The tangled web they weave - a journey beyond the headlines in the NLA v Meltwater litigation

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Yesterday, the Supreme Court handed down its decision in the PRCA v NLA case (usually referred to as the NLA v Meltwater litigation).  The issue to be decided in the case is whether the 'temporary copying' exception renders exempt from copyright the copies of web pages made in the end user's cache and on their computer screen when browsing the internet.  The Supreme Court gave its own view (that such copies are covered by the exception) but given the transnational importance of the issue it refrained from making any order and decided to refer the matter to the European Court of Justice to see whether it agreed.

The modern trend of journalists to report on court decisions as soon as they are handed down rarely allows sufficient time for contemplation of what the decision actually says or means.  A sensationalist headline may, of course, make better copy, but it may not be an accurate reflection of the decision itself.   In some quarters, yesterday’s decision has been reported as 'Meltwater wins landmark ruling against NLA in internet copyright case'.  Certainly, if the Supreme Court's view is confirmed by the ECJ, then the decision on this issue would favour Meltwater (which is not in fact a party to the appeal) but, at present, no final order has been made.  As representatives of the NLA and the publishers with an intimate knowledge of these proceedings we are well placed to dispel some of the sensationalism and put the decision in its proper context.

What the Supreme Court's view and the reference to the ECJ does not affect is the vast majority of findings of both the Court of Appeal and the High Court before it.  So those who receive news monitoring services from the likes of Meltwater by e-mail will continue to require a licence.  This is because an e-mail can stay in your inbox indefinitely, and is not therefore a temporary copy.  Headlines and text extracts used in these services remain protectable by copyright and are not covered by any of the fair dealing exceptions as Meltwater tried to argue in the courts below.

The appeal heard by the Supreme Court therefore concerned only one minor aspect of the dispute between the parties.  It related to a service which Meltwater could choose to provide in the future where its clients could only access their monitoring reports by viewing them on Meltwater’s website, rather than receiving them by e-mail.  If the ECJ chooses to agree with the Supreme Court, in reality it is likely to be a pyrrhic victory from Meltwater's perspective.  The Supreme Court has provided a clear indication that Meltwater requires a licence to scrape content from newspaper websites: “nothing in article 5.1 affects the obligation of Meltwater to be licensed in order to upload copyright material onto their website or make non-temporary copies of it in some other way”.  Meltwater has always denied that it needs a licence as a matter of law, although it lost such an argument against Associated Press in the US recently.

Furthermore, while Meltwater could configure its service so that its customers could only access their monitoring reports via Meltwater's website, rather than by e-mail, the NLA would seek to increase the £10,000 licence fee currently payable by Meltwater (at present, the NLA’s online licensing scheme collects the majority of the overall licence fee from end users). This is a point acknowledged by the Supreme Court itself: “It seems very likely (although I am not deciding the point) that the licence fee chargeable to Meltwater will be substantially higher if end-users do not need a licence because on that footing the value of the rights for which Meltwater is licensed will be significantly higher”.

However, the Supreme Court's view does raise some difficult issues which the ECJ will no doubt need to consider carefully.  On its view, from a copyright perspective, viewing pirated copies of content online becomes fair game with no disincentive for web users to use legitimate sources.  The copyright owner will be left to pursue the source of the pirated material, no doubt located offshore, or seek a blocking injunction against ISPs, which are often circumvented. The decision could be viewed by many as something of an online pirate's charter. 

The decision may also cause more publishers and other content owners to deploy paywalls to avoid the potential adverse economic consequences that may follow.  It would be ironic (but not the first time) that the application of European copyright laws has resulted in a reduction in free choice for European consumers.

It would also give rise to a commercially rather odd outcome.  Content delivered by e-mail would not be covered by the temporary copy exception and would continue to require a licence, whereas exactly the same content would be free if accessed through a website.

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