After five years of litigation between the parties, the Court of Justice of the European Union (CJEU) has now handed down its ruling on liability for browsing and caching in Case C-360/13Public
After five years of litigation between the parties, the Court of Justice of the European Union (CJEU) has now handed down its ruling on liability for browsing and caching in Case C-360/13Public Relations Consultants Association Limited v Newspaper Licensing Agency Limited and Ors. The background to the case was reported in our Spring 2011 and 2013 newsletters respectively (click here and here).
The fundamental issue before the Supreme Court and which it referred up to the CJEU for a preliminary ruling was whether internet users who view websites on their computers without downloading or printing the content are committing infringements of copyright by reason of the automatic creation of on-screen copies and cached copies on the hard disk or whether this act fell within the exemption at Article 5(1) of Directive 2001/29 as a (1) "temporary act of reproduction" which is (2) "transient or incidental" and (3) "an integral and essential part of a technological process" and (4) "whose sole purpose is to enable (a) a transmission in a network between third parties by an intermediary, or (b) lawful use of a work or other subject-matter to be made" and which (5) "have no independent economic significance". Further Article 5(5) states that the exemption only applies in certain "special cases which do not conflict with a normal exploitation of the work or other subject-matter and do not unreasonably prejudice the legitimate interests of the rightholder".
The Supreme Court was quite certain that the copies made in the above process satisfied conditions (4) and (5) above, but it was uncertain about conditions (1) – (3).
The CJEU ruled that condition (1) was satisfied because on-screen copies were deleted when the user moved away from the website and the cached copies were normally automatically replaced by other content after a certain time.
Condition (2) required the reproduction to be transient or incidental which was the case here because on-screen copies only existed to view the website (transient) and the cached copies did not exist independently of the technological process (incidental).
The CJEU held that condition (3) required the reproduction to be (a) carried out entirely in the context of the implementation of a technological process and (b) the completion of those acts had to be necessary for the technological process to function correctly and efficiently. In the case at hand, (a) was satisfied because the copies were created and deleted by the technological process used for viewing websites so the copies were made entirely in the context of that process - the CJEU held that it did not matter that the process was activated by the user or that it was terminated by the act of reproduction – and (b) was also satisfied because the internet would be unable to cope with the volume of data transmitted online without cached copying and on-screen copying allowed the viewing websites to function correctly and efficiently.
In relation to Article 5(5), the copies in this case, being created only for the purposes of viewing websites, constituted "a special case". Also the CJEU found that the copies did not unreasonably prejudice the legitimate interest of the rights holders as the works are made available to internet users by the publishers of the websites. It was for those publishers to obtain authorisation from the copyright holders to make the publication available and communicate it to the public, not the users. Finally, the copies created did not conflict with a normal exploitation of the copyright works because the creation of the copies formed part of the viewing of the website by means of the required technological process.
So the acts fell within the exemption to copyright infringement and the website users do not need to obtain a further licence to browse the content of websites with freely available copyright-protected works.
Comment
The CJEU's ruling is a sensible one (and it is interesting to note that it did not require the Advocate General's Opinion – a stage that is only bypassed when the CJEU considers that a case does not raise a new point of law). If the ruling had followed the High Court and Court of Appeal's decisions, this could have had serious implications for the billions of browsing Internet users in Europe. The CJEU ruling provides clarity as to the licensing obligations of the players in a typical chain of an information provider service. Those at the top of the chain who copy and send extracts of content from a website will still need to have the proper authorisation from the website owner in order to do this (subject to the extract enjoying the requisite copyright protection as to which see the earlier decisions reported at the link above). The end user who views this content, however, will not need to obtain a licence.
It will be interesting to see to what extent the NLA alters its licensing schemes following this ruling. The ruling means that media monitoring agencies (such as Meltwater in this case) will still require a licence to copy online content to create paid-for services (e.g. content sent via email) for their clients (PR agencies in this case) and their clients will still need a licence to view that content. However, where this ruling bites is in situations where the media monitoring agencies create portals on their websites that their clients can access to view the content. The NLA has indicated in press reports that if that means the end user does not need to pay a licence fee, then it will seek to increase the fees paid by media monitoring agencies.
This ruling does not affect the Svensson decision on the use of hyperlinks (click here for our previous commentary on this). A practical solution for some businesses may be to offer users hyperlinks to freely accessible content because it seems that, in those circumstances, neither the provider of the link, nor the user, will be required to obtain licences.
The case will now be referred back to the UK Court to implement the decision and it will be interesting to see if the Supreme Court makes any further comment.
The fundamental issue before the Supreme Court and which it referred up to the CJEU for a preliminary ruling was whether internet users who view websites on their computers without downloading or printing the content are committing infringements of copyright by reason of the automatic creation of on-screen copies and cached copies on the hard disk or whether this act fell within the exemption at Article 5(1) of Directive 2001/29 as a (1) "temporary act of reproduction" which is (2) "transient or incidental" and (3) "an integral and essential part of a technological process" and (4) "whose sole purpose is to enable (a) a transmission in a network between third parties by an intermediary, or (b) lawful use of a work or other subject-matter to be made" and which (5) "have no independent economic significance". Further Article 5(5) states that the exemption only applies in certain "special cases which do not conflict with a normal exploitation of the work or other subject-matter and do not unreasonably prejudice the legitimate interests of the rightholder".
The Supreme Court was quite certain that the copies made in the above process satisfied conditions (4) and (5) above, but it was uncertain about conditions (1) – (3).
The CJEU ruled that condition (1) was satisfied because on-screen copies were deleted when the user moved away from the website and the cached copies were normally automatically replaced by other content after a certain time.
Condition (2) required the reproduction to be transient or incidental which was the case here because on-screen copies only existed to view the website (transient) and the cached copies did not exist independently of the technological process (incidental).
The CJEU held that condition (3) required the reproduction to be (a) carried out entirely in the context of the implementation of a technological process and (b) the completion of those acts had to be necessary for the technological process to function correctly and efficiently. In the case at hand, (a) was satisfied because the copies were created and deleted by the technological process used for viewing websites so the copies were made entirely in the context of that process - the CJEU held that it did not matter that the process was activated by the user or that it was terminated by the act of reproduction – and (b) was also satisfied because the internet would be unable to cope with the volume of data transmitted online without cached copying and on-screen copying allowed the viewing websites to function correctly and efficiently.
In relation to Article 5(5), the copies in this case, being created only for the purposes of viewing websites, constituted "a special case". Also the CJEU found that the copies did not unreasonably prejudice the legitimate interest of the rights holders as the works are made available to internet users by the publishers of the websites. It was for those publishers to obtain authorisation from the copyright holders to make the publication available and communicate it to the public, not the users. Finally, the copies created did not conflict with a normal exploitation of the copyright works because the creation of the copies formed part of the viewing of the website by means of the required technological process.
So the acts fell within the exemption to copyright infringement and the website users do not need to obtain a further licence to browse the content of websites with freely available copyright-protected works.
Comment
The CJEU's ruling is a sensible one (and it is interesting to note that it did not require the Advocate General's Opinion – a stage that is only bypassed when the CJEU considers that a case does not raise a new point of law). If the ruling had followed the High Court and Court of Appeal's decisions, this could have had serious implications for the billions of browsing Internet users in Europe. The CJEU ruling provides clarity as to the licensing obligations of the players in a typical chain of an information provider service. Those at the top of the chain who copy and send extracts of content from a website will still need to have the proper authorisation from the website owner in order to do this (subject to the extract enjoying the requisite copyright protection as to which see the earlier decisions reported at the link above). The end user who views this content, however, will not need to obtain a licence.
It will be interesting to see to what extent the NLA alters its licensing schemes following this ruling. The ruling means that media monitoring agencies (such as Meltwater in this case) will still require a licence to copy online content to create paid-for services (e.g. content sent via email) for their clients (PR agencies in this case) and their clients will still need a licence to view that content. However, where this ruling bites is in situations where the media monitoring agencies create portals on their websites that their clients can access to view the content. The NLA has indicated in press reports that if that means the end user does not need to pay a licence fee, then it will seek to increase the fees paid by media monitoring agencies.
This ruling does not affect the Svensson decision on the use of hyperlinks (click here for our previous commentary on this). A practical solution for some businesses may be to offer users hyperlinks to freely accessible content because it seems that, in those circumstances, neither the provider of the link, nor the user, will be required to obtain licences.
The case will now be referred back to the UK Court to implement the decision and it will be interesting to see if the Supreme Court makes any further comment.