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You are here: BAILII >> Databases >> England and Wales High Court (Patents Court) Decisions >> Newspaper Licensing Agency Limited v. Marks & Spencer Plc [1999] EWHC Patents 266 (19th January, 1999)
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Cite as: [1999] EWHC Patents 266
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Newspaper Licensing Agency Limited v. Marks & Spencer Plc [1999] EWHC Patents 266 (19th January, 1999)
CH 1997 T 4106
CH 1998 T 6004
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
B E F O R E: THE HONOURABLE MR JUSTICE LIGHTMAN
Click here for Court of Appeal Judgment
B E T W E E N:
THE NEWSPAPER LICENSING AGENCY LIMITED
-and-
MARKS & SPENCER PLC
JUDGMENT
Hearing: 15th - 17th December 1998
Judgment: 19th January 1999
Lightman J.
INTRODUCTION
1. The plaintiff the Newspaper Licensing Agency Limited ("NLA") is the owner of the copyright in the typographical arrangement in a large number of national and regional newspapers. In the two actions before me NLA seeks to establish that the defendant Marks & Spencer Plc ("M&S") is infringing such copyright by making copies of cuttings from those newspapers and distributing such copies within M&S. M&S contends that it is entitled to make and distribute such copies on the ground that such conduct does not constitute an infringement of NLA's copyright (1) because the copying is not of a substantial part of the copyright work and (2) (even if the copying is of a substantial part of the copyright work) because such copying constitutes fair dealing for the purposes of reporting current events within the meaning of Section 30(2) of the Copyright Designs and Patents Act 1988 ("the Act"). The reason why M&S makes and distributes copies is the need on the part of M&S to know as soon as it appears what the press have to say about matters related to its business, so that it can make the appropriate response and take any necessary action. The NLA say that this need can and should be satisfied by M&S taking a copyright licence to make such copies from the NLA which is available for a reasonable consideration approximating to 2 pence per copy. M&S say that no such licence is necessary.
2. Beyond the issues of infringement and fair dealing there is also an issue between the parties as to the date when the NLA acquired copyright from the newspaper publishers. M&S in the first action before me raised the question whether the documentation initially relied on by NLA to effect an assignment by the publishers to the NLA of the copyright was sufficient and effective for this purpose. To meet the possibility that this challenge might succeed, NLA took fresh assignments from the publishers which M&S accept to have been effective for this purpose and commenced the second action relying on such fresh assignments. The parties have agreed that the issue whether NLA had title at the date of the first action (which only goes to the costs of the first action) should be deferred until after determination of the issue of infringement.
FACTUAL BACKGROUND
3. For many years press cutting agencies and public relations consultants have provided newspaper cutting services to their clients. Clients for these services include a wide range of commercial and other organisations which desire to be kept informed of material relevant to their operations which appear in the press. The service consists of scanning the national and major local newspapers and other periodical publications and providing their clients with cuttings or copies of cuttings of relevant articles appearing in those publications. It is common for the scope of the cuttings to be determined by a brief given by the client to the agency.
4. M&S is a large and well known retailer dealing in a wide variety of clothing, food and homewares. It has some 290 retail outlets to which some 10 million customers resort each week. It employs some 56,527 persons in the United Kingdom and it has a main board of 25 directors and some 30 divisional directors. Its success depends upon predicting and meeting the requirements of the purchasing public for the goods it sells. In two major areas of M&S's business, namely clothing and foods, fashions and public requirements can change rapidly. Public perception of M&S's goods is highly influenced by press comment. M&S needs to keep itself fully informed of all press reports of its and its competitors activities in order to be able to respond promptly and effectively to the information received by its customers. The need is the greater where the press comment is particularly favourable or adverse. It is essential that M&S respond promptly and appropriately to all such comments: adverse comment in the press may or may not be justified and requires a measured response. As a consequence it is an essential part of M&S's business that its senior executives receive copies of press reports relevant to their activities and are thus enabled to deal with what appears in those reports. To meet this requirement M&S has long had a press cutting service provided to it by a cuttings agency and operated a sophisticated press office.
5. The agency currently used is The Broadcast Monitoring Company, a subsidiary of the Financial Times. The brief delivered by M&S to the agency (which is constantly updated) requires cuttings of interest to M&S to be taken from the first and final editions of national daily and Sunday newspapers, The European, the Evening Standard, regional newspapers, the International Herald Tribune and the Wall Street Journal, and for these to be delivered to M&S each morning Monday to Friday. Cuttings are of interest if they relate to M&S. The topics of particular interest are enumerated in detail. They include the retail trade, suppliers and contractors, food and food safety, textiles and clothing. References to competitors and comparisons between M&S and their products and services are of special interest. Transcripts are also delivered of some articles of interest in foreign newspapers.
6. M&S has three separate press offices:
(a) the Corporate Press Office ("the CPO") is concerned with issues of a corporate nature, e.g. company results, health and safety, policy issues, Board issues and new store openings. The cuttings selected by the agency are delivered to the CPO in the early morning. The CPO reviews these cuttings and makes a selection of those which it adjudges to be relevant to the business under the headings of (i) retail interest; and (ii) merchandise features. These cuttings ("the CPO Cuttings") are then copied and sets of the copies are delivered to about 13 individuals within M&S in the early morning and to about 70 others through the internal post before lunchtime. Cuttings from the regional press are supplied separately to the CPO by fax or post by M&S's regional press agencies and (it is to be inferred) are dealt with in the same way;
(b) the General Merchandise Commercial Press Office ("GMCPO") deals with womenswear, menswear, childrenswear and home and beauty products. The agency in accordance with the brief send to the GMCPO on Mondays the same set of cuttings as are sent to the CPO. The GMCPO makes a selection of cuttings which make reference to M&S merchandise and other articles of interest, copies the selection and hand delivers sets in the early morning (until recently) to 12 (now only 3) different people and also selects and distributes cuttings of particular interest to individual departments to the various department representatives concerned. On Tuesdays to Fridays, the GMCPO receives a set of CPO cuttings from the CPO. Items of particular interest are selected and sent to relevant personnel in the various departments and their superiors. 2 other copies are made for the 5 Marketing and Press departments;
(c) the Food Press Office ("the FPO") deals with issues relating to food and drink. The FPO receives cuttings from the Agency in accordance with the food section of the CPO brief. From this a selection of relevant items is made for each Food Department, and a copy sent to each. Copies of relevant items are also sent to the Customer Service Department. Each Monday items from the "Tried and Tested" features in the weekend press are copied and sent to a number of Food Directors. Items from the regional press are sent direct to the FPO by regional agencies and (it is to be inferred) are dealt with as above.
7. In summary, the various copies of cuttings are used by the recipients to inform themselves of what is being said in the press about M&S and its products, and about their rivals and their products, together with other matters which affect its business, such as fashion trends, the introduction of the European Monetary Union, and so on. Where the items are critical of M&S, this may prompt action, either to correct the fault or refute the criticism. Favourable items may be used to flag up the item on display and anticipate increased demand.
8. The NLA was formed to protect the intellectual property rights of publishers of newspapers (inter alia) in respect of press cuttings and to operate collective licensing schemes in relation to the making of copies of such cuttings. It commenced operation in January 1996. Its clients, who now include the publishers of most national and a number of provincial, regional and other newspapers, have assigned to the NLA their copyrights in the typographical arrangements of their newspapers. The NLA licenses both press cutting agencies and others to make copies from newspapers. The licences to press cutting agencies were originally of two kinds. The first permitted the agency simply to make copies and supply those copies to their clients. The second also enabled the agency to sub-licence their clients to make further copies for their internal use. The NLA no longer offer the second kind of licence: all end-users must seek a licence to make further copies directly from the NLA. The charge is approximately 2 pence per copy. The various schemes operated by the NLA are subject to the control of the Copyright Tribunal on a reference by any affected party under Section 118 of the Act and in exercise of this jurisdiction the Copyright Tribunal can determine what licence fee is reasonable in the circumstances. A reference can only be made where the existence of copyright and the need for a licence are admitted. Since M&S do not admit the need for a licence, there has been no reference in this case.
COPYRIGHT IN TYPOGRAPHICAL ARRANGEMENT
9. Section 15 of the Copyright Act 1956 for the first time gave copyright protection to the typographical arrangements of a published edition. The current law is to be found in the Act. Section 1(1) of the Act provides that copyright is a property right which subsists in-
2. This is a special and narrow type of copyright which protects the image on the page and the purpose of which is to protect the publisher's investment in the typesetting work: see
THE ISSUES
10. The NLA claims to enforce its typographical copyright in the newspapers and accordingly in the cuttings made from them. No copyright is asserted in the contents or in any photographs reproduced in the cuttings. The cuttings from each newspaper are generally only small parts of the newspapers as a whole: they are the parts of value to and required by M&S, but for the general reader are no substitute for the newspapers as a whole. The typographical arrangement of a newspaper is of importance to the general reader, for it affects how reader friendly are the newspapers and the articles in it and the impact of the contents on the reader. The interest of M&S is primarily in the contents of the cuttings, but seeing the typographical arrangement may enable M&S better to judge the impact of the articles on the general readers and to have the benefit of the reader-friendly presentation. It is instructive to compare the impact of the copy cuttings and the transcripts of articles.
11. It is common ground that theoretically M&S can bypass the copyright in a number of ways:
(a) it could require its personnel to read all the newspapers;
(b) it could reprint or retype the contents of the cuttings;
(c) it could prepare or have prepared and distribute précises of the articles;
(d) it could compile (or have compiled) and distribute bundles of original (as opposed to copy) cuttings.
3. But none of these would be as effective or efficient a method of communicating the relevant information within M&S. Accordingly M&S say that there is no practical alternative to the use of the agency and photocopying cuttings.
12. It is common ground that the NLA is entitled to assert its limited copyright to prevent copying of the cuttings without a licence from the NLA if the cuttings constitute substantial parts of the newspapers and if M&S is unable successfully to invoke the provisions of Section 30(2) of the Act. Until a late stage during the trial M&S conceded that the copying of the cuttings was of a sufficiently substantial part of the newspapers to constitute infringement unless the defence of fair dealing was made good. But after further research undertaken in the course of the trial brought to light the decision of the Federal Court of Australia in Nationwide to which I will subsequently refer, M&S withdrew this concession. This took the NLA by surprise, and to meet this situation it was agreed that both parties should be free to submit supplementary skeletons after the close of oral argument. I received such skeletons on the 7th January 1999.
INFRINGEMENT
13. The first question to be considered is whether the NLA is entitled to copyright in each individual article in the newspapers or only in each newspaper as a whole. If the NLA is entitled to copyright in each article, then no question can arise whether the copies made constitute substantial parts of the copyright work; the question can only arise if the copyright is confined to the newspapers as a whole. Sections 1(c) and 8(i) provide that copyright shall subsist in the typographical arrangements of published editions of a literary work or part of a literary work. Accordingly where a literary work or part of a literary work is published, copyright subsists in the typographical arrangement of that edition (i.e. that version) of the work as distinguished from the typographical arrangements of other editions (or versions) of that literary work. In the case of a newspaper made up of a number of different articles, each separate article is in my view a literary work and the typographical arrangement of each separate article is accordingly a copyright work. This approach accords with the decision of Walton J. in Machinery Market Ltd v. Sheen Publishing Limited [1983] FSR 431 who held that the copying in one trade journal of substantial parts of advertisements in another trade journal, making alterations only to the head and foot of the advertisements, constituted infringement of the copyright in the typographical arrangement in those advertisements. A contrary view was taken by the Federal Court of Australia in Nationwide. But the "published edition" copyright which subsists under Australian law is quite different from that which subsists under English law and the contrary was not argued in the Federal Court (see p.292 line 49 - p.293 line 4). I think that the decision of Walton J. was correct and I accordingly hold that a separate copyright subsists in the typographical arrangement of each article copied, and that therefore the copies made of the cuttings are copies of substantial parts of the works in which the NLA is entitled to copyright.
14. The second question accordingly does not arise whether (on the basis that copyright subsists in the newspaper as a whole and not the individual articles) the copying of the cuttings constitutes copying of a substantial part of the newspapers from which the cuttings are made. If it had arisen, I would have been minded to decide this question in the affirmative. In deciding what amounts to a substantial part, consideration must be given to the nature of the protected work. This is because, as Whitford J. said in Krisarts SA v. Briarfine Ltd [1977] FSR 557 at 562:
Laddie at para 8.18 gives guidance as to the application of this principle in cases where the copyright is in the typographical arrangement of a work:
4. Turning to the facts of this case, it seems to me that the cuttings did constitute a substantial part of the newspapers. They were components of significance in the newspapers, most particularly to readers interested in the retail trade and consumers generally. The cuttings were made available substantially contemporaneously with the publication of the newspapers and afforded to M&S a cheaper and more effective substitute for M&S bypassing the copyright in one of the four ways I have referred to. I do not think that the contrary conclusion reached on a differently worded Australian Copyright Act in
FAIR DEALING
15. The history of the "fair dealing" defence to infringement of copyright may be of some significance in examining the relevant provisions of the Act. I shall accordingly set out a brief summary. Prior to the passing of the Copyright Act 1911, it was established that there is no copyright in "news" or "facts", but that copyright could subsist in the literary form of a newspaper report of news and that copyright could be infringed if the literary expression was copied to a substantial extent: see Walter v. Steinkopff [1892] 3 Ch 489. The Copyright Act 1911 provided that there should be no infringements of copyright unless a substantial part of the copyright work was copied; and (in Section 2(1)(i)) that any fair dealing with any work for the purposes of "newspaper summary" should not constitute infringement though a substantial part of the work was copied. The term "newspaper summary" did not extend to a newsreel: see Hawkes & Son (London) Ltd v. Paramount Film Service Ltd [1934] Ch D 593. The Report of the Gregory Committee of 1952 recommended that this limitation be removed and that broadcasting programmes and newsreels shown in cinemas should likewise be protected on the basis that "in principle no distinction can rightly be made between the latitude allowed to printed newspapers and that which should be allowed to a broadcast summary" (para 41). In accordance with this recommendation, Section 6(3) of the Copyright Act 1956 provided as follows:
5. The "fair dealing" protection conferred by Section 6(3) did not extend to copying the typographical arrangements of published editions. The Report of the Whitford Committee on the Law of Copyright and Designs 1977 recommended that the scope of the "fair dealing" defence, which it stated to be of particular interest to the publisher, the press and to the public at large, should be extended and no longer restricted to particular works (thereby excluding copies of typographical arrangements), to particular forms ("criticism or review" or "reporting current events") or to particular media (newspapers, magazines, periodicals, broadcasting or cinematograph films); and that there should be a general defence of "fair dealing" which does not conflict with normal exploitation of the work or subject-matter and does not unreasonably prejudice the legitimate interests of the copyright owners.
"We think that this would be sufficient to cover the interests of the press, publishers, broadcasters, reviewers and commentators" (para 677)
6. Parliament in enacting the Act did not adopt the suggestion of a general defence of fair dealing but did extend the established defence to all works (thereby including copies of typographical arrangements) and removed the restriction to particular media.
16. Chapter 3 of the Act (headed "Acts Permitted in Relation to Copyright Works") specifies in Section 28-76 a number of acts which the public interest requires may be done in relation to copyright works notwithstanding the subsistence of copyright. Section 30 (so far as is material) reads as follows:
7. Section 178 defined "sufficient acknowledgement as meaning:
8. The formula of words in Section 30(2) "reporting current events" is the same as that in Section 6(3) of the 1956 Act and is plainly intended to have the same meaning. It is to be noted in this context that Section 172(2) of the Act provides as follows:
9. There is not even a change of expression.
17. During the first two days of the trial, I was helpfully taken by Counsel through the pre 1911 law and the 1911 and 1956 Copyright Acts and the Act and the authorities on the law at all these various stages in its development. On the morning of the third day (the 17th December 1998) the Court of Appeal gave judgment in the case of Pro Sieben Media AG v. Carlton UK Television Ltd ("Pro Sieben"). This judgment encapsulates much of the guidance provided by earlier authorities relevant to the issues raised in this case. I would express this guidance as follows:
(1) Chapter 3 of the Act is directed to achieving a proper balance between protection of the rights of a creative author and the wider public interest (of which free speech is a very important ingredient);
(2) where an unlicensed reproduction has taken place of a substantial part of a copyright work, any defence under Chapter 3 must be brought squarely within one or more of the sections;
(3) when determining the validity of a defence under Section 30(2) of the Act, the words "for the purposes of reporting current events" should be looked at as a composite phrase;
(4) the words "in the context of" or "as part of an exercise in" could be substituted for "for the purposes of" without any significant alteration of meaning;
(5) it is unnecessary for the Court to put itself in the shoes of the user in order to decide whether the dealing was for the statutorily designated purpose.
(6) the words "reporting current events" are words of wide and indefinite scope and should be interpreted liberally. They extend e.g. to excerpts consisting of the highlights of sporting events: see British Broadcasting Corporation v. British Satellite Broadcasting Ltd [1992] Ch 141. I should add that I see no reason why (as submitted by the NLA) the report need be made in the media or to the public or be accessible to the public. The Act has eliminated the requirement in the previous law as to the medium in which the report is made and I can see no basis for reading in the words "to the public" after the word "reporting" in Section 30(2). But what is reported must fairly fall within the description of "current events".
(7) "fair dealing" is concerned with the genuineness of the intentions and motives of the user of the copyright material to report current events and the extent to which (having fair regard to the interest of the copyright owner) it is fair and reasonable in all the circumstances to make as extensive a use as is in fact made of the copyright material. The question is very much a question of degree and one of fact and impression;
(8) the requirement of a sufficient identification of the author does not extend to requiring that the author be identified by name: and other form of identification may be adopted which is sufficient for this purpose e.g. a logo by which he is accustomed to identify himself.
18. To these propositions, I would add the following:
(1) the publication of a report or article in the press may itself constitute a current event, and a defendant's publication may constitute fair dealing for the purpose of reporting current events though it contains no analysis or comment or any matter other than use of the copyright material: the fact that the copyright material stands alone may however be relevant to the issue of the fairness of the dealing: see PCR Limited v. Dow Jones Telerate Limited [1998] FSR 170 at 185 and De Garis v. Neville Jeffress Pidler Pty Ltd (1990) 18 IPR 292 a decision of the Federal Court of Australia ("De Garis"). But this does not mean that whatever is reported in the press is a current event or that Section 30(2) gives a licence to reproduce all or anything contained in a newspaper.
(2) The term "current events" is narrower than the term "news". Reporting of news can go beyond a report of events which are current and extends to information relating to past events not previously known: see De Garis supra. On the other hand reporting of current events does not extend to publishing matters (or items of information) which are merely currently of interest (whether generally or to particular persons e.g. M&S) but are not current events or to publishing matters not previously known and of historical interest alone. Publication of matters which are not current events can only be justified if reasonably necessary to understand, explain or give meaning to a report of current events: see Associated Newspaper Group v. News Group Newspapers Ltd [1986] RPC 515.
19. To summarise the law in my own words, the first hurdle to be surmounted by a defendant invoking the fair dealing defence in Section 30(2) is to establish that the dealing with the copyright work is part of an exercise of "reporting current events". There is a public interest reflected in section 30(2) of the Act in the reporting of current events and this public interest justifies overriding any barrier placed in its way by the law of copyright. A liberal construction is to be placed on the words "reporting of current events". To be a current event, the event need not be national, political or otherwise an important event: it may be a sporting event and it may be a matter of entirely local interest or of interest to few people. It is a question of fact whether the dealing satisfies this condition. The threshold is not high or the hurdle difficult to surmount. The value placed on freedom of information and freedom of speech requires that gateway to be wide. The constraints on abuse of this freedom lies in the need to surmount the second hurdle. The second hurdle is to establish that the way the current events are reported is in all the circumstances fair having regard in particular to the interests of the copyright owner and how they are affected, the activity carried on by the reporter, whether the copyright owner and reporter are in competition, the extent that the copyright work is copied and whether the report could reasonably have been made in a manner less intrusive upon the copyright owner's rights. If it appears that the reporter has "dealt" with the copyright work, not in order to report current events, but for some extraneous purpose e.g. in order to exploit the copyright work under the guise of reporting current events and thereby with impunity, his user is not fair. A balancing exercise is called for between the interest of the copyright owner in the preservation of his copyright and its value and the interest of the reporter in dealing with the work as part of the exercise of reporting current events. Both the first and second questions are "jury questions" on which a common-sense judgment is called for: it will often be a matter of impression reached after a careful scrutiny of the copyright work and the "report" read in the light of the evidence and surrounding circumstances. If the first two hurdles are surmounted, the third hurdle must then also be surmounted of a sufficient acknowledgement.
20. I accordingly turn to each of the three hurdles.
(a) "Reporting Current Events"
10. The critical question is whether the daily programme of circulating and distributing cuttings of articles of interest to M&S fairly falls within the language of Section 30(2), namely "reporting current events". I have (as invited by Counsel) read the cuttings in evidence in the case, and it is quite clear to me that the cuttings go far beyond reporting current events. No doubt many cuttings do include reports of current events (e.g. the announcement by M&S of expansion plans and by M&S and other retailers of their results). But the cuttings are not so confined. They include interviews (e.g. with Dame Stella Rimington, Sir Richard Greenbury, Mr Archie Norman and others); comparisons of products of different retailers (e.g. wine, chicken Kiev and tarasamolata); a review of the biography of Sir Thomas Lipton; lifestyle articles on choice of underwear; success stories of entrepreneurs; reviews of music albums; advice on matters including fashion accessories, St Valentine Day's gifts, obtaining foreign currency, garden furniture, PEPs, unit trusts and pensions; and personal interest stories. In short on no sensible basis can the copying of the cuttings fall within the scope of the defence afforded by Section 30(2).
(b) "Fair dealing"
11. In view of what I have held above, it is clear that the course followed by M&S does not constitute "fair dealing": the copying in this case goes far beyond what could be justified as fair dealing. There is a wholesale copying of material which goes far beyond what is necessary to report current events to M&S personnel. It may be that it is impracticable for M&S to circulate and distribute the desired material within the time frame it considers essential without adopting the copying procedures which it has implemented. But that does not mean that it is entitled to override the rights of the NLA in the way it has. Either M&S must adopt one of the available methods of by-passing the copyright or it must take the licence proffered by the NLA in order to obtain the benefits of continued copying of copyright material. The reasonable fee payable will reflect the limited and special character of the copyright in question.
(c) "Acknowledgement"
12. Again this question does not arise, but (in case this case goes further) I express the view that as a matter of common sense an acknowledgement identifying the work in question (in this case the newspaper from which the cutting is made and copied) may at the same time identify the "author" (in this case the publishers of the newspaper). If an author may be identified by a logo by which he is accustomed to identify himself (as was held in
CONCLUSION
21. Accordingly for the reasons which I have set out, I find that M&S in copying the cuttings from the newspapers has infringed the copyright of the NLA in the typographical arrangement and that the NLA are entitled to relief in respect of such infringement.
*****
© 1999 Crown Copyright