Interview: Meltwater CEO Says Ruling Hurts Web, But Is ‘Just An Interlude’

The CEO of paid online news monitor Meltwater says the High Court’s determination, that its UK customers should pay an extra levy for receiving “copies” through the service, will not harm the company and is just the prelude to a tribunal in the New Year.

Jørn Lyseggen also says he welcomes the UK government’s decision this month to review how intellectual property law should change to better encourage digital innovation – something which may be an opportunity to re-look at the situation.

We think it is a dangerous ruling,” Lyseggen told paidContent:UK.

“It literally means – it has been spelled out in the ruling – if you simply browse copyrighted content online, you actually infringe the content unless you have a license from the rightsholder. We believe that is going against the fabric of the internet. We don’t think this interpretation of copyright law is conducive to the world we are living in today.”

Whilst paragraph 109 of Mrs Justice Proudman’s ruling indeed says viewing web pages and emails containing copyrighted material constitutes copyright infringement, this appears to pertain only to web pages and emails from paid news aggregators themselves and, more specifically, from Meltwater.

Nearly a year ago, Meltwater referred the Newspaper Licensing Agency to the UK’s Copyright Tribunal, which can settle copyright levy rates. Whilst angered by Friday’s High Court hearing, Lyssegen says he will appeal and says it’s the tribunal hearing, due in February, which will really matter.

This is just an interlude to the Copyright Tribunal,” he told paidContent:UK. “The Copyright Tribunal is where the key issues that have consequence will take place.”

About a fifth of Meltwater’s global business, “a few thousand” customers, is in the UK, which many think has weaker fair use copyright provisions than other countries…

In the U.S., our legal team has said you would never see any issues like this,” Lyssegen told paidContent:UK. “This is a UK-specific issue. In the U.S., fair use would grant the user an opportunity to reference the headline and receive these kinds of reports.”

Though the judge’s ruling says aggregator clients are able to use free, simple keyword news searchers like Google (NSDQ: GOOG) News to avoid paying the license, Lyssegen said: “I don’t think it will do so much damage to Meltwater, it’s not going to be devastating.” The business was due to make $100 million revenue globally in 2010, he said.

Meltwater has offered to pay one of the two fees sought by newspaper websites through the NLA, after the full process is resolved – a £10,000 levy for its mining of publishers’ articles. But it objects to a second license which would compel customers of paid news aggregators to also pay a license for receiving “copies” through the services.

Lyssegen says his customers would have to pay an extra amount to the NLA equivalent to between 10 and 15 percent of the fees they already pay Meltwater.

The customers currently subscribe to receive alerts containing company or topical mentions, including headlines, links and either introductory paragraphs or down-page extracts.

“The ruling was the headline was copyright-protected,” Lyssegen told paidContent:UK. But he argues a headline is only “bibliographic reference”, like a book title, and not, as the judge concluded, something that is frequently a literary work of its own.

If the Copyright Tribunal fails to produce an outcome in Meltwater’s favour, one possible next avenue is the review commissioned by the UK government to examine “how the intellectual property system can better drive growth and innovation”, including how rightsholder frameworks create “barriers to new internet-based business models”. That review will be conducted by former editor and journalism professor Ian Hargreaves and is the second UK intellectual property review in five years.

I welcome David Cameron’s initiative to review copyright law,” Lyssegen said. “If copyright law should be interpreted in this way, this is a major blow.”

“The easiest thing would have been for us to surrender our clients to the NLA. The day we stop fighting, we do disservice to our clients and to our competitors.”