Policy-based Implied Bare Licences

This chapter addresses policy-based implied bare licences. Unlike in the previous chapter, there is no contract in existence and no voluntariness on the part of the copyright owner, and indeed in some cases, no prior relationship between the parties. Historically, English common law has recognised an open-ended power of the courts to restrict or prevent copyright enforcement in the public interest, which has been acknowledged under section 171(3) of the UK Copyright, Designs, and Patents Act 1988. The chapter considers how a successful invocation of this provision implies a bare licence to achieve policy goals. Although there is no statutory equivalent of this provision in other common law jurisdictions considered here, the chapter explores if the power has nevertheless been exercised by the courts based on their inherent powers. Since policy-based implied bare licences produce the same effect on copyright owners as the statutory limitations or exceptions, the framework for implying this type of licence draws inspiration from the three-step test and the fundamental rights regime.

Bases for Copyright Licences to be Implied

This chapter discusses the bases on which copyright licences can be implied. It begins by looking at analogies in other areas of private law dealing with implication. The most elaborate doctrine of implication are the rules of implication of a term into a contract—implied in fact, implied by custom, and implied by law. These are known to private law as sources of private and public ordering, which apply as much to the actions of persons vis-à-vis other persons (such as entering into a contract), as they do to the actions of persons vis-à-vis persons in relation to property (such as granting a licence). It follows that these also form the basis on which express copyright licences arise. The bases for implying copyright licences must be the same as the bases for express copyright licences to arise, because the courts cannot do by way of implication what they could not have done if there was an express provision. This way, the exercise of the discretion that the courts have in implying copyright licences is made more transparent and predictable, fostering legitimacy and coherence in the process. Accordingly, the bases for implying copyright licences are: the consent of the copyright owner (consent-based); an established usage in a trade or an industry (custom-based); and state intervention to achieve policy objectives (policy-based).

Licences Implied by Custom

This chapter focuses on licences implied by custom. A custom in this context represents the conduct of a community (of members of a trade, profession, industry, or market), as opposed to an individual copyright owner enabling the copyright work to be used in a particular way. So long as the community within which the custom is alleged represents the copyright owner, the community’s conduct will be taken as being on behalf of the copyright owner. Once established, a custom does not require validation by a court of law for it to be binding, so that a custom becomes an independent source of power that drives the implication of a copyright licence. Also, once established, a custom can be the basis for implying both a bare licence and a contractual licence, depending on the content of the custom. Therefore, the chapter analyses the case law within a single framework for implying both bare and contractual licences. It builds on the criteria developed by the courts in commercial law to establish a custom (certainty, notoriety, and reasonableness), incorporating factors specific to the copyright context.

Frameworks for Implying Copyright Licences

This chapter proposes frameworks under each category of copyright licences which help assess the facts and circumstances and determine whether a licence may be implied and, if so, the scope of the licence. Given that the advantage of implied licences is their flexibility, any rigid set of rules governing the implication could strike at the heart of such flexibility. Therefore, the chapter presents frameworks as opposed to rigid rules, and seeks to balance guidance and flexibility. These frameworks are developed based on the constituents that each category of licence would need to have, had it been an express licence; and when the express licence is absent, these frameworks indicate how the facts and circumstances can be marshalled, so that one can ascertain whether a licence is to be implied. In addition, these frameworks approach bare licences differently from contractual licences.

Consent-based Implied Contractual Licences

This chapter evaluates consent-based implied contractual licences. Consent-based implied contractual licences differ from consent-based bare licences in that there is consideration that flows from the licensee in exchange for the licensor undertaking not to revoke the licence, in addition to there being an intention to create legal relations. The existence of a contract provides the structure within which to assess the copyright owner’s consent as the basis for implying a licence. The modern significance of implied contractual licences lies in their application to copyright content placed online by or with the consent of the copyright owner, and is subject to terms of use that amount to a contract. This chapter applies the framework proposed in Chapter 3, rather than the rules of implying terms in fact, in order to make the process of implication more transparent. The chapter examines the case law in three broad categories of contractual copyright licences: (i) commissioning contracts; (ii) copyright exploitation contracts; and (iii) consumer contracts.

Hyperlinking

This chapter studies hyperlinking and how implied licence can help better understand it both when the content was placed on the internet by or with the copyright owner’s consent and when it was not. Hyperlinking enables establishing links between different webpages and is critical to enhancing the efficacy of the internet. Although scholars are still divided, courts have held that hyperlinking engages the right of communication to the public. However, the approach adopted by the courts suffers from inconsistencies. This chapter instead argues that it makes sense to regard hyperlinking as amounting to the exercise of the right of communication to the public based on a consistent interpretation, and asks whether such exercise does not infringe the right because of the licence implied on different bases.

Introduction

This introductory chapter provides an overview of implied licences. Copyright confers exclusive rights on copyright owners to perform certain acts in relation to their works. A person infringes copyright if she performs any of these acts in relation to a copyright work without ‘the licence of the owner of the copyright’. Alternatively, the user’s actions must be covered by one of the statutory limitations or exceptions, which address specific instances of permitted use of copyright works to achieve specific policy goals. If, however, a certain use is not authorised by either an express licence of the copyright owner or by the statutory limitations or exceptions, it does not always amount to an infringement. It may be possible for courts to imply a copyright licence to cover such use. The strength of implied licences lies in their flexibility to address a diverse set of circumstances. This may prove particularly useful in resolving issues arising from the interaction of copyright with new technologies. Armed with this flexibility and the ability to respond in a case-specific manner, implied licences can bring about a better balance among the interests of different stakeholders within the copyright system.

Browsing and Streaming

This chapter explores the application of implied licences to browsing as an activity on the internet. In this process, in addition to temporary copies of the content made on screen and in transmission, copies are made in the buffer of the computer in order to facilitate uninterrupted access, even if the content is not downloaded. If each copy made in this process needs permission from the copyright owner, then it would significantly impede the functioning of the internet. If browsing is not authorised, it would make infringers out of millions of users for simply viewing websites. The UK’s response has been to subsume this process into the statutory exception under section 28A of the Copyright, Designs and Patents Act 1988, which was transposed from Article 5(1) of the EU Infosoc Directive. This provision, however, suffers from inadequacies owing to certain inherent inflexibilities particularly apparent in relation to browsing of infringing content. This chaper argues that implied licence can offer a more flexible and dependable avenue to resolve the temporary copying issue, rather than the statutory exeption.

Final Remarks

This concluding chapter explores the advantages of implied licences not only in the offline, but especially in the online world. It sums up the justifications for the conception of ‘implied’ and ‘licence’ adopted in this monograph. It also explains how when faced with the facts and circumstances of a case, how one may ascertain which basis for implying a copyright licence might apply. While acknowledging that express words can override implied licences, it explains why it is not a significant limitation on the usefulness of implied licence, arguing that implied licence can and will continue to play a significant role in copyright law. The growing body of case law on implying a term into a contract is a testament to the fact that there are never going to be complete or comprehensive contracts. There will always be the need to fill in gaps, by way of implying licences based on the conduct of the copyright owner or to give effect to a custom or a policy. The chapter then looks at how implied licences have the potential to play a greater role after the Exit Day.

Policy-based Implied Contractual Licences

This chapter assesses policy-based implied contractual licences, focusing on situations where there is a pre-existing contract and a policy-based licence is implied into such contract. To the extent that a contract exists, there is a certain voluntariness to the conduct of the copyright owner in entering into the contract. However, the copyright licence is implied into the contract to achieve a policy objective regardless of the consent of the copyright owner. The framework for implication underlying this chapter is inspired by the rules of implying a term by law into a contract, but made more transparent to acknowledge the role of policy as the basis of implication and the need for the policy to be identified. The chapter illustrates the arguments by examining the transfer of ownership of products incorporating copyright works and the possible licences that may need to be implied into such transfer. It also discusses the highly regulated industry of hazardous substances, and how the information flow in this sector can be explained using the framework proposed here for policy-based implied contractual licences.