A recent decision from the United Kingdom illustrates issues that can arise when disruptive digital services seek to exploit sporting event content, and the legal protections that are available to rights owners.
England & Wales Cricket Board Ltd v Tixdaq
In the recent decision of England & Wales Cricket Board Ltd v Tixdaq  EWHC 575 (Ch), Justice Arnold of the English High Court held that a sports highlight service operated by Tixdaq (Fanatix) infringed the copyright of the England and Wales Cricket Board (ECB) and its licensees, Sky and News UK, (rights holders) in cricket related audio-visual content, and that the defence to copyright infringement of fair dealing was not available in respect of the service.
The Fanatix platform
Fanatix created, marketed and operated a mobile app that provided users the opportunity to upload and view short clips of sports event coverage (App). The clips were sourced from the live broadcasts of ECB’s television licensee and were often filmed on the App users’ phones directly from televisions. The clips featured highlights of cricket matches, such as the falling of wickets, and were up to eight seconds in length. Users were able to share the clips with other users, on a near-live basis. Additionally, many clips were also separately published by Fanatix on its website.
Questions to be determined
Under UK law, the two key issues before the Court were:
- whether the eight second clips available on the App were sufficiently substantial to constitute a breach of the rights holders’ copyright; and
- even if copyright was infringed, whether the defence of fair dealing available to Fanatix because the clips were used ‘for the purpose reporting of current events’.
As is the case under Australian law, copyright is not infringed by an unauthorised dealing with an insubstantial part of a work or other subject matter.
The rights holders argued that the use by Fanatix of short clips constituted an infringement of copyright in broadcasts or films owned by the rights holders.
Justice Arnold confirmed the law that when determining whether a substantial part of a broadcast has been copied, one must:
consider the degree of reproduction both quantitatively and qualitatively, having regard to the extent to which the reproduction exploits the investment made by the broadcaster or producer.1
While the eight second clips were not quantitatively a large portion of the cricket match broadcast (which can last for many hours), most of the clips were qualitatively substantial as they constituted highlights in the match, such as important incidents or milestones. Further, the Court noted the significant investment that rights holders make to create the authorised broadcasts of the event such that the greater the degree of investment, the less the degree of reproduction required to constitute a substantial part of a copyright in a broadcast.
Justice Arnold consequently held that each clip constituted a substantial part of the rights holders’ copyright.
Not fair dealing
Fanatix argued its conduct was not an infringement of copyright because it was protected by the defence of fair dealing ‘for the purpose of reporting current events’. A similar fair dealing defence exists in Australia for the ‘reporting of news’.2
Were the clips being used ‘for the purpose of reporting current events’?
Fanatix claimed that although it was not engaged in traditional professional journalism, the users of the App were creating and sharing reports of the contemporaneous sporting events and as such should still be entitled to protection under the fair dealing defence. The rights holders disagreed and argued that the Fanatix service did not constitute ‘reporting’.
Justice Arnold noted that under UK law citizen journalism can qualify as the reporting of current events for the purpose of the defence of fair dealing.3 However, his Honour held Fanatix’s conduct was not reporting. In coming to that conclusion, Justice Arnold found that the predominant purpose of Fanatix’s service was facilitating the sharing of the clips between users of the App because of the intrinsic value of the clips.4
Did the use of clips by Fanatix conflict with the rights holders’ exploitation of the works?
After finding that the Fanatix service was not reporting current events, Justice Arnold went on to consider other aspects of the fair dealing defence.
One important aspect of the fair dealing defence is whether the use by the alleged infringer competes with the rights holders’ exploitation of the copyrighted works. In this case, the Court assessed whether the commercial value of the exploitation of the rights holders’ copyright works would be impacted by the App. Justice Arnold noted the substantial benefits derived by the ECB from licensing the copyright works (including the clips) and the significant rights fees paid by Sky and found that the use of the clips on the App reduced the attractiveness of Sky’s and News UK’s cricket offerings for some potential subscribers 5 and impacted the ECB’s ability to licence the rights to the clips.6
Later iterations of the App attempted to bring the use of the clips within the fair dealing defence by enforcing a commentary length, restricting user uploading and viewing of clips per event, and removing the clips after 24 hours. Justice Arnold rejected that these restrictions took Fanatix within the defence, stating that the:
service remains the same: to enable fans to share on demand and near-live clips of the highlights from sporting events that are of interest to them. 7
Justice Arnold also noted that although the use of the clips may have complied with voluntary industry codes developed over a decade ago in relation to fair dealing of sports highlights via linear television broadcasts, those codes were was not determinative of fair dealing in a digital environment where the reproduction is on demand and near-live.8
The digital age has increased the ability of third parties to use (and misuse) copyright content. The judgment in the Fanatix case is encouraging for copyright owners because it recognises that the use of short, but qualitatively important, highlights of sporting events can constitute a substantial part of a broadcast or film copyright, and that a commercial service created to compete with a service licensed by the copyright owner was not able to rely on a defence of fair dealing when utilising the copyright material.
Although copyright law is governed by different legislation in Australia, it is likely that a similar result would arise if an owner or exclusive licensee of copyright sought to enforce their rights in Australia against a service similar to the Fanatix service.
2Sections 42 and 103B of the Copyright Act 1963 (Cth).