Military Grade News - CJEU Advocate General Opines on Copyright and the Freedom of Expression

IP and freedom of speech have always had a difficult relationship. What could be freer that the ability to use any works you have seen, and share them with a wider potentially different audience, while IP seeks to protect the interests of the original author, even sometimes at the expense of the rightsholders. These issues often come to blows in the courts, and a recent case in the CJEU has brought this conversation back to the forefront. Can you protect works using copyright, even with strong issues of freedom of speech underpinning the sharing of those documents? We found out the precursor to the European answer to this question late last October.

The case of Funke Medien NRW GmbH v Federal Republic of Germany concerned military status reports drawn up for the German government on a weekly basis, which detail developments of deployed forces abroad. These reports are subsequently sent to e.g. various members of the Federal Parliament and the Ministry of Defense for briefing purposes. The documents are classed as classified and restricted. Funke Media published summaries of some of these reports, having acquired copies of them through potentially illicit means as an application to access them was rejected by the German government. They were subsequently taken to court for copyright infringement, with the matter ultimately ending with Advocate General Szpunar.

The balancing act between ensuring freedom of expression, but still protecting copyright owners' rights, is a difficult one, since the interests are often very much in competition with each other. The Court was tasked in balancing this difficult dichotomy.

Copyright through numerous exceptions allows for some freedoms when it comes to using copyright materials, including for critique, satire and review. However, the exceptions are by no means very broad (like in the US under fair use), and could be used to curtail genuine public discourse and commentary.

The Charter of Fundamental Rights of the European Union sets out the various rights enjoyed within the Union, and Article 51 asserts those rights onto any EU legislation implemented by Member States. In this case, Article 11 is in contention, which gives everyone the right of freedom of expression.

Other methods might've worked better to keep matters 'secret'

The main question that the Advocate General sought to answer is whether the grounds asserted by the German government are good enough to trump the Claimant's right to freedom of expression. The Advocate General did, however, note that as the copyright holder in this case is a Member State, it does not enjoy the same rights as the people living in that Member State. He distinguished the matter in that "...the State cannot rely on the fundamental right to property as a means of restricting another fundamental right guaranteed by the ECHR or the Charter", even though the State might have a remedy under civil rights.

The Advocate General summarized the position as "...If the State were able to invoke its individual rights, other than the public interest, in order to limit fundamental rights, the result would be the destruction of those fundamental rights". The State would have to put forward an argument under public interest to protect the works in question in order to limit the fundamental rights guaranteed in the Charter. In his view, the State fails under the public interest argument.

He then turned to the matter of copyright protection offered for the military reports. Copyright at its core aims to achieve two objectives: (i) to protect the personal relationship between the author and his work as his intellectual creation; and (ii) to enable authors to exploit their works economically.

While Germany does own the copyright in the military reports, the country itself cannot be construed as the author of those works. Even though they were drafted by State employees, strictly speaking the works themselves do not have an author at all. The Advocate General saw that, as copyright endeavors to protect the relationship between the author and the works created, the State's interests cannot be protected in works it isn't the author of. As he put succinctly: "...where there is no author, there is no copyright, in the form of either moral or property rights".

Similarly, as the State does not seek to profit from the works themselves economically, but to protect the contents from public scrutiny, the Advocate General deemed the matter outside of the remit of copyright.

In short, "...the answer should be that Article 11 of the Charter, read in conjunction with Article 52(1) thereof, must be interpreted as precluding a Member State from invoking copyright under Article 2(a) and Article 3(1) of [the] Directive in order to prevent the communication to the public, in the context of a debate concerning matters of public interest, of confidential documents emanating from that Member State. That interpretation does not prevent the Member State from applying, in compliance with EU law, other provisions of its domestic law, including those relating to the protection of confidential information".

The Advocate General clearly sought to protect the interests of those seeking to share and disseminate information, while the State attempted to curtail those efforts through incorrect means. Copyright clearly was not the appropriate vehicle to protect the legitimate interests in keeping military documents secret, and the State therefore could pursue it through other avenues. In the end, it remains to be seen what the CJEU rules in this case.

One, Not the Other - Misuse of Confidential Information is Not (Necessarily) Copyright Infringement

Many areas of IP infringement often intersect, with one aspect potentially leading to the next. It can be difficult to distinguish these separate acts, and even harder to judge for one to have been committed and not the other. This separation, however, can be a crucial aspect of protecting both parties' interests, even if it could logically (in its non-legal definition) make sense to bundle the acts together. A recent case was dealt with by the Federal Court of Australia that touched on the intersection of breach of confidentiality and copyright infringement, tackling the aforementioned separation head on.

The case of TICA Default Tenancy Control Pty Ltd v Datakatch Pty Ltd dealt with the provisions of services relating to background checks for prospective tenants, conducted by TICA, showing any defaults on previous leases and other tenancy applications they might have made. This is conducted via the company's website for an annual fee, or, for non-corporate entities, possibly on a one-off fee as well. What the case mainly concerned were the databases and the software that underpinned the service. Former employees, Anthony Nounnis, Reginald Joshua and Nathan Portelli, after leaving the company under varying circumstances, set up their own company called Datakatch Pty Ltd. After its incorporation, it came to light that the company might have copied the database and software used from TICA, who subsequently took them to court over breach of confidence and copyright infringement.

Copying software is nothing like the Matrix, Adam realized

The first question addressed by the Federal Court was whether the TICA system was indeed taken by the respondents in the matter. Justice Perram extensively discussed the circumstances and pleadings surrounding the case, additionally focusing on the similarities and dissimilarities of the source code and the stylesheets for each system. There were two things to note, which were highlighted by the judge. Mr Joshua and Mr Nounnis were deemed to have accessed the TICA website using some clients' login details, specifically for the purpose of assisting in the design of the Datakatch website. This included accessing the HTML code, which was subsequently modified heavily in its use in Datakatch's system. Even with access to the website they still were deemed to have not accessed and copied the source code, due to the circumstantial nature of the evidence put forth on this point. Justice Perram determined that the only aspect that was directly copied was the HTML code.

The judge then moved onto the question of copyright infringement, prior to dealing with the issue of a breach of confidentiality. This would be assessed, as many would be aware, as whether there was a substantial copying of the materials by Datakatch or not. A further layer was added in the decision in CA Inc v ISI Pty Limited, where the substantiality of any copying of computer software would be assessed looking at the "...taking into account the importance of function" of the software and its code. Justice Perram quickly concluded that the copyright in the work had not been infringed as "[t]he amount of code copied is trivial from a quantitative point of view" and no functional analysis was done. Although unnecessary after a finding on non-infringement, the judge still looked at the ownership aspect of the copyright issue, i.e. whether TICA owned the copyright in the works allegedly copied. He concluded that they did own the copyright in the works.

Justice Perram finally took on the issue of breach  of confidence against the defendants, who, as stated above, had clearly used usernames and passwords to access confidential information on TICA's systems, which were deemed to have the necessary protectable quality of confidentiality in them. After some discussion, the judge concluded that only Mr Nnounis had breached confidentiality, although only under section 183 of the Corporations Act 2001 (which prevents officers of a company to use information acquired through their position for their own personal gain). He additionally imposed an injunction against Datakatch over the use of the usernames and passwords, as Mr Joshua is a shareholder and director of the company.

The case shows clearly the distinction between intellectual property rights and confidential information, and how an infringement of one right does not necessarily automatically bring about an infringement of the other. Although not by any means a landmark case, this writer still found it interesting, and wonders where the case would've gone had the claimants argued their case differently (and admittedly, better, by the looks of the comments made by the judge).

Source: Davies Collison Cave