Thursday, December 02, 2010

NLA v Meltwater thoughts

I've now read the NLA v Meltwater judgement issued by Mrs Justice Proudman in the UK High Court last Friday.  Despite the bitterness, spin and mud-slinging on both sides of the dispute, which was so bad the judge explicitly referred to it in her decision (paragraph 23), the case seems like a bit of a storm in a teacup that really shouldn't need a court to sort it out. Having said that I can understand why, given the uncertain future they are facing, the newspaper industry chose this case in an attempt to put down a marker.

Meltwater provides an electronic press cuttings service, via email and/or a website, to PR agencies interested in being alerted when their clients are in the news. The newspapers and their licensing agency, the NLA, want Meltwater's clients to pay them as well as Meltwater for the service. Both Meltwater and the PR agencies trade organisation the Public Relations Consultations Association (PRCA) were sued. The court only had to decide whether the PR agencies receiving Meltwater's electronic press cuttings needed to pay for a web end user licence (WEUL) from the NLA i.e. did they need the newspapers' permission to receive Meltwater's services, irrespective of whether Meltwater had a licence to provide such services.
"6. The issue I have to determine is whether PRCA and its members ("the End Users") require a licence from the claimants in order lawfully to receive and use Meltwater News. Such a licence is known as a Web End-User Licence ("WEUL"). Although I have defined PRCA and its members as the End Users they are not necessarily the ultimate users of the service in the sense that members (at any rate those members who are not in-house consultants) obtain the information from Meltwater News for external clients."

Meltwater does not currently have a 'web database licence' (WDL) from the NLA to provide the press cuttings service.  The company's position is that current law does not require them to hold such a licence but even so they would still be prepared to pay for one on terms agreed as reasonable by the Copyright Tribunal.  The High Court was not required to rule on this issue. The details are currently the subject of a dispute between the parties at the Copyright Tribunal.

At this point the average 21st century reader could be forgiven for scratching their head and asking why pay Meltwater or the NLA when you could get equivalent functions for free via Google alerts, other search engine facilities, newsreaders and a range of other accessible web tools. (The judge suggests as much at paragraph 20). Well seemingly the aggregation service provided by Meltwater has significant value to their clients.

It's probably worth noting that the judgement does not say, as widely reported, that weblinks are protected by copyright law; or that aggregated links would infringe copyright without a licence.  But it does seem to suggest that the copying of a combination of

1. aggregated headlines provided as links and
2. text extracts from the associated articles

of the quality exhibited in this case - "elements which are the expression of the intellectual creation of the author" - would be infringement.  The decision also seems to suggest that basic use of the web does involve copying sufficient to trigger prima facie copyright infringement.  So a link does not attract copyright protection unless the text the link is of such originality as to exhibit "elements which are the expression of the intellectual creation of the author". But the act of clicking on the link thereby copying the linked page onto the end user's computer is prima facie copyright infringement. Likewise opening an email client to collect emails.  Questions then arise as to whether there are permissable defences and whether the process is transient and necessary for a technological process etc. but the implications of the decision seem to be that clicking is infringing, whatever justifiable subsequent defence might arise.

Contrast this with an old style photocopy/print based press cuttings service - the end user receiving a collection of press cuttings in the post would not be implicated in infringement (save possibly via inappropriate inducement) since the copying would have been done by the company sending the cuttings.

The judge describes the Meltwater service at paras 26 - 27 and the nature of the dispute in paras 45 - 55

    1. Meltwater News will (subject to the constraints of length to which I later refer) include the following three items: 
    2.  •    A hyperlink to each relevant article ("the Link"). The Link is a citation of the headline ("the headline") from the article. A click on the Link takes the customer through to the article as it appears on the Publisher's website. 
      •    The opening words of the article after the headline ("the opening text"). 
      •     An extract from the article ("the hit extract") showing the context in which the agent appears. This will reproduce the agent and some words immediately preceding and following it. 
    1. Thus, subject to length constraints, the total text extracted from the article on the Publisher's website ("the text extract") comprises the headline, the opening text and the hit extract. Under the terms of the WDL, any text extracted from an article generated using scraping techniques must not exceed 256 characters, which it is common ground means 256 characters excluding spaces...
    2. NLA contends that in the absence of consent the End Users of Meltwater's service will have infringed copyright in the Publishers' headlines, and/or the Publishers' articles and/or the Publishers' databases in three ways:
    3. PRCA asserts that it has an overarching argument which defeats NLA's claim. It compares the service under consideration with the old press cuttings service in this way. A cuttings service requires the provider to take a licence for making copies of the articles for distribution to its customers. The recipients do not need a licence simply to receive the cuttings. Their licence is required to enable them to make further copies for internal or external purposes. Mr Silverleaf submitted that, on a proper analysis of the electronic process, the PRCA members merely receive Meltwater's services; there is only one copy inherent in the process, which is the copy sent by Meltwater to the End User. It is common ground that when one speaks of going to a website it is in fact the website which comes to the user. The submission is that whether access to the Meltwater Newsletter is by email or on Meltwater's website, there is in each case a single copy sent by Meltwater and accessed by the End User.
    4. As a further plank in the argument, Mr Silverleaf submits that once Meltwater is licensed, it is a derogation from grant to require an End User to take a licence as well. Mr Howe counters by saying that this ignores the fact that the WDL's terms are limited to providing services to customers who themselves have a licence. He relies on s. 119 (3) of CDPA which provides that a scheme which has been referred to the Tribunal under s.119 shall remain in operation until proceedings on the reference are concluded. In other words, the provision limiting the licence to services provided to those who also are licensed is binding unless and until the Tribunal determines otherwise.
    5. Mr Silverleaf ripostes with the argument that the terms of the licence are a matter of contract only. The issue is one of copyright law. Once Meltwater is licensed, it must be licensed to provide services; that necessarily imports the requirement that its customers must be entitled to receive them. To quote paragraph 12 (c) of PRCA's defence, the WDL
    6. I agree with Mr Silverleaf to this extent only. If the End Users do not need a licence for what they do, then no contractual term can alter that position. It is a matter for the Tribunal about which I can and do make no binding finding. However I see the common sense of the argument that if the End Users do not need a licence it would deprive the WDL of all or most of its force if Meltwater could only supply services to licensed End Users.
    7. However the issue is not to my mind one of derogation from grant or exhaustion. The outcome hinges on the answer to the very question which I am asked, namely whether the End Users need a separate licence for their activities in relation to Meltwater's services. It cannot be the answer to that question that a mere grant of a licence to Meltwater would obviate the need for a WEUL.
    8. If the PRCA members are making copies of copyright material there can be no exhaustion. A licence to provide a service may import an implied licence to receive it, but it cannot import an implied licence to make further copies of licensed material. If the PRCA members are not making any copies, then there is no scope for a WEUL. In either case it becomes a matter for the Tribunal to decide whether it is unreasonable to grant a WDL only on terms that Meltwater supplies to customers with WEULs, although I think it is accepted by NLA that if the End Users do not require a licence NLA would have to fall back on its alternative claim for a larger fee from Meltwater calculated on a different basis.
    9. In my judgment Mr Silverleaf's argument that there is only one copy faces the considerable difficulty that the defendants themselves admit (see paragraph 5.1 of the Defendants' response to the Claimants' Statement of Facts) that End Users make a copy of Meltwater News on their computers. I quote,
    10. Again, it is expressly admitted in paragraph 10 of PRCA's amended defence that when an End User receives the Meltwater Newsletter by email or accesses it via the Meltwater website "a copy is made in the memory of the end user's machine." In paragraph 11 it is expressly admitted that "a copy of the Meltwater Newsletter is also made by the end user's machine when the [Meltwater Newsletter] materialise[s] on the end user's screen in order to be viewed."
    11. Thus irrespective of whether or not End Users copy text extracts to their clients PRCA admits that receipt of Meltwater News involves copying by the End Users on their computers of material which has already been reproduced by Meltwater.
    12. In these circumstances the derogation and exhaustion arguments fail.
    In paragraphs 52 to 55 it seems as though the judge is missing the nature of the technology. Data is generated, processed, transmitted, copied and stored when do anything on the web or with a computer.  When we receive a printed copy of a press cutting in the post we do not copy anything.  To receive an electronic copy of the same press cutting over the internet, either in an email through opening a mail client or through clicking on a weblink, we have our computer copy the file or at least reconstruct it from the data packets that it has been split between and sent in over the Net. We cannot receive the file electronically without 'copying' it. Which raises the question again of whether copyright is now focussed on the wrong things, even (and especially) if the judge is right and receiving email or clicking on a weblink is prima facie copyright infringement.

    Paragraphs 56 to 86 cover the question of whether the cuttings collected by Meltwater are copyright works.
      "Are the text extracts or any part of them copyright works?
    1. It is not disputed that copyright subsists in the full articles (as literary works) published in the Publishers' publications. One issue is whether a headline is, or is capable of being, a free-standing original literary work. Secondly, there is the question whether a text extract constitutes a 'substantial part' of the article as a literary work. I deal with these issues in turn."
    In Paras 57 to 72 the judge relies on the ECJ Infopaq case (2009) to hold that headlines can have copyright protection.  She also discusses the Australian Fairfax case (2010) where it was decided that headlines as a general class could not attract copyright protection ("too trivial to be a literary work"), though some exceptional headlines might be worthy of copyright protection ("It may be that evidence directed to a particular headline, or a title of so extensive and of such a significant character, could be sufficient to warrant a finding of copyright protection"). The ECJ decision, however, trumps the Fairfax decision - as a matter of principle, Judge Proudman says, the Infopaq originality test "is now the only real test" - i.e. whether the headline/extract is an original  intellectual expression of the author rather than whether the it constitutes a substantial part of the author's work. The result in Infopaq was that 11 consecutive words could attract copyright protection.

    My puzzlement with this part of the decision is not that Justice Proudman relies on Infopaq - that's a logical approach regardless of the problems with the Infopaq decision - it is in the leap from the reasoning of the Infopaq focus on "elements which are the expression of the intellectual creation of the author" to the conclusion that "headlines are capable of being literary works".  The judge had accepted witness submissions/statements to the effect that newspaper headlines are not the creations of the authors of the articles but teams of people or editors who work for the paper.  I can't therefore see how it can be concluded that the headline is an element which is the expression of the intellectual creation of the author, when the author has not written/created the headline; albeit that it is dreamed up by another creator/creators based on the substance of the article written by the original author.  Yet the judge uses a combination of Infopaq and the defence argument that the headline is part and parcel of the article rather than a copyrightable entity itself to conclude that headlines can be copyrighted.
    "73. The next question is whether the text extracts constitute a substantial part of the articles so that s. 16(3) CDPA applies, as construed in conformity with the InfoSoc Directive."
    Paras 73 to 86 say text extracts are protected by copyright and this is a more straightforward and defensible analysis based mainly on Infopaq and the NLA v Marks & Spencer case of 2001.

    Para 87 to 92 deal with the database infringement issue:
    1. As far as I can see all the acts of infringement relied on against PRCA's members relate to the contents of the articles. There is nothing suggesting infringement of the arrangement or structure of the website as a database. It is untenable on the case as presented by NLA to suggest that a text extract is a copy of a substantial part of the effort that went into the structure and arrangement of the articles within the website.
    2. I therefore do not find that the End Users need a licence to avoid infringement of the Publishers' websites as databases. I say nothing which affects the position one way or the other in the case against Meltwater.
    End users don't infringe NLA database rights.

    Paras 93 to 100 deal with infringement by accessing the Publishers' website through Meltwater News
    100. ... There is undoubtedly however a tension between (i) complaining that Meltwater's services result in a small click-through rate (ii) complaining that a direct click to the article skips the home page which contains the link to the terms and conditions and (iii) asserting that the End Users are commercial users who are not permitted to use the websites anyway.

    Paras 101 to 105 suggest prima facie infringement in this case.
      Prima facie infringement
    1. When an End User receives an email containing Meltwater News, a copy is made on the End User's computer and remains there until deleted. Further, when the End User views Meltwater News via Meltwater's website on screen, a copy is made on that computer.
    2. Therefore the End User makes copies of the headline and the text extract in those two situations and there is prima facie infringement.
    3. When an End User clicks on a Link a copy of the article on the Publisher's website which appears on the website accessible via that Link is made on the End User's computer. It was (I believe) said by PRCA that owing to the factors considered under the previous heading there was an implied licence to copy articles directly from the Publishers' website. The argument on this head was, as I have said, a broad brush argument, and not presented as clearly as I would have liked. However it seems to me that in principle copying by an End User without a licence through a direct Link is more likely than not to infringe copyright.
    4. An End User who uses the share function to forward a headline Link (and, a fortiori, an End User who simply forwards an email) to a client will make further copies and thus further infringe. Such forwarding will also be issuing a copy to the public under s. 18 CDPA.
    5. As there is prima facie infringement I must therefore go on to consider the exceptions provided for in CDPA.
    As I said above opening an email client or clicking on a weblink makes a copy.  That is the way the technology works.  We cannot get email or view webpages through browser without making a copy. Virtually everything we do with computers and the web involves making a copy.  If that triggers copyright law then we have a problem. At 104. end users who forward the Meltwater News are making further copies and I can understand the argument that this might be infringing; but receiving emails and clicking on weblinks?

    Paras 106 to 112 deal with the question of whether the temporary copying exemption under article 5(1) of the copyright and related rights directive, Directive 2001/29, applies. The directive is referred to as the 'InfoSoc Directive' in the judgment. Basically the answer is no since it is designed to protect ISPs making temporary copies in transmission, not end users.

      Temporary copying
    1. First there is the exception contained in s. 28A CDPA. In Infopaq at [54] the ECJ set out the five requirements that must be fulfilled before the exception can apply. They are: (i) the act must be temporary, (ii) it must be transient or incidental, (iii) it must be an integral and essential part of the technological process, (iv) the sole purpose of the process must be to enable a transmission network between third parties by an intermediary or the lawful use of the work or protected subject matter; and (v) the act must have no independent economic significance. In addition, the ECJ also said at [61]-[64] that (vi) the act of making the temporary and transient copy must not exceed what is necessary for the proper completion of the technological process and (vii) the storage and deletion must not be dependent on human intervention; it must be automated.
    2. PRCA allege that any acts incidental to browsing are comprised within the exception and it relies on recital (33) of the InfoSoc Directive which allows "acts which enable browsing as well as acts of caching to take place". However, the exception only applies (according to the express provisions of recital (33)) to the extent that the acts enabling browsing and caching meet the conditions previously set out in the recital. Those are the conditions referred to by the ECJ in Infopaq.
    In the UK context Para 108 discusses Football Association Premier League Ltd v QC Leisure [2008] EWHC 1411(Ch) case where the "exception is concerned with transient copies which have no value in themselves and which do not prejudice the rights holder by interfering with the normal exploitation of the work."
    1. Thus the temporary copies exception is solely concerned with incidental and intermediate copying so that any copy which is 'consumption of the work', whether temporary or not, requires the permission of the copyright holder. A person making a copy of a webpage on his computer screen will not have a defence under s. 28A CDPA simply because he has been browsing. He must first show that it was lawful for him to have made the copy. The copy is not part of the 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 the 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. It begs the question for decision whether making the copy is to enable a lawful use of the work. Moreover, making the copy does have an independent economic significance as the copy is the very product for which the End Users are paying Meltwater.
    2. 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 kind of circumstance where the defence may be available is where the purpose of the copying is to enable efficient transmission in a network between third parties by an intermediary, typically an internet service provider.
    3. The exception cannot be used to render lawful activities which would otherwise be unlawful. On the contrary, the purpose of Articles 2 and 3 is to ensure that copyright is protected against all forms of electronic copying unless falling within the narrow scope of the exceptions in Article 5.
    4. I therefore find that s. 28A CDPA (construed in accordance with Article 5 and recital (33) to the InfoSoc Directive) is inapplicable to permit the End Users to make copies with impunity.
    Most of the rest of the decision is given over to an analysis of fair dealing under section 30 of the Copyright, Designs and Patents Act the context of the case (paras 113 to 147).  The defendents argue that the a broad interpretation of article 10 of the Berne Convention ("It shall be permissable to make quotations...") gives them a get out.  Justice Proudman rejects this.  Firstly because the InfoSoc Directive implements article 10 and can't be interpreted that loosely.  Secondly Article 10 of Berne has no direct effect in English law and can't displace the clear language of the English statute, section 30 of the Copyright, Designs and Patents Act. Thirdly the Court of Appeal has clearly, recently (within the last 12 years) and allegedly consistently interpreted s30 in a way which rejects the defendants' argument and such precedent is binding. (I'd argue that they haven't exactly been consistent in that the different preciding judges have come to the same answer through different routes and criticised each other's reasoning; but that's another issue).

    Paragraphs 124 - 129 look at whether the defendants can argue the copying - receipt of email or visiting webpage - by PR agencies (Meltwater clients) can be considered copying for the purpose of criticism or review.  Not surprisingly the answer is no.  The Meltwater press cuttings are alerts to enable their clients to decide whether it is worth reading the original newspaper article (the judge also says this later at par 131) and not used for traditional critiscism or review.  Even if they could show criticism or review they would still have to show fair dealing i.e. the copying/use does not conflict with a normal exploitation of the work and not unreasonably prejudice the legitimate interests of the rightsholder.

    The remainder of the fair dealing analysis is relatively straightforward, though I intersperse a handful of observations on the remaining paragraphs below.
    Fair dealing
    1. Even if the End Users were to establish that their use of the Publishers' copyright fell within criticism, review or reporting current events PRCA would have also to show that it constituted fair dealing. Article 5(5) of the InfoSoc directive provides that the exceptions:
    2. "…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 rightholder."
      Similar provisions are contained in Article 9(2) of Berne, Article 13 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and Article 10(2) of the World Intellectual Property Organisation Copyright Treaty and explanatory Statement (WIPO).
    131. It seems to me that the only purpose in copying the text extracts is to enable the End User to choose whether or not to read the underlying articles. Without those extracts, he would have no option but to go to the articles themselves. But for the existence of Meltwater and similar businesses, End Users that wanted to monitor press coverage would have to do so by going directly to the Publishers' websites or by using a free alert service or search engine...
    1. In NLA v. Marks & Spencer, Peter Gibson LJ, in deciding that there was no defence under s. 30(2) because there was no public reporting of a recent newsworthy event, said (at 271),
    2. "I can see no public interest reason why the legislature should want to provide a defence to an infringement of copyright for the copying within a commercial organisation for commercial reasons of material subject to copyright, whereas a public interest can be discerned in the public reporting of newsworthy current events."
      However, he went on to decide that if he was wrong about that (that is to say, if the dealing had been for the purpose of reporting current events) he would incline to the view that the dealing was fair dealing. In that connection he cited Aldous LJ Hyde Park Residence Limited v. Yelland [2001] Ch 143 and Pro Sieben.
    Interestingly enough, though the judge can see no public interest in allowing commercial copying, this is not as clear cut as it is often assumed to be for reasons addressed in the Consumer Focus paper published earlier this week, The economic impact of consumer copyright exceptions. We make a point in that paper of distinguishing economic damage to rightsholders from consumer value.  And when commercial interests, through new technology, generate new markets not currently exploited by (or visible to) rightsholders, they are arguably acting in the public interest if rightsholders show no inclination to develop such markets; and at least in no less reprehensible a manner than the recording industry did in its early incarnations in the early 20th century, much to the chagrin of composers of the time.

    The way to think about this is that people get more value out of music CDs if they are permitted to copy them to their MP3 players, something currently prohibited by UK copyright law, (though the law is widely ignored).  Music labels might prefer consumers to buy an extra electronic copy of the music for our digital players but that argument amounts to asking for more money because people have found a new way to enjoy music they have already paid for.  Likewise a furniture store does not suffer economic damage when someone buys a new flatscreen TV thereby getting more value out of their old sofa.  The specific example in the newspaper/music context that might demonstrate a public interest in allowing commercial copying is the service, which though shut down by the US courts basically enabled anyone to play music they had legitimately purchased from any computer with an internet connection that they had access to.  The latest version of, MP3tunes cloud music locker service is currently being sued by EMI for massive copyright infringement.

    The whole area of consumer value and economic damage to rightholders is hopelessly misunderstood in the copyright debates; the public interest is largely ignored and needs to be put front and centre of the shaping of the future copyright landscape; whereas the whole issue of commercial interest is confused.
    1. Chadwick LJ decided, to the contrary, that copying of articles within Marks & Spencer which had been supplied to it by a licensed cuttings agency was copying "done for the purposes of reporting a "current event" to those within the defendant's organisation who have a commercial need to be informed of it." However he went on to decide that the reporting of such current events for the defendant's internal purposes was not fair dealing. He said (at 280),
    2. "…a dealing by a person with copyright work for his own commercial advantage- and to the actual or potential commercial disadvantage of the copyright owner- is not to be regarded as a fair dealing unless there is some overriding element of public advantage which justifies the subordination of the rights of the copyright owner. In my view, it was the recognition that the property right conferred on the copyright owner by the 1988 Act and its statutory predecessors -and which, subject to the provisions of the Act, the copyright owner is entitled to protect and exploit- should yield, in appropriate circumstances, to an overriding public interest in the promotion of research or private study, in the publication of comment or criticism, or in the reporting of current events which led Parliament to include the fair dealing provisions in the legislation. I can see no reason why Parliament should have intended, in the absence of some overriding element of public advantage, to permit one person to deal with copyright work, to his own commercial advantage and to the actual or potential commercial disadvantage of the copyright owner; and no reason why what would otherwise be an infringement of the rights of the owner of copyright in typographical arrangement should be permitted. Simply because the particular commercial advantage to be obtained was a more convenient (or less costly) means of disseminating reports of current events within a commercial organisation by the circulation of facsimile copies of press cuttings.
      There is no suggestion, in the present case, that there is any element of public advantage in the use which the defendant makes of the press cuttings copied and circulated by its internal press offices. I would hold that the provisions of section 30 (2) of the 1988 Act have no application in the present case."
    134. Mance LJ also held that the defendants would be in difficulty in relying upon the subsection because they were copying a significant part of an otherwise protected arrangement for essentially private commercial reasons.
    1. Mr Silverleaf urged me to ignore these observations on the basis that the members of the Court based their decisions on different findings about s. 30 CDPA and that those findings were inherently contradictory. However, all the members of the Court of Appeal held the view in common that s. 30 (2) did not apply to commercial, non-public, user. To use Mr Howe's expression, although they did not all speak with one voice as to the reasoning, they were unanimous as to the result. When that decision is combined with the passages I have quoted from Ashdown, the Court of Appeal's decision about the scope and effect of s. 30 is, to put it at its lowest, very persuasive indeed, and I propose to adopt it.
    2. However Mr Silverleaf further submitted that dealing was fair in this case in that there is no actual or potential commercial disadvantage to the Publishers in the End Users' receipt and use of Meltwater News. He contended throughout that the service provided by Meltwater provides a different service to that provided by the Publishers. The End Users pay for Meltwater's search and analytical services and not for access to the original content, which is obtained only by visiting the Publishers' websites themselves. Further, a directed search such as the End Users obtain from Meltwater will inevitably lead them to the Publishers' websites in circumstances where they would not otherwise access them. Meltwater's services thus complement the Publishers' websites, they do not compete with them.
    1. Again, I find NLA's argument has an element of artificiality in that it says that as commercial users the End Users are not permitted to use the Publishers' websites anyway. However it seems to me that I should deal with the matter on an alternative basis.
    2. If NLA is correct and there is no implied licence to access the website directly, then the End Users are being permitted, indeed encouraged, to do something via the Meltwater service that they ought not to do. It is hard to see how that is fair dealing.
    3. If on the other hand the End Users are permitted to access the website directly, Mr Silverleaf's argument takes insufficient account of the fact that the text extracts contain direct quotations from the words of the articles (including the whole of the headline) for the express purpose of enabling the End Users to decide whether or not the articles themselves are worth reading.
    4. I also have regard to the scale of the use which is being made of the work. Mr Glittenberg provided no direct statistical evidence about Meltwater's operation in terms of the number of text extracts supplied to its clients. However, extrapolating from the rough figures provided by Mr Ellis of PRCA, it would seem that a single End User could well receive (and copy) text extracts from some 50,000 articles per annum.
    In a way, although it is a short throwaway comment buried behind a lot of involved and complex analysis, I get the impression that the scale of the operation - a single Meltwater client might get extracts from 50,000 articles a year - is what ultimately leads the judge to conclude there is end user infringement here. The scale is just too big for fair dealing.
    1. It therefore seems to me that, even if I am wrong about the inapplicability of the basic provisions of s. 30 CDPA, there is no fair dealing in copying Meltwater News.
      The use must be accompanied by sufficient acknowledgment
    1. However, even if I am wrong about all the foregoing in relation to s. 30 CDPA, PRCA is faced with the requirement for sufficient acknowledgment as defined in s. 178 CDPA. The requirement to identify the author is an absolute one (see also Article 5 of the InfoSoc directive) unless the work is published anonymously.
    2. It is common ground that unless the Publishers 'tag' the names of the authors of their articles the authors are not named in the Meltwater News text extracts.
    3. It is asserted in the defence that the author is identified "to the extent that is technically possible" (see paragraph 26(d)) but what is meant is that Meltwater's software does not enable the author to be identified automatically. That is not the same thing at all. Mr Silverleaf went so far as to say that the Publishers can hardly complain about Meltwater's failure to identify the author if his name is not tagged in such a way as to enable Meltwater's systems to identify it automatically. However, inconvenience is not impossibility and the criticism of the Publishers in this regard is misplaced.
    4. I think Mr Silverleaf realised the difficulty of his argument in the face of the uncompromising wording of s.178 CDPA. He therefore went on to contend that the Link provides a sufficient acknowledgement in the same way as a footnote in a critical review. He pointed out that s.30 (2) merely requires as a condition of fair dealing that the use be "accompanied by" a sufficient acknowledgment. Article 5 paragraphs 3(c) and (d) require an acknowledgment "including" the author's name, and s.178 defines sufficient acknowledgment as "identifying" the author.
    5. I do not accept that argument either. The Link directs the End User to the original article. It is no better an acknowledgment than a citation of the title of a book coupled with an indication of where the book may be found, because unless the End User decides to go to the book, he will not be able to identify the author. This interpretation of identification of the author for the purposes of the definition of "sufficient acknowledgment" renders the requirement to identify the author virtually otiose.
    6. This is, I accept, a technical reason for holding that the exception in s.30 CDPA does not apply but, technical or no, it seems to me that there is no answer to it.
    I agree with Justice Proudman that the acknowledgement issue is more complicated than it seems.  There is little doubt that both the CDPA s178 and the InfoSoc Directive Article 5(3)(c) indicate an absolute requirement to identify the author.  But it would appear that both the newspapers and Meltwater would be implicated in failing to identify authors in certain instances.
    1. In all the circumstances I find that without a licence from the Publishers there is infringement of the Publishers' copyright by the End Users in receiving and using Meltwater News.
    So the PR agencies do need to pay the newspaper industry as well as Meltwater if they wish to avail themselves of Meltwater's electronic press cuttings service. Interesting case but as I suggested above, before spending longer thinking about it than I originally intended, something of a storm in a teacup.

    Update: Meltwater is appealing the decision.
    Update 2: IPKat characterises the case as the tip of the iceberg on media monitoring and copyright licences.

    Tuesday, November 30, 2010

    Consumer Focus Report

    Consumer Focus has just published a report that Mark Rogers, Josh Tomalin and I wrote on the The economic impact of consumer copyright exceptions. Executive summary:
    "Advances in the technology available to consumers have fundamentally altered the relationship between authors, rights-holders and consumers with regard to copyrighted creative works. The copyright system in the UK is undergoing a gradual process of reform to reflect this new reality.
    In 2006, Andrew Gowers, a former editor of the Financial Times, presented a report into the state of intellectual property in the UK. Among his policy recommendations were three proposed changes to the copyright exceptions system which alter the way in which consumers can interact with copyrighted works. Gowers proposed introducing copyright exceptions for:
    • Format shifting, for instance the transfer of a piece of music from a CD to an mp3 player. 
    • Parody, caricature and pastiche. 
    • Creative, transformative or derivative works. In our context, this definition includes user-generated content.
    Our review examines the existing literature on the possible economic effects of these proposed changes to the copyright exceptions system, specifically whether the introduction of these proposed changes would cause economic damage to rights-holders. Whilst the economic issues surrounding copyright infringement via file-sharing and commercial „mash-ups‟ are interesting and important, our review is focused solely on copyright exceptions as they relate to non-commercial, consumer activities.
    Investigating potential economic damage to rights-holders requires an analysis of how consumer copyright exemptions could affect the demand for the original creative work. The processes via which consumer copyright exceptions influence the demand curve for original creative work can be complicated. This said, a standard analysis of the demand for creative works must assume that consumers incorporate the benefit of copyright exceptions into their demand. A consumer‟s decision to purchase is based on the benefits of the product, including – in the case of creative work – the value of any copyright exemptions. In this sense, it can be argued that a creator automatically extracts value from copyright exceptions, since these directly influence the demand for the original creative work.
    In our review, the two most commonly cited „economic‟ studies into the effects of Private Copying Remuneration (PCR) systems – Econlaw (2007) and Nathan Associates (2006) – do not provide any useful evidence that consumer copyright exceptions cause economic damage to rights-holders, or that a copyright levy is justified on these grounds.

    The Econlaw study incorrectly equates economic damage with consumer value and does not contain a formal discussion of the demand for copyrighted works. The Nathan Associates study does not make a necessary distinction between 'damage to consumers and producers' and 'damage to society as a whole'. It likely overstates the economic damage caused by PCR. It also uses estimates for demand elasticities that do not come from formal economic analysis.
    The economic evidence that format-shifting, parody and user-generated content cause any kind of economic damage to rights-holders simply does not exist. Arguments that support tighter copyright law, or support PCR systems, tend to confuse economic damage with consumer value. Any future analysis on this issue needs to investigate the conditions under which the proposed consumer copyright exceptions would have any impact on demand for creative work."