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FAQ: Newspaper Licensing Agency Dispute - Meltwater and PRCA
FAQ: Newspaper Licensing Agency Dispute - Meltwater and PRCA
Overview
On 1st January 2009 the Newspaper Licensing Agency Ltd (NLA) introduced a licencing scheme for Media Monitoring Organisations (MMOs) wishing to use content from its members' websites. The NLA's proposal means that ANY organisation with employees who receive or forward emails with links to newspaper websites will need a licence, as will all organisations providing commercial online media monitoring services.
Why is this important?
Significantly, the NLA's proposed licensing scheme raises serious issues of principle, both for media monitoring companies and their respective customers.
Furthermore, technology has evolved much faster than legislation over the last fifteen years both in the UK and internationally. This case will provide clarity for rights owners and end users about what is and isn't an infringement of copyright law in the UK. It will also take into account the outcome of the UK Intellectual Property Review and proposed changes to European legislation.
What is the NLA?
The NLA was set up in 1996 to create a licensing body to manage newspaper copyright collection from businesses such as press cuttings agencies. It is owned equally by eight major UK newspapers, however it represents hundreds of other smaller newspapers. In the context of this case, the NLA represents six of the eight major UK newspapers, and excludes The Times and the Financial Times as they operate their own paywall for access to their online content.
What is the NLA license scheme?
In 2009 the NLA decided to extend its hardcopy licensing scheme to cover the sharing of links to newspaper website content. The NLA believes that end users (those receiving commercial online media monitoring reports from MMOs, such as Meltwater) need a (licence) from the NLA in order to click on the links provided within the reports.
The NLA also claims that all MMOs (such as Meltwater) need a similar licence.
It is important to note that this only applies to the UK as copyright is a national, not international, right.
How will the NLA know who needs a licence?
The terms of the NLA licence for commercial MMOs obliges the service supplier to disclose the names of all their clients, the number of users at the client organisation, and the number of links they click on for each NLA member publication.
Are we anti-NLA?
We are not anti-NLA at all. We support any schemes that are reasonable and fair - in this instance, we are seeking clarification of UK copyright law for both rightsholders and end users.
What action is being taken against the NLA?
Meltwater referred the NLA licence to the UK Copyright Tribunal in 2010. The PRCA intervened in support of Meltwater and on behalf of its members.
Both parties deem the terms of the licence to be unreasonable - in particular that for simply receiving an online media monitoring service and clicking on links to read content on a public, free-to-access website, end users should pay a licence fee to the NLA.
Therefore Meltwater and the PRCA challenged it in the Copyright Tribunal.
The Tribunal is scheduled for September 2011.
What is the UK Copyright Tribunal?
The Copyright Tribunal is an independent body established under the Copyright, Designs and Patents Act 1988. The main function of the Tribunal is to settle disputes between licensors and licensees of copyright, where they cannot agree on reasonable terms for a license.
What is the recent High Court judgement?
In response to the Meltwater / PRCA reference, the NLA took Meltwater and the PRCA [as representatives of end users] to the High Court for copyright infringement. The NLA claimed that both Meltwater and its customers needed licences for the Meltwater service.
The NLA claim in the High Court that Meltwater needs to take a licence has been put on hold (stayed) because Meltwater has agreed to take the NLA licence once the Copyright Tribunal has determined if a licence is reasonable, and, if so, what a reasonable licence is.
The NLA claim that end users (represented by the PRCA) need a licence was heard by the High Court in early November 2010. The High Court has now given judgment ruling that end users (and therefore all commercial users of online monitoring services) need a licence from the NLA to receive the Meltwater (or other online monitoring) service.
This is disappointing but we, and our lawyers, consider there are good grounds for an appeal and we have successfully obtained permission to appeal this decision in the UK's Court of Appeal.
The Court of Appeal is scheduled for 15th-17th June 2011.
Although we respect the position of the High Court, we are very concerned about the ramifications of this decision and the basis on which it was reached.
In particular, the judgment carries the implication that simply the browsing of copyright protected content made freely available on the Internet will infringe copyright if it is read without a rightsholder licence. We believe that browsing content made available on the Internet should not infringe copyright.
Another effect of the decision is that titles and headlines cannot be used to refer to books or articles without infringing copyright.
We believe that this cannot be right as a matter of principle or law.
As the law is not clear on these points, a positive outcome cannot be guaranteed. Although if the High Court's decision is upheld by the Court of Appeal it will point to a need for an update to the law to prevent such counter-intuitive consequences.
It is also important to clarify that this case is not about the ‘scraping' of personal data, but the ‘scraping' of newspapers. ‘Scraping' occurs when automated software applications (known as “bots” or “spiders”) access websites and harvest (or "scrape" and "crawl" over) content from the site.
What happens now?
Even if our appeal is unsuccessful, the Copyright Tribunal will consider whether the NLA's licensing scheme is reasonable. The NLA has announced that its scheme is intended to capture at least 10-15% of the online media monitoring value chain. Furthermore, based on future projections by the NLA, this share will rise to 60-70%. Together with our lawyers, we are confident that the Tribunal will agree that the terms of the licences and the fees sought from customers are unreasonable and so will reduce the fees. Furthermore, we are confident that our ultimate aim of ensuring reasonable terms for the licensing of NLA content will be achieved.
Whatever the outcomes, Meltwater will continue to cover NLA sources as it has agreed to enter into the NLA licence once the Copyright Tribunal has determined if a licence is reasonable and, if so, what a reasonable licence is. Meltwater will then retrospectively pay the licence fee, back-dated to 1st January 2010 (the start date of the NLA licence).
How will this affect end users now?
If any appeal of the High Court decision is not successful, users of MMO services will have to sign up to an NLA licence. In this case, it is our understanding that the NLA intends to retrospectively charge fees back to 1st January 2010, so we recommend that you make provision for the appropriate amount.
Would end users have been better off if Meltwater and the PRCA had not referred the licences to the Copyright Tribunal?
If Meltwater and the PRCA had not challenged the current licence agreement, all end users would have been required to pay the originally proposed licence fee from 1st January 2010. There is therefore no disadvantage to end users that we challenged this licence. There is only an upside for end users if we succeed in either removing the need for the license or lowering the rates charged by the NLA.
Why did most MMOs sign up for the NLA licence?
Meltwater and the PRCA have reason to believe that most MMO providers agree that the NLA licence is unreasonable. Unfortunately legal action is very expensive and time-consuming, and is simply not an option for many businesses. Many MMO organisations were therefore not able or willing to take the risk of legal action, however we believe they are pleased that Meltwater and the PRCA have challenged the NLA as they will also benefit should we be successful. Whatever the outcome, all MMOs will be treated equally as the NLA is required by law to licence like with like.
Similarly there has been tremendous support from the industry for Meltwater's and the PRCA's challenge to the end user licence as highlighted by a PRCA survey [1]of marketing professional in which 91% of respondents who understand the scheme opposed it.
According to the NLA, Meltwater accounts for approximately 50% of the market share for online media monitoring in the UK. We therefore felt an obligation to take the necessary legal action to defend our customers and our market from the NLA's unreasonable demands.
The PRCA represents both in-house communications teams and PR consultancies across the UK and internationally and has a duty to represent our members' interests.
Is this case only relevant to organisations in the UK?
It is important to note that the High Court's decision has no application outside of the UK as copyright is a national right. Even if it is held that English law requires UK customers to have a licence, we will then argue that non-UK customers be excluded from this requirement as this is a matter for their local law; the High Court ruling applies only to the UK. This jurisdictional argument is a strong one.
The European Union is also reviewing copyright and intellectual property legislation. The European Commission will therefore be keeping a close eye on developments in the UK courts and the UK IP review. The decision in the UK may be superseded by EU legislation.
Why is what the NLA doing different to what the music rights holders did to Napster et al?
Napster was not the rights holder for the music that they were making available to the public to download. The newspapers with the exception of those such as the News International publications and Financial Times which put content behind a paywall choose to make their content available to internet browsers. Where articles are freely available on the internet, MMOs of course direct users to this content. The MMOs do not enable end users to bypass the paywalls but instead direct users to the paywall where they have the option of paying a one-off fee for that particular article or paying a subscription.
Either way, we are increasing website traffic and generating sales for the newspapers.
How can I be kept informed of developments on this issue?
Please contact either of the below with any queries or to seek further information:
Dan Purvis
Head of Global PR, Meltwater
+44 (0)7595 003334
Richard Ellis
PRCA communications director
+44 (0)20 7233 6026
About Meltwater
The Meltwater Group is a privately held software company founded in Norway in 2001, serving more than 18,000 clients through 55 offices located across North America, South America, Europe, Middle East, Africa, Asia and Australia. Meltwater mines the Internet for sharp, fresh insights, helping its customers make informed decisions. Supplementing the technology, Meltwater provides dedicated, personal support and consultation. The Meltwater Group delivers software that changes the way companies acquire, analyse and utilise information.
For more information, please visit Meltwater's website.
About PRCA
Who we are:
Founded in 1969, the PRCA is the professional body that represents UK PR consultancies, in-house communications teams and PR freelancers. The PRCA promotes all aspects of public relations and internal communications work, helping teams and individuals maximise the value they deliver to clients and organisations.
What we do:
The Association exists to raise standards in PR and communications, providing members with industry data, facilitating the sharing of communications best practice and creating networking opportunities.
How we do it and make a difference:
All PRCA members are bound by a professional charter and codes of conduct, and benefit from exceptional training. The Association also works for the greater benefit of the industry, sharing best practice and lobbying on the industry's behalf e.g. fighting the NLA's digital licence.
Who we represent:
The PRCA represents many of the major consultancies in the UK, and currently has more than 230 agency members from around the world including the majority of the top 100 UK consultancies. We also represent around 60 in-house communications teams from multinationals, UK charities and leading UK public sector organisations.
For more information please visit our website.
