Is the ECB v Fanatix decision a fair deal for copyright owners?Nick Aries, Will Smith, Craig Giles
The creation of short clips of broadcasts of sporting events - for example, clips of goals, tries or wickets - is increasingly widespread. Modern technology (smartphones and the ability to rewind live TV) means almost anyone can film a part of a broadcast. And there are now a host of Apps (such as Vine) that allow such clips to be shared across the Internet in a matter of seconds. Concurrently, users are increasingly turning to social media outlets to access sporting content in addition to (or instead of) traditional broadcast channels.
This presents rights holders with a new challenge of how to effectively prevent the unauthorised use of their content, in order to preserve the market for themselves and their official broadcasters and commercial partners. Copyright laws are central to this issue, and in particular the questions of:
- what constitutes a “substantial part” of a sporting broadcast (which is necessary to prove a breach); and
- what constitutes “fair dealing” of sports clips (which can be used as a defence).
Sports clips and copyright
Given the value of sporting content3 it is obviously of great importance for rights holders to be able to preserve their exclusivity as much as possible.
The principal weapon available to rights holders seeking to restrict the unauthorised dissemination of content is copyright. Contractual terms and conditions can be attached to tickets for live events, however the sharing of clips of sufficiently high quality to be of commercial value is an issue that most commonly arises through the recording of televised content rather than live action.
In order to establish copyright infringement, there must be an infringing act in relation to the whole or a “substantial part” of the work in question. This immediately raises the question of what amounts to a “substantial part”? In other words, at what point does a clip become an infringing clip? Another question is to what extent content sharers might be able to rely on defences to copyright infringement, such as fair dealing for the purposes of news reporting or quotation.
These questions were recently considered by the High Court of England and Wales in the Fanatix case. To briefly recap the facts, Tixdaq developed an App called “Fanatix”. Users of the App, as well as Tixdaq's own employees and contractors, uploaded clips of broadcasts of cricket matches to the App where they could then be viewed by users. The ECB and Sky were the copyright owners in television broadcasts of cricket matches organised by the ECB, and films made during the course of such broadcasts (for example action replays). The main arguments advanced by the Defendants were:
- that the clips were not a substantial part of the broadcasts; and
- the use amounted to fair dealing for the purpose of reporting current events (for which there is a statutory defence under s30(2) Copyright Designs and Patents Act 1988 (“CDPA”).
What constitutes a “Substantial Part”
Copyright is infringed in the UK 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 (s16 CDPA). Following the decision of the CJEU in Infopaq I4 an original work is infringed where there is an unauthorised reproduction of the author’s “intellectual creation”.
However, broadcast and film rights are "signal rights", rather than authorial works, and therefore have no requirement for originality or intellectual creation. It is worth noting in this context that under the CDPA a "film" refers to the "fixation" of an audio-visual signal, rather than the underlying content of that signal. If the ECB and Sky had wanted to seek protection on the basis that Sky's broadcast personnel had created an intellectual creation, under the CDPA they would have had to have argued that through the use of camera angles, close-ups and the like Sky had created a "dramatic work".5 As it was, the claim was limited to "films" and "broadcasts", and as such this gave rise to the question of what test for substantiality should apply in circumstances where there is no "intellectual creation".
In Fanatix, the Judge held that an approach parallel to the "intellectual creation" test should be applied and therefore that parts of films and broadcasts were protected if they contained elements reflecting the rationale for their protection i.e. the investment made by the broadcaster or producer. This required both a quantitative and qualitative assessment of the part of the work reproduced which could include consideration of its value and interest (see paragraphs 60-66).
The clips used by the Defendants were (at most) eight seconds long, taken from broadcasts or films which were around two hours long. Quantitatively this was not a large proportion. However, from a qualitative perspective, the clips were typically of highlights of the matches such as wickets and appeals and therefore were of interest and value. The Judge held that this meant each such clip substantially exploited the Claimants’ investment in producing the relevant broadcast or film and therefore constituted a substantial part (see paragraph 99). The Judge noted (at paragraph 102) that the consequence of this finding was that certain other clips did not amount to a substantial part (for example if they do not show a highlight of the match).
This impact of this finding on other sports is that where an unauthorised clip is created of a “highlight” of the event in question it is very likely to amount to a substantial part of the broadcast (irrespective of the length of the clip). The investment made by broadcasters in the right to broadcast live sport and the ability to show slow motion action replays from all angles is very great, and therefore the finding that even very short highlight clips can constitute a substantial part of the broadcast will provide comfort to rights holders that this investment can be protected.
What constitutes “fair dealing” for the purpose of reporting sporting events?
To rely on the defence of “fair dealing” under s30(2) CDPA you have to show:
- that the use of the clips was for the purpose of reporting current events; and
- that the dealing was fair.
The reproduced works also had to be accompanied by a sufficient acknowledgement.
Use for the purpose of reporting current events
In Fanatix, the Judge held that a sporting event such as a cricket match is a “current event” within the meaning of s30(2) CDPA (see paragraph 106). Therefore, as the majority of the clips were uploaded "near-live" in relation to matches, the clips qualified as being in relation to a current event.
On the other hand, interviews or analysis of matches were unlikely to be current events (unless the interview or analysis itself somehow qualified as a current event, rather than the event it was reporting on) (paragraph 107).
The key question was whether the infringing acts were "for the purpose of" reporting the matches. Reading s30(2) in light of the InfoSoc Directive,6 the Judge accepted that “reporting” should be construed broadly and could therefore encapsulate “citizen journalism” in addition to traditional news reporting (paragraph 114).
However, notwithstanding the potentially broad definition of “reporting”, the Judge concluded that the App's primary purpose was sharing clips. Even though users added comments to the clips, this was not sufficient to qualify as use for the purpose of reporting current events. Instead, the clips were presented for consumption because of their value, rather than to inform the audience about current events (see paragraph 129).
The Judge went on to consider whether, if the clips were for the purpose of reporting current events (contrary to his finding), the use of the clips was fair dealing. The evidence demonstrated that the use was commercially damaging to the rights holders and conflicted with the normal exploitation of the works, including live coverage and clip rights (through the licensing deals the ECB had negotiated with other outlets, its own proposed use and future licensing plans). Further, the extent of the use was held not to be justified by the informatory purpose. The dealing was therefore not fair, and the defence failed (paragraphs 136-151).
This finding will be welcomed by rights holders as it suggests that where commercial value is extracted from the content (rather than it merely being used to report on events) it will be difficult to satisfy the requirement for fair dealing for the purpose of reporting current events. This is the case notwithstanding the broad construction given to the concept of "reporting" which seems justified in light of the modern media environment.
Given the value of investment in obtaining exclusive rights to broadcast sporting events, it comes as little surprise that even small parts of a broadcast can be considered to have an intrinsic value.
Where particular skill or specialist equipment is deployed in generating a part of the broadcast, such as a slow motion replay from a particular camera angle, the value is likely to be increased. In light of the importance that Fanatix placed on the qualitative assessment of the broadcast, rather than a simple assessment of the length of the clips, it seems likely that most clips worthy of being shared online will satisfy the "substantial part" test.
The application of the fair dealing defence fell down in part because the Defendants' objective in using the clips on the Fanatix App was:
"purely commercial rather than genuinely informatory" (and because) "the conflict with the Claimants' exploitation of their copyrights was not warranted by the nature and extent of the use, and thus the use was not proportionate." (paragraphs 139 and 151)
Bolstered by the Fanatix decision, rights holders may feel more comfortable in pursuing online platforms that make a business out of providing access to unauthorised clips.
However, this leaves open the possibility that an individual user sharing a one-off clip for no financial gain could still have a defence. Given the speed with which material can spread through social media networks, such a user could indirectly make content available to a large number of people. Depending on the facts, the user's act may (as in Fanatix) not be strictly "for the purposes of" news reporting. But the individual user could perhaps rely on the separate 'quotation' fair dealing defence under s30(1ZA) CDPA, which is arguably unrestricted by reference to purpose. This relatively new defence was not relied on in the Fanatix case and has not to our knowledge been tested yet in a UK Court. Its scope is therefore uncertain.
If it did apply, the requirement for fair dealing would still restrict it to cases where the use did not interfere with the rights holder's exploitation of the rights (or at least, did so only to a justifiable extent in light of the purpose and the extent of use). Further, where large numbers of clips appear on a single platform, although certain individual users might have an arguable news reporting or quotation defence, that defence is far less likely to apply to the platform aggregating such content although the platform may be able to invoke the "hosting defence" under Article 14 of the E-commerce Directive.7
This provides a defence to liability for copyright infringement (and other liability arising from hosted content) for online platforms which host information provided that the host (i) does not have knowledge of the illegal activity and (ii) acts expeditiously to remove information upon being made aware of it. This defence is relied upon by platforms such as YouTube, Facebook and Twitter, each of which have a take-down procedure in relation to infringing content in order to ensure that they can rely on the defence (and its US equivalent).
Many rights holders may take the view that it is not worth the time and effort for to pursue multiple individuals who reuse content (as opposed to businesses), even if it could be established that the fair dealing defence did not apply to their use. In such circumstances, the more effective strategy would be for broadcasters and rights holders to focus on:
- pursuing large scale operators such as Fanatix; and
- delivering high quality content which can be licensed to social media outlets to provide a superior competing product to that offered by an individual user's recording of their TV screen.
An example that the market may already be moving this way can be seen in the announcement in April 2016 of the NFL's multi-year deal with Twitter allowing the social media platform to live-stream certain matches and provide other daily content to subscribers. Returning to our introduction, this seems a logical market response to the growth in both social media consumption and unauthorised clip sharing.
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- Tags: Copyright | Designs and Patents Act 1988 | Dispute Resolution | E-Commerce | Electronic Commerce (EC Directive) | England | Intellectual Property | United Kingdom (UK) | Wales
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About the Author
Nick Aries is a partner in the Media Entertainment and Sports group at international law firm Bird & Bird. He particularly advises sports clients on media and entertainment issues.
Will Smith is an associate in the Media Entertainment and Sports group at international law firm Bird & Bird. He particularly advises sports clients on media and entertainment issues.