Copyright originality and the possible impact of EU law reform

The recent Court of Appeal ruling of THJ v Sheridan, in which Arnold LJ clarifies the threshold for originality in copyright, has being causing ripples in a number of sectors. In this article, we delve into the facts of the case, its broader implications and look ahead to ask whether the enactment of the Retained EU Law (Revocation and Reform) Act 2023 could result in an uncertain future ahead for this legal test.

We have also published a sister article, looking at what this judgment could mean to cultural organisations, click here to read.

Facts of the case

The facts of the case are summarised here for context.

The case concerned a joint venture between Mr Mitchell, a software developer, and Mr Sheridan, a former options trader turned mentoring services provider. Mr Mitchell had developed a platform called OptionNET Explorer (ONE) to assist with trading options. Mr Sheridan would use ONE to display data and information to his clients, which would in turn benefit Mr Mitchell by promoting the use of the ONE platform.

Mr Mitchell, through a company owned by him and his wife (THJ), and Mr Sheridan became members of an LLP. Mr Sheridan, THJ and the LLP entered into an LLP agreement governing the LLP’s affairs.

The LLP agreement contained a number of terms that were important to the dispute. In particular Mr Sheridan was required to:

• Personally deliver a one-hour live Webex session every other week to each ONE subscriber.
• Ensure that appropriate copyright marks were displayed on all educational material relating to ONE, including “website content, webinars, seminars, and presentations containing images of the ONE Software.”
• Ensure that, if he advertised his own business in webcasts, seminars, or presentations, he would also advertise ONE by displaying the ONE logo in a prominent and visible position and providing a slide with details of ONE and copyright marks.
  
  

The relationship between the two individuals soured as Mr Mitchell felt that Mr Sheridan hadn't been sufficiently promoting the ONE platform, due to the absence of prominent logos and copyright notices in Mr Sheridan's materials. Mr Mitchell raised his concerns with Mr Sheridan and requested information about Mr Sheridan’s activities, including a list of recent Webex presentations and their links. Despite multiple requests, Mr Sheridan didn't provide the information Mr Mitchell asked for.

In the initial proceedings at the High Court, the primary matter revolved around the validity of Mr Mitchell's expulsion of Mr Sheridan from ONE. However, the High Court also deliberated on additional aspects, specifically: (1) whether THJ, the initial claimant in the appeal, effectively terminated Mr Sheridan’s license to use the software; and (2) THJ’s assertions that Mr Sheridan's purported use of the software post-termination infringed THJ’s copyright. Although the judge affirmed the existence of copyright in these works, the claims of copyright infringement were dismissed due to insufficient proof.

The claims brought before the judge encompassed both the copyright in the software itself as a literary work and the copyright in the graphical displays generated by the software (GUIs) as artistic works. However, the appeals only focused on the GUIs. Specifically, the claimants leaned on the copyright pertaining to “risk and price charts” (R & P Charts) produced by the software. They contended that these charts qualified as graphic works under section 4(1)(a) of the CDPA 1988.

Appeal

The appeal concerned only the copyright in certain graphical displays.

Mr Mitchell claimed copyright in the R & P Charts as artistic works or, more specifically, graphic works, within section 4(1)(a) of the Copyright, Designs and Patents Act 1988. In order for copyright to subsist in an artistic work it must be “original” under section 1(1)(a) of the 1988 Act.

Mr Sheridan disputed that the R & P Charts were sufficiently original to merit copyright protection. The judge had reasoned that he was satisfied that “the work of creating the look and functionality of interface including the arrangements of the tables and graphs did involve the exercise of sufficient skill and labour for the result to amount to an artistic work.” In the appeal, Mr Sheridan contended that this was not the correct test to apply.

In the Court of Appeal judgment, Arnold LJ agreed with Mr Sheridan that the judge failed to use the correct test as set out by the CJEU, choosing instead the obsolete “skill and labour” test employed by UK courts prior to the Infopaq International A/S v Danske Dagblades Forening (C-5/08) EU:C:2009:465, [2012] Bus. L.R. 102, [2009] 7 WLUK 441

The correct test was whether the works were the “author’s own intellectual creation”. This standard is considered more rigorous than the “skill and labour” test that the first instance judge applied, and so the Court of Appeal was required to re-evaluate the originality of the ONE software by employing the appropriate test.

Arnold LJ underscored and confirmed that the test for originality is an objective one, removed from considerations of artistic merit: section 4(1)(a) of the CDPA 1988, states that a graphic work is an artistic work, ‘irrespective of artistic quality.’

Applying the correct test to the facts of the case, Arnold LJ observed:

• The various component parts of the R & P Charts had been laid out with some care and quite a large amount of information was crammed into a single screen.
• Mr Mitchell had made choices as to what to put where, and what fonts and colours to use.
• The degree of visual creativity which went into the R & P Charts was low. However, this didn’t imply a complete absence of creativity. Instead the result of this low creativity level was that the copyright protection for the R & P Charts was consequently limited in scope, so that only a close copy could infringe the works in question.
  
  

Arnold LJ concluded that despite the judge at first instance using an incorrect test, the determination that the ONE software was indeed original was accurate. Consequently, the Defendant’s appeal was dismissed.

Conclusion

While the “author’s own intellectual creation” test is higher than the “skill and labour” test, it is still a low bar. In this case, and irrespective of the test applied, these fairly generic-looking charts were considered original enough to warrant copyright protection.

Arnold LJ found the analogy of building using Lego bricks helpful: while the pieces are unique, the configuration of them was Mr Mitchell’s own doing. It is a helpful one, precisely because it shows just how low the bar really is.

Post-script: how long will this ruling last?

One final observation on this case: whether the test set out in THJ v Sheridan will remain law for long, given that it results from the direct application of CJEU jurisprudence.

The Retained EU Law (Revocation and Reform) Act 2023 came into force on 1 January 2024. While it was very much not the bonfire of EU red tape as was initially trumpeted, its enactment does introduce a degree of legal uncertainty into English law. In particular it has removed the special features of EU law that apply to interpretation and application of legislation and case law. 

Relevant for these purposes is that fact that UK courts are no longer automatically bound by retained case law (now known as “assimilated case law”). The higher courts (Court of Appeal and Supreme Court) are, from 1 January 2024, allowed to depart from such case law. In doing so, the courts are permitted to consider a number of factors in making such a decision, including whether they consider this assimilated case law to restrict the proper development of domestic law. It is too early to say the extent to which our higher courts will decide to align or to depart with jurisprudence set out by CJEU case law, in any given circumstance and so legal uncertainty will remain for some time.

Would THJ v Sheridan have been decided differently if it was brought in 2024? It isn’t clear. Arnold LJ does not question the legitimacy of this EU originality test, and gives no indication that he would have approached the question differently had the REULA been in force. Note too that this ability to depart from assimilated case law only applies to things done from 1 January 2024 onwards, and so the old law will continue to apply to disputes involving facts that occurred pre-this date.

Whether the higher courts decide to stick with the “author’s own intellectual creation” test or revert to the UK’s “skill and labour” test will depend on the extent to which they consider the legal certainty of aligning this test with the rest of Europe more important than the “proper” development of domestic law.

Of course, taking a step back from any constitutional uncertainty that may arise, it remains the case that whatever the test, the threshold for originality in copyright work is and will remain low.

With thanks to Matthew Konadu-Yiadom, current trainee in the team, for their help in preparing this briefing.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, January 2024