Copyright infringement: defence of fair dealing

Background

Section 1(1)(b) of the Copyright, Designs and Patents Act 1988 (CDPA) provides that copyright subsists in films and broadcasts. 

Copyright is infringed by doing an act restricted by copyright, such as reproduction or communication to the public, in relation to the whole, or any “substantial part”, of a work (section 16, CDPA). Fair dealing with a work for the purpose of reporting current events does not infringe, provided it is accompanied by a sufficient acknowledgement (section 30(2), CDPA) (section 30(2)). In Pro Sieben Media AG v Carlton UK Television Ltd, the Court of Appeal held that the appearance on screen of a broadcaster's logo could be a sufficient acknowledgement. Read article >>

The Copyright Directive (2001/29/EC) provides that exceptions and limitations should be applied only in certain special cases that do not conflict with a normal exploitation of the work or other subject matter and do not unreasonably prejudice the legitimate interests of the rights holder (the three-step test).

Articles 12 to 14 of the E-Commerce Directive (2000/31/EC) limit the liability of internet service providers (ISPs) where they act as mere conduits, caches or hosts of information. This is implemented in the UK by regulations 17 and 19 of the Electronic Commerce (EC Directive) Regulations 2002 (SI 2002/2013) (regulations 17 and 19). 

Facts

E and S owned the copyright in television broadcasts of cricket matches organised by E, and films made during the course of those broadcasts, for example action replays.

T and F’s app allowed users to upload screen-captured clips of broadcast footage and to add commentary to those clips. T’s employees, contractors and users uploaded clips of cricket match broadcasts lasting up to eight seconds onto the app where they could be viewed by users. Users could also view the clips on T’s website, Facebook page and Twitter.

E and S alleged that users committed infringing acts when using the app, and that T and F were jointly liable with the users for those acts. They argued that T and F were primarily liable for their employees’ and contractors’ acts. T and F did not dispute joint liability, but relied on the defences of acting as a mere conduit and hosting in regulations 17 and 19. T and F also relied on the defence of fair dealing in section 30(2).

Decision

The court held that the copyright works relied on, broadcasts and films, were signal rights rather than authorial works, and had no requirement for originality. 

So, the court had to consider what test for substantiality should apply in circumstances where there is no intellectual creation. 

The issue was whether it was correct to consider the value or interest of the part of the broadcast or film when determining whether it was a substantial part: whether a qualitative assessment should be applied. The court held that an approach parallel to the “intellectual creation” test should be applied and so parts of broadcasts and films were protected if they contained elements reflecting the rationale for their protection: the investment made by the broadcaster or producer. This required both a quantitative and qualitative assessment of the part of the work reproduced.

The clips used were at most eight seconds taken from two-hour broadcasts or films. Although quantitatively this was not a large proportion, from a qualitative perspective the clips were typically highlights of the matches and so were of interest and value. Each clip substantially exploited E and S’s investment in producing the relevant broadcast or film and so constituted a substantial part. However, other clips might not amount to a substantial part, for example if they did not show a highlight of the match. 

A sporting event such a as cricket match is a “current event” within the meaning of section 30(2) so, as most clips were uploaded “near-live”, they qualified as being in relation to a current event. This did not include interviews or analysis of matches. The key question was whether the infringing acts were “for the purpose of” reporting the matches. Reading section 30(2) in light of the Copyright Directive, “reporting” should be construed broadly and could encapsulate “citizen journalism” in addition to traditional news reporting. 

Despite the potentially broad definition of “reporting”, the court concluded from the way T and F had advertised their app that its primary purpose was sharing clips. Although users added comments to the clips, this was not sufficient to qualify as use for the purpose of reporting current events. The clips were presented for consumption because of their value, rather than to inform the audience about current events.

The court also found that, even if the clips were for the purpose of reporting current events, the use of the clips was not fair dealing. The evidence demonstrated that the use was commercially damaging to E and S and conflicted with the normal exploitation of the works, including live coverage and clip rights, through the licensing deals E had negotiated with other outlets, its own proposed use and future licensing plans. Also, the extent of the use was held not to be justified by the informatory purpose, even for later versions of the app that restricted the amount a user could view.

The app did not merely involve transmission of information but also storage, and so the mere conduit defence was also inapplicable. As regards hosting, many of the clips uploaded to the app were subject to editorial review by T and F, or even uploaded by their employees, and so not subject to the hosting defence. 

Comment

This decision will be welcomed by rights holders, especially in the sports sector where sporting events which are the underlying subject-matter of the broadcast tend to be less readily protected than, for example, television drama series or feature films which have an underlying “authorial” dramatic work. Substantial investment is made by broadcasters in the right to broadcast live sport and the ability to show slow motion action replays from all angles, and so the finding that even very short highlight clips can constitute a substantial part of the broadcast will provide comfort that this investment can be protected.

This decision provides useful guidance on how the categories of use exempted from liability can be construed purposively and so broadly in light of technological developments and the Copyright Directive, even if here the purpose was sharing footage purely for consumption not imparting information. It suggests that where commercial value is extracted from the copyright content itself, rather than the use of this content to report on events, it will be difficult to satisfy the requirement for fair dealing for the purpose of reporting current events.

The defence of fair dealing for the purpose of reporting current events is explored in detail and guidance given on how to determine whether a reproduction and communication is for this purpose. Social media users will be comforted by the fact that capturing images or sound of a newsworthy event using a mobile phone and uploading it to a social media site could qualify as reporting current events, even with relatively little commentary. There are also some helpful comments about what could qualify as a sufficient acknowledgment based on the Pro Sieben principles.

Case: England and Wales Cricket Board Ltd and another v Tixdaq Ltd and another [2016] EWHC 575 (Ch).

First published in the May 2016 issue of PLC Magazine and reproduced with the kind permission of the publishers. Subscription enquiries 020 7202 1200.