Sensis Loses Copyright Control of Listings

Ever since Feist Publications, Inc. v. Rural Telephone Service Company, decided by the US Supreme Court in 1991, the law in the US has been that directory listings (construed as “facts”: name, address, phone) are not entitled to copyright protection. This decision opened the door for data aggregators and for competitive print and, later, online directories.

Copyright protection for incumbent directories outside the US has been broader and more enduring as a general matter.

However Telstra in Australia, the parent of directory publisher and online search provider Sensis, has now lost that protection apparently according to a recent court decision. The logic of the Australian court’s decision appears to be the same as the US Supreme Court’s in Feist.

It’s not clear to me if there’s any further legal review or recourse available to Telstra. If not the Australian directory and local search market will shortly mirror the US. However top brands will likely still prevail; it’s just that the market will become increasingly competitive.

While I agree with the core notion that facts are not subject to copyright, there’s unfairness in permitting third parties to “piggyback” on the publisher’s compilation of those “facts” by simply sending phone books to low-cost labor markets to have listings keyed in verbatim to an electronic database.

As a related matter, the doctrine of “fair use” is probably being abused by “aggregators” online in the US. I know this is an “old” and apparently “settled” issue. But the case above made me think about it this morning again.

There have been various cases around the question of fair use and its application to the Internet; however most of those (with a few specific exceptions) have ruled in favor of defendants for policy reasons. Courts have been reluctant to find against search engines and others for fear of “impeding the development of the Internet.” Indeed, as a practical matter, Google and other search engines’ continued existence is to a large degree predicated on liberal interpretation of the “fair use exception” to US copyright law.

Here’s what the federal statute says about “fair use”:

Section 107 contains a list of the various purposes for which the reproduction of a particular work may be considered fair, such as criticism, comment, news reporting, teaching, scholarship, and research. Section 107 also sets out four factors to be considered in determining whether or not a particular use is fair:

1. The purpose and character of the use, including whether such use is of commercial nature or is for nonprofit educational purposes
2. The nature of the copyrighted work
3. The amount and substantiality of the portion used in relation to the copyrighted work as a whole
4. The effect of the use upon the potential market for, or value of, the copyrighted work

This four-pronged test means that each case must be decided on its own facts; there can be no hard and fast rules or “bright lines” in terms of what does or doesn’t qualify as fair use.

On its face search engine and other types of data and Internet content indexing would, in my mind, fall outside fair use because the overall objective and existence of most of these companies is explicitly commercial. Lawyers for defendants might cite items 3 and 4 in arguing against that. The industry and search engine response has also been to argue any party may request removal from the database/index. As a practical matter, however, that has come to represent a kind of commercial suicide given the way that consumers now rely on search and content aggregators to find information online.

It’s been more than a decade since I stopped practicing law and I have not followed the development of the case law in this area so take those qualifiers as caveats for all of this. However here’s my view on an early Sunday morning:

Much of the indexing and presentation of content in search engines and elsewhere online (e.g., news aggregators that index headlines and portions of articles) almost certainly fails the original idea behind the “fair use exception” (technically an affirmative defense to a copyright infringement claim). These practices, however, have been allowed to continue by courts because to narrowly construe fair use would potentially “limit the development and growth of the Internet.” That’s probably true  — a more restrictive interpretation would limit the dissemination of information online — and it is beneficial for consumers to have access to vast amounts of information via search engines.

But that liberal, policy driven interpretation of fair use has created categories of winners and losers on the Internet and in the media more generally.

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