Meltwater fails to wash NLA away

I'm glad I'm not the Newspaper Licensing Agency. Collecting societies are rarely loved, but the NLA must be the least loved (or most unloved) of the lot. It exists because, after the Copyright, Designs and Patents Act 1988, it became easier to set up a body to licence the copying of press cuttings, which is what was was hurting the newspaper proprietors at the time. Now the way in which the products of the newspaper proprietors are consumed has changed again, as have the activities of press cuttings agencies (for which there's a new generic name which escapes me for now): they distribute links to the stories in the online editions of the papers, and PR companies pass them on to their clients.

The question in The Newspaper Licensing Agency Ltd and Ors v Meltwater Holding BV and Ors [2010] EWHC 3099 (Ch) (26 November 2010) was whether subscribers to a news aggregation service needed a licence from the NLA (which had enterprisingly devised a new form of licence to cover precisely this). Does merely following a link require the copyright owner's consent? And, in addition, do the end users need permission to receive the compilation of news items made by Meltwater (and, more particularly, what it contains, which includes headlines), and what if, being a PR company, the end user passes Meltwater News or its contents on to its clients?

The matter is going to the Copyright Tribunal, which has jurisdiction over licensing schemes, anyway, but it seems that there is enough bad blood between the parties (not including Meltwater, who undertook to pay for a licence anyway) to fuel a High Court case too.

The judge had to consider whether the activities of the end users are comprised in the grant of the licence to Meltwater. Interesting: this raises questions about non-derogation from grant, a useful fall-back when things get complicated (as in BL v Armstrong), exhaustion, and whether there is in fact only a single copy which is treated like a press cutting used to be in ancient times. Once Meltwater is licensed to provide services, its clients must be licensed to receive them - so the PRCA argued. But, given that when something is received in electronic form and passed on to clients there are unavoidably going to be more copies made - incidental and transient ones, true, but copies nonetheless - the end users couldn't rely on this analysis.

What does copyright protect here? The judge had to consider whether the headlines that were reproduced could be literary works in their own right. Were they, as the PRCA contended, integral with the articles themselves, in which case perhaps they would not be substantial parts of the works, or did they have an existence of their own? They did in Shetland Times Limited v Wills [1997] FSR 604, but that was a Scots case and only at an interim stage. Now, however, there's the Court of Justice decision in Case C-5/08, Infopaq, which at least lends weight to the argument that headlines are literary works and capable of being protected by copyright.

What about the websites' terms and conditions? There's precious little law on these, so this case is interesting for that alone. Generally, online newspapers prohibit access to their websites for commercial purposes - which involves, as the judge pointed out, an "element of circularity", because you have to access the site to read the terms and conditions. Not that anyone ever does anyway, but if everyone knows they say that, perhaps there's no need to read them. The judge was not impressed by the lack of authority and the fact that she was being asked to adopt a "broad brush approach" to this part of the case. The arguments presented contained inconsistencies, like that element of circularity, and in the end she moved on from the terms and conditions point leaving it hanging a bit.

There was however clearly prima facie (albeit technical) infringement of copyright. Did any permitted acts assist the defendants? Temporary copying? No, not here, because to be "enjoyed" by the end users something more than temporary copies were needed. Fair dealing for criticism or review or reporting current events? That was NLA's nemesis in earlier litigation ... However widely she interpreted "criticism and review", the judge declared herself unable to bring the defendants' activities under that head. "Reporting current events" did not appeal to her as an appropriate rubric to cover showing clients what coverage they had received in the media - it was not reporting to the public. In any event she seems underwelmed by the evidence adduced to support a defence under this head, as she had not been shown how the material was actually used.

Whatever was happening, it probably didn't constitute fair dealing anyway, the overriding test of which reporting current events and criticism and review are specific types. The scale of the use was too great, and the fact that end users could look at the headline and some text before deciding whether to access the whole article on the paper's site meant that they were detracting from the normal exploitation of the copyright works, which Berne, TRIPS and the Information Society directive all say makes it not fair dealing.

Then there's the acknowledgement point. The only thing the defendants could put up on that was the argument that the link served the purpose, like a footnote - but that can't have sounded very convincing even to them, and it certainly didn't wash with the judge.

So now we wait for an appeal or the Copyright Tribunal. It's good to have these matters out in the open, but they serve more to highlight the desirability of looking carefully at the fair dealing exceptions, perhaps with a view to introducing a true fair use exception, which is exactly what the government is threatening.

Here are links to an interview on paidcontent:UK with the CEO of Meltwater and with the NLA plus a piece on computerworld.co.uk.