Bit of a weird one, this. The High Court has ruled that anyone getting clippings of online newspaper articles should pay a licence fee to the Newspaper Licensing Agency - which is owned by eight of the UK's largest newspaper publishers - even if they can only see the headline of the story, the line of text where their company's brand appears and the link to the article.
Clippings service and news aggregator Meltwater News had argued that while it is happy to pay a licensing fee to the NLA itself, its customers should not be considered to be infringing copyright for simply seeing where their company is mentioned in online newspaper clippings.
Newspapers don't have to pay anything to brand owners when they write about them, of course. Which means Nike may have to pay to see where its name is used in newspapers, while newspapers can use Nike's brand for free to help drive readers, web traffic and hence advertising revenues.
But a judgement issued yesterday by Mrs Justice Proudman ruled that end-users who paid aggregator Meltwater News to distribute online newspaper content in the form of a news monitoring service should also obtain a license to do so from the Newspaper Licensing Agency (NLA).
Meltwater's CEO Jorn Lyseggen told the NS that while he was disappointed by the decision, the firm intends to appeal, and that the main focus should be on a forthcoming Copyright Tribunal decision which will rule on the reasonableness of the NLA's licensing terms for online content.
"This High Court issue is just something that the NLA threw up to get in the way [of the Copyright Tribunal]," said Lyseggen. "It's a disappointing verdict which has dramatic consequences for the UK Internet ecosystem."
As Lyseggen pointed out, the ruling means that in theory users of the Internet should obtain a license from the NLA to view copyrighted material even when it is not protected behind a 'pay-wall'. "A user reading a poem online that is copyright could mean they need to pay a license fee, even though it has been posted online free," said Lyseggen. "There are very serious consequences of this verdict."
David Pugh, managing director of the NLA, welcomed today's ruling. "We hope this ruling will help ensure a fair share of web monitoring revenue for publishers and a fair media monitoring market," he said.
"Creating news content for the web is a substantial investment for publishers - it is therefore only right that they take a share when others are profiting from it. We estimate the total UK market for online news monitoring to be worth around £10 million," said Pugh.
But Meltwater's Lyseggen was unmoved. "We will appeal this verdict, we think this verdict is a misinterpretation of copyright law. If this ruling stands it will be a significant step back for the UK Internet ecosystem," he said.
"If the court upholds this decision then we think the courts need to take a closer look at copyright law and see if it needs to be more up-to-date for today's world," said Lyseggen.
He also noted that Meltwater News would object less if the license fees that the NLA wants to charge end users were lower. "In principle if the court rules that there must be a license then although we disagree, that's one thing," said Lyseggen. "But the licence should reflect the small amount of copyrighted material being accessed."
Justice Proudman granted permission to appeal her decision; Meltwater's CEO says it will.
Jason Stamper is NS technology correspondent and editor of Computer Business Review.