Why Meltwater and the PRCA challenge the NLA

Media monitoring service providers Meltwater and the PRCA have won the right to appeal the High Court ruling concerrning the online licensing scheme. Ben Allgrove, partner at law firm Baker & McKenzie, puts forward their case 

The NLA introduced its controversial online licensing scheme early in 2010 to explicitly control the reproduction of newspaper articles by online media monitoring companies and the PR Industry. PR professionals in particular found the licensing schemes contentious as, at a time when the industry is already straining, they significantly increase operational costs and there is viable argument that PR companies are being charged by the NLA as ‘end-users’ for content that they often contribute to and create.

Meltwater Group, supported by the PRCA, challenged the reasonableness of the NLA licensing scheme, being imposed upon its customers, by referring it to the UK Copyright Tribunal, asking it to rule on the reasonableness of the terms of the licences and whether in fact a licence for end users was legally necessary. The Tribunal scheduled a hearing for early 2011; however the NLA then commenced proceedings in the High Court believing that while the Tribunal could rule on the commercial validity and ‘fairness’ of the licenses the High Court was the place to rule on the legality of them. Mrs Justice Proudman in the High Court ruled that end users of online media monitoring companies, such as PR companies, do need a licence from the NLA in order to receive the service.

While the NLA claim to make no attempt to regulate the use of hyperlinks where they are not used as part of a commercial service — such as when shared by bloggers or by search engines like Google, the High Court ruling has effectively generated an interpretation of the law that narrows the definitions of the fair-dealings exceptions and could potentially see everyday internet users penalised under copyright laws for common acts of net sharing such as documenting a hyperlink in a bibliography or using a hyperlink on a monetised blog.

Meltwater has always maintained that it, like the PR industry, has a vigorous and healthy respect for the publishing sector — supporting its rights to copyright protection. However, it is greatly concerned that Mrs Justice Proudman’s interpretation of the copyright laws falls short of understanding the operational level of the technology involved. For example, internet browsers, as standard, use a cache system which makes a temporary copy of any webpage you view; these 'copies' are now effectively not covered by the “temporary copies” exception in the UK and thus could be construed as infringing copyright, unless they fall within very narrowly defined exceptions — or you have each and every content creato'rs express permission. If treated literally this very interpretation of the law means any PR professional simply reading an online news article for the purposes of their job — which constitutes use for “commercial purposes”, does so at risk of copyright infringement unless they have the explicit permission of the content publisher. This ruling has in essence enabled publishers to regulate the very act of digital ‘reading’, something they have been unable to control via print publications in the past. The potential impact on the eco-system of the internet is significant, which is why Meltwater and the PRCA have since sought and won the right to appeal the High Court ruling.

Currently we await a date to be set for the appeal, which we suspect may put the tribunal hearing on hold temporarily. Meltwater stands firm in its position of protecting its customers’ interests and is pleased that the PRCA continues to offer its vigorous support in seeking legal and commercial clarity on these litigious licensing and copyright issues. Issues that affect the entire media monitoring and PR industry — and could undermine the very nature of the internet and the future of its current powerful sharing structure.

You can read the NLA's side of the argument here