As Lord Sumption said in the opening words of the Supreme Court's judgment in The Public Relations Consultants Association v The Newspaper Licensing Agency & Ors [2013] UKSC 18, 17 April 2013 (PRCA v NLA): "This appeal raises an important question about the application of copyright law to the technical processes involved in viewing copyright material on the internet".  

Following on from our IP e-bulletin on the day of the judgment, issued pending a reference to the Court of Justice of the European Union (CJEU), this e-bulletin looks at the decision in more detail.

Lord Sumption's statement was, perhaps, an understatement of the position, since the issues in this case could be seen as fundamental to the operation of the internet and the protection of copyright.

The Supreme Court felt that it was being asked to decide whether simply viewing material on the internet could ever be a copyright infringement.  Lord Sumption felt that the fact that viewing material on the internet requires an element of actual, but unconscious, copying, should not create potentially infringing activity, since such temporary downloading is exempted by Article 5.1 of the Information Society Directive 2001/29/EC.

Lord Sumption, giving the leading judgment (with which all other members of the Supreme Court were in agreement), broke down the "ordinary" use of the internet into the following stages:

  • The creation of copies in the course of transmission in internet routers and proxy servers;
  • Viewing the web page by an end-user, without it being downloaded, requires temporary copies to be made on screen and also in the internet "cache" on the hard disk; 
  • The screen copy will remain on screen until the  user moves away from the relevant web-page; and
  • The internet cache may deliberately be cleared by the end-user or otherwise will in the ordinary course be overwritten by other material after an interval which will depend on the capacity and on the volume and timing of the end-user's internet usage.  It is currently an essential part of internet browsing to have a cache, as without this system the internet could not cope with the volumes of traffic. 

The important point, Lord Sumption stated, was that in none of these cases did the end-user set out to make a copy of the web-page, unless he chose to download it or print it; his object was to view the material.

However, Lord Sumption did not distinguish between the commercial context of the targeted viewing in this particular case and the casual browsing done by any internet user.

Background

As we reported in our IP ebulletin of 2 August 2011, both the Court of Appeal and before that Proudman J concluded that a licence was required to view material on an email web page.

The website under consideration here was that of the media monitoring agency Meltwater, which directs its clients (represented by the PRCA) to a web page which displays extracts from and links to articles featuring the client's chosen "key words". This material was also emailed to clients. The Court of Appeal (and Proudman J at first instance) had concluded that both the receipt of emails with extracts and links, and the simple accessing of a web page on which those extracts and links could be viewed, were both potentially infringing activities (due to the copyright content of the extracts and possibly also the headlines used in the links) and therefore the clients of the media monitoring agency were required to purchase an "end-user" licence.  The appeal to the Supreme Court was in relation to the web-page only: whether accessing this and using this to access the underlying news items, via the links provided, was an infringing activity and required an end user licence in itself.

The PRCA, representing the clients of the media monitoring agency Meltwater, contended that such "browsing" did not infringe any of the NLA's members' rights. By directing clients to the web page, from which they could click on links to get to the actual news material as usual, Meltwater hoped to obviate the need for their clients to have an end-user licence, as there would be no copying on the customer's part, only viewing (and clicking to link to a different site). Where links went to subscription sites, the customer would not be able to access the material, if it did not already have a separate licence for the particular sights, so there would be no circumvention of copyright in these situations either.

The Information Society Directive

In the original consultation on the Information Society Directive (2001/29/EC) (the Directive), there was concern that an over-rigid application of a copyright law that had been devised for physical media would retard the commercial development of the internet and other forms of electronic media technology. To respond to this concern an exemption was introduced to allow for "a fair balance of rights and interests between right holders and users and to ensure a high level of protection for copyrights", while modifying those rights to allow the ordinary use of the internet. This is the essence of the issue being considered on this appeal.

Recital 33 of the Directive refers directly to the problem of temporary copies and sets out the parameters of any exempted use:

The exclusive right of reproduction should be subject to an exception to allow certain acts of temporary reproduction, which are transient or incidental reproductions, forming an integral and essential part of a technological process and carried out for the sole purpose of enabling either efficient transmission in a network between third parties by an intermediary, or a lawful use of a work or other subject-matter to be made. The acts of reproduction concerned should have no separate economic value on their own. To the extent that they meet these conditions, this exception should include acts which enable browsing as well as acts of caching to take place, including those which enable transmission systems to function efficiently, provided that the intermediary does not modify the information and does not interfere with the lawful use of technology, widely recognised and used by industry, to obtain data on the use of the information. A use should be considered lawful where it is authorised by the rightholder or not restricted by law.”

This exemption was set out at Article 5.1 of the Directive (implemented as section 28A of the Copyright, Designs and Patents Act 1988) as follows:

5.1. "Temporary acts of reproduction referred to in Article 2, which are transient or incidental [and] an integral and essential part of a technological process and whose sole purpose is to enable: (a) a transmission in a network between third parties by an intermediary, or (b) a lawful useof a work or other subject-matter to be made, and which have no independent economic significance, shall be exempted from the reproduction right provided for in Article 2.   

...

Article 5.5: "The exceptions and limitations provided for in paragraphs 1, 2, 3 and 4 shall only be applied in certain special cases which do not conflict with a normal exploitation of the work or other subject-matter and do not unreasonably prejudice the legitimate interests of the right holder.”

Review of the CJEU case law

Lord Sumption considered Infopaq I (Case C-5/08); the Premier League case (FAPL v QC Leisure (C-403/08) and Murphy v Media Protection (C-429/08)); and Infopaq II (C-302/10). Neither Premier League nor Infopaq II were decided at the time the Court of Appeal gave its judgment in the present case.

In Infopaq I, the CJEU set out five conditions necessary for the fulfilment of the requirements of the Article 5.1 exemption: 

  • the act is temporary;
  • it is transient or incidental;
  • it is an integral and essential part of a technological process;
  • 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.

Lord Sumption held that, whilst this was an "undoubtedly convenient" formulation, which had been used in subsequent case law, it should be remembered that it was a paraphrase of the actual law.  The requirements are not independent of one another "[t]hey are overlapping and repetitive, and each of them colours the meaning of the others. They have to be read together so as to achieve the combined purpose of all of them". This was, and has always been, the approach of the CJEU, as the case law demonstrated, said Lord Sumption.

Temporary copies: The process in Infopaq I involved the creation of copies at four successive stages:

  1. the creation of the scanned image of the original article;
  2. the conversion of that image into a searchable text file;
  3. the extraction of the keywords from that text file together with the five words on either side, and their storage as a text file; and
  4. the printing out and retention of copy (iii).

The issue in Infopaq turned on the temporary or transient character of copies made in the course of this procedure. It was held that Article 5.1 might apply to (i), (ii) and (iii), if the national court was satisfied that these copies were deleted automatically, i.e. without any discretionary human intervention, when the technical need for them had passed. On the other hand, (iv) was not “transient”, because the print-outs were destroyed only when a human agent decided to destroy them.

Technological process: The CJEU held that the requirement that the copying should be an "integral and essential part of a technological process" meant that it could only be regarded as temporary or transient, if it was inherent in the technological process that the copy would be deleted when that process was complete. It was for the national court to ascertain whether the deletion of the text file containing the keyword extracts in this present case was dependent on the will of the user of the reproduction and whether there was a risk that the file might remain stored, once the function of enabling completion of the technological process had come to an end.

Effect of Article 5.5: Lord Sumption underlined the CJEU's comments that the Article 5.1 exemption is a derogation from the rights conferred on copyright owners and must be seen in light of Article 5.5, under which the exemption is to be applied only in certain special cases, which do not conflict with a normal exploitation of the work or other subject matter and do not unreasonably prejudice the legitimate interests of the right holder.

Lawful purpose: Lord Sumption looked at Premier League. Since Mrs Murphy's copies were not made for the purpose of transmission (5.1 (a)), she was required to show that they were made for some lawful purpose (5.1(b)). Referring to Recital 33, the CJEU had held that "a use should be considered lawful where it is authorised by the right holder or where it is not restricted by the applicable law". Mrs Murphy's use of the material was not contrary to the "applicable legislation". Mere reception of broadcasts, "the picking up of the broadcasts and their visual display" in private circles, does not reveal an act restricted by legislation and that act is therefore lawful. It was thus held to be lawful for the purposes of Article 5.1(b), even though it was not authorised by the owner of the rights. However, Mrs Murphy's use was held by the CJEU to infringe the separate communication right defined by Article 3 of the Directive and was to that extent unlawful. Nevertheless, Lord Sumption held that this did not affect the CJEU's conclusion that her use of the material was lawful for the purpose of Article 5.1(b), because Article 5.1 was concerned only with the ambit of the reproduction right defined in Article 2 and not the communication right. The only requirement was therefore that the relevant use should be consistent with EU legislation governing the reproduction right, including Article 5.1 itself.

Economic significance: On the issue of economic significance, Lord Sumption relied on the CJEU's finding in Premier League, that: acts of temporary reproduction, within the meaning of Article 5.1, aim to make access to the protected works and their use possible and since those works have a specific economic value, access to them and their use necessarily has economic significance, but that this should not be seen as the independent economic significance required to fail the Article 5.1 exemption test. Recital 33 in the preamble to the Information Society Directive supports the use of acts of temporary reproduction — like the acts enabling ‘browsing’ and ‘caching’ — which have the purpose of facilitating the use of a work or making that use more efficient. Thus, as was concluded in Premier League, an inherent feature of those acts is to enable the achievement of efficiency gains in the context of such use and, consequently, to lead to increased profits or a reduction in production costs. However, the efficiency gains resulting from the implementation of the acts of temporary reproduction, such as those in issue here, have no such independent economic significance, "inasmuch as the economic advantages derived from their application only materialise during the use of the reproduced subject matter, so that they are neither distinct nor separable from the advantages derived from its use".

"On the other hand", the CJEU had continued in Premier League, "an advantage derived from an act of temporary reproduction is distinct and separable if the author of that act is likely to make a profit due to the economic exploitation of the temporary reproductions themselves.”

Lord Sumption quoted the above statement from the CJEU, but did not apply this to the Meltwater website; rather he classed the whole Meltwater customer experience as one of simple browsing, no different to someone chancing across material on the internet, rather than having been directed there as part of a paid-for service.

The Supreme Court's findings (pending a reference to the CJEU)

On the facts of PRCA v NLA, the Supreme Court held that the conditions of Article 5.1 had been fulfilled:

  • The storage was "temporary"/"transient": The storage of material via copies in the cache or on screen was the automatic result of browsing the internet. "It requires no other human intervention other than the decision to access the relevant web-page. Its deletion is the equally automatic result of the lapse of time coupled with the continuing use of the browser … Thus the storage and deletion of the copyright material is automatic and not dependent on "discretionary human intervention", and the duration of the copy is limited to what is "necessary for the completion of the technological processes in question". It is retained for no longer than the ordinary processes associated with internet use continue. "The creation of the copies is wholly incidental to the technological process involved."
  • Lord Sumption stated that the purpose of the exemption (Art. 5.1) is "plain", it is "to distinguish between the use of a computer or other equipment simply to view the relevant material and its use to record it. The object of the restriction to "temporary" or "transient" copies is to ensure that the exception does not apply to protect downloading or other forms of digital or physical copying which will remain in existence until the user chooses to delete or destroy them and are therefore as permanent as he chooses to make them."
  • It was a "technological process": Making copies in the internet cache and on screen are an integral and essential part of a technological process; they are a basic feature of the design of modern computers, without which acts of reproduction, the process of browsing the internet could not function correctly and efficiently.
  • The use was "lawful": This means lawful according to the applicable law (i.e. in relation to Article 2 reproduction right infringement).  The lack of authorisation by the copyright owner is not relevant in this context if the use was lawful as it relates to Art 2 (Premier League and Infopaq II).
  • The copying had no independent economic significance: Lord Sumption stated that this fifth condition was satisfied for the same reason as it was satisfied in the Premier League case "namely that it has no independent economic value to Meltwater's customers. This is because unless they download or print out the material (in which case it is not disputed that they require a licence), the sole economic value which they derive from accessing information on Meltwater's website is derived from the mere fact of reading it on screen." 

Reference to the CJEU

Lord Sumption felt that the issues were so critical that a reference should be made to the CJEU (as set out in our IP ebulletin of 17 April).  The reference should ask whether the requirements of Article 5.1 of the Directive, that acts of reproduction should be (i) temporary, (ii) transient or incidental and (iii) an integral and essential part of the technological process, are satisfied by the technical features of browsing a website, having regard in particular to the fact that a copy of protected material may in the ordinary course of internet usage remain in the cache for a period of time after the browsing session which has generated that copy is completed and until it is overlaid by other material, and further a screen copy will remain on screen until the browsing session is terminated by the user.

Comment

This might at first sight look like a beneficial decision for the customers of media monitoring agencies who, on the basis of this judgment, will not need an end-user licence to view a monitoring agency's key word hit results and links on an agency's website.  Arguably, if the links are followed, the page would not necessarily need to be printed, but any printing of the page would require a licence. In practical terms, most customers would still need a licence, since most would want some sort of record of the service they were paying for, either through print-outs of the webpage or via the cut and pasting of it into an email or word document or otherwise dowloading it, both being types of copying which would otherwise be infringing without a licence. Lord Sumption contemplated that any loss of revenue for the NLA from the demise of end-user licences in this context would more than likely be accounted for by higher rates being charged for media monitoring companies' licences.

It is perhaps surprising that the profit-related nature of the commercial webpage-based service being offered by Meltwater which was the subject of this appeal, did not play a greater role in the decision.  Afterall, profit is "not irrelevant" in assessing the legality of a communication to the public, as the CJEU stated in Premier League. The disconnect between the illegality of this act and the "lawfulness" required by the Article 5.1 exception (the application of only the law on reproduction rights to Article 5.1, ignoring other "unlawful" activity when considering whether the exemption applies to particular acts) will remain a matter of concern for copyright owners.

Similarly the test for independent economic significance appears to have been applied very broadly in the Supreme Court's decision. The copying involved in accessing a private web page, for a fee, was held not to be an act with an economic significance independent to other theoretically infringing acts which form part of the general functioning of the internet.  Directed and paid-for viewing does not appear to the authors to be equivalent to undirected browsing of the internet. However, the analogy with the simple viewing of an infringing work not being an infringing act in itself, may be a persuasive one.

It will be for the CJEU to decide how broadly Art 5.1 is to be interpreted or whether Article 5.5 may be used to limit the concept of blameless viewing of infringing material. End-users are difficult to enforce against in practice, so an emphasis on the liability of providers of infringing material is likely to be the most pragmatic way forward.