Reposting 8-second sports clips infringes copyright

Fanatix loses High Court case against Sky and England Cricket Board

The High Court of England and Wales has ruled against an app developer who encouraged users to post eight-second sports clips under the guise that it was a social network.

Mr Justice Arnold rejected the defence offered by Fanatix developer Will Muirhead that he could avoid infringement using either a fair use defence or a user-generated content loophole.

The case was brought by the English and Wales Cricket Board and Sky TV. Arnold accepted that he had tried to satisfy rights holders to some extent, so rejected the prosecutions assertion that the infringement was “flagrant”.

Muirhead, who has a background in building companies and technologies around sports video clips, said he was inspired by Vine to create the Fanatix app. The app broadcast some editorially curated content, but much of the content was short clips of sporting events which Fanatix encourages users to upload. Most clips were taken down after 24 hours.

Mr Justice Arnold rejected Muirhead's defence of fair dealing, designed for news reporting, admitting it was a woolly and poorly defined area. Isn’t every citizen a journalist? Not so fast, said Arnold: motive matters, and Fanatix, by its own admission, was rather more than a high-minded journalistic venture. One presentation to investors and advertisers stated that “fanatix seeks to disrupt the US$40 billion global sports media rights market”, designed to address what a presentation by Fanatix summarised as: “Problem: keeping up to speed with the action from your team is complex and costly”.

Fanatix also admitted in presentations that it was parasitic: the “UGC model enables global scale & zero production costs”.

In addition, what users were doing with Fanatix was adding comments to the clips they uploaded, not creating reports to which they added clips. The legal definition of "reporting" should remain broad, Arnold said, but not so broad that any little burp can be used to claim a defence against infringement.

The app launched in 2014, introduced curbs late last year, but neither the app nor the website has posted new clips since February.

Sky has unbundled its packages in recent years, and offers Day and Week passes to its sports bundle. But just because the ECB didn’t operate a cricket video clips service, Arnold told the defence, didn’t mean you could create your own without the rights to the valuable property.

Mr Justice Arnold also accepted that the financial damage to Sky probably wasn’t enormous although it had been affected, which the court respected in its final judgement:

“For some subscribers at the margins, this might have an effect on their willingness to subscribe to Sky services which included cricket. On the other hand, it would not affect the vast bulk of subscribers.”

The clincher here was that Fanatix built up a network of blogs and distribution channels such that the user could rely on a desired clip being there. It was a direct rival to legitimate, licensed channels.

“It is clear from the Defendants' internal and external documents that Mr Muirhead was always well aware that the Defendants were (as he put it in a presentation to investors) ‘pushing legal boundaries’. Moreover, the documents show, and Mr Muirhead accepted, that he and his team were not as careful in the early stages of the project as they could have been,” Arnold observed.

However, Muirhead was no Kim Dotcom-style scofflaw. For various restrictions he’d put in place, Arnold rejected the prosecution’s assertion that the infringement was “flagrant”.

You can read the full ruling here. ®

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