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What does the Supreme Court’s NLA and Meltwater/PRCA ruling mean for you?

19th April 2013


The NLA and Meltwater/PRCA have been battling each other in various (and I imagine ever more expensive) courts for a while now. I'm no legal journalist, and to be honest when I ask either party to summarise whereabouts we are in this process - my head starts to hurt.

So I thought it might be an idea to put a few questions to the NLA's David Pugh and the PRCA's Francis Ingham:

For those readers who have not been following this case closely – can you both briefly outline what this case was originally all about?
 

David Pugh: In January 2010, following a two-year consultation with media monitoring agencies (in which Meltwater chose not to participate), the NLA launched two licences: one for media monitoring agencies to copy online ‘newspaper’ content and send it to their clients in monitoring reports; and one for clients to receive a paid-for service and make further copies of content.  It is worth noting that the NLA introduced these licenses due to the considerable profits being made by commercial services scraping and distributing online newspaper content. As far as the NLA is concerned, this case was never about ordinary internet users – who have always been able to browse newspaper websites for free under an implied licence.

Meltwater referred both licences to the Copyright Tribunal – which regulates prices and licence terms for licensing agencies like NLA and PRS for Music – but cannot decide questions of law. So the NLA asked the High Court to decide two questions: does a company like Meltwater need a licence to provide a service (Meltwater said it didn’t); and do their clients (like PRCA members) require a licence to receive it and use copyright material (Meltwater/PRCA said they didn’t either)?

Francis Ingham: The case is about the NLA’s decision to require clients (PR agencies/in-house communications teams) for a license to view online articles from media monitoring organisations (MMOs) such as our legal partner Meltwater, on top of the license fee they already charge to MMOs. We challenged the NLA together at the Copyright Tribunal, and the NLA responded by taking us to court to prove the licence itself was legal. Three years later, and after saving the PR industry millions at the Copyright Tribunal, the Highest Court in the UK has disagreed with the previous judgments (in the High Court and Court of Appeal) that viewing online articles requires rights-holder (newspapers) authorisation.

What was the High Court’s ruling and what element did the High Court refer to the Supreme Court?
 

DP: The High Court (2010) and subsequently Court of Appeal (2011) said ‘yes’ to the second question: the media monitoring agency client needs a licence. The first question became void as Meltwater had agreed to take a licence – and is now an NLA client! In reaching this conclusion, both courts agreed that headlines and text contained in monitoring reports can attract copyright protection. This benefits all online publishers – and was not appealed by Meltwater in the Supreme Court. It also did not appeal the ruling that its present monitoring service, which sends their clients reports by email will continue to require its clients to take an NLA copyright licence. The single point taken to the Supreme Court was that in a situation where Meltwater created a new, effectively inferior, service where clients have to go and find links on a web portal – would the ‘temporary copying exception’ in the Information Society Directive (and UK Act) provide legal cover? Meltwater previously ran the argument in the lower courts, applying it to their present, actual, service – and got a resounding ‘no’. The SC has taken a different view on the yet to be developed, hypothetical service, but has referred it to the ECJ to be sure.

FI: The High Court, and Court of Appeal ruled that the proposed NLA licence was legal, but the PRCA and Meltwater were concerned that its ruling would lead to millions of internet users unwittingly infringing copyright law when browsing online articles. Specifically, The PRCA contested at the Supreme Court in February the Court of Appeal’s decision that that the temporary copies made through the purely technological process of displaying a web page on a computer to enable a user to read that web page is a violation of UK copyright law if made without the explicit consent of the copyright owner. In other words, your computer makes a temporary, incidental copy when you view a webpage, and the PRCA argued at the Supreme Court that existing law meant it should be exempt from requiring a licence. The PRCA and Meltwater did not appeal rulings in the High Court and Court of Appeal relating to whether headlines can be copyrighted and the extent to which copyright caught text snippets returned in search results.

What impact does the Supreme Court Ruling to refer the NLA/Meltwater/PRCA case to the European Courts of Justice have on PR professionals? Both in the immediate term and the long term.
 

DP: In the immediate term, the ruling has no impact: licences are required for present services and the Court of Appeal ruling is law until the ECJ rules otherwise (and then the SC translates that into UK law). And then Meltwater or their competitors may choose to design a new service that their clients will want to buy in preference to the high-quality ones they have now. In the longer term, a variety of options open up for publishers and/or the NLA. It is likely that an increasing number of online news titles will go behind paywalls – and therefore not be available for scraping by Meltwater. The Times, FT and a number of regional titles are paywall protected and are shortly to be joined by the Sun and Telegraph. In the event that end-user licensing of web monitoring becomes unviable at some point in the future, the Supreme Court has observed that the NLA could potentially derive the same economic value from licensing media monitoring agencies and dispense with licensing their clients. We could have done that from the start, but did not want to burden the media monitoring agencies with the administration; but we may have to.

FI: The PRCA is to discuss the next steps with Meltwater and its legal team shortly. In the meantime we are asking our members to continue to pay their licences. However, in the short term PR professionals can rest assured that the law is on their side when it comes to viewing and browsing articles online.

Will the European Court of Justice ruling still be confined to the specific element  of whether “end user opened articles on a publisher site might fall within the temporary copying exception?” Or are there wider implications that might mean the decisions reached previously by the High Court will be reversed?
 

DP: None of the other High Court or Court of Appeal decisions were appealed by Meltwater – and therefore are not open to review by the ECJ. 

FI: Yes and no. The CJEU will be asked to clarify the position reached by the Supreme Court across the EU, but if it rules in our favour – and we expect it to do so after today’s judgment – then we could find ourselves defending the PR industry again at the Copyright Tribunal.

And if the European Court of Justice is limited to the specific “temporary copying exclusion” what impact will this have on the NLA’s/Meltwater’s fee structure?
 

DP: Fee structures may change with time depending on the service media monitoring agencies like Meltwater provide – the reality of licensing stays the same. The Supreme Court upheld the core NLA principle – that paid-for web monitoring services using publishers’ content require copyright licences.  Newspaper Publishers will continue to be fairly paid by media monitoring agencies and PR professionals.   

In real numbers the media monitoring agencies and their clients will pay £800,000 in licensing fees to the NLA in 2013 – a fair return to journalism from an industry worth about £10 million in the UK. The repeated claim that this legal battle has saved the PR industry £100 million in licensing fees has thus no basis in fact. So far, on the contrary, the NLA has been the recipient of several hundred thousand pounds in legal costs from Meltwater and the PRCA. And that, ultimately, is paid for by the PR agencies that are members of the PRCA and clients of Meltwater.

FI: That is a question for Meltwater, and indeed the other MMOs offering services in the market.

Does anyone know when the European Courts of Justice will hear the case? Or is it too early to say?
 

DP: My understanding is that referred cases often take 12 months to 18 months to reach the ECJ – but the pace at which the wheels of justice may grind is not my field!

FI: Too early to say, but we have been told that it is likely to be at some point next year, 2014.

Written by Ben Smith



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