FAQ: Newspaper Licensing Agency Dispute

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, as well as the clients of these MMOs. 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.

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.

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 (http://www.nla-web.co.uk/media_monitoring_clients.aspx) 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 rights-holders and end users.

What action is being taken against the NLA?
Meltwater referred the NLA licence to the UK Copyright Tribunal in 2009. 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 hearing is scheduled for September 2011 and a decision is expected in early 2012.

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.

Why did the NLA refer PRCA and Meltwater to the High Court?
The Copyright Tribunal was unable to rule on certain elements of the Meltwater / PRCA reference without clarification from the High Court. The NLA Ltd therefore 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 Court of Appeal ruling and implications
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 ruled 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.

The PRCA and Meltwater decided to refer elements of the High Court judgment to the Court of Appeal with a view to minimising the costs of the NLA licence to the end user in the Copyright Tribunal.

The Court of Appeal’s ruling highlighted that the High Court judgment went further than is warranted. The court has clarified that it is not the case that every recipient and/or user of Meltwater News will inevitably infringe the copyright so as in all cases to require a licence or consent from the publisher.  

The court also ruled that it will be very rare that headlines are copyrightable. Going back 200 years no court has ever found a title worthy of copyright protection, and the Court of Appeal endorsed this legal precedent.

Given this, we now have a stronger case with the Copyright Tribunal than we had after the High Court judgment.

We believe that the Courts have to date avoided ruling on some of the more challenging elements of the copyright law where technology is evolving faster than the legislation.  This latest verdict, although more positive for us, is a clear sign that UK copyright law is in need of a refresh to bring it into line with modern day Internet usage.

In particular, we believe the judgments carry 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, and we are raising this concern with Government as we believe that it risks stifling innovation and investment in the UK.

This a broad and important principle with implications, not only for the user of media monitoring services and the PR industry, but for all users of the Internet. We have therefore decided to seek permission to appeal the issue of temporary copying (clicking on links and reading content) to the Supreme Court.

What happens now?
In November 2011 the PRCA and Meltwater were granted leave to appeal to the Supreme Court.

The decision of the Supreme Court to allow the appeal reflects the significant potential ramifications (for society and the economy as a whole) of the Court of Appeal’s ruling on the scope of what is known as the "temporary copies" exception to copyright protection. The scope of the temporary copies exception is fundamental to how the Internet functions and both the PRCA and Meltwater welcome the decision to allow an appeal of the Court of Appeal's very narrow interpretation.

As it stands the ruling from the Copyright Tribunal hearing on whether the NLA’s licensing scheme is reasonable is still awaited. 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. 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.

How will this affect end users now?
If the Copyright Tribunal decides end users of MMO services will need to sign up to an NLA licence it is our understanding that the NLA intends to retrospectively charge fees back to 1st January 2010, but this will be clarified once the Copyright Tribunal has ruled on the terms of the licence.

End users are not obliged to pay this fee until the Copyright Tribunal has ruled on the terms of the licence.

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 survey¹ of marketing professionals 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. Meltwater therefore felt an obligation to take the necessary legal action to defend its customers and the 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 and Court of Appeal 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, MMOs are increasing website traffic and generating revenues for the newspapers. MMOs like Meltwater are not substitutes to the publishers, to the contrary they support whatever business model the publishers haven chosen to monetize their content.

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
dan.purvis@meltwater.com
+44 (0)7801 424454

Richard Ellis
PRCA communications director
richard.ellis@prca.org.uk
+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 57 offices located across North America, South America, Europe, Middle East, Africa, Asia and Australia. Meltwater is committed to challenging existing business models by introducing disruptive technologies.​ The Meltwater Group delivers B2B solutions based on search engine technology, cloud computing and talent management software. For more information, please visit http://www.meltwater.com.

About PRCA

Who we are:
Founded in 1969, the PRCA is the professional body that represents UK PR consultancies, in-house communications teams, PR freelancers and individuals.  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 50 in-house communications teams from multinationals, UK charities and leading UK public sector organisations.

For more information please visit: http://www.prca.org.uk.

¹ The survey received 439 responses. 46% from agency, 40% in-house, 3%media publishers and 11% other. Of the respondents 13% were Meltwater clients, 26% PRCA members, 5% Meltwater clients and PRCA members and 55% neither PRCA members nor Meltwater clients.