Media Monitoring Services: Meltwater or Meltdown?
Meltwater News UK Limited and its parent company Meltwater Holdings BV ('Meltwater') provide online media monitoring services. These are effectively an online extension of a press cutting agency business. Many companies are engaged in this relatively new and growing industry. It seems it can be a lucrative business model, not least evidenced by the resources clearly invested in this case, the outcome of which could have serious commercial ramifications. Essentially, these companies use a spider programme to scrape or search the internet for news and current affairs articles which use or contain specified words or phrases. The scope of the search is defined by the search terms used, which are selected by customers. They then provide their customer with a monitoring report-in this case 'Meltwater News' (the News)-which contains details of relevant articles which contain the specified search terms. The report is then either emailed to the customer or made available to it on Meltwater's website. The News includes the three following items which are most relevant to this case:
A hyperlink to the article, which comprises its headline. By clicking on this, the customer will be taken directly to the relevant article on the newspaper's website.
The opening words of the article.
Extracts from the article which contain the search terms specified by the customer.
Essentially, the information provided aims to allow the recipient to decide whether the article is relevant to it or to its business and so whether to read the article or not. The extracted text does not exceed 256 characters.
The Legal Actions
Meltwater were the defendants along with the Public Relations Consultants Association (PRCA), which represented its members as UK public relations providers (the customers of Meltwater and of other media monitoring service providers).
NLA is a collecting society for the publishers of newspapers. It brought this claim in the High Court along with various publishers as a result of a case against it by Meltwater before the Copyright Tribunal challenging the terms of the licence that NLA sought to impose on it [a Web Database Licence (WDL)] as being unreasonable and indeed questioning whether it needed a licence at all. Meltwater was also challenging the need for its customers to take any licence to obtain its services or view the articles. Since it was unclear whether the Tribunal could deal with legal issues beyond the terms of the WDL licence in dispute, the High Court claim was raised to determine the wider legal issues in dispute as regards copyright infringement.
PRCA had intervened to challenge whether its members as users of the Meltwater services needed another type of licence (a Web End User Licence or WEUL) to view the materials contained in the results of the online media monitoring service.
Meltwater had in the context of the Tribunal claim agreed, notwithstanding it did not accept it needed one, to enter into a WDL on such terms as the Tribunal set; thus the Court claim against Meltwater was stayed. As Meltwater had agreed to take a WDL already, the court did not need to consider specifically whether it was infringing, but the implications of the judgment are such that it would be. The terms of the WDL will be decided by the Tribunal. Of those terms, the most controversial is the limitation that Meltwater must only supply its services to customers who also hold a NLA licence-in this case a WEUL. NLA's position was that the fee for the WDL of £10,000 was set with that in mind. It asserted that, if the court decided that a customer WEUL was not required, it should be allowed to set a higher fee. This was challenged by Meltwater.
In summary, the issue of whether PRCA members/Meltwater's customers needed a WEUL to avoid infringing the copyright in the published articles came to be the sole issue which the High Court had to decide. The court thus had to consider whether there was copyright in the materials provided as part of the monitoring service, whether it was infringed, whether certain copyright infringement exemptions applied, and whether the end customers needed a licence. If the answer was negative, the result must be that the Tribunal would need to excise the limitation in the WDL as regards customers needing a WEUL and there would then no doubt be a dispute about the level of the licence fee in the WDL.
It transpired that the answer was positive and the court concluded that, without a licence from the publishers, there was infringement of copyright by end-users receiving and accessing the results of the service. Meltwater are appealing the judgment as clearly it has potentially significant ramifications for its business model.
Was there Copyright in Newspaper Headlines and Text Extracts?
The issues were whether headlines had sufficient originality and thus attracted copyright and whether they were free-standing or part of the article they prefaced. The judge (Proudman J) had significant regard here to Infopaq (Case C-5/08 Infopaq International v Danske Dagblades Foening ) (and took the view that Infopaq seemed to decide that it did not matter whether a part of work was regarded as substantial). What mattered was whether it was original.
Since there was evidence that there could be significant skill in creating headlines, the judge decided that copyright could exist in them independently or as part of the whole article. Each individual headline though would need to be considered on the basis of its process of creation to decide if it did attract copyright. Thus some of those in this case would attract copyright, but those that did not would do so anyway by virtue of being part of the overall article to which they referred.
The evidence also suggested that headlines were often devised by a different person to the journalist writing the article. The judge suggested in that case that it might not be part of the article and might also not be sufficiently original to be an independent work.
The result of these conclusions is that it will be difficult to avoid infringement of copyright in headlines, even where they are not sufficiently original to attract copyright in themselves, where they are created by the author of the article, and are copied with a link to the article concerned. As such, they become part of the article and gain copyright protection as a result.
Were the text extracts a 'substantial part' of the article as a whole such as to attract copyright? Again Infopaq was a key consideration. The judge held that this decision had not significantly altered the test of quality over quantity but rather had restated it. The effect was that if the extract demonstrated the stamp of individuality reflective of the creation of the author or authors of the article, whether it was only a very small part of the article or not, it may attract copyright protection. Again this would require to be assessed on a case by case basis.
The judge did not, however, feel able to go on and decide on any of the specific examples in evidence but held that there was no doubt that in many cases copyright did arise in the text extracts concerned as they contained the expression of the intellectual creation of the author of the article as a whole. It was relevant that the text extracts in question were not merely random extracts but aimed to give the recipient a clear idea of the content of the whole article to enable the recipient to assess its relevance and whether to access it or not.
Thus both headlines and/or the text extracts (including or excluding the headlines) could attract copyright protection.
A further issue, albeit more of a side argument, addressed the terms and conditions on some of the publisher's websites. These in some cases stated that paid-for media monitoring services and their customers need a licence to use the content and, in all cases, that the websites could not be used for commercial purposes without express consent. The main issue was whether these terms were part of any contract between the website and the user of the link and whether the use made was for commercial purposes. The judge remarked that she was not addressed on the law on the effect of incorporation of such terms and conditions via small print, any issue of implied licence or if these aspects affected whether direct access to the websites via the links provided was a way to create infringing copies. Although no decision was made on this point it does seem that, given appropriate and more detailed evidence, the court might have accepted the view that accessing articles via an online media monitoring service link would also breach the terms and conditions on publisher's websites, as well as infringing any copyright that existed.
Copyright Infringement by Meltwater and Customers
By receiving and reading the articles, NLA argued, endusers would be making a copy in breach of section 17 of CDPA and would also be in possession of an infringing copy in breach of section 23. In addition, by clicking on a link to an article, the end-user would make a copy of the article in breach of section 17. NLA also argued that, if the end-user then forwarded the monitoring results or even part of them to other parties or its own customers, it would be issuing copies of the copyright materials to the public in breach of section 18.
The judge conducted an analysis of what happens when the end-user received an email from a media monitoring agency and views it and more importantly the actual article. Copies are made on its computer and on Meltwater's computer, respectively. Both sets are made by the end-user, so there was clear prima facie infringement. When a link was clicked on to the publisher's website, a copy of the article would also be made on the end-user's computer.
The judge decided that, in principle, this was copying which did infringe copyright as copying by an end-user without a licence through a direct link was more likely than not to infringe copyright. Further, if the end-user forwarded the link to its customers, this would also infringe.
Having decided there was prima facie infringement the court had to assess the possible defences and exceptions to infringement.
The Limitations/Defences Argued
Implied Licence and Derogation from Grant
PRCA argued that there was an implied licence to endusers receiving the media monitoring service to view the results of the service. An analogy was made with the historic model when a press cuttings agency would provide physical press cuttings to customers. The customer did not need any licence to consider and view the cuttings and would only have required a licence to permit the making of additional copies for internal or external purposes. The provision of the information via electronic format to the customer should be treated the same way and, as Meltwater was licensed to provide such services, it would be a derogation from grant to require end-users to also have a licence when they still were in effect only receiving a single copy of an article. Essentially, only a single copy is actually sent by email or accessed on Meltwater's website.
The judge had some sympathy for these arguments but indicated that these points were not relevant: the real question was whether customers needed a separate licence. It was not a sufficient answer to point to the grant of a licence to Meltwater or any other media monitoring agency as removing the need for such a separate licence. The problem for PRCA/Meltwater was that the customers inevitably did make 'technical' copies. Media monitoring services even if they were just receiving the material. In those circumstances, the judge held that these arguments failed.
Section 28 of the CDPA contains an exemption for temporary copying. In Infopaq, the ECJ interpreted the five requirements as set out in Article 5(1) of the Information Society Directive for the exemption to apply. The act must be temporary, transient, or incidental; it must be an integral and essential part of the technological process and it must have no independent economic significance. In addition, the sole purpose of the process must be to enable a transmission or lawful use of the copyright material.
Again the judge looked at Infopaq and also at Football Association Premier League Ltd v QC Leisure2 which held the exception was only concerned with incidental and intermediate copying and did not allow any copy to be made which was a 'consumption' of the work, whether temporary or not. The latter decision stressed that transient copies should have no value in themselves and should not prejudice the rights holder by interfering with the routine exploitation of the work. The whole point of the receipt and copying of the Meltwater news was for the end-user to receive and read it. That act of copying was not part of the automated technological process of reproduction of transmission. The end-user controlled the process and the storage of and when to delete the copy. The copy did have independent economic significance as the enduser was paying for it, albeit to Meltwater and not to the NLA. The exception was intended for use for internet service providers and intermediaries, not end-users. The judge stressed that a person making a copy of a webpage on a computer screen will not have a defence simply because that was generated by the technical process of browsing-otherwise any infringement could be excused.
Fair Dealing Section 30 CDPA
For the Purposes of Criticism or Review
Although the case law allowed a wide interpretation to be given to 'criticism and review' that was to no avail here because the end-user copied the text abstracts to view them simply to decide whether he wanted to read the articles. He did not apply any substantive critical analysis to them, so the court held that this exception also did not apply. Simply viewing an item was not enough to qualify for this exemption as otherwise copyright would have no protective value at all.
For the purposes of reporting current events
The argument here seems to have been a vague one and failed to get off the starting blocks as there was no reporting and none in any event to the public as such, but it was tailored to subscribing customers exclusively. The exemption could not apply to commercial nonpublic use.
As neither of these exemptions applied, there could be no fair dealing. In reaching this view, the court took account of the large scale nature of the services being provided by Meltwater. The evidence indicated that a customer could possibly receive extracts from over 50,000 articles each year.
NLA also argued that its members' websites were databases protected by database copyright and that this was infringed by Meltwater's customers/end-users. It was agreed for the purposes of the case and the decision that they could be capable of being a database protected by copyright. Notably database copyright infringement is not subject to the section 28A CDPA exception for temporary, transient copies and that is likely to be why NLA made this argument here. The judge decided that the end-users were not infringing the arrangement or structure of the websites and did not represent the taking of the effort that went into those aspects. There was thus no infringement of database copyright.
However, the judge noted that she was not saying anything which might affect the position vis-a`-vis Meltwater (as opposed to its customer) and any database copyright. If the decision on the copyright issue, so far as it concerned Meltwater as opposed to the end-users, upheld any of the exceptions relied upon as defences, NLA might well have taken this up against Meltwater as an alternative ground of liability. Had Meltwater not agreed to take a copyright licence at all, database copyright could have become a live issue going forward.
Perhaps not surprisingly, the decision is being appealed by Meltwater and the position is far from settled. Further proceedings before the Tribunal are also expected.
Impact on Media Monitoring Industry
It seems on a strict application of the law as it stands that the decision has a good chance of being upheld and certainly the judgment is a measured and reasonable one. It could thus influence the thinking of the Tribunal as to whether the terms of the WDL are reasonable. Meanwhile, there is uncertainty for the media monitoring industry and its customers. Liability could be building up, pending any final decision, and the main question must be how the industry players can persuade their clients to remain with them and that they will not face a potentially significant bill or even legal action in due course. It seems unlikely that NLA would take direct action against end-users as that would be a mammoth and expensive task as well as being a difficult policing exercise, albeit they could decide to make one or two examples of larger commercial organisations. Nonetheless, it seems that media monitoring agencies may require to consider offering some form of indemnity to their customers in order to provide them with suitable assurance.
If this decision is not overturned and if the Tribunal decides that the WDL is reasonable, so that Meltwater can only supply service to customers who have a WEUL, it is difficult to see how Meltwater can check this in advance. They can insert a provision into their terms and conditions with their customers to that effect but, if the customer chooses to ignore it or does not read it and does not have a licence, Meltwater would still be liable, although it might have a right of relief against its customer for breach of contract.
As ever, the dispute ultimately comes down to money and the real bone of contention seems to be the price set in the original WDL of £10,000. It was set on the basis that the licence was restricted in the above way. NLA clearly do not think that is enough to cover the extent of the overall use ultimately being made of their members' materials/ websites, given the substantial investment in them. They seem to feel that the fee is out of proportion to Meltwater's profits. Given the impractically of the mechanism in the WDL for dealing with end-users and ensuring that they all sign up to WEULs, perhaps the neatest solution will be to deal with it via the WDL-which will inevitably increase the licence fee for Meltwater. It will pacify their customers, but will that increase-some or all of it-be passed on to them or borne as an additional cost by Meltwater? If passed on, it could result in customers deciding the service is too expensive and moving to a free service in which case the media monitoring industry could suffer as well as the NLA and its members. It may then only be a matter of time before the free services such as Google news and Google Alerts also have to charge as a result of a forced change of policy by the NLA.
Wider Impact and Discussion
As things stand, the case could set the precedent that accessing any material via a hyperlink from a source other than the original publisher's website could give rise to liability for copyright infringement. At the very least if the decision stands, users of such press monitoring services will have to give serious thought to obtaining the appropriate licence from the NLA or switch to carrying out their own monitoring activities from free sources such as Google news alerts.
The decision has been made on a very strict technical and legal basis. Should it really be the case that recipients cannot legitimately use such services even just to receive the materials without a licence? The finding of liability regarding the end-users hinged on an analysis of the technical workings of the web and whether the electronic process involved in allowing the end-user to receive the news amounted to making copies. When a comparison is made to paper press cuttings services, these can be 'received' without physical copies being made and thus with no infringement. What is the difference other than one is electronic and one is paper? Should the exception in section 28 be revised to include the type of passive copying required to make a non-commercial or already licensed use of a copyright piece?
Further, the decision may add to the impetus for harmonisation of copyright law. The importance the judge appeared to attach to Infopaq was significant, in that that ruling has been criticised in some circles as altering the test for the subsistence of copyright to allow protection for any work which is the author's own intellectual creation regardless of what the relevant domestic legislation (here the CDPA) permits to be protected by copyright. While unlikely to allow a substantial attack on Meltwater on its facts, it does highlight again the potential for different approaches in European member states. Any reforms to UK domestic legislation should therefore be considered with that in mind.
This may prove a tricky reform to carry out effectively, as once there is a chink in the armour of this strict exception, where will the line in the sand finally be drawn? It may be that to benefit from the developments in technology offered by the internet as a medium, the sacrifice has to be acceptance of what amounts to a stricter implementation of copyright and other IP law.
This article was written by and first published in the Journal of Intellectual Property Law & Practice of 17 May 2011.