News Startups: Different parts of the world, different rules you got to follow

By: Entrepreneurship & Innovation Clinic Studen

After the 2013 Meltwater case, news aggregation startups became unable to adopt fair use as a defense against the copyright infringement claims in the United States. Even a fraction of the original news, as few as four words from the headlines or ledes, used in thumbnails would be considered as a copyright infringement on the original news publisher. Most news aggregation startups, however, do not limit their target customers to the United States. Once an app is successfully developed, a startup can easily expand to the global market without much further cost. In this article, we will review how the other parts of the world regulate this murky area of internet copyrights.

In 2013, United Kingdom Supreme Court reached surprisingly different outcome from the U.S. Meltwater case with same questions and essentially the same nature of plaintiffs and defendants. Public Relations Consultants Association v. The Newspaper Licensing Agency Ltd. ([2013] UKSC 18, on appeal from: [2011] EWCA Civ 890 ) The U.K. Supreme Court ruled that Meltwater Group in U.K.’s Search & Link service without license within the news aggregating app did not infringe the copyrights of the original news publishers under the current Copyright law in the UK. Meltwater provided an online media monitoring service called Meltwater News. Subscribers to the service were sent emails containing the headlines of online articles, hyperlinks to the articles' publishers' websites and short extracts of the articles themselves. UK Supreme Court strongly expressed the view that the temporary copies exception should apply to on screen and 'cached' copies of copyright protected works generated in the course of ordinary browsing. Under the EU copyright law, CJEU ruling also decided that the linking itself is not a copyright infringement. See Svensson and others v Retreiver Sverige, (C-466/12). In Svensson, the CJEU ruled that a website providing links to copyright-protected content on another site was not, in and of itself, copyright infringement.

Along with many other European jurisdictions, Germany does not have a clear recognition of the concept of fair use or fair dealing as a defense of the copyright infringement. Currently, providing Search & Link service without a license within the news aggregating app may have a legal problem in Germany especially after the 2013 amendment of Copyright Law with ancillary copyright for press publishers. Article 8 of the Act of 1.10.2013 (Federal Law Gazette I p. 3714) When the German Publishers had demanded a royalty from Google News in 2014, however, Google had started removing snippets from the Google search result. As a result, the publishers faced plunge of traffic to their web page and a severe drop in revenue. Consequently, the majority of publishers granted royalty-free licenses to Google to ensure that their content to be included in Google News once again. See “Germany's top publisher bows to Google in news licensing row.” The German Copyright law prohibits news aggregators’ free-riding from the Search & Link business model; however, German publishers and the regulating body found it difficult to force huge news aggregators like Google News to pay the royalty fee.

In South Korea, providing Search & Link service without a license within the news aggregating app may not have a legal problem under the current Copyright law in South Korea. Recently, South Korea Supreme Court ruled that Search & Link service itself is merely a service of providing a passage to a location of the information on the internet and therefore does not constitute illegal reproduction or transmission of news articles under the current Korean Copyright law. 대법원 2009. 11. 26. 선고 2008다77405 판결, 대법원 2010. 3. 11. 선고 2009다80637 판결.

Canada might be the best country in the world right now for news aggregating startups. In Canada, providing Search & Link service without a license would not face any copyright infringement claim under the current Copyright law in Canada. See Warman et al. v. Fournier, FC 803 (2012). The controversy involved three separate claims for infringement of copyrighted works. When Fournier posted an excerpt of the article, Warman alleged that the posted excerpts were substantial reproductions of the work within the meaning of section 3(1) of the Copyright Act. The court, however, found that there was no infringement. In determining substantiality, the court applied a five-part test. The relevant factors to be considered include:

a. the quality and quantity of the material taken;

b. the extent to which the respondent’s use adversely affects the applicant’s activities and diminishes the value of the applicant’s copyright;

c. whether the material taken is the proper subject-matter of a copyright;

d. whether the respondent intentionally appropriated the applicant’s work to save time and effort; and

e. whether the material taken is used in the same or a similar fashion as the applicant’s.

The court ruled that the posted headline, three complete paragraphs and part of a fourth were the opening “hook” of the article and determined that it was not substantial to be a copyright infringement. The court further stated that even if the posted portion is substantially enough to be considered as a copyright infringement, Fournier’s reproduction constituted fair dealing for the purposes of news reporting, pursuant to section 29.2 of the Canadian Copyright Act. In determining whether the fair dealing is appropriate defense of copyright infringement, the court considered 6 fair dealing factors, (1) the purpose of the dealing; (2) the character of the dealing; (3) the amount of the dealing; (4) alternatives to the dealing; (5) the nature of the work; and (6) the effect of the dealing on the work. Balancing all the factors together, the court found that “the reproduction… falls within the fair dealing exception for the purposes of news reporting.” For the linking, the court also ruled that a hyperlinking is a mere redirection to the original content and not a copyright infringement.

From the above cases, we can see that each nation approached differently on copyright issues in Search & Link business. Unlike in the States, most of the world do not Search & Link as a blatant copyright infringement. Instead, they view it as a providing mere passage to the original article and usually do not forbid when such linking entails headlines or thumbnails from the original contents.