UK Supreme Court Rules on Interface Between Copyright and Internet Browsing

Introduction

The United Kingdom Supreme Court has issued a landmark decision on user liability for browsing copyright protected material on the internet. In its view, copies which are stored in a browser cache and produced on-screen fall within the temporary copies exception in Article 5(1) of the Information Society Directive (implemented in the UK by s 28A, Copyright, Designs and Patents Act 1988 (“CDPA”)) and therefore do not require authorisation from the copyright holder (Public Relations Consultants Associations Limited v. Newspaper Licensing Agency Limited and Ors, April 17, 2013, Supreme Court).

The decision is at odds with the position of the Court of Appeal below, which had held that these copies were within the copyright holder’s control. However, as this issue has a transnational dimension and “important implications for many millions of people across the EU making use of what has become a basic facility”, the Supreme Court has referred this point to the Court of Justice of the European Union for a preliminary ruling before making its final order on the appeal. If the CJEU agrees with the Supreme Court’s unanimous decision, it will deliver much needed clarity to the copyright licensing position of internet browsing and avoid what the Supreme Court has described as an “unacceptable result”.

Background

This case arose out of a reference to the UK Copyright Tribunal brought by web clipping service Meltwater and the Public Relations Consultants Association (“PRCA”) challenging the reasonableness of licensing terms sought by the Newspaper Licensing Agency (“NLA”), representing major UK newspaper publishers. One of the live issues in that tribunal reference was whether Meltwater’s customers, represented by the PRCA, needed a licence to receive the Meltwater service. This issue was determined by way of an application for a declaration to that effect sought by the NLA in parallel proceedings in the English High Court. It is an aspect of these High Court proceedings which was before the Supreme Court on appeal.

Meltwater offers an online media monitoring service which uses internet search technology to compile an index of newspaper websites. Meltwater customers (“end users”) use the service to monitor the online press. They nominate search terms and search reports are then sent to them by periodic e-mail, identifying when those terms appear. End users can also access the search results on Meltwater’s website.

The NLA claimed that end-users required a licence due to the following three acts of copying:

•   (i)  The copy of Meltwater’s alert email held on the user’s computer containing search results;

•  (ii)  The temporary copy of the search results in the RAM and on screen on the user’s computer when the user viewed search results on Meltwater’s website; and

• (iii)  The copy of the article in the RAM and on screen on the user’s computer when the user clicked on a link and viewed an article on the publisher’s website.

The PRCA claimed in defence that (ii) and (iii) were temporary copies within the terms of the exception in s 28A CDPA/Article 5.1 Information Society Directive. It was this defence which the Supreme Court considered.

CJEU Guidance and Previous Rulings

In Infopaq I
¹ the CJEU set out the following conditions to be satisfied for acts of temporary copying to fall within the Article 5.1 exception:

• The act is temporary;

• It is transient or incidental;

• It is an integral and essential part of a technological process;

• The sole purpose of that process is to enable a transmission in a network between third parties by an intermediary or a lawful use of a work or protected subject matter; and

• The act has no independent economic significance.

Both Proudman J at first instance (see “Hyperlinks and Headlines Infringed Copyright” [25 WIPR 30, 2/1/11]) and the Court of Appeal (see “Web Clipping Service Users Infringe Copyright Unless They Have License” [25 WIPR 28, 9/1/11]) took the view the defence did not apply to any copies, whether temporary or not, made for the purposes of “consumptive use” of copyright material, including reading or viewing such material, thereby ruling out the application of the exception to internet browsing. They held that none of the above five conditions were met by Meltwater’s end users.

Subsequent to the Court of Appeal’s judgment, the CJEU issued its rulings in both the FAPL
² and Infopaq II
³ cases which cast doubt on this conclusion. In particular, in FAPL, the CJEU held that Article 5.1 applied to the reception of broadcasts on digital televisions, delivering an obvious analogy with viewing other forms of copyright work in digital form on a webpage.

Supreme Court Judgment

The Supreme Court, in a unanimous judgment delivered by Lord Sumption, took the view that:

• Acts of end users which merely constitute opening and reading a webpage fall within the temporary copies exception, and as such do not require authorisation, either express or implied, from the relevant copyright owner. The Supreme Court drew an analogy with the reading of copyright material in physical form, which has never been an infringing act (in and of itself) in either English or EU law.

• To decide otherwise would “lead to an unacceptable result, which would make infringers of many millions of ordinary users of the internet across the EU who use browsers and search engines for private as well as commercial purposes”.

• There is no rational distinction between temporary copies on an internet cache and on screen, and temporary copies stored within a decoder and on a television screen in the context of broadcasts, which, according to the CJEU in FAPL, were covered by the temporary copies exception.

• The NLA’s central concern that allowing the appeal would lead to what some have called an “internet piracy charter” was unfounded. Rights holders continued to have access to other tools to combat piracy and all allowing the appeal would do is give effect to the purpose of Article 5.1.

The court’s reasoning can be summarised as follows:

• It was clear from Recital 33 to the Directive that the exception was intended to apply to “the ordinary technical processes associated with internet browsing” and that to give it a different interpretation would render the exception incoherent.

• The five conditions set out in Infopaq I are not freestanding requirements, but rather that they are “overlapping and repetitive, and each of them colours the meaning of the other” and as such “have to be read together to achieve the combined purpose of all of them”.

• The requirements that the copies be “temporary” and “transient” mean the same thing, and are intended to exclude acts such as downloading or other forms of digital or physical copying. The ordinary processes of caching and browsing fulfil this requirement, notwithstanding that there is some scope for users to adjust settings to extend the period for which temporary cached copies are stored.

• The copies were “incidental” as they were “for the purpose of enabling a lawful use of the copyright material, i.e. viewing it”.

• The making of copies in an internet cache or on screen is “manifestly” an integral and essential part of a technological process, and is required to allow the internet to function efficiently.

• The exception is not limited to copies made in order to enable the transmission of material through intermediaries in a network, but also applies to copies made for the sole purpose of enabling other lawful uses. Lawful “means lawful apart from any lack of authorisation by the copyright holder” and thus includes merely viewing copyright material, whether on a computer or television screen.

• The requirement that the copy must have no independent economic significance does not require that the copy has no commercial value at all. Rather, it must have no independent commercial value additional to that which is “derived from the mere fact of reading it on screen”.

• The purpose of Article 5(5) of the Directive (often referred to as the “three step test”) is simply to require that the temporary copies exception is as narrowly construed as is consistent with its purpose. Therefore, if all five conditions are met, no additional restrictions are imposed by Article 5(5).

• The argument that allowing internet browsing would encourage piracy was rejected as copyright owners have remedies against pirates and intermediaries through whom pirated content is distributed plus it remains unlawful for end-users to download or print out webpages.

What Next?

The outcome of the reference to the CJEU is now eagerly awaited. However, as the Supreme Court’s reasoning was based squarely on the CJEU’s previous decisions in Infopaq II and FAPL, most commentators believe it is likely that the CJEU will follow its own jurisprudence and reach the same conclusion as the Supreme Court. If so, the scope of copyright’s reach in the internet browsing context will have been usefully clarified.

The CJEU’s decision may also have an impact on the Copyright Tribunal’s view on what constitutes reasonable licensing terms for online media monitoring services and their customers. When the tribunal ruled on the NLA’s licensing scheme in 2012 (see “Tribunal Rules License Needed for ‘Headline Only’ Web Clipping Services” [26 WIPR 30, 3/1/12]), it was on the basis of the law as stated by the Court of Appeal and both Meltwater and the PRCA reserved the right to come back to the tribunal in the event that the appeal to the Supreme Court was successful. If endorsed by the CJEU, the effect of the Supreme Court’s decision is that the number of restricted acts licensed under the NLA’s scheme is materially reduced, which begs the question as to whether that should impact the price. For the moment, that is a question for another day.

Baker & McKenzie acted for Meltwater and the PRCA in these proceedings.