A recent High Court decision decided that an App, fanatix, which enabled users to use screen capture technology to make clips of sporting broadcasts of up to 8 seconds long and upload them for sharing was an infringement of the reproduction and making available rights of the copyright owner in the TV broadcasts and films of the sporting fixtures. The defence of fair dealing for the purposes of reporting current events did not apply because the court found that the predominant purpose of the App was to enable the sharing of clips with other users, not the reporting of current events. This primary purpose did not change even when the Defendants took specific steps to meet the copyright owners concerns. (England and Wales Cricket Board & Another v Tixdaq Ltd & Anor [2016] EWHC 575 (Ch), Arnold J, 18 March 2016).

Business Impact

This decision will hearten broadcasters and those licensing rights to sports matches as it recognises the intrinsic value of clips of broadcasts and films, and the commercial drivers behind licensing only clips. Equally, it will be disappointing for those with Apps which enable clip sharing, where caution will now be needed, if the clips include the copyright works of others, and the app provider engages in any sort of editing function.

For those dealing with copyright more generally in business, the decision is useful in several respects.

  • It contains a review of the hierarchy of applicable treaties and laws in the area of copyright, and stresses the purposive approach to interpretation of Directives required by European law, casting doubt on the validity of older UK authorities on fair dealing which may now not be consistent with the requirements imposed by EU law.
  • It looks at how to approach the test of substantiality for broadcasts and films (signal copyrights) where originality of the work is not required to qualify for copyright protection.
  • It gives a detailed consideration of the approach to and application of the fair dealing defence, particularly on what amounts to the reporting of current events, and acknowledging that "citizen journalism" may fall within the provision.  It recognises that this defence is not limited to reporting on news, but includes sports fixtures and other events. Whilst the case emphases the need to identify the primary purpose for the use of the copyright work to apply the fair dealing test, it also raises the question over whether the fair dealing test in section 30(2) CDPA is the same as the three step test found under the Berne Convention.

Background

The Claimants were the ECB and Sky as the owners of the copyright in the television broadcasts of cricket matches, and films made during the course of recording the broadcast footage, including in action replays. There was no dispute that the copyright subsisted and was valid, nor that the Claimants were the owners of the copyrights. It was noted by the Judge that the Claimants were relying on broadcasts and films (both signal rights or entrepreneurial rights protecting the investment of the broadcaster/film producer), rather than relying upon any dramatic work (a content right protecting the intellectual creation of the author).

The Defendants were the owners and operators of the App which enabled both the Defendants' employees and members of the public to use screen capture technology to record and upload clips of broadcasts of sporting events to the App. The maximum length was 8 seconds. The person uploading was encouraged to add commentary to the clips and, in later versions of the App, was asked to attribute the clip to a broadcaster and particular event. The Defendants also added their own "fanatix" logo to the clips. The Defendants' employees also selected certain clips for prominence in sections of the App, such as "latest" or "news". Separately the Defendants also had a website and social media sites which also carried some of the links from the App. The App enabled a user to search for clips, to follow other users and matched clips against a user's favourite teams. The App enabled clips to be posted as soon as the clip had been created, so enabled clips to be viewed on a near­live basis.

The first version of the App which enabled the uploading of clips was launched in January 2015, but came to the Claimants' attention in June 2015 when the App had clips of the England International Test Matches against New Zealand. From mid­2015 onwards, the App went through several releases where additional requirements/functionality were added, most of which sought to address concerns about use raised by the Claimants. However, the Claimants remained of the view that the App was an infringement, so issued proceedings. The Defendants in turn sought a declaration that the latest version of the App was not an infringement.

The Applicable Law and its interpretation

Mr Justice Arnold's decision walks through the hierarchy of international law which governs copyright, from the Berne Convention, through TRIPS, and the European Directives down to the Copyright Designs and Patents Act 1988 ("CDPA") and the E­Commerce Regulations 2002/2013. He stressed the established need to interpret domestic legislation in line with European directives, and the need to interpret European directives in a manner consistent with applicable international law. He concluded that, when dealing with copyright, you must interpret both the domestic and European legislation as far as possible in accordance with the purpose of the international agreements where the EU is a party.

Further, particularly in relation to the interpretation of the exception to copyright found in section 30(2) (fair dealing for the purpose of reporting current events), Mr Justice Arnold said that the correct interpretation was whether the extent of the use was justified by the informatory purpose, as referenced in Article 5(3)(c) of the Information Society Directive.

The Decision

What is the relevant work?

It was held that the broadcast of each two­hour session of cricket during the day could amount to a work because they were each discrete sections of play broken by breaks for lunch and tea, rather than a full day of play. This was the case, even though it was a continuous broadcast running throughout the day. Although there was an argument that the film works may be shorter pieces, especially where editing had taken place, the Judge preferred to continue on the basis that the works for the broadcast and films were the same.

What is the test to determine a substantial part of a film or broadcast?

The usual test of substantiality for reproduction of literary and artistic works (content rights) set out by the CJEU in Infopaq I did not apply, as it was directed at the creativity of the author. Here the rights asserted were signal rights, and so did not have the quality of creativity to be tested. The Claimants argued that the test should nevertheless be qualitative and quantitative but the Defendants, not surprisingly, put more stress on the quantitative element in the test.

Mr Justice Arnold identified that the rationale for protecting copyright in broadcasts and first fixation of films was to protect the investment of the broadcaster or producer in making those copyright works. The test for whether a substantial part had been taken was therefore both qualitative and quantitative but must have regard to the extent to which the reproduction exploited the investment made by the broadcaster/producer. The judge recognised that in sports coverage key parts of the event would be more interesting to viewers than others, such as the goals in football or the wickets in cricket. This was borne out by the market for highlights programmes, and reflected in the broadcasters/producers investing in technology to produce replays and enable editing of the key events, for example, multiple camera angles, slow motion, close ups etc.

Whilst 8 second clips were not quantitatively a large proportion of the broadcast, it was clear that qualitatively, the clips uploaded tended to be the key parts of the match. They also tended to include the replay parts of the films in the broadcasts. As such, those clips were of value and did exploit the Claimant's investment in producing the broadcast/film, and so reproduced a substantial part of the copyright works.

Did the use fall under the exception to copyright for fair dealing for the purpose of reporting current events (Section 30(2) CDPA)

Was the use for the purpose of reporting current events?

Whether use of a copyright work was fair dealing for the purpose of reporting current events is to be judged objectively. There was no doubt that the clips of the sports action qualified as current events, but any clips of other parts of the broadcast such as analysis or interviews would not necessarily qualify as current events.

However, Mr Justice Arnold found it difficult to decide whether the use made of the clips was for the purpose of reporting current events. The Claimants argued that the purpose of the App was to enable sporting highlights clips to be shared, which was purely commercial and therefore did not amount to reporting. The Judge held that reporting under section 30(2) was not limited to traditional media but could include "citizen journalism". However, he went on to look at the detail of many presentations to investors made by the Defendants in which they had described the App and their business model in detail. He concluded that they demonstrated that the clips were primarily reproduced and communicated to the public for the purposes of sharing the clips with other users. A secondary purpose was to facilitate debate about sporting events. He found that the users added comments to the clips, rather than made reports which were illustrated by the clips, so the emphasis was on the sharing of the clips for "their intrinsic interest and value".

The Defendants' objective in using the clips was purely commercial rather than genuinely informatory. On that basis, the Defendants were not using the clips for reporting current events and therefore infringed the Claimant's copyright. On the basis that the copyright was infringed by use on the App, the Judge also held that similar use on the website and social media sites would be an infringement as a communication to the public.

Other issues

Although the finding that use of the clips was not for the purpose of reporting current events effectively ended the matter, the Judge continued to give his view on the other points which had been argued before him:

The sufficient acknowledgement requirement under the fair dealing exception

The Judge acknowledged that the capture by the users of the Sky logo in making the clips would have been sufficient acknowledgement to fall under section 30(2). He also went on to say that where there was no logo, but it was clear that the clip was from the same source, then it was in principle acceptable to say that a reasonable user would realise that the clips were from the same source and there would be sufficient acknowledgement. Equally, the Judge acknowledged that the fact that a few clips may not have sufficient acknowledgement would not be a reason to injunct the whole service, if it had fallen under the exception in section 30(2).

Interpretation of the fair dealing exception: the three step test and status of domestic authorities

Mr Justice Arnold stated that the correct interpretation of the fair dealing defence in section 30(2) CDPA was whether the extent of the use was justified by the informatory purpose, as referenced in Article 5(3)(c) of the Information Society Directive.

However, the Judge also acknowledged that Article 5(5) of the Information Society Directive (which contains the three step test found in Article 9(2) of the Berne Convention) is relevant. The parties agreed that Article 5(5) required the three step test to be applied even though the UK had not transposed the three step test into its national legislation, but that this only required consideration of the same factors as fair dealing. The Judge accepted this, noting that there had been no real judicial consideration of the three step test in the English courts.

Having noted the multiple recent influences on the interpretation of the fair dealing defence from EU legislation and jurisprudence, Mr Justice Arnold cautioned against putting too much emphasis on the authorities in the UK which pre­dated the Information Society Directive, and although the Judge relied on the Ashdown case for the test for fair dealing, he added a gloss to the third factor.

The Fair Dealing test

The relevant factors to determine fair dealing are:

  • Is the alleged fair dealing commercially competing with the copyright owner's exploitation of its work?
  • Has the work already been published or otherwise exposed to the public?
  • What is the amount and importance of the work that has been taken? And Is the extent of the use justified by the informatory purpose (added by Arnold J)

In applying the test to the facts in the case, Mr Justice Arnold concluded that the use made did not, in any event, amount to fair dealing. On factor one, the use made was commercially damaging to the Claimants and conflicted with normal exploitation of the copyright works. In doing so, the Judge rejected an argument by the Defendants that the use did not damage the Claimant as they offered no stand alone clips service themselves. This did not matter, as such a service was within the scope of "normal use". There was no issue on factor two as the works were published. In relation to factor three, the Judge looked at whether the extent of the use was justified by the informatory purpose. He concluded that it did not: although actual usage might have been small for the initial versions, the App was designed to be used by large numbers and as such, was not justified by the informatory purpose.

Later versions of the App

Mr Justice Arnold went on to consider whether any of the refinements which the Defendants had introduced to the App over time changed the analysis, and whether the latest version could be said to be non infringing. However, none of these changes were found to have affected the primary purpose of the use, so despite the changes made, the App continued to be an infringement. This was the case even with the later versions which had an algorithm limiting the rate at which each individual user could view clips, and an overall limit. The Judge found that whilst this was relevant to the issue of fair dealing, and did reduce the amount the Defendants were impinging on the Claimants' rights, even the limited use would not amount to fair dealing.

Mere conduit and hosting

The Defendants put forward arguments based on Articles 12 and 14 of the E­Commerce Directive to cover the circumstances where the general use was within the fair dealing exception, but the occasional clip uploaded by users fell outside the exception as it failed to give sufficient acknowledgement. The Judge's provisional view was that the Defendants would only be able to claim that they were mere conduits for those clips where they had not engaged in an editorial review, but the determination did not help the Defendants who were outside the fair dealing exception in any event.