Newspaper Licensing Agency v Marks & Spencer Plc

The Defendant, Marks and Spencer plc ("M & S"), appeals from the judgment (now reported at [1999] R.P.C. 536) and order of Lightman J. on 25 January 1999 in a copyright action. The Plaintiff, The Newspaper Licensing Agency Ltd. ("the NLA"), brought proceedings against M&S, claiming that M&S, by copying articles, which had appeared in newspapers, for internal circulation, had infringed the NLA's copyright in the typographical arrangements of published editions of newspapers and sought an injunction and an inquiry as to damages for copyright infringement. M&S denied any infringement and counterclaimed for a declaration that what it did was not an infringement of the NLA's copyright and constituted fair dealing. The judge held that the NLA's action succeeded and that M&S had infringed the NLA's copyright. But the judge accepted undertakings from M&S in lieu of an injunction and an inquiry as to damages. The judge gave M&S leave to appeal. We are told that this is a test case of some general interest.

The facts

M&S has long used the services of a press cuttings agency which scans the national and major local newspapers and other periodical publications and provides its clients with copies of cuttings, the scope of which the clients dictate in their briefs to the agency. The agency is the Broadcast Monitoring Agency (the trading name of a subsidiary of The Financial Times Group Ltd.).

The NLA is a company formed to protect the intellectual property rights of publishers of national and provincial newspapers particularly in relation to press cuttings and to operate collective licensing schemes for the making of copies of such cuttings. It commenced operation in January 1996. Assignments of copyright were taken by the NLA from the various publishers, the copyright assigned being both the copyright of the typographical arrangement of the articles published by the newspapers and the copyright of the literary and artistic works published in the newspapers (to the extent that this is owned by the newspapers), in both cases so far as the copyright extends to licensing the making of photocopies and other types of facsimile copies. The NLA licenses both press cuttings agencies and others to make copies from newspapers for a fee. The fee was 2p per copy until the beginning of 1999 when it rose to 2.066p per copy, the fee being agreed between the NLA and the Institute of Public Relations and the Public Relations Consultants Association, one of whose clients was M&S (it reserved its position that it did not require a licence).

The agency which supplies M&S with press cuttings is licensed under the NLA scheme and passes on to M&S the charge made by the NLA. What M&S does with the cuttings supplied to it by the agency and why are summarised in the skeleton argument of Mr. Silverleaf Q.C. and Mr. Vanhegan for M&S in this way:

"2.7 M&S is a large and well known retailer. It deals in a wide variety of clothing, food and homewares. The success of its business depends upon predicting and meeting the requirements of the purchasing public for the goods it sells. In two major areas of M&S's business —clothing and food —fashions and public requirements can change rapidly. Public perception of M&S's goods is highly influenced by press comment. M&S needs to keep itself fully informed of all press reports of its and its competitors' activities in order to be able to respond promptly and effectively to the information received by its customers. This is particularly so where the press comment is particularly favourable or adverse. It is essential that M&S respond promptly and appropriately to all such comments: adverse comment in the press may or may not be justified and requires a measured response. Favourable press comment may lead to an increased demand for particular products which has to be met. As a consequence it is an essential part of M&S's business that its senior executives receive copies of press reports relevant to their activities and are thus enabled to deal with what appears in those reports.

To ensure that this occurs M&S has three internal press offices which as part of their function obtain cuttings from the cuttings agency and copy and distribute them to the appropriate personnel. The cuttings copies of which are distributed are themselves selected by the press offices from those selected by the cuttings agency. Those distributed form a relatively small portion of the cuttings which are initially selected by the agency. Distribution is restricted to those executives and directors who need the information they contain to carry out their functions. Further copies of the distributed cuttings are almost never made. If action on a particular cutting is required, this is almost always brought about by passing the distributed copy to the person who is required to act."

We were told by Mr. Garnett Q.C. for the NLA that every working day of the year between 80 and 120 copies are made of individual articles appearing in newspapers and that on a typical day at least 20 separate articles are copied, about 500,000 copies being made per annum.

We were shown a number of cuttings which had been copied, and in three cases we were shown copies of the complete pages from which they were taken. It is apparent that in compiling the cutting, the compiler has felt free to rearrange the original format of that cutting and in many cases has cut and pasted parts of what originally appeared so as to present to the reader what was printed but in a different layout.

The 1988 Act

At this point it is convenient to refer to the relevant statutory provisions of the governing Act, the Copyright, Designs and Patents Act 1988 ("the 1988 Act").

By s. 1:

"(1) Copyright is a property right which subsists in accordance with this Part in the following descriptions of work -

(a) original literary, dramatic, musical or artistic works,

(b) sound recordings, films, broadcasts or cable programmes, and

(c) the typographical arrangement of published editions.

(2) In this Part 'copyright work' means a work of any of those descriptions in which copyright subsists."

S. 8 is in this form:

"(1) In this Part 'published edition', in the context of copyright in the typographical arrangement of a published edition, means a published edition of the whole or any part of one or more literary, dramatic or musical works.

(2) Copyright does not subsist in the typographical arrangement of a published edition if, or to the extent that, it reproduces the typographical arrangement of a previous edition."

Ss. 9(2)(d) and 11 (1) provide that the publisher is the author of the work and the owner of the copyright in it. S. 15 provides for the expiry of copyright in the typographical arrangement of a published edition at the end of 25 years, from the end of the calendar year in which the edition was first published. Ss. 2(1) and 16(1) provide that the copyright owner has the exclusive right to copy the work.

By s. 16(3):

"(3) References in this Part to the doing of an act restricted by the copyright in a work are to the doing of it -

(a) in relation to the work as a whole or any substantial part of it, and

(b) either directly or indirectly."

By s. 17, so far as material:

"(1) The copying of the work is an act restricted by the copyright in every description of copyright work; and references in this Part to copying and copies shall be construed as follows.

(5) Copying in relation to the typographical arrangement of a published edition means making a facsimile copy of the arrangement."

By s. 178 "facsimile copy" includes a copy which is reduced or enlarged in scale.

In Chapter III, headed "Acts permitted in relation to copyright works", s. 30 provides:

"(1) Fair dealing with a work for the purpose of criticism or review, of that or another work or of a performance of a work, does not infringe any copyright in the work provided that it is accompanied by a sufficient acknowledgement.

(2) Fair dealing with a work (other than a photograph) for the purpose of reporting current events does not infringe any copyright in the work provided that …. it is accompanied by a sufficient acknowledgement."

There are various other provisions in Chapter III providing defences to what would otherwise be copyright infringements. For example, copying for educational purposes is allowed in particular circumstances. Thus by s. 33(1) the inclusion of a short passage from a published literary or dramatic work in a collection of a specified description does not infringe the copyright in the work if a specified condition is satisfied. Again by s. 36(1) reprographic copying by educational establishments of passages from published works is permitted without infringing copyright to the extent specified in s. 36.

Chapter VII provides for licensing schemes whereby licensing bodies may operate schemes for copyright licences. Such schemes may be referred to the Copyright Tribunal. It was the settlement of such a reference which produced the agreement on fees which I have mentioned in ...