In a decision of Mrs Justice Proudman on Friday, the NLA has succeeded in its claim that recipients of media monitoring services (such as that provided by Meltwater) need a licence from the NLA for such receipt and that receipt of, and access to, such news services would otherwise be an infringement of copyright (NLA v Meltwater [2010] EWHC 3099, 26 November 2010).

Summary

Meltwater provides a news service to its subscribers, which sends them the opening lines and other extracts from articles on newspaper websites along with a link to the full article (the text of which is the headline of the article) as triggered by specific search terms which the subscriber has pre-registered with Meltwater.

Proudman J held that

  • there could be copyright in headlines (cf the recent Australian case Fairfax v Reed);
  • the use of these headlines and extracts (following Infopaq (2010, ECJ)) could be infringing; and
  • accessing the articles via links could be copyright infringement and might breach the terms of the newspaper sites in some cases, although she expressed herself dissatisfied with the level of argument and evidence put before her on this issue.

None of the fair dealing exemptions applied nor did the temporary copying exemption.

Meltwater have permission to appeal.

Business impact

This is a significant decision and if followed on appeal, could mean that accessing any material on the web through a hyperlink may potentially be infringing. Certainly the use of headlines as links to newspaper articles should be avoided at least until the appeal is determined. But the decision could apply more widely to any copyright materials, since the judge appears to conclude that accessing a hyperlink creates sufficient copying to infringe the material accessed if done without express permission. In this case the terms of the websites forbade access via a media monitoring agency service or to commercial users. Where website terms and conditions do not make such stipulations there may be room for argument that hyperlink access does not unfairly exploit the rights of the copyright owner.

Unless this decision is overturned on appeal, subscribers to media monitoring services will need to take a licence from the NLA to use them or switch to the free monitoring services referred to in the judgement.

Background

The NLA is a collecting society which manages the rights of newspapers and provides licences for the copying and other uses of newspaper material (both digital and hard copy) so that each newspaper publisher does not have to conclude these licences themselves. Different papers have different arrangements. Some allow scanning of their material and others only copying of the hard copy. The NLA agrees licences of the publishers' copyright and collects the fees on behalf of its members. The NLA licenses press cuttings agencies whose business is the provision of copies of newspaper articles, as well as individual businesses for their own copying.

Meltwater is what is termed a media monitoring agency and provides a different service to a press cuttings agency, in that it does not send copies of articles to clients, rather it sends a link, often combined with the headline and an extract from the article. It uses "spider" programs to "scrape" the content of news websites. Meltwater customers select specific search terms and Meltwater then provides a monitoring report with details of every article that contains these terms within the search period (e.g. the last 7 days). These reports are emailed to the customer or accessible to them on the Meltwater site.

Meltwater's news feeds comprise:

  • A hyperlink to the article – usually in the form of the headline (clicking on which takes the reader to the article on the newspaper website)
  • The opening words of the article after the headline
  • A "hit extract" – an extract from the article showing the context in which the search words

In total the extracted text is not allowed to exceed 256 characters (not counting spaces).

Meltwater initially brought an action in the Copyright Tribunal to challenge the terms of the licence which the NLA requested it take (a "web database licence" WDL) and also the principle that its customers should be asked to take a licence in order to receive its service and to view the newspaper articles via its service. Such a licence is known as a "web end-user licence" (WEUL). The Tribunal refused to order that it should not entertain Meltwater's reference in relation to the existence and infringement of copyright within the material provided in their service. However, that the question of whether the end users required a licence was one which the Tribunal said required "careful thought" and there was a suggestion that the Tribunal might refer those questions to the High Court for determination but it was uncertain that it had jurisdiction so to do. NLA therefore brought the current proceedings separately in order to resolve these issues definitively. The Public Relations Consultants Association (PRCA) was also a defendant in this case, representing the interests of its members who use media monitoring services and are being asked to take a licence from the NLA to receive the Meltwater service.

However, these issues are now to be appealed by Meltwater, following the High Court's decision that their service was infringing copyright.

Proudman J commented that "It became obvious during the course of the evidence that the Publishers feel a strong grievance against Meltwater's perceived commercial exploitation of their websites". They feel that media monitoring agencies are making a profit on the back of their efforts without paying a fee.

The only issue before Proudman J was whether the end users infringe the publishers' copyright so as to require their own licences in the form of WEULs.

Acts restricted by copyright

Copyright exists in a literary work (s.1(1) Copyright Designs and Patents Act 1988 (CDPA)). Assessment of literary work does not require any assessment of literary quality – it must simply be original in its expression i.e. not copied from another author's work (rather than "original" in terms of thought process or inventiveness). There is a level of skill or labour required in the creation of the work but this need not be directed to the creation to the particular modes of expression and can be deployed in the selection or choice of what should be included in the work.

The owner of copyright has the exclusive right to copy it and issue copies of the work to the public (s.16). Copying, including electronic copying, is an infringement (s.17). Issuing copies of the work to the public without copyright owner's permission is also an infringement (s.18), as is possession of a copy in the course of business (s.23). Transient or incidental temporary copes can be made without being infringements, if they are made as an integral and essential part of a technological process and the sole purpose of which is to enable (i) a transmission of the work in a network between third parties by an intermediary, or (ii) a lawful use of the work, and as long as they have no independent economic significance (s.28A).

There are other exemptions to copyright infringement under s.30 for "fair dealing" including use which is allowed for the purpose of criticism or review or reporting current events as long as sufficient acknowledgement is made of the source of the re-used material.

The Arguments

The NLA claimed that the end users needed a licence to use Meltwater's service for the following reasons:

  • The Meltwater News product contained material that was the copyright of the publishers (as administered by the NLA)
  • By receiving and reading the Meltwater News (whether by email or by accessing the Meltwater website) the end user would be making an infringing copy of that material on their computer within the meaning of s.17 and would also be in possession of an infringing copy in the course of business within the meaning of s.23
  • Clicking on the link provided within the Meltwater News service also makes a copy of the article (s.17) and also in possession of an infringing copy (s.23)
  • By forwarding the Meltwater News email or any of its contents to others, an end user is also infringing by issuing copies to the public (s.18)

The defendants argued that their clients (the end users) did not need a licence simply to receive the Meltwater News service, only to forward it to others. If Meltwater was licensed to provide its service then this should be enough. They drew an analogy with the press cuttings service where the recipients of this service did not require a licence to receive the cuttings, only if they wanted to copy them internally or externally. The defendants argued that only one copy was made as part of the Meltwater News service which was the copy sent by Meltwater to the end user.

Meltwater also argued that it would be a derogation from grant for the NLA to seek to impose terms on the end user. The NLA argued that there was a provision in the licence to Meltwater (WDL) that limited Meltwater's licence to providing a service to licensed end users. Until this was declared unreasonable by the Copyright Tribunal in the parallel proceedings, these terms were valid. Meltwater countered that this was a matter of contract law not copyright – if Meltwater had a valid licence in copyright terms to provide the service, then it must extend to its recipients legitimately receiving the service.

No derogation; copying

However, Proudman J did not consider that derogation from grant or exhaustion were relevant – a grant of a WDL licence did not obviate the need for a WEUL in his eyes where PRCA members were making copies of the material. She held that the defendants' argument that recipients of Meltwater News received just one copy and did not make further copies fell down on several counts:

  • A copy was made on the computer on receipt of the Meltwater News report upon receipt of the email or when "visiting" the Meltwater website
  • A copy is also made when the report is accessed to be viewed
  • These are copies of material that has already been copied by Meltwater to produce its reports

Copyright works

That copyright subsisted in the full articles accessed on the newspaper websites was not disputed. The court had to consider whether the extracts, opening words and headlines used in the reports were each literary works.

Headlines: Previously the issue of whether a headline could be an independent copyright work had been considered in the Shetland Times case (1997) where a headline was used as a hyperlink (as here) and although only an interlocutory application, the court considered that this might have its own copyright. An Australian case this year Fairfax Media Publications v Reed International Books, referring to the US practice of excluding headlines and short phrases from copyright, held that newspaper headlines could not qualify for copyright protection, commenting that "to afford published headlines, as a class, copyright protection as literary works would tip the balance too far against the interest of the public in the freedom to refer, or be referred, to articles by their headlines".

Proudman J pointed out that Shetland Times proceeded on the basis of a concession that there was copyright in the headline and that the public policy reasoning in Fairfax was "an important ingredient in [the judge's] decision in rationalising the authorities" but did not take into account any European authorities. Proudman J held that she must do so and, in particular, she must take into account the recent Infopaq ECJ reference. There, the ECJ held that an extract of as little as 11 words (5 words on either side of a search term) can constitute reproduction in part within the meaning of Article 2 of the Information Society Directive (2001/29) where those words have the necessary quality of originality. The ECJ held that "elements which are the expression of the intellectual creation of the author" are a "substantial part" as UK copyright lawyers would consider it, although the case was assessed under Article 2 which does not refer to "substantial part" – originality rather than substantiality being the test to be applied to the part extracted under Article 2. Proudman J held that "[a]s a matter of principle this is now the only real test". She held that the evidence put before her showed that headlines involve considerable skill in devising and they are specifically designed to entice by informing the reader of the content of the article in an entertaining manner and that in his opinion headlines are capable of being literary works whether independently or as part of the articles to which they relate.

Text extracts: The principles of assessment of copying in terms of the original author's skill and labour appropriated by the copier must now be considered in light of Infopaq. That ECJ case did not require the court to conduct an assessment of whether the extract is itself novel or artistically worthwhile. Proudman J quoted Arnold J in SAS Institute v World Programming earlier this year, that it follows from Infopaq that "when considering whether a substantial part has been reproduced, it is necessary to focus upon what has been reproduced and to consider whether it expresses the author's own intellectual creation … [and also to consider] the cumulative effect of what has been reproduced". "Even a small part of the original may be protected by copyright if it demonstrates the stamp of individuality reflective of the creation of the author of the article" (Proudman J.). The text extracts provided not only words around the search term but also the headline and the opening text and as such Proudman J concluded that many (if not all) of the extracts "provide the tone of the article and generally have the special function of drawing the reader into the work as a whole" and give the reader "as clear an idea as possible of the subject-matter and content of the article, within the constraints affecting the permissible number of characters" and were therefore infringing.

Hyperlinks: The terms and conditions of some of the newspaper publishers' websites stipulate that paid for media monitoring services and their customers require a licence to use the content. Further all the websites state that they cannot be used for commercial purposes without the relevant publisher's express consent. Counsel for Meltwater argued that no-one reads such terms and conditions and that in order to read the terms and conditions you would need access to the site first in any case. The judge noted that there were print icons beside the articles "inviting the user to print and make a hard copy of the article". She complained that she was taken to no authority as to the effect of incorporation of terms and conditions through small type, as to implied licences, as to what is commercial user for the purposes of the terms and conditions or as to how such factors impact on whether direct access to the newspaper publishers' websites creates infringing copies. She said "As I understand it, I am being asked to take a broad brush approach to the deployment of the websites by the Publishers and the use by End Users".

When an end user clicks on a link, a copy of the article on the publisher's website (accessed by that link) is made on the end user's computer. The PRCA argued there was an implied licence to copy that article directly from the website. The judge commented that the argument was not presented "as clearly as I would have liked" but felt able to conclude that "in principle copying by an end user without a licence through a direct link is more likely than not to infringe copyright". Certainly, end users who share the link by forwarding it to a client or other person not previously identified to Meltwater (and of course an end user who forwards an email) will make further copies and thus further infringe whilst also infringing by issuing copies to the public.

Exceptions to infringement

Temporary copying: When "visiting" a website, you are actually making a copy of it on your computer; it is not a case of going to look, rather of copying it to look. In assessing whether such copying is temporary copying as contemplated by the exemption under s.28A, Proudman J referred to Kitchin J's comments on the temporary copying exemption in Football Association Premier League v QC Leisure (2008) (referred to the ECJ) stating that the exemption is concerned with "transient copies that have no value in themselves and which do not prejudice the rights holder by interfering with the normal exploitation of the work". Any incidental or intermediate copying which is "consumption" of the work whether temporary or not requires the permission of the rights holder. Making the copy does have an independent economic significance as the copy is the very product for which the end users are paying, held Proudman J, the exception cannot have been intended to legitimise all copies made in the course of browsing or users would be permitted to watch pirated films and listen to pirated music: "the exception cannot be used to render lawful activities which would otherwise be unlawful".

Fair dealing: Proudman J examined both the "criticism and review" and the "reporting current events" exceptions in detail and concluded that neither applied to the Meltwater service. Even if she should be found wrong on these points, Proudman J held that there was no "fair dealing" in any case (significantly the NLA maintained that the terms of the publishers' websites were that they could not be used for any commercial use which included use by "commercial" end users) nor was there "significant acknowledgement" as is required by the exceptions.

The Court's decision

Proudman J therefore felt able to conclude that without an end user licence (WEUL) end users would be infringing the rights of the newspaper publishers by receiving and accessing Meltwater's services.