Why the Meltwater case won't break the internet

The following piece is a guest post by Simon Clark (Head of Intellectual Property, Berwin Leighton Paisner LLP) in which he outlines his view on the implications (or lack of them) for internet browsing of the much-discussed litigation before the courts of England and Wales in NLA v Meltwater.  Whether you agree with Simon or whether your take on this litigation is quite different, do let us know.

Why the Meltwater case will not break the internet 

You may have read some recent discussion on this blog regarding the effects of the Newspaper Licensing Agency’s litigation with Meltwater and the PRCA on “linking” and “browsing”. 

One of the often repeated claims is that the Court of Appeal’s decision has been to make all browsing on the internet illegal. In this post I’ll explain why this is a misunderstanding – both of the nature of the case and the safeguards in place that would make such a result impossible.

The background to various proceedings between the NLA and Meltwater and the PRCA are given in more detail here.  But, in brief, the litigation had little to do with either “linking” or “browsing” when both the High Court and the Court of Appeal made their rulings in favour of the NLA. 

In fact, the litigation only relates to the extent to which Meltwater’s customers and other end users of paid-for online press monitoring services require a copyright licence. The Courts found in favour of the NLA, but the PRCA appealed a single issue to the Supreme Court which they say has a direct effect on the legality of browsing. This is known as the “temporary copying” exception. 

The reason it is called an exception is because, under current copyright law, any original article, plus some extracts of an article and some headlines appearing on newspaper websites will be protected by copyright. However, since temporary copies as well as permanent copies can infringe copyright, calling the exception in issue the “temporary copying” exception is somewhat misleading. In fact, the exception only applies to certain types of temporary copies and the European Courts have said that it must be interpreted narrowly.     

Most acts of browsing are either authorised or fall within an existing exception 

If internet users access a newspaper website on their computers to read an article, they make a copy of the article in the memory of their computers, and a copy appears on their computer screens. Does this mean that every internet user that accesses an article on a website infringes copyright? Of course not. There will be no infringement of copyright if the otherwise infringing act falls within one of the exceptions, or if the owner has authorised the act. 

It is not an infringement of copyright if the acts are undertaken for “the purposes of research for a non-commercial purpose” or for “the purposes of private study”. Many internet users’ browsing activities will fall within these exceptions. 

Most websites are designed to be accessed by members of the public. The operators of those websites add content to their website with the very intention of wanting people to read it. They have given an implied, free-of-charge copyright licence to the reader to make a copy of their content on the reader’s computer screen so that they can view it.  As such, most acts of browsing will be entirely legal and will not infringe copyright. 

So what about for-profit media monitoring services like Meltwater? 

Newspaper publishers are different to many other websites as they have only given an express licence (made clear in their terms and conditions) to members of the public to reproduce the articles on their computer screens so that they can read them for non-commercial purposes.

The newspapers have made it very clear (including expressly in their terms and conditions, but also through the litigation) that no such licence is granted to a client of a paid-for media monitoring agency such as Meltwater which is using the newspapers’ content for commercial purposes. Despite this, Meltwater and the PRCA argue that the copies of the articles made on the end user’s computer screen and in their computer’s memory fall within the “temporary copying” exception.

Accordingly, in February 2013 the Supreme Court will have to decide whether the Court of Appeal was right to conclude that the copy of the newspaper article which appears on the user’s screen does not fall within the temporary copying exception.  The screen copy is the result of users paying for a media monitoring service such as Meltwater’s, and acts as a substitute for the hard copy article which users would otherwise have had to have paid for.  The PRCA argues that it falls within the exception, because the screen copy is temporary and appears as part of the same technical process involved with any act of browsing.  The NLA’s position is that it does not, because it is far removed from the non-profit making temporary copies that the exception was intended to cover.  It is the final copy produced at the end of the technological process that the end user has paid to receive, rather than an incidental copy.  

So in summary:

1.     Copyright in an article does not simply disappear as soon the article is put on the internet;

2.     It is perfectly permissible for a copyright owner to grant a copyright licence to allow some types of use (e.g. non-commercial) but not others (e.g. commercial);

3.     Most websites grant an express or implied copyright licence which permits acts of browsing;

4.     Browsing a website for private study and non-commercial research is already expressly permitted by existing copyright law;

5.     Linking to articles for the purposes of criticism or review or for reporting current events may well fall within one of the other specific exceptions;

This is a summary of a longer article which you can access here.

Cameron wins Avatar copyright case

Following on for my post on The Godfather, and whether it is possible to protect a film character by copyright, this week a federal judge in the US has thrown out a claim against James Cameron and 20th Century Fox. The  claim alleged that in making the film Avatar, Cameron and 20th Century Fox had copied the screenplay for the unmade film Bats and Butterflies by Elijah Schkeiban. This is one of many claims that Avatar infringes copyright in an existing work (no doubt inspired by Avatar's $2.7bn (£1.7bn) box-office gross) all of which have failed.

In this instance, Mr Schkeiban alleged that Avatar was substantially similar to his screenplay for Bats and Butterflies, an unmade film which was based on a series of books written by him. In particular he claimed that Jake Sully, the wheelchair-bound hero in Avatar, was based on the lead character in Bats and Butterflies because both are physically "weak". He also said that he multi-levelled homes which the Na'vi tribe live in on Avatar's moon, Pandora, are comparable to the plants and trees in Bats and Butterflies. Finally Mr Schkeiban argued that that the "twist" in Bats and Butterflies, whereby the baddies turn on the goodies, should be protected by copyright.

Common sense dictates that Mr Schkeiban's claim should fail. It is always difficult to protect a plot by copyright, and it is even more difficult to protect distinct elements of a story such as the protagonist's physically weak demeanour. In the UK, the Patent County Court found last year in Hodgson v Isaac that the entire plot of a book can be protected, however Mr Schkeiban's claim fell far short of alleging copying of the whole plot.

Manuel Real, sitting in the US district court of California held that Mr Schkeiban's screenplay was "not substantially similar" to Avatar and that Bats and Butterflies was "a straightforward children's story that lacks the depth and complexity of the moods expressed in Avatar". Whilst the decision is undeniably less interesting than the question of who should play Christian Grey in Fifty Shades of Grey, it is reassuring to see a straightforward copyright case now and again.

The 1709 Blog's Christian Grey poll results

Michael blushes as he is told that copyright enthusiasts love him 

Following last week's post on potential moral rights concerns relating to the Italian translation of the Fifty Shades trilogy and other IP issues surrounding EL James's best-selling books, The 1709 Blog launched a very serious poll aimed at gathering its readers' views on derivative works or - to be slightly more precise - on who should play the part of enigmatic Christian Grey when Fifty Shades of Grey is filmed. 

The poll closed last night and the results show a clear victory for Hunger and Shame lead actor Michael Fassbender (who received a total of 16 votes), followed by Ryan Gosling (8 votes), Henry Cavill (6 votes), Christian Bale (5 votes) and Matt Bomer (1 vote).

This blogger is pleased with the results and thinks that Michael would make a perfect Christian Grey.

Now the discussion is open as to who should play Anastasia Steele. She is supposed to look like a 22-year-old pale brunette with a slender figure. Any ideas as to who could play her?    

Linking to infringing material is an infringement of copyright in the Netherlands

The great debate continues: is it an infringement of copyright to link to third party content? And does it matter whether that content is itself infringing or not, or whether the person providing the link is making a profit from their website? A quick recap on what the courts have found recently: in the US it is ok to link to infringing content, but it might not be in the UK, and in Canada  it is ok to link to non-infringing content.


A family friendly bunny

Last week the Dutch Courts gave their view on the issue: in the Netherlands can be an infringement  of copyright to provide a link to an infringing photograph. The Dutch blog GeenStijl provided a link to naked photos of model/reality TV star Britt Dekker. The photos had been leaked from Playboy magazine shortly before publication of its November 2011 issue, and had been illegally uploaded to a website called Filefactory. In providing the link, GeenStijl was found to infringe Playboy publisher Sanoma's copyright in the image. It has been ordered to pay €28,400 and will face further fines if it does not take the link down. The decision is available, in Dutch, here.

GeenStijl has posted an online statement saying that the decision is "terrifying for every journalist and everyone with a website". The statement says that GeenStijl disagrees with the court's reasoning, and argues that Dutch copyright law is in urgent need of reform.

The Court held that while linking to a photo does not infringe in itself infringe copyright in that photo, there are a number of factors which must be taken into account and which may cause copyright infringement. In this instance it was relevant that the public was not aware of the existence of the leaked photos before GeenStijl published the link, and that the public would not have had access to the photos had GeenStijl not published the link.

The Dutch Court also took into consideration the fact that GeenStijl is an ad-supported website, which would profit from posting the link, as it would attract more visitors to its site.

These two factors served to make the link infringing. Although it may be different under Dutch law, the potential to make money from an activity is not traditionally relevant to an analysis of copyright infringement, although we are seeing that in the online world it is clearly a relevant factor (see here and here for example).

GeenStijl has said that it will appeal the decision. Janneke Slöetjes of Dutch digital rights organization Bits of Freedom has commented saying that Bits of Freedom is not happy with the verdict which spells uncertainty for search engines. On the other hand Tim Kuik, director of Brein, the Dutch anti-piracy foundation, has said that "This [verdict] offers many opportunities against sites that are consciously offering access to unauthorized content".

This blogger agrees with the sentiment that linking to infringing material should not be right, but queries whether it is really an infringement of copyright?

More on this story from Ars Technica and from PC World.

Innocence of the act is no defence

It seems that a 40-year-old Frenchman who was summoned to court in France under the French anti piracy ‘HADOPI’ three strikes legislation for illegally downloading pirated music, has found himself on the receiving end of a conviction – even though it was his wife who illegally downloaded the two Rihanna songs in question. 

PC World report that Alain Prevost was fined for failing to secure his Wi-Fi network after Prevost self-incriminated himself by admitting he knew his wife illegally downloaded the songs. Under French law the “three strikes” are as follows: first, an email message is sent to the alleged offender: Secondly if the alleged offender illegally downloads copyrighted material again within the next six months, a certified letter is sent to the alleged offender: Thirdly if the alleged offender does not stop downloading illegally within one year from the receipt of that letter, the offender's Internet Service Provider (ISP) is required to suspend their Internet access. 

According to TorrentFreak, content owners have identified a total of three million French IP addresses associated with piracy since October 2010. Of these three million IP addresses identified, 1.15 million were eligible for a first strike, 102,854 eligible for a second strike, and 340 eligible for a third. Of those 340 just 14 were referred to French prosecutors. Prevost’s defence  (apart from not actually committing the infringing acts) was that whilst he did receive the first and second communications, he actually took himself offline as he was divorcing his wife, and whilst prosecutors say he did not respond at all, he said he did respond to the third letter and his wife’s lawyer sent a letter to the HADOPI agency. Prevost also says that as he was offline he received no further emails from HAPOI. He was then summoned to Paris to explain himself, but he didn't want to pay the cost of travel for such a (what he assumed) trivial matter. He was then summoned to his local Police station and despite explaining it was his wife who was the guilty party, ended up in court. 

The report says that even with his wife (ex-wife?) as a witness, Prevost was found guilty by le Tribunal de Police de Belfort of failing to secure his Wi-Fi network, and was fined 150 euros. The court did not terminate his Internet connection. If any of our French readers can add to the detail of this report by way of comment, this blogger would be very grateful. 

EU directive on orphan works on its way to adoption

The proposal for a directive on certain permitted uses of orphan works, which was published last year by the Commission, is marching towards final approval. Along the way, it has been subject to a series of amendments, which you can find here. 

Following last June's informal agreement between the Parliament and Council representatives, yesterday also the European Parliament voted in favour of the proposed directive by 531 votes to 11, with 65 abstentions (the official press release is available here).

The next step in the adoption process is vote by the Council, which is likely to happen some time soon. 

A more detailed analysis of recent developments in the world of orphan works has been published on the IPKat earlier today. Hence, this post is just for the record and so that readers searching The 1709 Blog's database of 1,160+ items will find prompt reference to this piece of news. 

Christian Grey?
Don't forget your chance to vote!

ps: Until next Tuesday you can cast your vote in The 1709 Blog's Christian Grey poll, which you can find at the top of the blog's side bar. Do vote! For the record, Michael Fassbender is currently leading the field, followed by Ryan Gosling. 

TF1 v. Video Sharing Platforms - Round 2

Yesterday, the Paris High Court (Tribunal de Grande Instance) handed down its long awaited decision in TF1's case against DailyMotion (which begain in 2007!).

Readers may recall that a similar case brought by France's leading broadcaster against YouTube ended in a debacle for the plaintiff (See here).

This time out, TF1 had a bit more luck and was awarded over €200,000 in damages (it had sought €80 million!).

On a more substantive level, however, it is hard to read the judgment as anything other than a victory for DailyMotion which saw its (all important) status as mere hoster for the impugned content confirmed by the Court.

The takeaway from the judgment:

- DailyMotion is, with respect to the content posted by its users (other than so-called official users and motion makers, with whom it has specific contractual relationships), a mere hosting entity, entitled, as such, to the specific regime of liability attaching thereto; functionalities such as a posteriori moderation and inclusion of a search engine do not alter this conclusion (although DailyMotion was ordered to remove the terms "TF1" and "LCI" from the list of suggested key words);

- the Court (as did the YouTube court) rigorously required the plaintiffs to establish its standing to sue with respect to each piece of content; in this regard, it is notable that reliance on the well-established rule that exploitation of a work under one's name creates a presumption of copyright ownership (see here) is not a panacea;

- DailyMotion incurred liability for failing to promptly remove content that was duly notified (and prompt means prompt - four days is too long) and for failing to take punitive acion against the most egregious uploaders of illegal content.

Those DMX music licences: some clarification of the issues

Following the recent post concerning DMX's music licensing activities by Deep Larynx and the response from DMX's Lorne Abony, the 1709 Blog has received a rejoinder from Deep Larynx which, we hope, will both clarify the position and reduce the temperature of the dialogue.  It reads as follows:

Lofty Larynx is happy to clarify that no malice whatsoever was intended towards DMX and its vast US music operation. Distilling this complex issue into one page was never going to be an exact science – but it does appear to have worked well enough to engage the attention of Britain’s songwriters and composers – which was the purpose of the text. Concern was solely that revenues for US public performance get through to writers –as opposed to the “trickle up economics” all too prevalent in today’s creative industries.

One can agree without reservation with DMX that:

“When DMX enters into a direct license with a music publisher, the music publisher assumes the obligation to pay the writer’s share of any performance royalty directly to the writer(s) of the licensed composition. Those payments are governed by the contracts entered into between a songwriter and a music publisher ... the writer is also dependent upon their music publisher to accurately and faithfully remit all funds due under applicable contracts.”

So, US writers’ royalties first:

All should welcome DMX’s urging writers to check their statements to check for the “proper allocation of royalties”. Is DMX filing detailed usage data for US writers whose works they play so the publishers can pay the US writers in those directly licensed catalogues? Perhaps Lorne Abony can reassure US writers. Why? Because, sadly, writers are exposed to the risk that they may never see this licence revenue – it being highly likely that their contractual entitlement to be paid arises when usage is "directly and identifiably" attributable to their works.

One cheap and easy riposte from publishers might be to allege deficiencies in the statistical analyses by the societies to inform distributions. Aside from the maxim that smashing up other people’s furniture seldom makes one’s own furniture look any nicer, surely the societies’ administrative function is preferable, even if only as a matter of policy? It seems unfair that writers have to fund publishers’ generous executive salaries and bonuses and dividends to shareholders out of their earnings. Collecting societies, by contrast, are not-for-profit organisations whose senior executives are remunerated well below the levels of the major music companies. And writers sit on societies’ boards, can influence and monitor policy, tariffs and distributions.

Questions about the data relating to the performance by DMX of UK writers’ works, however, are largely academic because regrettably one cannot see how DMX can have been granted a valid licence as the US publishers do not have the UK writers' performing right to grant (though it may be useful to determine losses if any legal action were to ensue). Why?

The writer’s assignment to the publisher is customarily "subject to" the writer’s assignment of the broadcast and public performance right exclusively to PRS for Music. This exclusive grant by the writer is a personal contract (the Membership Agreement) between each writer and PRS for Music. A music publishing contract presupposes a writer's membership of PRS - clarifying the position in terms whereby, should a writer resign from PRS for Music, the performing right will vest with the publisher. But only where the writer resigns their membership. 

One by product of this arrangement is that a publisher cannot compel a writer to resign from the society without exposing themselves to allegations of tortious interference ie inducement breach a contract which, under English law, is a tort. 

There is no question of the PRS issuing licences in the USA. The UK writers’ rights pass exclusively to the PRS and then onward to societies in the US - not to the US publishers. It is interesting to see how many more members of the public than was first thought receive DMX's service – 120 million listeners per day. That’s quite a reach and, as writers are the basic building block of DMX’s supply chain, one begins to be sympathetic to their position – playing some music that they were assured was granted under a valid licence. One hopes they will discuss their difficulties with their purported licensors.

In the meantime, UK (and Canadian, Australian, and Continental European) songwriters, composers and lyricists should be entitled to expect their revenues to be paid to them by PRS for Music, the body that, by contract, they authorised to act as their exclusive licensors – money arriving in Blighty from the USA via ACSAP, BMI and SESAC".