Sports clip App infringes copyright

The recent decision of Arnold J. in (1) England & Wales Cricket Board Ltd, (2) Sky UK Ltd v (1) Tixdaq Ltd, (2) Fanatix Ltd [2016] EWHC 575 (Ch) is important not only for sports rights holders and broadcasters, but for all those involved and interested in the limits of copyright protection law in a fast moving world where developments in information technology constantly challenge the way we communicate and consume.

Fanatix created an “App” for iPhones and iPads, which allowed users to upload short clips of sports broadcast footage, often filmed on their phones from TVs. The clips were then shared, for free, with other users who could search for their favourite sport or team, and view the best of the latest action in a match. Many of the clips were also separately aggregated and published on the Fanatix website by Fanatix staff.

When a number of frequent, near live, highlights of last summer’s Ashes series were copied and shared through the Fanatix App and website, the rights holders, ECB and its host broadcaster, Sky, brought the proceedings.

Fanatix relied on s.30 of the Copyright, Designs and Patents Act 1988 Act which provides a defence of “fair dealing” to a claim for an infringement of copyright where the purpose of copying the material is “reporting current events” (amongst others). They argued that their users could only post clips of 8 seconds’ duration which had to be accompanied by some brief written commentary, attribution of the rights holder and would only be transmitted for 24 hours. Fanatix argued that in the era of “citizen journalism” where people shoot and share news events filmed on their mobile phones and young people consume most of their viewing on laptops, tablets or phones, the defence ought to be as open to them as it is to linear broadcasters showing the goals of a Premier League game in their evening news bulletins.

The Chancery Division, following a final hearing of the substantive case, determined that Fanatix’s activity did amount to an unlawful infringement of the Claimants’ copyright, and they could not rely on the fair dealing defence. A number of important points of principle of wider application can be derived from the judgment (which should of course be read in full):

• A short few second clips copied from a live broadcast of a sporting event were capable of being a “substantial part” of the rights’ holders copyright where they consist of highlights (such as wickets in cricket matches or goals in football games) of events [60] – [67], [99];

• The phrase “reporting current events” ought to be given a broad interpretation and can apply to “citizen journalism” as well as conventional news broadcasters [112] – [114];

• However, Fanatix’s own investor presentations and the way the App worked showed that the predominant purpose of the use of the clips was to share clips of sporting events between users and that Fanatix’s objective was purely commercial rather than genuinely informatory. The clips were used not to inform an audience about a current event but for consumption because of their intrinsic interest [128] – [129];

• The dealing was not fair in any event because presenting extensive highlights of sports events on a near-live basis was both disproportionate and commercially damaging to the Claimants by conflicting with their normal exploitation of their copyright [136] – [151];

• Attempted adherence to usage limits derived from a broadcasters’ code of practice did not render Fanatix’s use “fair dealing”. That code applies to the use of sports clips within linear broadcasts of scheduled news bulletins. The dissemination of on-demand and near live content is a different matter [163];

• Finally the “hosting” defence based on the E-Commerce Directive for users’ posts over which Fanatix had no editorial control could not succeed in relation to the majority of posts, which were editorially reviewed and, in any event, the defence only applied to a claim for financial remedies, not to a claim for a final injunction [167] – [171].

The ECB and Sky’s victory in the case is obviously good news for sports rights holders and sports broadcasters alike. Sports rights holders might otherwise have seen an erosion of such valuable rights, which form an increasingly important element of the main income stream for most sports. Sports broadcasters, who invest vast sums of money both to acquire media rights and then to produce and deliver their premium sports programming, have also landed an important blow in their ongoing battle to combat digital infringement of their content.

Arnold J.’s careful judgment engaged with the arguments about the changing face of reporting and consumption of broadcast material, whilst differentiating between a sports clips sharing service taking copyright material on an unauthorised basis and sharing it for free and the possibility of a citizen reporting or commenting on newsworthy events (including sporting events) by occasionally using broadcast material without infringing copyright.

Nick De Marco was junior counsel (appearing with Robert Howe QC, both of Blackstone Chambers) and Chris Walsh (Onside Law) was instructing solicitor for the ECB and Sky.