on a hyperlink to an article, the End User made a copy of the article (section 17) and was in possession of an infringing copy (section 23).
By forwarding Meltwater News or its contents to clients, an End User issued copies of the work to the public under section 18.
Proudman J held that without a licence from NLA, the End Users were infringing the Publishers' copyright in receiving and using Meltwater News.
The following is a summary of her judgment.
PRCA argued that once Meltwater had a licence with NLA, it was a derogation from grant to require an End User to take a licence as well. Alternatively, once Meltwater was licensed, it must be licensed to provide services, which meant that its customers must be entitled to receive them.
Proudman J rejected both these arguments because the defendants had admitted that End Users made a copy of Meltwater News on their computers. A licence to provide a service might import an implied licence to receive it, but it could not import an implied licence to make further copies of licensed material.
Proudman J found that some of the headlines to the Publishers' articles were independent literary works and those that were not formed part of the articles to which they related, which were also capable of being literary works.
She explained that since the ECJ decision in Infopaq International A/S v Danske Dagblades Forening (Case C‑5/08) 16 July 2009 (see Legal update, ECJ considers whether reproduction of extracts from newspaper articles infringed copyright (www.practicallaw.com/3-386-7049)) no distinction should be made between the part and the whole, provided that the part contained "elements which [were] the expression of the intellectual creation of the author". There was no reference in Article 2 of the Copyright Directive to "substantial part"; the ECJ had made it clear that originality rather than substantiality was the test to be applied to the part extracted.
Consequently, she rejected PRCA's argument that a headline was part of the newspaper article and formed a single work with the article. She found that the evidence showed that the headlines involved considerable skill in devising and were specifically designed to entice by informing the reader of the content of the article in an entertaining manner.
In considering whether the text extracts constituted a substantial part of the articles under section 16(3) of the CDPA, Proudman J said that the test of quality had been restated by the Infopaq decision (see above), but not significantly altered for the purpose of this case. The effect of Infopaq was that even a very small part of an original article might be protected by copyright, if it showed the stamp of individuality reflective of the creation of the author of the article. Whether it did so was a question of fact and degree in each case.
In this case, she found that many of the text extracts, even excluding the headlines, did contain elements which were the expression of the intellectual creation of the author of the article as a whole. In most cases the text extracts (particularly the headline and the opening text) were not merely isolated words or clauses which in themselves conveyed no meaning; they provided the tone of the article and generally had the special function of drawing the reader into the work as a whole.
Proudman J concluded that the End Users did not need a licence to avoid infringement of the Publishers' websites as databases (assuming they met the definition of a database within section 3 of the CDPA).
The alleged acts of infringement related to the contents of the articles and not the arrangement or structure of the website as a database; protection of a database was restricted to its structure and arrangement.
Proudman J said that when an End User received an e-mail containing Meltwater News, a copy was made on the End User's computer and remained there until deleted. Similarly, when the End User viewed Meltwater News via Meltwater's website on screen, a copy was made on that computer. Consequently, the End User made copies of the headline and the text extract in such situations and there was prima facie infringement.
The judge said that when an End User clicked on a hyperlink, a copy of the article on the Publisher's website was made on the End User's computer and this was more likely than not to infringe copyright. She commented that PRCA had sought to argue that this was covered by an implied licence, but this argument had not been presented clearly enough.
Finally, Proudman J said that there was also infringement under section 18 of the CDPA (issuing a copy to the public) when an End User used the share function to forward a hyperlink.
Proudman J held that section 28A of the CDPA did not enable the End Users to make copies of the works with impunity and referred to the five requirements set out by the ECJ in Infopaq as to when the exception could apply.
She explained that the exception could not have been intended to legitimise all copies made in the course of browsing, since otherwise users would be permitted to watch pirated films and listen to pirated music. The kind of circumstance where the defence might be available was where the aim of the copying was to enable efficient transmission in a network between third parties by an intermediary, typically an internet service provider.
Proudman J held that the End Users' activities did not fall within either the fair dealing exception for the purpose of criticism or review (section 30(1), CDPA), or for reporting current events (section 30(2), CDPA).
The End User did not apply his critical faculties at all to the work; the purpose of Meltwater News was merely to enable him to decide whether he wanted to see the content of the articles. There was no reporting of current events as Meltwater News was not intended for public consumption.
The judge said that even if she was wrong about these exceptions, the End Users' use of the Publishers' copyright did not constitute fair dealing. If NLA was correct and they had no implied licence to access the Publishers' websites directly, they were being encouraged to do something, via the Meltwater service, they ought not to be doing; it was hard to see how that was fair dealing. Alternatively, it they were permitted to access the Publishers' websites directly, then the court had to consider the scale of the use of the Publishers' works and the fact that the text extracts contained direct quotations from the works themselves.
Proudman J held that even if the fair dealing exceptions did apply, Meltwater had failed for technical reasons to identify the author, which was an absolute requirement.
Newspaper publishers and NLA will welcome this decision in what Proudman J described as a "very bitter" dispute between the parties. It confirms, with clarity, that the End Users do have to take out a licence with NLA, as well as Meltwater. It is now a matter for the Copyright Tribunal as to whether the terms of these licences are reasonable.
Proudman J's decision confirms that it is possible for copyright to subsist in a newspaper headline following the ECJ's ruling in Infopaq. That case was not directly concerned with headlines, but with short extracts (11 words) from newspaper articles. Her interpretation of the ECJ's judgment and whether it has changed the English test of quality when determining whether a substantial part of a work has been copied will be helpful in future cases. In her view the test has been re-stated by looking at whether the extract amounts to the expression of the author's intellectual creation, but not significantly altered (at least when applied to the facts of this case). However, she did comment that many questions remained unanswered by the ECJ and the full implications of its decision have yet to be worked out.
Aside from the key issue of substantiality, Proudman J's judgment will be of general interest to those dealing with the potential infringement of copyright over the internet. For example, it shows that the exception for temporary copying in section 28A of the CDPA and Article 5.1 of the Copyright Directive is to be narrrowly interpreted. It also suggests that when clicking on a hyperlink to an article, a copy of that article is made on the end user's computer, which amounts to infringement, although Proudman J was not absolutely definite about this.
The Newspaper Licensing Agency Ltd and others v Meltwater Holding BV and others  EWHC 3099 (Ch), 26 November 2010 (Proudman J; Robert Howe QC and Edmund Cullen (instructed by Berwin Leighton Paisner LLP) for the claimants and Michael Silverleaf QC and Andrew Lykiardopoulos (instructed by Baker & McKenzie LLP) for the third defendant).