The Newspaper Licensing Agency Ltd v Meltwater Holding BV
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Proudman |
| Judgment Date | 26 November 2010 |
| Neutral Citation | [2010] EWHC 3099 (Ch) |
| Docket Number | Case No: HC10C01718 |
| Court | Chancery Division |
| Date | 26 November 2010 |
[2010] EWHC 3099 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Before: Mrs Justice Proudman
Case No: HC10C01718
Robert Howe QC and Edmund Cullen (instructed by Berwin Leighton Paisner LLP) for the Claimants
Michael Silverleaf QC and Andrew Lykiardopoulos (instructed by Baker & McKenzie LLP) for the Third Defendant
Hearing dates: 9, 10, and 12 November 2010
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Mrs Justice Proudman:
Background
The first claimant, the Newspaper Licensing Agency Limited (“NLA”) is a company formed to manage the intellectual property rights of its members by licensing, and collecting the licensing fees for, making copies of newspaper content. The other claimants (“the Publishers”) are publishers of national newspapers and are shareholder members of NLA. NLA was formed in 1995, primarily with a view to licensing press cuttings agencies to make copies of newspaper articles to send to their clients and to license the clients to make their own copies. The NLA is a licensing body within the meaning of s 116(2) of the Copyright Designs and Patents Act 1988 (“ CDPA”).
The NLA has promulgated various licensing schemes. It is for the Copyright Tribunal (“the Tribunal”) to determine the resonableness of the terms of any such schemes on the reference of a recipient.
The first defendant is the Dutch parent company of a multi-national group and the second defendant is its UK subsidiary. I shall collectively refer to them as “Meltwater”. They provide a commercial media monitoring service called “Meltwater News” to business customers. That service is provided on-line only. The action has been stayed against Meltwater in the circumstances I shall mention.
The third defendant Public Relations Consultants Association Limited (“PRCA”) is an incorporated professional association which represents the interests of its members who are UK public relations providers using the Meltwater News service.
Because of the proliferation of on-line media monitoring services the NLA has recently promulgated two new licensing schemes for commercial users of such services. One, taking effect from 1 September 2009, is to license media monitoring organisations, and the other, taking effect from 1 January 2010, is to license those who receive and use their services.
The issue I have to determine is whether PRCA and its members (“the End Users”) require a licence from the claimants in order lawfully to receive and use Meltwater News. Such a licence is known as a Web End-User Licence (“WEUL”). Although I have defined PRCA and its members as the End Users they are not necessarily the ultimate users of the service in the sense that members (at any rate those members who are not in-house consultants) obtain the information from Meltwater News for external clients.
There was some evidence tending to show that emails received from Meltwater containing Meltwater News are sometimes forwarded to clients. At the time Mr Glittenberg (a founder and director of Meltwater) made his statement there were two forward functions enabling the text extracts to be forwarded to third parties via the Meltwater website. However the ‘share’ function now provided has been modified so that only the headline can be forwarded, thus limiting the scope of the shared information. Mr Glittenberg said that forwarding the whole text extract is contrary to Meltwater's terms and conditions, although it is technologically impossible to prevent the forwarding of an email. Mr Silverleaf QC submitted on behalf of PRCA that I had to make findings on the basis of simple receipt by PRCA's members.
Mr Silverleaf pointed out that para 67.2 of NLA's pleading seeks a declaration that,
“the PRCA and/or its members require a licence or consent from the NLA and/or the Publishers in order lawfully to receive and/or use the Meltwater News Service”,
He asserts that the focus and scope of the claim is whether receipt of the service, rather than communicating the results to others, is a potential breach of copyright. It seems to me that the word ‘use’ goes further than that, and it seems to be accepted that some at least of PRCA's members share the contents of Meltwater News with external clients although there was little or no hard evidence on this subject.
Despite questions from the Court it has not been made clear whether it is still alleged that PRCA itself requires a licence. PRCA says it is not a customer of Meltwater and does not receive Meltwater News. Mr Howe QC says it does not matter very much and I ought to concentrate on the position of PRCA's members.
Meltwater does not currently have a licence and was offered a Web Database Licence (“WDL”) by NLA under which Meltwater would be licensed to carry out its monitoring activities.
Under CDPA the Tribunal exercises control over licensing bodies in accordance with its jurisdiction set out in s. 149 CDPA. Under s. 118 and 119, the terms of any new or existing licensing scheme can be referred to the Tribunal by a potential licensee (or under s. 121 by a person who has been refused a licence) for adjudication on whether those terms are reasonable in the circumstances of the case. A licensor cannot make such a reference.
On 16 December 2009 Meltwater commenced a reference under s. 119, challenging a number of aspects of the WDL as unreasonable. PRCA intervened in the reference on behalf of its members, adopting some of Meltwater's objections in relation to the WEUL. Meltwater and PRCA make common cause and are represented by the same lawyers. In the Tribunal PRCA has formally appointed Meltwater to act as its agent.
Importantly, Meltwater asserts that it does not require a licence at all as its activities do not infringe the Publishers’ copyright. However Meltwater took the position that notwithstanding this contention it would enter into the WDL on such terms that the Tribunal determined were reasonable. Both Meltwater and PRCA deny that PRCA's members require WEULs.
Pausing there I make two observations about the effect of CDPA. First, it is common ground that under s. 129 the Tribunal must exercise its powers to ensure that there is no unreasonable discrimination between licensees or prospective licensees under any proposed scheme, ensuring a level playing field and avoiding the abuse potentially inherent in the dominant position held by a collective licensing body.
Secondly, there is a dispute between the parties as to the effect of an award once it is made. PRCA asserts that under s. 123 CDPA the person obtaining the licence is deemed to be in the same position as regards infringement as if he had at all material times after the making of the reference, not the Order, been the holder of the licence. In other words, it is asserted that the licence is backdated to the start of the reference so that the licensee cannot be sued for infringement in respective of any subsequent period. NLA says that is not the case save in the restricted circumstances provided for by s. 123 (3). That is where the Tribunal has exercised its statutory power to backdate the effect of its order only where it has ordered a variation in the charges payable under the scheme. I do not find it necessary to adjudicate on that question of statutory construction.
The terms of any licence are a matter for the Tribunal. The Tribunal refused to order (as sought by NLA) that it should not entertain Meltwater's reference to the extent that it related to the existence and infringement of copyright. However the Tribunal observed that the question of whether the End Users required a licence was one which required “careful thought”. There was a suggestion in the judgment that the Tribunal might refer those issues to this court for determination, but I am told that it is dubious whether any jurisdiction exists to make such a reference.
NLA accordingly brought these proceedings. As Meltwater had agreed to enter into a licence irrespective of whether it needed to do so, Newey J on 5 July 2010 stayed the claim in this action against Meltwater. He also directed an expedited trial of the claim against PRCA.
There is a further wrinkle. Under the terms of the existing WDL as offered, Meltwater is only licensed to supply its services to other licence holders, that is to say, to End Users holding WEULs. The licence fee of £10,000 under the WDL has been set by NLA in that context. In the event that this court decides that the End Users do not have to obtain WEULs, NLA has lodged an alternative claim with the Tribunal seeking to obtain from Meltwater a higher fee (calculated on a different basis) than the £10,000 currently proposed under the WDL. I am told that Meltwater contests NLA's ability to change its case in this way. Doubtless in such circumstances both parties would seek to alter their positions.
It became obvious during the course of the evidence that the Publishers feel a strong grievance against Meltwater's perceived commercial exploitation of their websites. The Publishers have devoted very substantial resources in developing those websites and to the selection, arrangement and presentation of the material on them. Meltwater is making millions of pounds from its own activities which include ‘scraping’ the Publishers’ websites for...
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