Courts busy with copyright: Meltwater UKSC, Viacom v YouTube, UMG v Escape, Cariou v Prince

It was another busy two weeks in copyright with courts in the UK and US canvassing whether browsing a work, hosting a user generated content site, and creating appropriation art, infringes copyright. The opinions of the three courts (finding no liability in each case) on copyright policy was perhaps as interesting as the holdings themselves. On top of that, a U.S. appeals court ruled that the DMCA hosting exception does not apply to pre-1972 sound recordings.

In Public Relations Consultants Association Ltd v The Newspaper Licensing Agency Ltd & Ors [2013] UKSC 18 (17 April 2013), the UK Supreme Court ruled that the exception permitting temporary copying as part of a technical processes in section 28A of the Copyright, Designs and Patents Act 1988, permitted copying in a web browser. The Court’s thinking on this issue was summed up in the paragraph below where the Court canvassed the intent behind Article 5.1 of Directive 2001/29/EC upon which the UK exception was based. The Court highlighted the important balancing acts which copyright straddles. It must provide a high level of protection for right holders, especially against those that are at fault, while at the same time not creating significant unintentional liability by end users who simply engage in acts that in the analog world traditionally have not been infringing.

It is the policy of the EU to maintain a “high level of protection of intellectual property”. That policy is acknowledged both in the Directive itself (see recitals 4 and 9), and in the case law (for example, Premier League at para 186). We were pressed with the argument that if the viewing of copyright material on a web-page did not require a licence from the copyright owner, he would be exposed to large-scale piracy of a kind which would be difficult to detect or prevent.

I am not persuaded by this argument and nor, it is clear, was the Court of Justice on the successive occasions when it has dealt with this issue. Of course, any diminution in the rights of copyright owners necessarily narrows the scope of the protection which they enjoy for their works. But we need to keep this point in proportion. In the first place, article 5.1 is an exception to the copyright owner’s right to control the reproduction of his work. It necessarily operates to authorise certain copying which would otherwise be an infringement of the copyright owner’s rights. Secondly, it has never been an infringement, in either English or EU law, for a person merely to view or read an infringing article in physical form. This state of affairs, which is recognised in the enumeration of the copyright owner’s rights in articles 2, 3 and 4 of the Directive, has never been thought inconsistent with a high level of protection for intellectual property. All that article 5.1 of the Directive achieves is to treat the viewing of copyright material on the internet in the same way as its viewing in physical form, notwithstanding that the technical processes involved incidentally include the making of temporary copies within the electronic equipment employed. Third, if it is an infringement merely to view copyright material, without downloading or printing out, then those who browse the internet are likely unintentionally to incur civil liability, at least in principle, by merely coming upon a web-page containing copyright material in the course of browsing. This seems an unacceptable result, which would make infringers of many millions of ordinary users of the internet across the EU who use browsers and search engines for private as well as commercial purposes. Fourth, nothing in article 5.1 affects the obligation of Meltwater to be licensed in order to upload copyright material onto their website or make non-temporary copies of it in some other way. At the moment, the licence fee payable by Meltwater is fixed on the basis that its customers need a licence of their own from the publishers and that the service will be supplied only to end-users who have one. It seems very likely (although I am not deciding the point) that the licence fee chargeable to Meltwater will be substantially higher if end-users do not need a licence because on that footing the value of the rights for which Meltwater is licensed will be significantly higher. The respondents have lodged an alternative claim with the Copyright Tribunal on that basis. In my view it is altogether more satisfactory that a single large licence fee should be payable representing the value to the person who puts the material onto the internet, than that tiny sums should be separately collectable from hundreds (in other cases it may be millions) of internet viewers. Fifth, if merely viewing a web-page is not an infringement, that does not leave the copyright owner without effective remedies against pirates. It simply means that his remedy must be found against others who on the face of it are more obviously at fault. Nothing in article 5.1 impairs the copyright owner’s right to proceed against those who unlawfully upload copyright material onto the internet, just as the copyright owner has always been entitled to proceed against those who make or distribute pirated copies of books, films, music or other protected works. The Directive itself contains in Chapters III and IV important provisions enlarging the range of procedures and sanctions available against piracy.

The result in the case was the second loss for Meltwater‘s controverisal news clipping service  in the last month. However, Meltwater will get another chance to make its case, as the issue was referred to the CJEU for final determination.

In Viacom International, Inc v YouTube, Inc 2013 WL 168907 (S.D.N.Y April 18, 2013), the US District court released its decision on the question of YouTube’s copyright liability remanded to it by the Second Circuit in Viacom International, Inc v YouTube, Inc 676 F.3d 19 (2nd. Cir. 2012). The Court exonerated YouTube from liability even though YouTube knew there were significant infringements occurring at its site, as had the Ninth Circuit exonerated Veoh just over a month earlier in UMG Recordings v Shelter Capital Partners 2013 WL 1092793 (9th.Cir. March. 14, 2013). The US law under the DMCA has now come to this according to the judge: “the governing principle must remain clear: knowledge of the prevalence of infringing activity, and welcoming it, does not itself forfeit the safe harbor. To forfeit that, the provider must influence or participate in the infringement”, unless the site fails to take action in response to specific instances of infringement of which it is made aware or has “red flag” knowledge of it.

The YouTube decision was followed last week by a decision of a New York appeals court that ruled that the DMCA safe harbors do not apply to pre-1972 sound recordings. In UMG Records, Inc v Escape Media Group, Inc., 2013 NY Slip Op 2702 (App. Div.,1st Dept. 2013), the Court addressed the two competing policy objectives advanced in the case as follows:

Finally, we reject defendant’s argument that the very purpose of the DMCA will be thwarted if it is deemed not to apply to the pre-1972 recordings. The statutory language at issue involves two equally clear and compelling Congressional priorities: to promote the existence of intellectual property on the Internet, and to insulate pre-1972 sound recordings from federal regulation. As stated above, it is not unreasonable, based on the statutory language and the context in which the DMCA was enacted, to reconcile the two by concluding that Congress intended for the DMCA only to apply to post-1972 works. In any event, defendant’s concerns about interpreting the statutes in the manner advocated by UMG are no more compelling than UMG’s concerns about interpreting the statutes in the manner advanced by defendant. Under such circumstances, it would be far more appropriate for Congress, if necessary, to amend the DMCA to clarify its intent, than for this Court to do so by fiat.

Late last week the Second Circuit Court of Appeals released an important decision in Cariou v Prince 2013 WL 1760521 (2nd.Cir.Apr. 2013). The Court reversed the District Court holding (with 5 exceptions) that Richard Prince’s artworks infringed on Cariou’s registered copyrights in certain photographs. The Court ruled that Prince’s appropriation art had made significant use of Cariou’s photos. That use was nevertheless non-infringing on account of fair use. Perhaps the most interesting part of the decision was the Second Circuit’s summary of the role and scope of fair use in US copyright law.

The purpose of the copyright law is “[t]o promote the Progress of Science and useful Arts ….“ U.S. Const., Art. I, § 8, cl. 8. As Judge Pierre Leval of this court has explained, “[t]he copyright is not an inevitable, divine, or natural right that confers on authors the absolute ownership of their creations. It is designed rather to stimulate activity and progress in the arts for the intellectual enrichment of the public.” Pierre N. Leval, Toward a Fair Use Standard, 103 Harv. L.Rev. 1105, 1107 (1990) (hereinafter “Leval”). Fair use is “necessary to fulfill [that] very purpose.” Campbell, 510 U.S. at 575. Because “ ‘excessively broad protection would stifle, rather than advance, the law’s objective,’ “ fair use doctrine “mediates between” “the property rights [copyright law] establishes in creative works, which must be protected up to a point, and the ability of authors, artists, and the rest of us to express them—or ourselves by reference to the works of others, which must be protected up to a point.” Blanch, 467 F.3d at 250 (brackets omitted) (quoting Leval at 1109).

The doctrine was codified in the Copyright Act of 1976, which lists four non-exclusive factors that must be considered in determining fair use…

As the statute indicates, and as the Supreme Court and our court have recognized, the fair use determination is an open-ended and context-sensitive inquiry. Campbell, 510 U.S. at 577–78; Blanch, 467 F.3d at 251. The statute “employs the terms ‘including’ and ‘such as’ in the preamble paragraph to indicate the illustrative and not limitative function of the examples given, which thus provide only general guidance about the sorts of copying that courts and Congress most commonly had found to be fair uses.” Campbell, 510 U.S. at 577–78 (quotation marks and citation omitted). The “ultimate test of fair use … is whether the copyright law’s goal of ‘promoting the Progress of Science and useful Arts’ … would be better served by allowing the use than by preventing it.” Castle Rock, 150 F.3d at 141 (brackets and citation omitted).

Fair use has been called “the most troublesome in the whole law of copyright.” Dellar v. Samuel Goldwyn, Inc., 104 F.2d 661, (2d Cir. 1939) (per curiam). Courts and commentators have criticized it because the doctrine is “so flexible as virtually to defy definition”.  Monge v. Maya Magazines, Inc., 688 F. 3d 1164 (9th.Cir.2012). If the ultimate test is, as the Second Circuit suggsted in Cariou v Prince, ultimately whether “copyright law’s goal of ‘promoting the Progress of Science and useful Arts’ … would be better served by allowing the use than by preventing it”, one can see why its applicability in any given case could lead to unpredictable results.



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