The Court of Appeal has dismissed the Public Relations Consultants Association (PRCA)'s appeal against the decision of Mrs Justice Proudman in the High Court and the PRCA's claims that its use of a media monitoring organisation service (Meltwater News) should not require separate licensing from the newspaper copyright collecting society, the Newspaper Licensing Agency (NLA) (NLA v Meltwater and PRCA [2011] EWCA Civ 890).  In doing so, the Court of Appeal has confirmed Proudman J's decision in almost every respect.

The judgment centred on the legitimacy or otherwise of the receipt and use by an "end-user" (represented by the PRCA) of the services of media monitoring organisations (MMOs) like Meltwater.  Meltwater sends links to online newspaper material along with extracts from the articles, often using the headlines as the text of the hyperlinks. The decision outlines the copyright position with respect to both end-user and the generator of the MMO service, finding that both activities have the potential to infringe copyright if done without licence from the rights holders.

Business impact:

  • The Court of Appeal has confirmed that there can be copyright in headlines and in extracts from newspaper articles.
  • There is a risk that newspaper headlines used as the text of links will infringe copyright as may the article extracts also provided as part of a media monitoring service.
  • Accessing such links, without appropriate licences in place, can also infringe copyright. Even receiving the media monitoring service's email may infringe copyright because of the copies made on the recipient's computer.
  • Those who wish to receive media monitoring services will need to take a separate licence from the NLA, as well as paying fees to an MMO. The Copyright Tribunal, Meltwater's application to which was stayed pending the outcome of the Court proceedings, will now have to consider what are fair and reasonable terms for the MMO and the end-user licences.
  • The Court of Appeal's findings in relation to the potential for headlines to qualify for literary copyright could be extended more generally to titles of books or other references longer individual copyright works.
  • The finding that the receipt of a MMO email, as well as opening the links provided in it, is potentially an infringing act may cause concern, since it is premised on the fact that a copy of the material is de facto made on the recipient's computer, effectively without the consent of the recipient, and yet the transient copying defences do not apply (s 28A CDPA, as introduced by the Information Society Directive (Art 5)) (although it may be arguable that they have consented by signing up to the service in the first place). This is a boon for copyright owners who can then choose where and when to enforce their rights in respect of what is now officially infringing activity.

Background

For details, background to the case and Mrs Justice Proudman's findings at first instance - see our IP newsflash of 30 November 2010  on the High Court decision.

The appeal was brought solely by the PRCA (who were disputing the need for a licence from the NLA for their "end-user" use of Meltwater's services) and not by  Meltwater, who had taken a licence in order to continue their business whilst the proceedings were being conducted, although still disputing the terms of such a licence under a separate action in the Copyright Tribunal stayed pending the outcome of these proceedings.

The Court of Appeal's conclusions

The appeal failed on all counts:

  • Copyright in a headline independently from the article itself: Proudman J had held that there could be copyright in headlines as literary works. The Court of Appeal confirmed her view that "newspaper headlines are capable of being original literary works" saying this was "plainly correct" and that her view that “some of the headlines are independent literary works” was "unassailable".

The Court of Appeal referred to the evidence that Proudman J had heard on the ingenuity and effort that went into the creation of headlines. She had accepted counsel for NLA's submission that it was not the completed work/headline as published that should be assessed for its copyright worth "but the process of creation and the identification of the skill and labour that has done into it which falls to be assessed." She found that some of the articles were independent literary works and that those that were not formed part of articles to which they related (which were literary works themselves).

The recent Australian case where a headline had been refused copyright (Fairfax Media v Reed (2010)) was considered, but the CA said that "even there the court recognised that a headline may enjoy copyright protection" i.e. there were situations where copyright could subsist.

  • Article-extracts, as used by Meltwater (with or without the headline) as substantial parts of the literary work that is the article from which it was/they were taken: Proudman J had followed the ECJ decision in Infopaq (C-5-08) which held that “a mere 11 word extract may now be sufficient in quantity provided it includes an expression of the intellectual creation of the author” and had rejected any suggestion that the 11 words themselves needed to have a particular artistic quality or be novel in themselves. She had held that Meltwater's extracts sent to their clients along with the links to the newspaper articles could infringe copyright. The Court of Appeal agreed, stating that it was "well established" that the test of substantiality was one of "quality" not "quantity" and that Infopaq had done nothing to change this, rather the ECJ had been referring to the "intellectual creation" in the context of the originality of the material and not its merit or novelty.

The Court of Appeal held that: "Each time Meltwater produces an edition of its news for a client, depending on the search term or agent, a large number of extracts are taken from a variety of publications, in some cases several from the same article. Given the principles to be applied, it seems to me to be inevitable that some of them will constitute a substantial part of the original so as, when copied by the client, prima facie, to amount to an infringement of copyright in the original literary work. What is in issue is not whether any particular extract is a substantial part of the original but whether the conduct of the business of Meltwater is such as, on a balance of probability, likely from time to time to cause its clients, prima facie, to infringe the copyright of the Publishers in the original work so as to justify the making of the declaration. The judge concluded that it was. I see no ground on which this court would be entitled to interfere with her conclusion."

The Court of Appeal considered the possibility of the extracts constituting substantial parts separate from the headlines. However, the court felt that the proper question was whether the relevant part of the Meltwater news service, comprising both the headline and the extracts was such as, when copied by the clients, prima facie to infringe the newspaper publishers' copyright in the original articles. The Court of Appeal took the view that the probability of that occurring on a regular basis and to a significant extent was "substantial". Accordingly the activities of clients of Meltwater in receiving and using the news service were sufficiently likely to constitute prima facie infringements of copyright to warrant the declaration Proudman J had made.

  • Defences: As Proudman J had found, so too did the Court of Appeal; none of the transient copying, fair dealing or database regulation extraction/utilisation defences applied.
  • Temporary copies – Section 28A of the Copyright Designs and Patents Act 1988 (CDPA), was inserted by the Copyright and Related Rights Regulation 2003 (SI 2003/2498), to give effect to Article 5 of the Information Society Directive 2001/29/EC, which enables browsings as well as acts of caching to take place, including those which enable transmission systems to function effectively and are by definition, created and deleted automatically and without human intervention. So said the ECJ in Infopaq. In that case the ECJ stipulated that a reliance on Article 5 as a defence required the following conditions to be fulfilled:
    • That the act is temporary
    • That it is transient or incidental
    • That it is an integral and essential part of a technological process
    • That the sole purpose of that process is to enable a transmission in a network between third parties by an intermediary or a lawful use of a work or protected subject-matter; and
    • The act has no independent economic significance.

The ECJ held that the "transient" copying exception would only apply "if the duration is limited to what is necessary for the proper completion of the technological process in question, it being understood that the process must be automated so that it deletes that act automatically without human intervention once its function of enabling the completion of such a process has come to an end."

Proudman J therefore concluded that the temporary copies exception is solely concerned with incidental and intermediate copyright so that any copy which is "consumption of the work" whether temporary of not requires the permission of the copyright holder" and that a person making a copy on his computer screen "will not have a defence under section 28A CDPA simply because he has been browsing. He must first show it was lawful for him to have made the copy. The copy is not part of a technological process; it is generated by his own volition."

"The whole point of the receipt and copying of Meltwater News is to enable the End User to receive and read it. Making a copy is not an essential and integral part of a technological process but the end which the process is designed to achieve." Storage of the copy and the duration of that storage are matters within the end-user's control. Further, "making the copy does have an independent economic significance as the copy is the very product for which the end-users are paying Meltwater."

Recital 33 of the Information Society Directive refers to the "exclusive right of reproduction" enjoyed by a rights holder being "subject to an exception to allow certain acts of temporary reproduction" which carry the conditions set out above (no independent economic significance etc), and refers to "browsing as well as caching" as an act that this exception should enable. However, the Court of Appeal commented that such enablement was only to the extent that they meet these conditions, and therefore section 28A could not afford the PRCA even a limited defence to claims of infringement in this context.

  • Fair dealing

Section 30 CDPA provides a defence of fair dealing where the work is being used for criticism or review, or for reporting current events, and, in either case, is accompanied by sufficient acknowledgement. None of these conditions applied to Meltwater and the PRCA members' use. Moreover the use was not "fair" as it was for commercial purposes and was encouraging end-users to infringe the newspaper publishers' copyright.  

  • Database Regulation defence

The PRCA argued at first instance that the provisions of the Database Directive 96/9/EC implemented in the UK via the Copyright and Rights in Databases Regulations 1997 (SI 3032/1997) which allow extraction and reutilization of insubstantial parts of the contents of a database as lawful uses of a database which has been made available to the public. Proudman J held that the "database defence" did not apply since the acts of infringement relied on were not to do with the structure and arrangement of a database but rather to do with the use of parts of particular articles. On appeal the PRCA instead argued that the restrictions on the individual newspaper sites purport to restrict such legitimate extraction and therefore should be void. The Court of Appeal dismissed this, saying that the invalidation would only apply "in so far as" any contractual provision precluded a person from extracting or re-utilising and in any event would only apply in relation to a "lawful user", which an unlicensed end-user would not be.

  • Double-licensing: The PRCA had argued that the end-user would not need a licence if Meltwater had a licence. The PRCA's case was that if Meltwater are licensed to send extracts, and the copies of which complaint is made are the inevitable consequence of doing so, therefore, by necessary implication, the act of receiving must be licensed. Counsel for the appellants suggested that sending and receipt are two sides of the same coin. Before Proudman J this argument was put on the twin legal bases of derogation from grant and/or exhaustion of rights, both of which she rejected. The Court of Appeal did not agree with the PRCA either: Meltwater's licence did not authorise end-users to make copies on their computers; end-users needed a licence.