IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG LOCAL DIVISION, JOHANNESBURG

CASE NO: 13/31575

In the matter between

MONEYWEB PROPRIETARY LIMITED Applicant

And

MEDIA24 LIMITED First Respondent

FADIA SALIE Second Respondent

APPLICANTS HEADS OF ARGUMENT

INTRODUCTION

1 The applicant (Moneyweb) and the first respondent (Media24) operate

competing business, financial and investment news websites in South Africa.1

Moneyweb operates moneyweb.co.za while Media24 operates Fin24.com. The

second respondent, Ms Salie, is the editor of Fin24.com.2

2 The application concerns a series of eight news stories, the copyright in which vests

1 FA, p. 7, para 5.3, p. 8, para 6.3 and p. 16, para 27; AA, p. 263, para 5.

2 FA, p. 8, para 7.

2

in Moneyweb (the Moneyweb articles).3 The same news stories, containing a

substantial amount of the same content, were then published by Fin24.com (the

Fin24.com articles).4 Moneyweb seeks interdictory relief against the first and

second respondents based on copyright infringement and unlawful competition.5

The infringement is ongoing as the articles concerned continue to be accessible on

the Fin24 website.

3 Although eight articles are now relied upon by Moneyweb in support of the relief

which it seeks, the dispute between the parties came to a head following Media24s

reproduction and misuse of Moneywebs Defencex articles. The facts in this regard

are not and cannot be disputed; and they pertinently illustrate the causa of

Moneywebs complaint.

4 In summary, Moneyweb had uncovered, and was the lead newspaper, in relation to

a particular scheme known as Defencex (which, although not yet proven, was

suspected of being a Ponzi scheme). There had been substantial public interest in

the story. Indeed, the article which first revealed the story had broken Moneyweb

records for the number of times the article had been viewed.6

5 The promoter of the Defencex scheme, Chris Walker, was due to make an

appearance at the Linder Auditorium on Saturday 9 March 2013 (after the articles

3 The founding affidavit refers to seven articles (p. 49 50, para 79). In its answering affidavit, however,

Media24 admitted to having sourced 11 articles from Moneyweb (see p. 286, para 33.2 and p. 291, para 38). Three of these additional articles were published by Moneyweb under licence (RA, p. 481,

para 148). As Moneyweb has no proprietary claim to them, they do not form part of the relief sought in

this application (they remain relevant insofar as they establish Media24s modus operandi). The Notice of Motion was, however, amended to include reference to the fourth additional article identified by

Media24 as having been taken from Moneyweb (RA, p. 481 - 482, para 149). 4 FA, p. 8, para 8.

5 Notice of Motion, p. 1.

6 FA, p. 34 - 35, para 60 64.

3

referred to above had been written). Fin24 instructed its own journalist, Neville

Lennox, to attend. However, he missed the meeting, did not file a report and did not

respond to his editors telephone calls on the Sunday.7

6 Moneywebs journalist did attend the rally, paid R800 to gain entry, spent his

Saturday afternoon travelling to and from the event, and then had to formulate and

write a story, using his own labour and skills as a journalist.8

7 On the Sunday evening, the second respondent, who was on deadline, but without a

report of her own about the Defencex meeting, decided simply to search the

internet for other peoples stories of the event. This yielded the Moneyweb story

which she simply reproduced9 and posted, as her own, on the Fin24 website.

10

Moneywebs lead story had therefore been filched by Moneywebs direct

competitor, Fin24, allowing that competitor to reap where it had not sown.

8 Early on the Monday morning, the applicants editor complained to Fin24.11 In

response, Fin24, while agreeing to insert one hyperlink back to the Moneyweb

article in question, claimed that it was entitled to copy as it had done and that this

was acceptable aggregation.12

It has maintained that position, wrongly, throughout

this application.

9 In line with this, Media24 admits, euphemistically, that in each of the eight cases

before the court that the Fin24.com articles were sourced from and derived in

7 FA, p 37, para 67; AA, p 299, para 54.1.

8 FA, p 36 37, para 66.

9 FA, p 38 - 39, para 68.

10 AA, p 299, para 54.3.

11 FA, p 43, para 71.

12 FA, p 43, para 71.3; AA, p 301, para 55.

4

part from the Moneywebs articles.13 In fact, an integral part of Media24s

defence to the relief sought in this application is that the Fin24.com articles were

presented to Fin24.com readers as having been prepared or written with input from

Moneywebs corresponding story.14 That Media24 has copied Moneywebs

news stories is not therefore in dispute. On the contrary, Fin24 espouses an

editorial policy of copying from third parties, and prescribes how such copying

should be undertaken.

10 That editorial policy is contained in Media24s aggregation guidelines,15 which

reflects a deeply flawed approach to journalism. This is borne out by the fact that

the senior editors of the largest newspaper groups in the country and

representatives of the majority of journalists in South Africa, have considered the

policy and have concluded that these guidelines undermine rather than promote

legitimate journalism and are not in accordance with industry standards or

practice. Instead, they appear to permit a form of illegitimate and unlawful

copying. The editors state unequivocally that they would not permit journalists

under their control to copy or aggregate from other publications as Media24 does.16

11 The primary issues for determination, therefore, insofar as copyright is concerned,

are two-fold.

13

AA, p. 263, para 5, p. 278, para 23. 14

AA, p. 302, para 57.2. See too p. 296, para 47 for an admission that Fin24.com took the news lead from Moneyweb in relation to the Defencex articles.

15 These appear at page 323 of the record (annexure JM2 to the answering affidavit).

16 See, in this regard, the affidavits of Ms Naidoo (General Manager, Editorial of Times Media Group), p.

509 511; Ms Brown (Group Executive Editor of Independent News and Media South Africa), p. 512 518; Mr Mnyandu (Editor of Business Report, Independent Newspapers), p. 519 527; Mr Motale (Editor of The Citizen), p. 529 530; Mr Brkic (Founder and publisher of The Daily Maverick), p. 531- 533; Ms Albrecht (formerly Editor of Rapport, Media24), p. 534 536); Mr Lotter (Chairman of the South African Freelancers Association), p. 537 539.

5

11.1 First, it must be determined whether or not Moneyweb enjoys copyright in

its news articles. Media24 contends that it does not on two separate bases,

namely that (i) the Moneyweb articles are not original within the

meaning of section 2(1) of the Copyright Act, 98 of 1978 (the Copyright

Act); and (ii) the subsistence of copyright in the Moneyweb articles is

excluded by the provisions of section 12(8) of the Copyright Act.

11.2 Secondly, it must be determined whether or not Media24s conduct in

reproducing or adapting news stories published by Moneyweb on its

website falls within the scope of either of the statutorily-recognised

exceptions to copyright infringement which apply in respect of news

articles and articles on economic, political or religious topics (sections

12(1) and 12(7) of the Copyright Act). As we show below, Media24 falls

considerably short of the burden which falls upon it in this regard.

12 Insofar as unlawful competition is concerned, the facts in this matter and

Moneywebs cause of action bear marked similarity to the seminal United States

decision in International News Service v Associated Press17

(International News

Service). International News Service has been discussed and approved in

virtually every significant unlawful competition decision in our own jurisprudence,

including Dun and Bradstreet (Pty) Ltd v SA Merchants Combined Credit Bureau

(Cape) (Pty) Ltd,18

Schultz v Butt19

and Grundlingh Phumulela Gaming and

17

(1918) 248 US 215. 18

1968 1 SA 209 (C) 219 220. 19

1986 3 SA 667 (A) 681- 683.

6

Leisure Ltd (albeit in the minority judgment of Comrie JA).20

13 We deal first with the cause of action based on copyright infringement.

COPYRIGHT INFRINGEMENT

A. The requirements and onus

14 To establish a cause of action for copyright infringement, an applicant must

establish,21

(i) in addition to certain formal requirements of the Copyright Act,22

that it is (ii) the owner;23

(iii) of an original work;24

(iv) which qualifies for

protection under the Copyright Act;25

and that (iv) the respondent has carried out an

act in respect of which the applicant, as owner, enjoys an exclusive right in terms of

the Copyright Act.26

15 As they are raised by way of defence, Media24 bears the onus of establishing the

exceptions to copyright infringement, including those contained in section 12 of the

Copyright Act upon which it relies.27

We deal first with the matters in respect of

which Moneyweb bears the onus, before turning to Media24s defences.

20

2005 6 SA 502 (SCA) 513 514. 21

See generally, Handbook of South African Copyright Law, Dean, Juta loose-leaf (Dean), p. 1-122 1-123, para 11.1.6.

22 See sections 3 to 5 of the Copyright Act.

23 Section 21 of the Copyright Act.

24 Section 2(1) of the Copyright Act.

25 Section 2(1) of the Copyright Act.

26 Section 23, read with section 6, of the Copyright Act.

27 Eg: Pillay v Krishna and Another 1946 AD 946 at 951 952; Simon's Town Municipality v Dews 1993

(1) SA 191 (A) at 197C

7

B. Authorship, ownership and the technical requirements

16 It appears to be common cause that Moneyweb has satisfied the technical28

requirements of the Copyright Act, including in relation to authorship and

ownership. Media24 does not dispute that:

16.1 the Moneyweb articles are literary works within the meaning of the

Copyright Act;29

16.2 the authors of each of the articles have been identified;30

16.3 the authors are qualified persons within the meaning of section 3 of the

Copyright Act;31

and

16.4 Moneyweb owns the copyright in the Moneyweb articles. In this regard,

lest there be any doubt, supporting affidavits have been filed in the names

of each of the authors (excluding Ms Schnehage, who is deceased) in

terms of which they assign copyright in the articles to Moneyweb to the

extent that this did not occur by operation of law or previous

assignments.32

28

Memory Institute SA CC v Hansen and others 2004 (2) SA 630 (SCA) para 4. 29

The definition of a literary work in the Copyright Act includes, specifically, stories and reports. 30

The names appear, in any event, on the articles themselves see FA, p. 75, 85, 90, 97, 105, 113 (and 116 and 119) and 128; and RA p. 790. The named authors are presumed to be the actual authors unless

the contrary is proven - section 26(1) of the Copyright Act. 31

FA, p. 51, para 84.3; RA, p. 483, para 149.3. 32

Record, p. 179 196; and 733 734.

8

C. Originality of the works

17 Section 2(1) of the Copyright Act provides that a work must be original in order to

qualify for copyright protection under the Copyright Act.

18 Media24 claims that there is no copyright in Moneywebs articles because there is

no copyright and no exclusivity in the news.33 It adds that because the Moneyweb

articles record facts and contain quotations from third parties, they are not original

works.34

Media24 further cites the public interest in news dissemination and in

the ability of a media institution to re-report the core elements of a news story

first reported by its competitor as a reason why this court should reject the

applicants claims to protection under the Copyright Act.35 The argument is flawed

for a number of reasons.

19 First, there is no general principle that copyright cannot vest in the creative

expression of news articles or in the recordal of facts. The fact that the content of

a literary work is news does not prevent that work from being capable of protection

by copyright. What is protected is the form of expression of that content.36

That

copyright may subsist in a particular recordal of facts was specifically recognised

by the appellate Division in Galago Publishers (Pty) Ltd and Another v Erasmus37

(Galago). The court in that matter upheld a claim for copyright in relation to a

book which recorded historical facts relating to the Rhodesian war. There can be

33

AA, p. 263, para 5.1. 34

AA, p. 263, para 5.1 and p. 306, para 68.1. 35

AA, p. 264, para 5.2. 36 Copinger and Skone James On Copyright, para. 3-19 and Handbook Of South African Copyright Law,

O H Dean, P1-25, paragraph 3.4.3 37

Supra, p. 293 294.

9

no distinction, in principle, between a book recording historical facts and a

newspaper article recording historical (albeit more recent) facts.

20 There is thus no general principle of copyright law that serves to exclude news

articles from copyright protection. This is also evident from section 12 of the

Copyright Act. Section 12 creates certain limited exceptions to the infringement of

copyright in news articles appearing in newspapers or periodicals.38

The exceptions

create the rule because they would be redundant if, as Media24 appears to contend,

there was no copyright in these works in the first instance. In other words, in

creating the exceptions to infringement, the legislature has recognised that, as a

general rule, to which rule the exceptions then apply, news articles do enjoy

copyright protection as literary and, where relevant, artistic works.39

21 Moreover, the exceptions serve to protect, in the limited way in which they do,

whatever public interest there may be in news dissemination which occurs

through the copying of a rivals news stories. That the exceptions are as narrowly-

framed as they are (as discussed below) is, no doubt, on account of the fact that the

legislature recognised that there is a much more compelling public interest in

research-based original journalism; and that this public interest generally outweighs

the public interest in news dissemination through parasitism or plagiarism.40

38

See sections 12(1) and 12(7) of the Copyright Act. 39

This is also borne out by section 21(b) dealing with the ownership of copyright in newspaper articles. 40

These competing interests are discussed in the Meltwater decision included as an annexure to the

replying affidavit) - the court there describing original journalism an essential function of democracy (see page 614 of the record); and finding that such interest as there may be in news dissemination

through a news clipping service was outweighed by the strong public interest in the enforcement of copyright laws.

10

22 In this regard, it is generally recognised that it is in the public interest that firms be

incentivised, in particular through intellectual property laws, to incur the time and

expense associated with producing original work.41

22.1 Simply put, without the time, effort, skill, cost and labour invested in

producing an original article (which process we refer to as original

journalism) the press would not serve the important function which they

do in any democracy; and society would be much the poorer for it.42

22.2 Indeed, intellectual property laws are essential for the protection of the

right to freedom of expression guaranteed by section 16(1) of our

Constitution. As the US Supreme Court has recognised, the very purpose

of copyright "is to promote the creation and publication of free

expression". It has explained that [b]y establishing a marketable right to

the use of ones expression, copyright supplies the economic incentive to

create and disseminate ideas. 43

23 Thus, while of course it is in the public interest that news be disseminated to the

extent possible, that interest is secondary: because without the investment in

original journalism there would be nothing for the likes of Fin24.com to copy and

disseminate and the right to freedom of expression would be fatally undermined.

There is no authority that supports the general proposition that freedom of the press

41

See, in a patent context, the quid pro quo rule referred to in Letraset Ltd v Helios Ltd 1972 (3) SA 245

(A). In a copyright context, see the first page of Dean. 42

See, in this regard, FA, p. 25 - 26, para 46 and RA, p. 423, para 37 and p. 484, para 152. 43

Eldred v. Ashcroft 537 U.S. 186 (2003) at 219

11

includes the freedom to infringe the copyright in the form of words created or used

by another journalist in order to convey information.

24 Moreover, the public interest in news dissemination through copying cannot assist

Fin24.com. Moneyweb and Fin24.com are competing websites. There is no

evidence to suggest that they reach different target markets. If a news article is not

made available on Fin24.com, a reader will still be able to access it on Moneyweb.

25 It follows that, outside of the specific exceptions in section 12 of the Copyright

Act, there is no reason why news articles should be treated any differently to other

literary or artistic works in determining whether or not they are original works

within the meaning of the Copyright Act.

26 Turning then to those general principles, it is trite that what gives a work the

quality of originality for the purposes of copyright protection is a sufficient degree

of skill or labour in execution. Thus, in Klep Valves (Pty) Ltd v Saunders Value

Company Ltd, the Supreme Court of Appeal set out the test in the following terms:

The next question is whether the respondent's drawings qualified as

'original' works for the purposes of s 1 of the 1911 British Act. The

principles relating to originality in this context were not in dispute

between the parties and are conveniently set out by Prof AJC Copeling in

the following passage (Copyright and the Act of 1978 at 15):

'To be original a work need not be the vehicle for new or inventive

thought. Nor is it necessary that such thoughts as the work may

contain be expressed in a form which is novel or without

12

precedent. "originality", for the purposes of copyright, refers not

to originality of either thought or the expression of thought, but to

original skill or labour in execution. All that is required is that the

work should emanate from the author himself and not be

copied...44

(our emphasis)

27 The threshold for originality is therefore relatively low. Originality does not mean

that the work must be in any way unique or inventive.45

Provided the work in

question is not copied from another source; and that skill and labour has been

employed in its production, the work will qualify as an original work for purposes

of the Copyright Act.

28 As to the measure of skill and labour required, the SCA, in Haupt t/a Soft Copy v

Brewers Marketing Intelligence (Pty) Ltd And Others, made clear that it need only

be a substantial (or not trivial) amount:

Save where specifically provided otherwise, a work is considered

to be original if it has not been copied from an existing source and

if its production required a substantial (or not trivial) degree of

skill, judgment or labour. In Canada 'original' has likewise been

interpreted so as not to require creativity. In CCH Canadian Ltd v

Law Society of Upper Canada it was held:

'(A)n original work must be the product of an author's

exercise of skill and judgment. The exercise of skill

and judgment required to produce the work must not

be so trivial that it could be characterized as a purely

mechanical exercise. While creative works will by

definition be "original'' and covered by copyright,

44

1987 (2) SA 1 (A) 22H 23H. 45

Dean, op.cit. at p.1-21, paragraph 3.3.1

13

creativity is not required to make a work

"original''.' 46

29 In applying these principles to the evidence, there can be no doubt that Moneyweb

has discharged the burden upon it in establishing the originality of the Moneyweb

articles.

29.1 There is no suggestion that the content of any of Moneywebs articles

were taken from any other source. In fact, the affidavits filed in the name

of each of the authors also confirm that each of the articles were original

works which required the authors independent, effort skill and expertise

to write.47

There is no challenge to that evidence; and nor could there be.

29.2 Furthermore, there is nothing to gainsay the considerable evidence before

the court regarding the original skill and labour which was required to

produce each of the eight articles in question. The evidence establishes

that the authors in question spent time and used their skills as journalists to

(i) investigate the story by attending a press conference or conference call,

visiting the site of the story, interviewing the role players in the story etc;

and then (ii) write the story using their own creative skill and language, in

a manner which would be of interest to and understood by the readers.48

46

2006 (4) SA 458 (SCA) para [35]. 47

Record, p. 179 196; and 733 734. 48

FA, p. 26, para 47.1; p. 28, para 49; p. 29, para 51; p. 30, para 53; p. 31, para 55; p. 36, para 66; and p.

46, para 76; and RA, p. 482, para 149.

14

30 In the circumstances, Media24s claim that the Moneyweb articles are not original

within the meaning of section 2(1) of the Copyright Act is spurious. Indeed, the

fact that Fin24.com felt it necessary to copy each of these articles is itself strong

evidence of the originality of the works in question and the skill and labour

employed in their production. As remarked by Petersen J in University of London

Press Ltd v University Tutorial Press Ltd, 'what is worth copying is prima facie

worth protecting'49

D. An infringing act

31 Section 23(1) of the Copyright Act provides that it is an infringement of copyright

to perform an act in respect of which the owner of the copyright enjoys the

exclusive right to do or to authorise. The exclusive rights reserved to the copyright

owner in a literary work, in terms of section 6 of the Copyright Act, include the

acts of reproduction and adaptation. In terms of s 1(2A), the reproduction or

adaptation of a work is, unless the context otherwise indicates, to be construed as a

reference to the reproduction or adaptation of a substantial part of the work.

32 In listing its defences to this application, Media24 does not include any denial that

it has reproduced (or adapted) Moneywebs articles.50 Media24 has a policy that

proscribes copying of up to 30% of anothers works, and to re-write the copied

material in the copiers own words. We assume, therefore, that the question of an

infringing act is not in dispute. However, we deal with the issue fully because the

49

[1916] 2 Ch 601 at 610 referred to with approval at Payen Components SA Ltd v Bovic CC 1995 (4) SA 441 (A) at 452 D.

50 AA, p 306 - 308, para 68

15

principles and the evidence relating to the extent of the reproduction cast their

shadow over the question of fair dealing, which we deal with in detail below.

D1 Reproduction

33 As noted by Corbett CJ in Galago there are two elements of reproduction which

must be considered:

To 'reproduce' within the meaning of the Act means to copy and in order

for there to have been an infringement of the copyright in an original

work it must be shown (i) that there is sufficient objective similarity

between the alleged infringing work and the original work, or a

substantial part thereof, for the former to be properly described, not

necessarily as identical with, but as a reproduction or copy of the latter;

and (ii) that the original work was the source from which the alleged

infringing work was derived, ie that there is a causal connection between

the original work and the alleged infringing work, the question to be

asked being: has the defendant copied the plaintiff's work, or is it an

independent work of his own? (See Francis Day & Hunter Ltd and

Another v Bron and Another [1963] Ch 587 at 618, 623, indirectly

referred to with approval by this Court in the unreported case of Topka v

Ehrenberg Engineering (Pty) Ltd 30 May 1983).51 (emphasis added)

34 There is no dispute on the papers that the Moneyweb article was, in each of the

eight infringements, the source from which each of the Fin24.com articles was

derived. The causal connection between the articles is not therefore disputed.

51

1989 (1) SA 276 (A) 280 B - E

16

35 The only question which remains is whether there is sufficient objective similarity

between the Fin24.com articles and the Moneyweb articles so as to conclude that

the Fin24.com articles are a reproduction of the Moneyweb articles, or a substantial

part thereof.

36 In its founding affidavit, Moneyweb carried out an extensive analysis of the extent

to which the seven Fin24.com articles dealt with in the founding affidavit

reproduce substantial parts of the corresponding Moneyweb story and are thus

objectively similar.52

It did the same in respect of the eighth story dealt with in the

replying affidavit.53

37 The objective similarity between the articles is, in any event, plain to see. We

tabulate below, the relevant pages from the record from which the court will be

able to draw its own conclusions in this regard (the highlighting on these pages

providing further guidance):

52

See in particular FA, p. 27, para 48.2; p. 28, para 50; p. 29, para 52.1; p. 30 31, par 54; p. 32, para 56; p. 38 - 39, para 68; p. 47 - 49, para 78.

53 RA, p. 482 483, para 149.5 and 149.6.

17

Story Moneyweb article Fin24.com article

MPs remuneration 75 78

Group Five 85 87

McDonalds 90 93

Hout Bay castle 97 101

Angloplats 105 107

Defencex 1 128 131

Defencex 2 161 165

Davos 790 792

38 Media24 has not sought to challenge Moneywebs analysis of objective similarity

in any meaningful way. Its only point of substance is that the Fin24.com articles

are shorter than the Moneyweb articles in each case. 54

This is irrelevant.

38.1 Only a substantial part of the Moneyweb articles need be taken; and there

is no suggestion by Media24 that what has been taken is insubstantial,

even if measured quantitatively (as Media24 does in its answering

affidavit).

38.2 But, more importantly, substantiality refers much more to the quality of

what has been taken than to the quantity.55 Thus, the unauthorised

copying of even a small but essential part of the original work constitutes

copyright infringement. There is no doubt that the Fin24.com articles are

54

AA, p. 293 - 295, para 44; p. 301, para 55; and p. 305, para 64. 55

Payen Components Sa Ltd v Bovic CC And Others 1995 (4) SA 441 (A) 451 - 452. Dean, loc.cit, p. 1-

65, para.8.3

18

reproductions of a substantial part of the Moneyweb articles. In each

instance, the core elements of each of the eight Moneyweb stories

including the idea of the story, the essence of the news which it conveys,

the headline, the selection of underlying facts which form the basis of the

story (the selection being made from a much larger pool of available and

potentially relevant facts), the quotations in the story, the structure of the

article in question and even the language itself has been copied by

Media24 in producing the Fin24.com article. Ironically, even the errors in

the Moneyweb articles have been reproduced in the Fin24.com articles.56

39 Indeed, should the question of reproduction be placed in dispute, the approach of

the Appellate Division in Galago on similar facts, dealing with a reproduction by

way of abridgement, is determinative.57

Having conducted a full analysis of the

books in dispute in that matter, the court concluded that:

As I have demonstrated, in writing Pictorial Account the second

appellant not only used the general idea underlying Top Secret War,

but went much further: he reproduced the facts selected by the author

of Top Secret War to portray the history of the Selous Scouts, virtually

down to the last detail. In each of the chapters of Pictorial Account,

to which objection is taken, the story follows faithfully, in all its

essentials, that told in Top Secret War. In the chapters dealing with

the operations by the Selous Scouts second appellant selected the

same operations (out of a much greater potential number) and told

the story of each operation in the same way, with the same

circumstantial detail, selection of the characters portrayed, the use of

56

RA, p. 489, para 163. At other times, as a consequence of the efforts to disguise their copying,

Fin24.com have introduced errors into their articles which do not appear in the Moneyweb article. See

RA, p. 499 - 500, para 193. 57

Supra, p. 284 294.

19

the same pseudonyms, and so on. Moreover, as I have shown, there

was a very considerable amount of language copying. It was argued

that this is for the most part what was termed 'referential language':

language which had to be used to recount a particular fact. I am not

impressed with this argument. There are often different ways of

describing facts; and in this case there is such a large degree of

correspondence between the language used in the two works that, in

my opinion, it can only be described as copying.58

40 The same conclusion can be drawn on the facts before this court. The similarities

in the articles, in particular in their headlines, structure, content and overall

message, are such that the one can clearly be described as a copy of the other. The

selection, in both the Fin24.com articles and the Moneyweb articles, of precisely

the same facts and quotations, from a far larger pool of both, and the use of very

similar (if not identical) language to describe those facts, is no coincidence.

Measured qualitatively, therefore, as they must be, it is clear that the Fin24.com

articles are reproductions of the Moneyweb articles.

41 This is especially the case given that our courts have held that even a few words,

sentences or phrases can be regarded as separate discrete works enjoying copyright.

As McCreath J explained in Juta v De Koker:59

The British Courts have not excluded the possibility that a single

word can be a literary work and thus the subject of copyright - see

Exxon Corporation and Others v Exxon Insurance Consultants

International Ltd [1982] RPC 69. Indeed, in my view, there is no

reason why chapters of a book or even pages, sentences and phrases

58

Supra, p. 293 294. 59

Juta & Co Ltd v De Koker 1994 (3) SA 499 (T) at 504H

20

therein contained cannot in an appropriate case be regarded as

separate discrete literary works enjoying copyright.60

D2 Adaptation

42 If not reproductions, then the Fin24.com articles are clearly adaptations of the

Moneyweb articles in question. Adaptation is defined in section 1(1) of the

Copyright Act by reference to certain examples of types of adaptations, none of

which are relevant to the facts here.

43 In Bosal Afrika (Pty) Ltd v Grapnel (Pty) Ltd and Another61 the court held that this

definition was not exhaustive. In making its finding the court had regard to the

Afrikaans text of the Act (as signed) and held that adapted (in Afrikaans

aanwend) simply meant to use the work of another, presumably to create some

form of derivative (adapted) work.

44 In this case, it is, as we have said, common cause that Media24 used the Moneyweb

article in each case to create the abridged version which constitutes the Fin24.com

article dealing with the same subject matter. 62

The abridged Fin24.com version of

the article is therefore nothing other than an adaptation of the original Moneyweb

article.

E. Conclusion on Moneywebs copyright cause of action

60

61

1985 (4) SA 882 (C) 62

The adaptation generally involves reproducing the essential aspects of the Moneyweb article in a

shorter version of it.

21

45 Moneyweb has satisfied the onus upon it in relation to its cause of action in

copyright. We turn then to show that Media24 has failed to establish the defences

upon which it relies pursuant to the exceptions to copyright subsistence and

infringement contained in section 12 of the Copyright Act.

MEDIA24S DEFENCES

A. Introduction

46 Copyright protection provides an important incentive to induce authors to create

works for which they will be rewarded. Copyright also acts as an incentive to

publishers to invest in the dissemination and exploitation of works for the ultimate

benefit of the public. Thus, works that are subject to copyright are worthy of

protection in the public interest. Furthermore, investments will not be made for the

purposes of creating works unless there is a reasonable expectation of obtaining a

reward when such works are commercially exploited. The reward that authors and

investors receive provides a stimulus to creativity. It is in this general context that

the exceptions to copyright infringement should be seen and interpreted.

47 Section 12 of the Copyright Act contains a series of exempting provisions. More

particularly, sections 12(1) to 12(7) operate to render conduct which would

ordinarily be considered an infringement of copyright, in terms of the general

provisions of section 23 of the Act, non-infringing. Section 12(8) operates to

22

exclude the subsistence of copyright in certain works which would ordinarily

qualify for Copyright protection, as literary works, in terms of the Act.

48 It is a settled canon of statutory interpretation that exempting sections are narrowly

construed such that only conduct as clearly falls within the scope of the language

used in the statute is exempted.63

This is a principle which must be applied in

interpreting each of the sub-sections relied upon by Media24 in its defence of this

application.

B. Section 12(8)(a)

49 Section 12(8)(a) of the Copyright Act provides that:

No copyright shall subsist in official texts of a legislative,

administrative or legal nature, or in official translations of such

texts, or in speeches of a political nature or in speeches

delivered in the course of legal proceedings, or in news of the

day that are mere items of press information. (our emphasis)

50 The first respondent appears to contend that this section should be interpreted to

exclude copyright subsistence in any article which reports on current news and

events.64

This is clearly wrong.

63

Norwich Union Life Insurance Society v Dobbs 1912 AD 395 at 399; South African Broadcasting

Corporation v Pollecutt 1996 (1) SA 546 (SCA) at 556D. See also: Hartman v Chairman, Board For

Religious Objection and Others [1987] 1 All SA 205 (O) 927 - 928 and the cases there cited. 64

AA, p. 273, para 17; p. 306, para 68.2

23

50.1 First, the copyright infringement exclusions in section 12(1) and 12(7)

would be redundant, insofar as they deal with articles in newspapers or

periodicals if, in fact, these articles could not be protected by way of

copyright anyway.65

50.2 Secondly, had the legislature intended that the exclusion in section 12(8)

extend to all articles published in newspapers and periodicals, it would

have said so in express terms; and it would have done so by using the

wording it adopted in sections 12(1) and 12(7).66

By adopting different

wording, the legislature drew a clear distinction between news of the day

that are mere items of press information in section 12(8) and articles in

newspapers or periodicals which appears in both sections 12(1) and

12(7). The first respondent impermissibly seeks to elide the two phrases.

The respondent in fact systematically ignores the qualification mere

items of press information in section 12(8) in its answering affidavit.67

This is not surprising. When due regard is had to it, Media24s reliance on

the section is shown to be nonsensical.

51 Media24s interpretation of section 12(8) is therefore without merit. The actual

meaning of the provision is clear when regard is had to the context in which the

exclusion in section 12(8)(a) appears.

65

We have made a similar point, above, in dealing with originality under section 2(1). 66

In other words section 12(8) would simply have read, in relevant part, that that no copyright shall subsist in any article published in a newspaper or periodical.

67 See, by way of example, AA, p. 273, para 17; p. 278, para 23; and p. 306, para 68.2.

24

52 In this regard, reading section 12(8) as a whole makes clear that it is intended to

allow newspapers and other reporting firms to copy official texts, be they

legislative, administrative or legal; and quasi-official texts, such as political

speeches, legal speeches and mere items of press information without the need to

re-write them. The works referred to in section 12(8), being primarily official texts

and speeches, have in common that (i) the works in question would ordinarily be

generated by someone other than a member of the press (a member of the

legislature for example); (ii) but delivered to, or received or heard by, the press;

(iii) in circumstances in which it was always understood that the works in question

would be made public, including through being reported by the press; and (iv) in

relation to which it is generally in the public interest that the works content be

reported, verbatim if needs be, in the press.68

53 It is in this context that the exclusion from copyright protection for news of the

day that are mere items of press information should be understood. Press

information does not refer to a news article written by a journalist. It is a

reference to information which is given to the press (hence press information

rather than news article), and which is intended to be conveyed by the press to

the general public in that precise form. This kind of information would often take

the form of a press release69 although it is not inconceivable that the mere item

of press information may take other forms (such as, for example, a government

notice).

68

The purpose of the section is to allow free use by journalists of the works mentioned in the section

without compelling them to edit or re-write such material. This is obviously desirable, particularly in

circumstances where the information in question was intended to be conveyed to the public in the first

instance. It is only in faithful reproduction that one can be assured that the true meaning of the text is

conveyed. 69

RA, p. 412, para 9.2.

25

54 That this interpretation is correct is also clear from the corresponding Afrikaans

text of the Copyright Act, viz., Outeursreg bestaan nie in amptelike stukke van 'n

wetgewende, administratiewe of wetlike aard of in amptelike vertalings van

sodanige stukke of in toesprake van 'n politieke aard of in toesprake gelewer tydens

regsverrigtinge nie of in nuus van die dag wat slegs items van persinligting is

nie.

55 In summary, the exclusion from copyright protection in section 12(8) does not

extend to original articles written by members of the press. Had the legislature

intended such a broad exclusion, it would have said so in express terms, using the

wording in section 12(1) and 12(7) instead of the wording which it does use in

section 12(8). The Moneyweb articles are not therefore mere items of press

information within the meaning of section 12(8); and Media24s reliance on

section 12(8) is misguided.

C. Section 12(7))

56 Section 12(7) provides that:

The copyright in an article published in a newspaper or periodical,

or in a broadcast, on any current economic, political or religious

topic shall not be infringed by reproducing it in the press or

broadcasting it, if such reproduction or broadcast has not been

expressly reserved and the source is clearly mentioned. (our

emphasis)

26

57 The exemption in section 12(7) does not save an infringer in circumstances where

the right of reproduction has been expressly reserved by the publisher in question

and if the source is clearly mentioned.

58 Moneyweb has indeed expressly reserved the reproduction of its articles, as

contemplated in section 12(7) of the Act. In this regard, the use of Moneywebs

website by members of the public, including by Fin24 and its employees, is subject

to its terms and conditions. Clicking on the terms & conditions on the first page

of the internet website takes the user to a page on the website where the following

is clearly stated and was clearly stated at the time when each of the eight articles

was published:70

Moneyweb Holdings Limited, 1997-2008. Redistribution or reproduction

of this content, whether by e-mail; newsletter; capture into databases;

intranets; extranets or Web sites; is permissible only with the written

permission of the publisher. Please respect our property. Moneyweb

Holdings, its sponsors, advertisers and contributors disclaims all liability for

any loss, damage, injury or expense that might arise from the use of, or

reliance upon, the services contained herein. You may only use the data

retrieved from our website for your own personal and non-commercial

purposes while accessing our services. You may not copy, distribute or

redistribute the data, including by caching, framing, pop-ups or any other

means, or sell, resell, re-transmit or otherwise make the data (including

share information) retrieved from our services available in any manner to

any third party.71 (our emphasis)

59 This, clearly, represents a full reservation of the Moneywebs rights against

reproduction by third parties, including Fin24 in terms of section 12(7).

70

RA, p. 413, para 12.1. 71

RA, p. 413, para 12.1.

27

60 That is sufficient to dispose of the section 12(7) defence. Media24 has not

established that its reproduction of the Moneyweb articles fall within the scope of

exemption section 12(7) of the Copyright Act.

D. Section 12(1))

61 Section 12(1)(c)(i) of the Copyright Act provides that:

Copyright shall not be infringed by any fair dealing with a literary or musical work

(b).

(c) for the purpose of reporting current events

(i) in a newspaper, magazine or similar periodical; or

(ii).

Provided that, in the case of paragraphs (b) and (c) (i), the source shall be

mentioned, as well as the name of the author if it appears on the work.

62 In what follows, we show that the Fin24.coms use of the Moneywebs articles

does not constitute fair dealing for purposes of reporting current events and does

not sufficiently attribute Moneyweb as the source of the article.

D1 Fair dealing for purposes of reporting current events

63 Media24s claim that its conduct amounts to fair dealing for purposes of reporting

current events does not bear scrutiny.

64 In essence, the defence amounts to no more than a claim that, by including a deep-

28

link72

to the Moneyweb article in question, Fin24.com has provided sufficient

attribution to Moneyweb and is there entitled to copy as much of Moneywebs

article as it likes.73

This approach elides the separate requirements in section 12(1)

of fair dealing and attribution. Even if there was sufficient attribution of source,

which is denied, that does not exempt from infringement, reproduction of a

copyrighted work on a scale which extends beyond fair dealing. There is no basis

for the proposition that a hyperlink/deep link, in the world of the internet, is the

only thing necessary to satisfy both the attribution aspect of fair dealing, and the

substantive criteria to be met for fair dealing.

65 The fair dealing provisions in section 12 have not, as far as we are aware, been

the subject of judicial interpretation in South Africa. Guidance can, however, be

obtained from international jurisprudence on the issue, in particular in England and

the United States.

66 The statutory exemption74 from infringement in the United Kingdom provides in

relevant part that fair dealing with a work (other than a photograph) does not

infringe any copyright in the work provided that it is accompanied by a

sufficient acknowledgement.

67 Although the statutory provision differs in certain respects, both the South African

and the UK statute include the requirement that the dealing or use be fair. This

72

The papers refer to hyperlinks, but the Fin24.com articles contain deep-links rather than hyperlinks. A

hyperlink takes the user to the first page of a website and requires the user to then search for the

relevant content; a deep-link takes the user to a specific page of the second website, thus obviating the

need for the user to search the second website for what he or she is looking for - see Dean, p. 1-71. 73

AA, p. 264 265, para 5.5 and p. 278, para 23. 74

Section 30(2) of the Copyright, Designs and Patents Act, 1988.

29

requirement has been the subject of a number of judgments in the United Kingdom.

Helpfully, a very useful summary of the position appears, in similar terms, in both

of the leading English textbooks on the subject.

68 In Laddie et als The Modern Law of Copyright and Designs the following is

stated:

It is impossible to lay down any hard-and-fast definition of what is fair

dealing, for it is a matter of fact, degree and impression. However, by far

the most important factor is whether the alleged fair dealing is in fact

commercially competing with the proprietors exploitation of the copyright

work, a substitute for the probable purchase of authorised copies, and the

like. If it is, the fair dealing defence will almost certainly fail. If it is not and

there is a moderate taking and there are no special adverse factors the

defence is likely to succeed, especially if the defendants additional purpose

is to right a wrong, to ventilate an honest grievance, to engage in political

controversy, and so on. The second most important factor is whether the

work has already been published or otherwise exposed to the public. If it

has not, and especially if the material has been obtained by a breach of

confidence or other mean or underhand dealing, the courts will be reluctant

to say this is fair. However, this is by no means conclusive, for sometimes it

is necessary for the purposes of legitimate public controversy to make use of

leaked information. The third most important factor is the amount and

importance of the work that has been taken. For, although it is permissible

to take a substantial part of the work (if not, there could be no question of

infringement in the first place), in some circumstances the taking of an

excessive amount, or the taking of even a small amount if on a regular basis,

would negative fair dealing. So, if the defence alleged is fair dealing for the

purposes of criticism of the work, the taking of a large amount thereof and

the addition of brief critical notes would not presage a successful defence,

and vice versa. On the other hand there can exist circumstances where it is

proper to quote the whole work, particularly if it is a short one; a possible

example would be the bona fide criticism of a poem. It may be relevant to

take account of trade practices as to length of permissible taking as

30

announced by the relevant trade associations but this requires caution: not

only is there some risk that such announcements may contain an element of

what is self-serving, but length by itself is not very meaningful when

divorced from the context of other relevant factors, such as those we have

noticed above. By analogy with the defamation cases the courts have

sometimes refused to prejudge the issue and grant interlocutory injunctions

where defendants have said that what they propose to do will be by way of

fair dealing, in the interests of freedom of speech and that truth will out,

leaving the plaintiff to his remedy in damages, if any.75

(our emphasis)

69 Similarly, in Copinger and Skone James on Copyright76 the authors explain that

there are three primary factors which the courts will consider in determining

whether the dealing was fair, namely:

69.1 The degree to which the alleged infringing use competes with exploitation

of the copyright work by the owner. Copinger & Skone James identify

this, and the extent to which the reproduction is a substitute for the

original, as likely to be a most important factor and highly relevant.

69.2 Whether the original work reproduced has been published or not (which it

has in this case).

69.3 The extent of the use and the importance of what has been taken from the

original work. Copinger & Skone James explain that the test to be adopted

in this regard is not so much to do with how much was taken but rather

75

Laddie, Prescott and Vittoria, Butterworths, London, 1995, p. 134. The footnote references have been

excluded from this quotation. The summary was approved in Ashdown v Telegraph Group Ltd [2001]

EWCA Civ 1142 (18 July, 2001) available on the Bailli.org website, more particularly at

http://www.bailii.org/ew/cases/EWCA/Civ/2001/1142.html. 76

Garnett, Davies and Harbottle, Sweet & Maxwell, London, 16th

ed, 2011, p. 570 576.

31

whether it was necessary to use as much as the defendant did for the

relevant purpose.

70 These considerations do not differ materially from those which are statutorily

prescribed in the United States.77

The statutory exclusion in the United States

provides, in relevant part, that the fair use of a copyrighted work for purposes

such as news reporting is not an infringement of copyright.78 The statute

then prescribes that the following non-exclusive factors will be taken into account

in determining whether the allegedly infringing use is in fact fair use:

(1) the purpose and character of the use, including whether such use is of a

commercial nature or is for non-profit 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; and

(4) the effect of the use upon the potential market for or value of the

copyrighted work.79

71 In seeking to reconcile the factors considered in the US and in the UK, we note the

following (dealing first with the considerations that are most obviously

reconcilable).

72 Consideration (3), relating to the extent of copying, is identical to the third

consideration in UK law referred to above. Furthermore, as is the position in the

UK, the US courts also consider both the extent (quantitative) and the importance

77

For a useful summary, see the Meltwater decision which appears from page 581 of the record of this

application. 78

Record, p. 607. 79

Record, p. 608.

32

(qualitative) of what has been taken from the original work; and then ask whether

the alleged infringer has taken no more than is necessary for his or her purpose.80

73 In US law, consideration (2), relating to the nature of the copyright work, requires

an assessment of whether the work has been published or not and whether the

original work is a work of fiction or more factual.81

This consideration therefore

overlaps with the second consideration in UK law referred to above. The only

difference appears to be that the courts in the USA also regard fair use to be more

likely to be established where the original work relates to factual rather than

fictional subject matter.82

74 That leaves only the first consideration in UK law (substitutability) and, in US law,

consideration (1), dealing with the purpose and character of the use by the

infringer; and consideration (4) dealing with the effect which the infringers use has

on the copyright owners market for or value of the original work. We note the

following in this regard.

74.1 In assessing (1), the US courts have regard to whether and to what extent

the new work is transformative83 of the original work; that is to say

whether the alleged infringement is intended to be a substitute for the

original work;84

or whether it serves a different purpose or otherwise

provides new information, new aesthetics, new insights and

80

Record, p. 626 81

Record, p. 625. 82

Record, p. 625. 83

Record, p. 609. 84

Record, p. 613; 618.

33

understandings.85 The courts in the United States also have regard, under

(1), to whether the new work has a commercial or a non-profit educational

purpose, and in particular, whether the user stands to profit from the

exploitation of the copyrighted material without paying the customary

price.86

74.2 These questions obviously overlap, considerably, with questions that

might be asked under consideration (4), something which the Meltwater

case recognises.87

Simply put, the less transformative and more

substitutable the infringement is for the original, the greater the effect will

be on the market for the original.

74.3 And, for the same reason, it seems to us that the questions asked under

consideration (1) and (4) in the United States are all questions which

might be asked in assessing the degree to which the alleged infringing use

competes with exploitation of the copyright work by the owner under UK

law.

74.4 There is, therefore, substantial overlap in these factors considered by the

UK and US courts.

75 Against that background, in addition to the submissions already made, we make our

submissions in three parts: (i) substitutability and lack of transformation; (ii) the

85

Record, p. 610. 86

Record, p. 611 87

Record, p. 628 (foot of the page referring to the relationship between the substantiality of copying and

market substitutability).

34

extent of the copying; and (iii) the nature of the copyrighted work.

Substitutability and lack of transformation

76 It is on this the first and most important factor that the respondents reliance on

section 12(1) and fair dealing defence must fail. Indeed, it seems clear from both

Fin24s answering affidavit and the aggregation policy of 24.com which is

applicable to it88

that Fin24 does not understand that the fair dealing defence

requires that its article should not effectively dispense with the need for a user to

read the original Moneyweb article; and that reproduction of a competitors news

article in order to profit from it at the expense of a competitor will very seldom, if

ever, ground a defence of fair dealing. Media24 advances no facts to sustain an

argument that its articles transform Moneywebs articles into a different article

serving a different and non-competing purpose. This is fatal to its reliance on the

fair dealing defence.

77 That the Fin24.com article is, in each of the eight cases, a substitute for reading the

Moneyweb article, and thus not a transformation of it, is in any event clear simply

by reading the articles in question. While the Moneyweb article is invariably

longer, and contains additional facts, as we have already submitted in dealing with

reproduction, the core elements, or the essence,89 of the Moneyweb story all

appear in the Fin24.com article. The one simply substitutes for the other.

78 Once a reader has read the abridgement of the story contained in the Fin24.com

88

Annexure JM2, p. 323. 89

Record, p. 619.

35

article there is absolutely no need for the user to carry on and read the Moneyweb

article. Given that Fin24.com and Moneyweb are direct competitors, and that

Fin24.coms reproduction of the articles is at Moneywebs expense, this is fatal to

Fin24.coms reliance on fair dealing as a defence.

79 The Fin24.com articles, were, furthermore, clearly intended90 to substitute for the

Moneyweb article.91

If Fin24.com had genuinely intended simply to make people

aware of the fact that a particular news item had been reported by Moneyweb, it

would have included nothing more than a headline, a deep-link to the Moneyweb

article and perhaps a paragraph providing a taster of what the reader may find on

the Moneyweb site.92

That is the way true aggregators of news content, such as

Legalbrief93

and Google News94

, work.

80 Fin24.com in fact denies in terms that it operates as a news aggregator; and seeks to

distinguish its offering from such services on the basis that it has an extensive

product offering,95 some of which is sourced from Moneyweb. Having made that

distinction, however, Media24 never explains why the Fin24.com articles are not

substitutable for the Moneyweb articles, from which omission (and the repeated

reliance on hyperlinking/attribution instead), the court can infer that Media24

accepts that that they are indeed substitutable one for the other.

81 This conclusion is, in any event, easily drawn from the facts. What Fin24.com did

90

Motive is one of three other factors that may be relevant to a fair dealing enquiry referred to by Copinger and Skone James, p. 576.

91 RA, p. 425, para 45.4.

92 See two good examples of this at RA, p. 495 - 496, para 182.

93 RA, p. 452, para 85.8

94 RA, p. 460, para 88.

95 AA, p. 278, para 23.

36

in each instance was simply to lift the most pertinent paragraphs from the

Moneyweb article, including the headline and the quotations, so as to convey the

essence of the Moneyweb article to its readers, without the need for those readers to

actually visit the Moneyweb site and view the original article. Qualitatively

measured, there can be no doubt that Media24 extended well beyond what might be

considered fair dealing. There is no transformation. In each case, the Fin24.com

article tells precisely the same story, serves the same purpose and substitutes for

reading the Moneyweb article.

82 The substitutability of the Fin24.com articles for the Moneyweb articles is further

evidenced by the fact that, remarkably, on average, 98.5% of users who read the

Fin24.com articles did not click on the deep-link embedded in Fin24.coms article

to read the original Moneyweb articles.96

Only 1.5% of people, therefore, did not

consider the Fin24.com article to provide them with all the information that they

required in relation to the story. These paltry percentages negate any argument

which might sought to be made by Media24 that its articles did not substitute for

reading the Media24 article in question.

83 Surprisingly, Media24, seeks to suggest that a click through rate of 1.5% is in fact

fairly high. It does this by comparing these rates to the click-through rates obtained

by advertisers who pay to place their advertisements on particular website pages.97

The comparison is opportunistic and wholly inappropriate.

83.1 Like advertisements that disrupt ones television viewing or which appear

96

RA, p. 425, para 45; and, in more detail, p. 497 - 498. 97

AA, p. 302, para 57.2.

37

in a newspaper, advertisements that appear on a website are often

perceived by the reader to be really nothing more than an irritation.98

The

user has not accessed a website to view the advertisement. He or she

wants to read the story which is the subject of the news article. Seeing the

advertising is therefore involuntary and unrelated to the purpose for which

the user when to the website page in the first place. It is hardly surprising,

then, that click through rates for advertisements are as low as they are.99

83.2 By contrast, it is because the user wants to read the story which is the

subject of the Fin24.com article that he or she will be much more likely to

click through to the Moneyweb website to read a further article on the

same subject matter. The likelihood of the user clicking-through to

Moneyweb will increase further if the Fin24.com article is properly

attributed to Moneyweb and the Fin24.com article did not provide all the

information that he or she was looking for anyway.100

By contrast, a

Fin24.com article which serves as a substitute for reading the Moneyweb

article actually impedes the chance of someone clicking through to the

Moneyweb website.101

83.3 The proper comparison to make, therefore, is between (i) click-through

rates from news aggregators such as LegalBrief and Google News to the

98

Jacob L J made the comment some 10 years ago in Reed Executive Plc v Reed Business Information Ltd

[2004] RPC 40 that most of the time advertisements which appear on a Google webpage are nothing but an irritation and are ignored.

99 See the explanation in this regard at RA, p. 426 427, para 46.

100 See RA, p. 425, para 45 for an explanation of why the Click-through rates from Fin24.com are as low

as they are. The correlation between levels of attribution and click-through rates is also shown by

reference to the Defencex II article see p. 498, para 189.2. 101

RA, p. 427, para 46.2.3.

38

relevant news websites; and (ii) the evidence showing the click-through

rates from Fin24.com articles to the Moneyweb articles (by way of the

hyperlink in the Fin24.com articles).

83.4 Moneyweb has shown, through two independent studies, the veracity of

which there is no reason to doubt, that click through rates from news

aggregators to third parties is in excess of 35% and often above 50%. 102

These studies make a mockery of Media24s claims that a click through

rate of 1.5% shows that its attribution to Moneyweb was successful.103

83.5 In fact, what the comparison shows is that which is obvious from a simple

reading of the Fin24.com articles. Those articles copy so much of the

Moneyweb articles that, having read them, there is simply no need to read

the Moneyweb article as well.

84 In summary, Media24s fair dealing defence must fail on this basis alone. As noted

by Laddie et al in the quotation above a fair dealing defence will almost certainly

fail where the alleged infringement is commercially competing with proprietors

exploitation of the copyright work, a substitute for the probable purchase of

authorised copies and the like. This is such a case. Fin24.com and Moneyweb

are direct competitors competing for the same audience and advertising spend.

Fin24.coms article supplants demand for Moneywebs article and, with it,

102

RA, p. 428, para 47.3 p. 433, para 48. The Meltwater decision also makes reference to the second of these studies, the Outsell study, at page 617 (footnote 13).

103 AA, p. 264, para 5.5.

39

Moneywebs advertising revenues.104 One cannot invoke fair dealing in such

circumstances. Media24s conduct is, indeed, anything but fair. This is borne out

by all of Media24s major competitors who agree that the aggregation policy goes

too far.

The extent of the copying

85 As explained above, both UK and US courts will in assessing the extent of the

copying, consider both the extent (a quantitative measure) and the importance (a

qualitative measure) of what has been taken from the original work; and then ask

whether the alleged infringer has taken no more than is necessary for his or her

purpose.

86 Media24 has again advanced no evidence upon which it might be argued that this

factor should weigh in Media24s favour. And it is again difficult to see on what

basis it could.

87 Measured quantitatively, the percentages of what was taken are startling:

104

See, inter alia, FA, p. 16 24, para 27 - 43.

40

Story Quantitative copying by

Fin24.com

Reference to record

MPs remuneration 5 paragraphs out of 12 (6 others

copied form SAPA)

p. 27, para 48 and p. 485,

para 155

Group Five Virtually all p. 87

McDonalds Two-thirds p. 488, para 160.

Hout Bay castle 49% p. 490, para 166

Angloplats > 30% p. 491, para 168

Defencex 1 Most p. 493, para 174

Defencex 2 Two key paragraphs without

attribution (11%) and additional

quotations from Moneyweb

(23%)

p. 502 para 202

Davos 40% p. 83, para 149.6

88 We have made our submissions above regarding the importance of what was taken.

We do not therefore do so again here.

89 What must then be considered is whether what was taken by Media24 extends

beyond what was legitimate. This is, however, an enquiry which can only be

meaningfully carried out where the alleged infringer has a legitimate non-

commercial and non-competing purpose for reproducing the Moneyweb articles.

Media24 fails at the first hurdle in this regard. Its purpose is entirely illegitimate.

41

Fair dealing does not serve to permit a copier to acquire conspicuous financial

rewards from its use of the copyrighted material.105 But that is the only purpose

for which Media24 has copied the Moneyweb story.

90 If Media24 has been genuinely motivated by the public interest in news

dissemination, it would have acted as news aggregators generally do and simply

included an anodyne headline and a deep-link to Moneywebs article (see our

submissions above in this regard). Media24 has therefore taken considerably more

than what would have been required to fulfil a legitimate purpose for purposes of

fair dealing.

91 This factor must therefore weigh heavily against Media24s fair dealing defence in

this case.

Attribution of source

92 The dispute on the question of attribution falls within a narrow compass. In each

case, Fin24.coms articles contain a deep-link to Moneyweb. The question then is

whether this is sufficient or not. For the reasons which follow, we submit plainly

not.

92.1 With the exception of the second Defencex article,106 there is only one

reference to Moneyweb in the entire article.107

In every case, the

perception created is that only the particular paragraph in which the deep-

105

Meltwater, record, p. 612, 106

FA, p. 131. 107

FA, p. 78, 87, 93, 101, 107, 122 and RA, p. 792.

42

link appears is attributed to Moneyweb. In truth, however, as we have

already shown, there are numerous other paragraphs which have been

copied from Moneyweb too, including the selected quotations.

Fin24.coms attribution is in fact therefore a misrepresentation. It fails to

attribute to Moneyweb all of the content which has been taken from

Moneyweb.

92.2 True attribution requires rigour in its application. Every sentence or

quotation or paragraph which has been copied from another source must

be attributed to that source. The practice is no different to the way in

which counsel prepare heads of argument or academics write their theses.

The fact that an academic thesis might somewhere mention a source does

not excuse the reproduction of substantial parts of that source as if it were

the authors own work.

92.3 On reading Fin24.coms articles any reasonable reader would be misled

into thinking that the subject matter was original to Fin24.com when in

truth, the substance of the article was copied from the original Moneyweb

article. And it is for this reason that the attribution in the Fin24.com

articles is so plainly deficient.

92.4 Finally, the form of attribution is unsatisfactory. In each of the Fin24.com

articles there is simply a reference, through a deep-link, to Moneyweb. No

indication is given in the Fin24.com article that the full article is available

on the Moneyweb website. This can only be deliberate. Quite obviously,

43

Fin24.com does not want to divert readers away from its website to its

competitor. To avoid that outcome, it attributes the source of its articles

in the most anodyne and unrevealing way. This is not sufficient. True

attribution would make it clear that a fuller article is available to the reader

at the particular website address. Fin24.com falls woefully short of the

standard in this regard.

93 The attribution to Moneyweb is not therefore sufficient. It does not constitute a

proper identification of source for purposes of section 12(1) of the Copyright Act.

Conclusion on fair dealing

94 Fair dealing in the context of the aggregation of a news article would generally take

the form of a headline, a taster and a deep-link simply referring Fin24.com readers

to Moneywebs website if they wished to read the story which was the subject of

the headline. Fin24.com has gone well beyond what might be considered fair

dealing. What it has done is to copy the core elements of the story covered in

Moneywebs articles, thereby obviating the need for its customers to visit the

Moneyweb site at all.

95 The conduct of Media24 has nothing to do with the public interest and, we submit,

everything to do with serving the private commercial interests of Media24. What

Media24 did was to exploit the copied articles by disseminating them to their own

customers. Thus, Media24 was, and is, content to ride on the coat-tails of

Moneywebs efforts and to reap the commercial benefits associated with

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Moneywebs investment in the creation of the Moneyweb articles to the direct

prejudice of Moneyweb. Commercial, competitive and substitutive use of this sort

can never constitute fair dealing. The fair dealing exception can never be

interpreted to mean that infringement of copyright should be permitted simply

because the commercial advantage that an infringer obtains is a more convenient

and less costly means of disseminating information to its customers.

F5 Unclean hands

96 This is the final defence, if it be that, raised by Media24 in its answering affidavit.

The allegation made is that Moneyweb is itself guilty of reproducing the news

articles of other newspapers, all of which are international publications (the

relevant articles are thus referred to as the international articles in what follows)

and should not therefore be entitled to the relief which it seeks in this application

against Fin24.com. Six examples are given,108

but in one of those instances

Moneywebs article was reproduced under an express licence from a third party.109

97 The defence is misplaced for a number of reasons.

98 First, it need hardly be stated that the doctrine of unclean hands is an extraordinary

doctrine which effectively closes the doors of court to a litigant. It will be applied

by our courts only in the clearest of cases. 110

For this reason, the doctrine only

108

AA, p. 279, para 24 and 25. 109

RA, p. 467, para 97.2. 110

Even in the face of the egregious conduct described in Soller v Soller [2000] 3 All SA 531 (C), the guilty party was given the opportunity to remedy his conduct by way of an affidavit retracting his

contemptuous comments regarding officers of the court; and then approach the court again for the relief

which he sought.

45

finds application where there is some element of fraud, dishonesty or mala fides on

the part of an applicant/plaintiff. 111

99 Media24 has not come close to establishing this requirement. Indeed, each one of

the Moneyweb articles which reproduce parts of the international articles clearly

and unequivocally identify its source throughout the Moneyweb article.112

As

such, even if this court was not satisfied that Moneywebs conduct amounted to fair

dealing (and therefore considered it to be copyright infringement- which

Moneyweb strenuously denies and has in each case justified why the claims by

Media24 are totally misplaced), there is simply no basis upon which it might be

said that Moneywebs conduct was fraudulent, dishonest or mala fide. Fraudulent,

dishonest or mala fide conduct would involve trying to hide the fact that the article

in question was copied from another source. Moneyweb has done the opposite.

100 Secondly, as far as we are aware, the doctrine of unclean hands has, at least in

intellectual property cases, only ever found application in circumstances where the

applicants unclean hands are related, directly, to the rights in issue in that

application or otherwise relate to conduct undermining the authority or dignity of

the court. Thus, one can fully understand a court will not, in a passing off case,

enforce a false reputation or a get-up which contains a material, false

representation.113

Applied to the facts of this case, one could understand reliance

111

Mulligan v Mulligan 1925 WLD at 166-167; Tullen Industries Ltd v de Sousa Costa (Pty) Ltd and

Others 1976 (4) SA 218 (T) at 221H; Soller v Soller [2000] 3 All SA 531 (C); S v Marais 1982 (3) SA

988 (A) at 1003A-C; Stopforth v Minister of Justice and Others Veenendaal v The Minister of Justice

and others 2000 (1) SA 113 (SCA) at para 39. 112

The articles appear at p. 324 338 of the record. 113

Zyp Products Co Ltd v Ziman Bros Ltd 1926 TPD 224; Caterham Car Sales & Coachworks v Birkin

Cars (Pty) Ltd 1988 3 SA 947 (SCA).

46

on the doctrine where Moneyweb had obtained ownership of copyright in the

Moneyweb articles through fraudulent means.

101 But those are not the facts there. It can never be the case that Moneywebs alleged

infringement of copyright in an article appearing in a third party newspaper, the

publisher of which is not even before the court, can excuse Fin24.coms

infringement of Moneywebs bona fide claim to copyright in Moneywebs

articles.114

102 Thirdly, Moneywebs conduct is distinguishable on the facts from Fin24.coms

conduct. This is fully traversed in reply. 115

We do not repeat the evidence here.

Suffice it to say the following:

102.1 Unlike Fin24.coms conduct, Moneywebs conduct amounted to fair

dealing. Of primary importance in this regard is the fact that the

newspapers that generated the international articles operate, without

exception, in entirely different markets to Moneyweb. The reproduction

of these articles on Moneyweb therefore had no effect whatsoever on the

commercial interests of these newspapers. Indeed, South African

consumers were no doubt made aware of an article they might otherwise

never have known about. This issue alone, which goes to core of the

most important consideration in a fair dealing case, sufficiently

distinguishes Moneywebs conduct from that of Fin24.com.

114

The submission really amounts to a suggestion, in principle, that because A defames B about X, C is

fully entitled to defame A about Y. The proposition need only be stated to be rejected. 115

RA, p. 463 472.

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102.2 In addition, the focus of the Moneyweb articles is, in each case, the fact

that international publications are reporting on certain stories or events in

South Africa (i.e. that the event or incident is gaining international

attention from reputable international sources) rather than the facts

contained in the international articles themselves. To give effect to this

purpose, one has to quote from and reproduce parts of the international

article. Moneyweb does so but only to the extent necessary to serve the

purpose outlined above.

102.3 Moreover, Moneyweb acknowledges the source of its content, in clear and

unequivocal terms, in virtually every paragraph of Moneywebs article,

and indeed every paragraph which reproduces the original content.

103 The defence of unclean hands therefore finds no application on the facts of this

case and in any event fails on the merits.

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UNLAWFUL COMPETITION

104 The foundation of the case on unlawful competition is based on the principles laid

down in the International News Service case in the United States and which were

explained and followed by his Lordship Mr Justice Corbett in Dun

and Bradstreet (Pty) Ltd v SA Merchants Combined Credit Bureau (Cape) (Pty)

Ltd116

.

105 The facts in the International News Service case bear remarkable similarity to the

facts before this court. We quote the relevant part of the judgment in Dun &

Bradstreet in what follows:

A leading case in the United States on the subject of unfair competition is

the decision of the Supreme Court in International News

Service v. Associated Press, 248 U.S. 215 (1918). Unfortunately the report

of this case is not available to me. From summaries thereof contained in

other writings (see Dr. H. J. O. van Heerden's interesting and instructive

theses entitled 'Grondslae van die Mededingingsreg'; Callmann, He who

reaps where he has not sown: Unjust Enrichment in the Law of

Unfair Competition, 55 Harv. L.R. 595; Chafee, Unfair Competition, 53

Harv. L.R. 1289, 1309 - 10) it would seem that the facts were briefly as

follows. The plaintiff was a news agency engaged in the gathering of the

latest news from the war front in France and making this available to its

member newspapers. The defendant was also a news agency acting for the

Hearst group of newspapers. Owing to the fact that this group was on bad

terms with the authorities in France the defendant was unable to obtain war

news directly. To do so defendant copied war news from the plaintiff's

bulletin boards - apparently resorting to the bribery of plaintiff's officials in

116

1968 (1) SA 209 (C) 219 222.

49

this connection - and from early editions of plaintiff's newspapers. The news

thus copied on the Atlantic Coast was telegraphed to the Pacific Coast and

in this way the Hearst newspapers often got the war news on the street

before it appeared in plaintiff's newspapers. The Supreme Court (by a

majority) granted an injunction against the defendant. It was argued that the

defendant, just like any purchaser of a newspaper, had the right to

communicate the news to others. In answer thereto the Court stated -

'The fault in the reasoning lies in applying as a test the right of the

complainant as against the public, instead of considering the rights of

complainant and defendant, competitors in business, as between themselves.

The right of the purchaser of a single newspaper to spread knowledge of its

contents gratuitously for any legitimate purpose not unreasonably

interfering with complainant's right to make merchandise of it, may be

admitted; but to transmit that news for commercial use, in competition with

complainant . . . is a very different matter. In doing this defendant, by its

very act, admits that it is taking material that has been acquired by

complainant as the result of organisation and the expenditure of

labour, skill, and money, and which is saleable by complainant for money,

and that defendant in appropriating it and selling it as its own is

endeavouring to reap where it has not sown, and by disposing of it to

newspapers that are competitors of complainant's members is appropriating

to itself the harvest of those who have sown. Stripped of all disguises, the

process amounts to an unauthorised interference with the normal operation

of complainant's legitimate business precisely at the point where the profit is

to be reaped, in order to divert a material portion of the profit from those

who have earned it to those who have not; with special advantage to

defendant in the competition because of the fact that it is not burdened with

any part of the expense of gathering the news. The transaction speaks for

itself, and a court of equity ought not to hesitate long in characterising it as

unfair competition in business.'

Regarding news matter as the mere material from which two competing

parties are endeavouring to make money, and treating it therefore,

as quasi property for the purposes of their business because they are both

selling it as such, defendant's conduct differs from the ordinary case of

50

unfair competition in trade principally in this that, instead of selling its own

goods as those of complainant, it substitutes misappropriation in the place of

misrepresentation, and sells complainant's goods as its own. (our

emphasis)

106 We interpose to note that the finding of the US Supreme Court is applicable mutatis

mutandis to the conduct which is the subject of this application. The dicta on which we

rely from the International News Service case in the United States, were also approved

and applied by Nicholas AJA in Schul