Special Report: Licensing Of News Titles And Extracts – Newspapers’ Best And Last Bet?

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In a bold and unprecedented move, the ruling coalition of Germany has come to the rescue of the beleaguered news publishing industry by pushing for the enactment of a related right to copyright that would ask commercial aggregators to pay publishers for their use of headlines and extracts of news articles. Search engine and news aggregator Google and the Federation of German Industries trade group, along with other groups and stakeholders, have already spoken out against the proposed ancillary right, an amendment to the proposed German law on copyright and neighbouring rights. Among other things, they claim potential harm to the internet business and to the fundamental freedom of expression rights.

“If news publishers want to make more money on the net, they need to develop paid content models instead of pushing for legislation that forces aggregators to pay a tax for content publishers make freely available on the web. This kind of legislation would tremendously increase legal uncertainty and would harm innovation,” Matthias Spielkamp, journalist and project lead of the German copyright and online information portal iRights.info, told Intellectual Property Watch in an interview.

He noted that already, newspaper publishers are benefiting from the operation of intermediaries, with search engines “sending them billions of page views each day.”

However, a look back into the legal developments in this area, especially in the European Union (EU), would reveal that a licensing agreement could be the most realistic – if not the only – solution for now in meeting the interests of both the news publishers and commercial online intermediaries.

The same analysis of the legal situation hounding the newspapers and commercial online intermediaries led by Google would also show that is not surprising a move as daring as charging for the online reproduction of the headline and the first paragraph or the first sentence of a news article would come from Europe.

“Licensing is clearly the best option, but you need to be able to convince the other party (online intermediaries) to negotiate,” Belgian IP and media lawyer and professor Alain Strowel told Intellectual Property Watch.

“The problem in practice is that some users do not want to get a licence and pay, and, on the other side, the press publishers are asking too much,” Strowel added.

A Development Just Waiting To Happen?

Already, at least two top EU courts – the Court of Justice of the European Union (CJEU) and the UK Court of Appeal – have decided for the protection of short text snippets in news articles.

In Infopaq International A/S v. Danske Dagblades Forening the CJEU, the EU High Court, ruled in 2009 against the scanned reproduction by media monitoring service provider Infopaq of short summaries – text extracts of not more than 11 words – from Danish newspaper articles.

“…an act occurring during a data capture process, which consists of storing an extract of a protected work comprising 11 words and printing out that extract, is such to come within the concept of reproduction in part within the meaning of Article 2 of the Directive 2001/29…,” the court wrote.

Directive 2001/29 is the EU directive on copyright and related rights in the information society, in which Article 2 provides EU member states – once the directive has been transposed into national laws – “the exclusive right to authorise or prohibit direct or indirect, temporary or permanent reproduction by any means and in any form, in whole or in part” of protected works of authors, performers, phonogram producers and broadcasting organisations.

Just last year, the UK Court of Appeal held in Newspaper Licensing Agency (NLA) v. Meltwater, in a judgment that echoed the reasoning of the Infopaq court, that a newspaper headline contains “elements which are the expression of the intellectual creation of the author,” and thus should be granted copyright protection.

Copyright is an area that is not yet harmonised in the EU, but copyright laws in the region, in one way or another, put value on “the author’s own intellectual creation” as a strong requirement for copyright protection. The same test for copyright eligibility is included in one of EU’s copyright related directive – the Council Directive 96/9/EC or the Directive on the Legal Protection of Databases.

In NLA v. Meltwater, the latter was found “scraping” news of NLA member newspapers and feeding news summaries, with the headlines, the hyperlink and some extracts of news articles, to their clients. The court dismissed the argument that by forcing an intermediary to pay on behalf of its end-users would result in double licensing, arguing that both Meltwater and its end-users need licences from NLA and the publishers.

“The copies created on the end-user’s computer are the consequence of the end-user opening the e-mail containing Meltwater News, searching the Meltwater website or accessing the publisher’s website by clicking on the link provided by Meltwater. They are not the same copies as those sent by Meltwater,” the UK Appeal Court wrote.

In addition, the EU has the infamous Belgian court decision that made a copyright infringer out of Google. In Google v. Copiepresse (2007), the Court of First Instance in Brussels held that Google News was in violation of the Belgian copyright law, dismissing Google’s defence of legal exceptions for citations and reporting of news. The decision was later upheld by the Court of Appeal of Brussels (9th Chamber) in a decision released in May 2011.

The Belgian court ruled that Google’s use of headlines and short extracts of news articles constituted reproduction and communication to the public of the copyrighted news articles. The court went beyond the length of the work being copied and zeroed in on the stamp of the author”s personality which the court found in the headlines and short snippets of news articles.

Across the Atlantic, pockets of similar developments are also happening. In the US, a group of publishers, including the New York Times, launched last year NewsRight, a clearinghouse designed to track and make aggregators pay for the uncompensated consumption of subscription stories.

Before this, there was the copyright holding company Righthaven LLC, founded in 2010, which sued bloggers and other intermediaries found copying the news articles of its partner newspapers. Bombarded by a barrage of lawsuits, Righthaven filed for bankruptcy after operating for less than two years.

In the US, where freedom of expression rights are stronger and where the doctrine of fair use in copyright originates, the rights granted by its laws are insufficient to support licensing of headlines and news excerpts, said Robert Brauneis, IP professor at the George Washington University Law School.

“I would say it’s very unlikely for headlines, and uncertain for news excerpts – as for the latter, it depends upon their length, purpose, etcetera. Anything that would serve as a near-substitute for the article itself would likely be protected,” he elaborated.

How Much is a Fair Amount in Licensing?

According to the draft proposed German law on ancillary right for publishers, even its proponents admitted in page 7 of the draft that the amount of compensation is not easy to calculate. (The draft legislation, in German, is sourced from iRights.info [pdf])

Strowel said the “price for the licence should be quite low, as decided by the Copyright Tribunal in the Meltwater case.” In the lengthy decision [pdf] handed down by the Tribunal on 14 February, the body opted to maintain a variable rate proposed by NLA, but pushed to set a fixed rate tariff to mitigate the likelihood of Meltwater paying too much in the end for the news extracts.

Interestingly, the Tribunal factored in the business of Google News in making the decision, writing that it is a “competitor to a significant extent” and has influenced Meltwater’s pricing “to a substantial extent.”

“If Google News did not exist as a free to user service, we are quite sure that Meltwater could charge much more for its service and maintain a similar market share. Thus if we impose a tariff on one kind of organisation (Meltwater) which makes their current pricing level economically unviable in this market, we are discriminating between Google and Meltwater,” the Tribunal wrote.

“The argument that Google drives a lot of traffic to the newspapers’ sites is not a justification, it added. “All it does is to seek to justify penalising a smaller participant in the market for their smaller size.”

Deep-linking Now Old News

The proposed German ancillary right is clearly the result of successful but long lobbying efforts of politically powerful news publishers. An interesting twist in this development is that German publishers have opted for a new related right, not through the exclusive rights of copyright, to prevent the commercial use of intermediaries of their headlines and news extracts, Strowel said.

This is so as the exclusive rights of copyright have failed, in most cases except in Belgium’s Google v. Copiepresse, to prevent what they thought then were infringing activities on the internet, particularly deep-linking – which for a time was very controversial. Deep-linking refers to the widely-used practice on the internet of helping a user navigate directly to the page of the news article, thus bypassing the homepage of the online site where the premium advertisements are posted.

In Europe, until the German Federal Court decision in 2003 on Holtzbrinck v. Paperboy.de, some news publishers had been successful in court cases against intermediaries doing deep-linking to their news pages. Particularly, news publishers were arguing infringement of rights granted by the Database Directive which protects databases in two ways: by copyright and by sui generis right.

The Paperboy court held that “the database producer’s right … is not infringed if smaller individual elements of newspaper and magazine articles stored in database are communicated to users by an internet search service following the entry of a search word in order to provide such users with an indication of whether access to the full text would be of interest to them.”

In the US, deep-linking was largely allowed, for one, after the 2003 landmark decision by the 9th Circuit Court of Appeals on Ticketmaster v. Tickets.com which affirmed the lower court ruling that deep-linking did not violate the copyright and unfair competition laws.

With deep-linking now a thing of the past, the next battleground for news publishers and commercial online intermediaries is the reproduction of headlines and news extracts. Licensing of news snippets might happen very soon in Europe if the proposed German law gets enacted. In the meantime, the rest of the world can debate whether news publishers should limit or just embrace in resignation the business of Google and other intermediaries.

Maricel Estavillo studied Intellectual Property and Competition Law at the Munich Intellectual Property Law Center. She spent seven years as a reporter and editor for a leading business newspaper in Manila, Philippines. She continues to write about technology and intellectual property developments.

Maricel Estavillo may be reached at maricelestavillo@gmail.com.

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