IN THE SOUTH GAUTENG HIGH COURT, JOHANNESBURG (REPUBLIC OF SOUTH AFRICA)
MONEYWEB PROPRIETARY LIMITED - Applicant
MEDIA24 LIMITED - First Respondent
FADIA SALIE - Second Respondent
I, the undersigned,
RYK VAN NIEKERK
do hereby make oath and state:
1 I am the editor of Moneyweb Proprietary Limited ("Moneyweb"), the Applicant in this application. I am responsible for the editorial content on all the Moneyweb publishing and broadcast platforms. I am duly authorised to depose to this affidavit and to bring this application on behalf of the Applicant.
2 Save where it is otherwise stated, or where the contrary appears from the context, the facts contained herein fall within my personal knowledge and are true and correct. Where I make legal submissions, I do so on the basis of advice that I have received from Moneyweb's legal advisers.
3 I have been a financial journalist for 15 years. I hold a B.Comm degree, a BA Hons (Journalism), and a M. Phil in Journalism from the University of Stellenbosch. I also hold a Masters in Business Leadership (MBL) from Unisa's Graduate School of Business Leadership.
4 Before I was appointed to my current position at Moneyweb, I was the national editor of Sake24, the business supplement for the Media24 publications Beeld, Die Burger, Volksblad and Rapport. I was also the editor of Sake24.com. I was the national editor of Sake24 for a period of two and a half years. Before that, I held various positions within Sake24 and its preceding entities. I have, during my career, gained significant experience and expertise in journalism, reporting, and in business, finance and investment-focused journalism.
5 The Applicant in this application is Moneyweb Proprietary Limited (Registration No 98/0016045/07), a company with limited liability, duly registered and incorporated in accordance with the company laws of the Republic of South Africa, which has its offices on the 2nd Floor, 20 The Piazza, Melrose Arch, Johannesburg.
5.1 Moneyweb is an indirect wholly owned subsidiary of its parent company, Moneyweb Holdings Limited, a company which is listed on the AltX board of the JSE Securities Exchange. The market capitalisation of Moneyweb Holdings Limited is around R73 million.
5.2 Moneyweb Holdings Limited is a subsidiary of Caxton and CTP Publishers and Printers Limited ("Caxton"), a printing packaging and publishing company which is listed on the JSE Securities Exchange. The market capitalisation of Caxton is around R7,9 billion
5.3 Moneyweb is a publisher of business, financial and investment news, primarily on the Internet and other digital platforms, as well as in newspapers with whom it has a content supply arrangement. Moneyweb also broadcasts financial programmes on several SABC radio stations, including RSG, SAfm and Lotus FM. I will deal with Moneyweb's operations in more detail below.
6 The First Respondent is Media24 Limited ("Media24"), a firm incorporated in terms of the laws of the Republic of South Africa, which has its principal place of business at 40 Heerengracht Street, Cape Town.
6.1 Media24 is subsidiary of Media24 Holdings (Pty) Ltd, which in turn is controlled by Naspers Limited ("Naspers"). Naspers is the holding company of a multi-national group, with expanded operations in inter alia the internet, pay television and technology sectors. Naspers is listed on the JSE Securities Exchange and has a market capitalisation of approximately R354 billion.
6.2 Media24 is the largest publisher and printer of magazines and newspapers in South Africa. The majority of these printed titles also have significant online components. Media24 also owns a number of websites and has migrated and expanded its traditional print titles to have significant online operations.
6.3 One of Media24's online publications is Fin24, which is the subject of the present proceedings. Fin24 purely has an online presence. Fin24 is a division of News24, the largest South African based website as measured by the Digital Media and Marketing Association (DMMA). To avoid potential confusion, I emphasise that Fin24 is entirely distinct from Sake24, though they both fall under the Media24 group.
7 The Second Respondent is Fadia Salie. Ms Salie was at all material times the editor of Fin24. She is also currently in this position. Her offices are situated at News24, 11 Adderley Street, Cape Town.
NATURE OF THE APPLICATION
8 This application concerns a series of articles unlawfully published by Fin24 on its website. Each of the articles were unlawfully published in that they copied, appropriated and/or plagiarised articles previously published by Moneyweb on its website. The conduct of Fin24 amounts to systematic plagiarism on an industrial scale and forms a core part of its business model in an effort to gain a commercial advantage for itself.
9 Moneyweb contends that Fin24's conduct in this regard is unlawful in two respects:
9.1 First, it infringes Moneyweb's copyright under the Copyright Act 98 of 1978 ("the Copyright Act");
9.2 Second, and in any event, it constitutes the delict of unlawful competition against Moneyweb.
10 Moneyweb accordingly seeks orders:
10.1 Declaring that Fin24's publication of the articles concerned was unlawful;
10.2 Interdicting Fin24 from continuing to publish the articles concerned and directing that the articles be removed from its website within twenty-four hours of this Court's order;
10.3 Declaring that Fin24 is liable to Moneyweb for the damages suffered by it as a result of the publication of the articles concerned and directing that the quantum of damages to be paid (including additional damages pursuant to section 24(3) of the Copyright Act) stand over to be determined separately in a damages enquiry;
10.4 Directing Fin24 to pay the costs of this application.
11 In what follows, I deal first with the question of jurisdiction and then explain the manner in which Moneyweb and Fin24 operate and compete with one another. I then deal with the offending articles and finally with Moneyweb's causes of action.
12 The largest financial internet market is in Gauteng, particularly in Johannesburg. Gauteng, including Johannesburg, represents Media24's largest South African readership base and nearly 50% of its (and Fin24's) internet traffic is generated in this province. Similarly, between 45% and 50% of Moneyweb's readers are based in Gauteng, including Johannesburg. I have attached marked Annexure"RvN1", the latest Effective Measure reports to substantiate this. It various from month to month, but it is around 48% for Fin24 and slightly lower for Moneyweb.
13 It is clear therefore that significant numbers of the readers of the Fin24 articles presently at issue are located within the jurisdiction of this Court and that they accessed and read the articles while located within the jurisdiction of this Court. I confirm, moreover, that I personally accessed and read the articles while in Johannesburg, as did various members of Moneyweb's staff. The articles were therefore published within the jurisdiction of this Court.
14 Media24 also has Johannesburg-based offices housing substantial print, newspaper, advertising and magazine operations. According to Media24's website, the publisher being the commercial head of Fin24 is Hayley Goodwin. She is based in Johannesburg. Media24 and Fin24 therefore have a presence in and operate out of Johannesburg. In addition to its principal place of business in Cape Town, therefore, Media24 also has a principal place of business within the jurisdiction of this Court.
15 In all of the circumstances, this Court has jurisdiction in relation to the present matter.
THE APPROACH OF MONEYWEB
16 Moneyweb is an integrated media company in South Africa and aims to publish and broadcast quality business, financial and investment content on its radio, print and digital platforms. The flagship brand of the Applicant is Moneyweb.co.za. Moneyweb's internet content is first published on this website, in South Africa.
17 Moneyweb was founded in 1997 and has over the past 16 years established itself as one of the leading online sources of business, financial and investment content in South Africa. In addition, Moneyweb produces financial radio programming for three SABC radio stations. These stations are SAfm, Lotus FM and RSG. Moneyweb also provides content for CitiBusiness, the business supplement of The Citizennewspaper and publishes its content on its digital mobile applications, known as Moneyweb Now and Moneyweb Talk. Moneyweb also has a copy sharing arrangement with MyBroadband.co.za which allows reciprocal use of up to three articles a week.
18 Moneyweb's content strategy is to provide excellent, unique and original business, financial and investment content to the Moneyweb community. This content includes, but is not limited to:
18.1 Breaking news in the financial, business and personal finance sectors;
18.2 In-depth analyses of and opinion on financial events;
18.3 In-depth analyses of and opinion on investment trends;
18.4 In-depth analyses of personal finance trends;
18.5 In-depth data of all key economic and financial indicators;
18.6 In-depth analyses of and opinion on JSE listed company results and corporate activity;
18.7 In-depth data of all listed companies on the JSE and selected international markets;
18.8 In-depth data on all unit trusts in South Africa; and
18.9 Other articles that the Moneyweb community will find interesting and/or useful.
19 Moneyweb's editorial approach under my editorship is based on the generation of unique and original business, financial and investment content for its various platforms.
19.1 Although Moneyweb, like most online news services, uses syndicated content from wire services for which it pays licence fees to the owners of the services, and other sources, Moneyweb's core focus is on the generation of unique and original content. Unique and original content refers to article ideas that have been conceptualised by a Moneyweb journalist or editor, and which are then written or produced for exclusive publication and/or broadcast on the various Moneyweb platforms. These articles are not found in any other publication or radio programme as our reporters are required to write their articles for exclusive use by Moneyweb. This refers to all types of news, ranging from breaking news, to unique and original angles on public news developments and news interpretations. It is important for me as editor to ensure that the work of my journalists comprises their own original skill, effort and expertise. The article ideas are generated in compulsory editorial meetings and agreed upon before the stories are written. In this way, I am able to exercise oversight over the editorial content of the Moneyweb website.
19.2 Moneyweb uses a core team of journalists to generate this unique and original content. Through the past 16 years we have established an excellent reputation as provider of exceptional business, financial and investment content.
19.3 Moneyweb's journalists are either full-time employees of Moneyweb under a contract of employment, or are freelance journalists, who provide journalism services to Moneyweb under contract. All works produced by these journalists, including myself, are produced in the course and scope of their employment or services contracts with Moneyweb.
THE APPROACH OF FIN24
20 Moneyweb's business model differs significantly from certain of our competitors who have adopted a strategy of predominantly publishing syndicated copy from wire services such as SAPA, Reuters, Bloomberg and AFP, as well as from unsolicited press releases generated and distributed by the public relations industry. In this regard "syndicated copy" refers to material that is distributed by wire services, for a subscription fee, for purposes of re-publication by newspapers, magazines and websites.
21 The "wires-only strategy" of such competitors is much less costly than employing a team of journalists. Simply put, where I believe a story warrants it, I require our journalists to personally investigate all angles of a particular event or development, to leave the office and to attend press conferences and/or to interview individuals and relevant experts before they apply their minds and write their articles. This approach ensures that Moneyweb publishes unique and original content.
22 The wire-services approach, on the other hand, regards news as a commodity and places no premium on originality. In this environment, third party material is published as is or merely re-purposed without a ‘journalist' ever having to leave his or her chair.
23 One of the consequences of a "wires-only" strategy, however, is that the particular website or publication cannot properly differentiate itself through unique and original content, as other competitors are able to publish the exact same syndicated articles.
24 The unlawful conduct of Fin24 that is the subject of this application appears to be an attempt to overcome this difficulty. In this regard, I attach an article written by Glenda Nevill, a highly respected journalist, which was published on Media Online, a reputable media focused news website, containing an interview with the Second Respondent on 12 September 2012 (Annexure "RvN2"). In this article the Second Respondent answers the question about the source of Fin24's content as follows:
Glenda Nevill's question: It's a big site, which demands a constant flow of content. Are you largely reliant on wire copy or aggregating your content from 24.com sites? How do you feed the site with top end copy?
Fadia Salie's answer: We know our users best and try to give them the best content that they can derive value from. So, yes we do rely on the wires, but we also aggregate not only from the 24.com sites, but also other news sites- stories we feel our users could benefit from."
25 Contrary to the above approach, the editorial focus of Moneyweb is the generation of unique and original content from our own team of journalists. Accordingly, as with the majority of our content, in each of the articles referred to below, I as the editor ensured that my journalists used their own skill, effort and expertise to produce unique and original articles. This distinguishes Moneyweb from Fin24, where the Second Respondent, the editor of Fin24, clearly states that Fin24 is "aggregating" stories, not only from their own publications, but from other news sites as well. This includes Moneyweb.
26 There is no magic to the word "aggregation". In the relevant dictionary sense, when used as a verb, according to the website Oxforddictionaries.com, the concept means, "collect (related items of content) so as to display or link to them". In the context of Fin24's practices, this means nothing more than copying original content from other news organisations and publishing it on the Fin24's website, and misrepresenting that this content is its own. In the international context, "aggregation" can also have a more precise meaning whereby a given website provides very short summaries of or limited extracts from news articles to be found on other news services and then unambiguously directs the reader to those articles for the original and full version. If a reader wants to access more information, he or she clicks on a hyperlink to read the original and full article on the website where the article was originally published. A typical example is Google's news service. Whatever the lawfulness of such an approach under our law, as I demonstrate below this is not the manner in which Fin24 operates.
COMPETITION IN THE SOUTH AFRICAN FINANCIAL MEDIA MARKET
27 There are three main South African entities that operate as financial media organisations via the internet. There are other players, but these players are the largest players in terms of traffic. They are:
27.1 Moneyweb (www.moneyweb.co.za);
27.2 Fin24 (www.Fin24.com); and
27.3 BDLive (www.bdlive.co.za). BDLive is owned by BDFM, a subsidiary of Times Media Group.
28 As I have already foreshadowed, while these three players compete directly with one another for readers and advertisers, their editorial strategy differs significantly.
29 As already indicated, Moneyweb focuses on the publication of unique and original content for its various digital, print and radio platforms. 30 BDLive follows a hybrid strategy where it publishes articles already published in the Business Day newspaper, as well as breaking news articles written by BDFM journalists.
30.1 BDLive focuses on the publication of unique and original content written by a centralised team of journalists within the BDFM group.
30.2 BDLive also publishes syndicated content from wire services to augment its original offerings, but the majority of its content is original as BDFM journalists generated it.
31 Fin24 operates differently. I emphasise that I have knowledge of the manner in which Fin24 operated and operates by reason of my prior employment at Media24 from 1997 to August 2011. It is also based on observations of the content published by Fin24 every day.
31.1 Historically, Fin24 generated original content from its own team of journalists. These journalists were predominantly working for FinWeek magazine, but also did freelance work for Fin24. This practice was stopped in 2009 following an aggressive restructuring and the inclusion of both Fin24 and FinWeek into a new entity, namely FinMedia24. FinMedia24 housed all the financial titles and publications of Media24, including Sake24, Sake24.com, Fin24, MiningMX, FinWeek and McGregor BFA.
31.2 The restructuring also brought about internal restructuring at Fin24. The staff was reduced to a few content editors who posted mostly wire copy and English translations of some original articles first published in Afrikaans by Sake24, the publication I edited at the time. At the time there were also a few freelance contributors who produced unique and original content for the Fin24 website.
31.3 After I left the employment of Media24 in 2011, Fin24 was restructured again and the editorial management of the entity was transferred to News24 based in Cape Town.
31.4 I acknowledge that Fin24 currently publishes some unique and original freelance columns from industry experts, interactive data pages and user generated content. My overriding concern is however with the content of its news sections where Fin24, in addition to syndicated wire copy, published and continues to publish articles that are effectively copies of articles published by Moneyweb and other publishers.
31.5 As far as I am aware, Fin24 employs six people. From observation of the news content published by Fin24, it is evident that neither these employees nor any freelance journalists contribute original journalism in any great volumes to the Fin24 editorial offering. The site publishes very little of its own unique and original news content. In the event that Fin24 denies this, it is invited to put up full particularity in this regard. This should include details of any dedicated journalists whose exclusive or main responsibility is to write original content for the website and details of the articles written by them in the last year.
31.6 It is the lawfulness of the use of this "aggregated" content that Moneyweb disputes. Moneyweb is one of the local market leaders in the field of online business and financial journalism. This position in the market was slowly built when the company opened its proverbial doors in 1997. At the time Moneyweb was the first dedicated financial news portal in the South African web domain. As indicated, it now competes mainly against Fin24 and BDLive.
32 In recent years, Fin24 was market leader in the online financial space in terms of both page impressions and unique browsers. Moneyweb has, however, seen significant growth during the past few years and its traffic has recently surged and surpassed Fin24's traffic in certain months. For example, in March 2013, Moneyweb's page impressions exceeded Fin24's by 85,362 impressions.
32.1 The statistics just quoted and those that appear in the tables below are for March 2013 as measured by the Digital Media and Marketing Association's (DMMA) measuring service known as "Effective Measure". The DMMA is an independent association, whose traffic measurement reports are relied on by all industry players, including Fin24 and Moneyweb.
32.2 I point out that in the tables that follow "unique visitors" are defined as the actual number of unique visitors who visited the particular portal during the month of March 2013. By contrast a "page view" or "page impression" is the number of individual pages that were opened on the website and viewed by a reader. Thus a single visitor might open five different articles/pages on the site during the month - that would mean one unique visitor, but five page views.
32.3 Measured by the number of unique visitors, Fin24 was the market leader and Moneyweb was ranked third:
Source: Effective Measure, South Africa traffic, March 2013.
32.4 Measured by the number of page views, Moneyweb was the market leader in March, followed by Fin24. It was only the second time in recent years that Moneyweb managed to attract more page views in a calendar month than Fin24. Since March 2013, Fin24's monthly page impressions have surpassed Moneyweb's.
Source: Effective Measure, South Africa traffic, March 2013.
33 There is considerable competition between Fin24 and Moneyweb for visitors and page views, which I collectively refer to as traffic. Indeed all the financial websites compete for traffic.
34 The revenue model of Moneyweb is based on the selling of advertising to advertisers. Without advertising revenue, Moneyweb cannot operate as a going concern. Moneyweb does not charge visitors to read its content. Our revenue is directly correlated to the number of page impressions our websites generate and the number of unique visitors we receive. In other words, advertisers pay us for delivering audiences to them.
35 The majority of advertisers use advertising agencies that specialise in online advertising. These agencies carefully monitor and compare the internet traffic of websites, as this greatly impacts their decision to advise their clients on where to advertise.
36 This, of course, applies to our competitors as well, including Fin24. Bluntly put, growing audiences and traffic translate into increased revenue.
37 There is no doubt that there is fierce competition between the major players in the online financial media market. I believe Moneyweb's good performance over the past few months can be attributed to our unique and original content strategy. The unlawful conduct by Fin24 that is at issue in this matter appears to be an attempt to overcome its lack of unique and original content.
38 The table set out below - again reflecting the DMMA figures - graphically depicts the monthly page impressions of the three main competing financial websites I have referred to:
39 As I have set out above, there is clear competition amongst these players, both for traffic and advertising rands. Financial pressures have now forced some publishers such as Fin24 to cut their editorial costs to the bone. Other publishers, such as Moneyweb, have increased investment to offer unique and original content. The theory is that unique and original content would attract more readers, while a low-cost model would lead to a commoditised offering of syndicated content. The reality is that the volume of Fin24's own generated news content is inferior to competitors who invest in original content. However, in order to generate revenues, Fin24 needs to generate traffic to its website.
40 Fin24 overcomes this problem by copying the original content from competitors to be able to compete.
41 The reason for the need to indulge in this behaviour is alluded to above. It is based on the fact that internet traffic is directly correlated to revenue. Indeed advertisers pay publishers per 1,000 advertisements served on a site, meaning each reader who opens the web page is measured and counted and this earns money for the publisher. Advertisers themselves are also more likely to buy advertising space in a high traffic site than a low traffic site. Thus the content offering of a news site is a crucial competitive advantage.
42 The critical role played by content on a news site is heightened by the manner in which search engines operate. One of the most significant generators of online traffic is from people who use a search engine such as Google to search for information on a particular topic. When so requested by a reader, the Google search engine searches the World Wide Web for content that accords
with the search parameters set by the reader, using a secret and complex algorithm. The Google algorithm ranks the content it finds and displays what it perceives to be "original" content higher up its search rankings than content that is simply a reference to someone else's article. Thus, where Fin24 copies content from Moneyweb and re-writes it marginally so that it appears to be its own, the Google algorithm will rank it as if the article was indeed an "original" article.
43 I now turn to deal with the facts relating to the articles that are the subject of the present proceedings.
THE UNLAWFUL CONDUCT OF FIN24
44 Fin24 follows a modus operandi whereby its content editors publish syndicated content from Reuters, SAPA, AFP and other electronic news services. The content editors also visit other financial news websites such as Moneyweb in search of other interesting news to supplement their syndicated wire-service offering. When they find such an interesting article, they copy the article, either in full or in significant part, and then rewrite the information to some extent. The rewriting of the article is aimed at changing the sentences of the original article to ensure that these sentences are not all used verbatim in the Fin24 article. There is usually one reference to the source website and a link to the original article - though it is never indicated to the reader that the full original article is available via the link. The rewriting of the article in whole or in significant part, based as it is on the original article, represents an infringement of copyright.
45 The Fin24 online editors may also augment an article copied from Moneyweb or other publishers with information from other sources. The strategy is aimed at taking unique and original content from a website such as Moneyweb, rewriting the sentences in an attempt to circumvent claims of copyright infringement, and then to add one or two paragraphs of additional (often non- essential) information sourced elsewhere, and then publishing the article on its own website. In virtually all cases the most important content or the essence of the Moneyweb article is re-used. This ensures that Fin24 copies original content from the websites of its competitors, which sometimes was procured by the latter at very significant cost. Fin24 then merely republishes this information after making a few minor changes and additions. The only cost to Fin24 is the proportional salary of the content editor, which could be regarded as a sunk cost.
46 I emphasise that Fin24 operates in direct competition with Moneyweb. As I demonstrate below, it is quite clear that Fin24 has repeatedly relied on, made use of, and copied the Moneyweb articles and information in order to generate the Fin24 articles and derive revenue without expending significant resources. Moneyweb gathered and generated the information and the articles concerned at a cost to itself and using the expertise and skill of it and its journalists.
46.1 The ability of Fin24 (and other parties) to free ride on the efforts of Moneyweb (and others) - if not prevented by this court - will reduce the incentive on the part of Moneyweb (and others) to invest in original journalism.
46.2 If Fin24 is able to engage in this conduct, there will simply be little point in Moneyweb incurring the substantial expense involved in producing new articles itself, rather than becoming primarily a "wires only service".
46.3 This would inevitably damage the public and its rights to receive information under the common law and the Constitution. The tendency will then be for media entities to reduce considerably (or indeed scrap) the resources they currently put into investigating and reporting new and breaking stories. Apart from anything else, this will substantially reduce the diversity of news reporting, which is very damaging.
47 I first became aware of Fin24's practices in July 2012 when it used information from the Moneyweb article "Annual packages for MPs may reach well over R1m" attached marked Annexure "RvN3.1". The Moneyweb article was published on 25 July 2012 at 17:53.
47.1 The freelance contributor and veteran journalist Kim Cloete wrote the particular article for Moneyweb about prospective remuneration adjustments for politicians and public officials following a press briefing in parliament. Cloete attended the press conference in Parliament, took notes of what was said at the event, asked supplementary questions to delegates at the conference and then proceeded to write her own unique and original article. Moneyweb paid her approximately R3000 for the article. It is apparent that Fin24 did not send a journalist to the press conference, as their story did not carry a by-line. This represents a significant cost saving on the part of Fin24.
47.2 Cloete emailed her article to Monique Vanek, the editor of Moneyweb.co.za at the time. She edited the article and kept Cloete's existing headline only adjusting parts of it to match Moneyweb's style. The blurb on the story was updated almost an hour later to reflect that tables had been added to the story.
48 On 26 July 2012 at 10:59 Fin24 published the article "MPs to get huge salary hikes" attached marked Annexure "RvN3.2".
48.1 The first five paragraphs of the Fin24 article are a substantial copy of the first six paragraphs of the Moneyweb article. Although sentences were rewritten, it is evident that the information comes from Moneyweb as they follow the form and structure of the Moneyweb article.
48.2 The Fin24 content editor went on to slavishly copy six paragraphs from a report from the news service SAPA attached marked Annexure "RvN3.3", whose representative also attended the conference and wrote an article. These paragraphs were not even rewritten but were used unchanged and without any reference to SAPA. I was shocked by this cavalier approach to ethical journalism and copyright as evidenced by this article. This is contrary to accepted protocol and professional ethics. It is particularly extraordinary that Fin24 even included its generic Fin24 by-line at the foot of the article, when the article did not contain even one vestige of original effort or skill.
48.3 Moreover, despite the single reference in the Fin24 article to Moneyweb, there is no indication to the reader that a full and original version of the article is available on the Moneyweb site.
49 The same process occurred in relation to a second Moneyweb article, published on 13 August 2012 at 17:08 under the title "Group Five hits rock bottom" attached marked Annexure "RvN4.1".
49.1 The article was written by Moneyweb reporter Sasha Planting and followed Group Five's publication of its annual results. Group Five CEO Mike Upton spoke to journalists and analysts during a conference call. Planting invested time and costs to participate in the call. Fin24 clearly did not.
49.2 Planting sent the article to Vanek. She edited the article and wrote the headline, based on the facts in the article.
50 Fin24 published an article entitled "Group Five feels the pinch" on 14 August 2012 at 11:39, attached marked Annexure "RvN4.2", which was clearly based on the information contained in Planting's article. The Fin24 article consists of six paragraphs, five of which are rewritten from information in Planting's original article. The paragraph which was not rewritten was a reference to the performance of the company's share price,
51 Thereafter, on 26 August 2012 at 23:12 Moneyweb published the article McDonald's plans to launch McKitchen attached marked Annexure "RvN5.1".
51.1 It was penned by Moneyweb employee Eleanor Seggie and followed a media visit to the fast food chain's Woodmead restaurant. Two journalists from other media groups were also present. There was no representation from Fin24.
51.2 Vanek edited the article and wrote the headline and sub-headline, based on the information contained in the article.
52 On 27 August 2012 at 14:44 Fin24 published an article McDonald's to launch McKitchen attached marked Annexure "RvN5.2".
52.1 Apart from one paragraph that took information from the McDonald's website, the content in the Moneyweb article had simply been rewritten and published by Fin24.
52.2 The headline of the Fin24 article is virtually identical to the Moneyweb article. The Moneyweb headline is: McDonald's plans to launch McKitchen. Fin24's headline is:McDonald's to launch McKitchen. Only one word in the headline was deleted.
53 On 14 September 2012 at 17:42 Moneyweb published the article Hout Bay castle sold for R23m, written by the late Micel Schnehage attached marked Annexure "RvN6.1".
53.1 The source of the article was a press release issued by Sotheby's International Realty on 13 September 2012 attached marked Annexure "RvN6.2". Moneyweb's journalist took note of the press release, but then phoned the senior executive, Nina Smith at Sotheby's Realty. Smith's name was not mentioned in the original press release.
53.2 Ms Schnehage, who was an award winning property journalist, expended significant effort and expertise to source unique and original material from her own sources. The article written by Ms Schnehage contained information not otherwise available in the widely circulated press release.
53.3 Ms Schnehage provided writing services to Moneyweb under a contract of service for the purpose of publication by Moneyweb. Ms Schnehage wrote such article in the course and scope of, and in terms of her contract of service with Moneyweb. All copyright in the articles supplied by Ms Schnehage vested in Moneyweb.
53.4 Seggie edited the article and wrote the headline and sub-headline based on the facts contained in the article.
54 On 17 September 2012 at 10:20 Fin24 published the article Hout Bay castle sells for R23m attached marked Annexure "RvN6.3".
54.1 The content of this article is blatantly rewritten from the Moneyweb article. There is not even a reference in the article that Moneyweb is the source, only a reference to a quotation Smith gave to Moneyweb.
54.2 An analysis of the article published by Fin24 reveals that this article contains information which was not included in the original press release, but which was included in Schnehage's article. It is evident that the sole source of the Fin24 article was the Moneyweb article.
54.3 The headline of the Fin24 article is also virtually identical to the Moneyweb article. The Moneyweb headline is: "Hout Bay castle sold for R23m", while the Fin24 headline reads: "Hout Bay castle sells for R23m". Only one word was changed.
55 On 16 January 2013 at 09:40 Moneyweb published the article Angloplats' Griffith responds to Shabangu outburst, written by me attached marked Annexure "RvN7.1".
55.1 The source of the information was an in-depth interview Moneyweb journalist Hilton Tarrant did with Amplats CEO Chris Griffith on the SAfm Market Update aired on 15 January 2013. The interview was a live broadcast and was also recorded by Moneyweb as the producer of the programme. Such recording comprised a sound recording in which the copyright vested in Moneyweb, as the person by whom all the arrangements for the making of the sound recording were made.
55.2 Moneyweb also invests a significant amount of money to transcribe these sound recordings and to post these transcriptions on its website. The copyright in the written transcriptions vests in Moneyweb. In writing the article, I used the transcription of the sound recording to source the quotes from Mr Griffith.
55.3 Seggie edited the article and wrote the headline and sub-headline based on the facts contained in the article.
56 On 16 January 2013 18:38 Fin24 published the article Amplats: CEO cites JSE rules attached marked Annexure "RvN7.2".
56.1 It is clear that from the way Fin24 referenced the article that the information was taken from the Moneyweb article, and not from the radio interview or the transcription. The Fin24 article's introductory paragraph paraphrases what Griffith said to Moneyweb, but does not credit Moneyweb as the source. Fin24 only references Moneyweb in the fourth paragraph.
56.2 The Fin24 article also contains, in full or in part, six direct quotations contained in the Moneyweb article. These six quotations represent the core of the Moneyweb article and Griffith's response.
56.3 As the author of the article, I expended significant time and effort to listen to the sound recording of the interview and to go through the transcription of the entire interview to extract the most salient quotes. The Fin24 article does not contain any other quotes from the transcription of the interview, which clearly indicates that the quotes were copied from my article and the copier had no reference to the original source material, namely the interview. Although the Fin24 article contains additional share price information and some context of what happened the day before, the core of the article was based on my Moneyweb article.
56.4 Although the headline of the Fin24 article is different from the Moneyweb article, it is similar to the sub-headline of the Moneyweb article. The sub-headline of the Moneyweb article is: "Cites JSE regulations ruling sensitive information limiting open discussion before announcement". The Fin24 headline is: CEO cites JSE rules.
57 The pattern of conduct of Fin24 just set out caused dismay in the Moneyweb office. However, while I considered Fin24's conduct grossly unethical and unlawful, I was reluctant to pursue the matter except as a matter of last resort.
57.1 In particular, I did not want to cause a dispute between Moneyweb and Media24, especially having regard to the fact that the latter was my previous employer up to as recently as September 2011. I point out in this regard that while I left to join Moneyweb, I retained a good relationship with my ex-employer. Thus, despite Media24 having knowledge of my new appointment, I was requested to and served out my notice period of one calendar month. I also complied with a request to serve an additional month's notice.
57.2 I was also alive to the fact that a number of the articles concerned were relatively "soft" - that is human interest stories rather than reporting on financial and commercial matters.
58 I therefore did not pursue the matter and hoped that there would be no trend of this behaviour by Fin24.
THE DEFENCEX ARTICLE
59 Regrettably, however, my concerns about Fin24's behaviour came to a head in March 2013.
60 Earlier, in February 2013, Moneyweb journalist Julius Cobbett broke the story of Defencex, an apparent pyramid scheme whose bank accounts were frozen by the Cape Town High Court. I deal with developments of this case in detail below.
61 Defencex is an investment scheme in which approximately 200 000 members invested. This is a huge number of individuals and it makes the scheme one of the largest in terms of participants in the history of South Africa. The scheme has been described as a pyramid or Ponzi scheme, but this has not been proven in a court of law.
62 On 28 February 2013, Cobbett broke the story that the Western Cape High Court had frozen bank accounts connected to the Defencex scheme. The article was published with the headline: "Court freezes ‘2%-a-day' Defencex scheme". This article is attached marked Annexure "RvN8.1".
62.1 The publication of the article resulted in an absolute traffic explosion on the Moneyweb website. The article received close to 45 000 page views within four days. To date, this article has received more than 70 000 page impressions. To put this increase in traffic into perspective, any Moneyweb article that receives 5 000 page views or more, is regarded as very popular. The article also received the most page impressions of any article since I joined Moneyweb in September 2011.
62.2 One of the reasons for this significant number of page impressions was that the search engine Google indexed the Moneyweb article. This means that if anyone searched for Defencex on the Google search engine, the Moneyweb article was the first item to be displayed.
62.3 The traffic also indicated that there was huge interest in the scheme and I took the decision to allocate more resources to cover this developing story.
63 On 3 March 2013, Cobbett wrote a follow-up article, attached marked
Annexure "RvN8.2". This article cited the significant interest the freezing of the bank accounts had ignited among participants. This article was also very popular and received above average page impressions for Moneyweb.
64 On 5 March 2013, Cobbett was the first journalist to source the court documents submitted by the Reserve Bank to the Cape Town High Court. The article attached marked Annexure "RvN8.3" was again extremely popular for Moneyweb as it contained the first real facts about why the Registrar of Banks had asked the court to freeze the scheme's bank accounts. The court documents also stated that it seemed as if the operations of Defencex, or Net Income Solutions as the scheme is also known, were similar to that of a pyramid scheme.
65 On 6 March 2013, Fin24 published its first article about Defencex. The article,
Watchdog warns on new Ponzi scheme, is attached marked Annexure "RvN9".
65.1 The article briefly refers to and relies on the Moneyweb article of 5 March 2013, but it plainly has a different focus and is not a copy of the Moneyweb article.
65.2 It is evident that this Fin24.com article was also very popular due to the number of reader comments below the article. I have no doubt that the Second Respondent would also have seen this interest and also taken a decision to publish additional articles about the scheme.
The first Defencex copying by Fin24
66 On Saturday 9 March 2013, Moneyweb's award winning reporter Malcolm Rees attended a special Defencex event held at the University of the Witwatersrand in Johannesburg. It was the first event at which Chris Walker, the head of the scheme, addressed participants. It was a significant opportunity to hear his side of the story, as he, until then, bluntly refused to speak to the media.
66.1 Rees gained entry to the event by paying R800 for a ticket. He then proceeded to write the article, 'Defencex mastermind rallies support', and the article was published shortly after 3pm on 9 March 2013. This article is attached markedAnnexure "RvN10.1".
66.2 This was an original and exclusive article for Moneyweb, requiring effort, skill and expertise to produce, and we expected significant traffic flowing from it.
66.3 At the time, the article did not contain the by-line of Rees, as he was concerned about his safety. Cobbett and Rees received death threats from disgruntled participants since the first Defencex articles were published on Moneyweb.
66.4 Seggie wrote the headline after consultation with Rees and myself. This process of writing this particular headline took more than 20 minutes and various formulations of the headline were considered and debated.
66.5 I point out in this regard that it takes significant skill and experience to write accurate and enticing headlines that not only fairly reflect the content of the article, but also attract readers to read it. While headlines are important in all forms of media, they are particularly critical in relation to online media. The reader will often have sight of little more than the headline on the site's home page and will determine, on the basis of that headline, whether to click the link to read the article.
67 There was no Fin24 journalist present at the Saturday rally. A freelance journalist, Neville Lennox, has since advised me that he had been asked by Fin24 to cover the rally. This was apparently an exceptional story for Fin24, as the contracting of a freelance journalist to cover the event falls outside the normal modus operandi of Fin24. Unfortunately, he "mixed up" the dates of the event and therefore did not attend the event. Simply put, Fin24 missed the story because it did not have a journalist present at the event.
68 However, Fin24 then simply resorted to copying Moneyweb's article. The following day, Sunday 10 March 2013, Fin24 published the article 'Defencex boss rallies support'. This article is attached marked Annexure "RvN10.2". The following aspects of the article bear emphasis.
68.1 The headline and first three paragraphs of the Fin24 article represent a substantial copy of the most pertinent content contained in the Moneyweb article. It is clear that the information in the Moneyweb article was rewritten, while no reference to the original Moneyweb article was made.
68.2 I point out that it is common knowledge in the media industry that the headline and first one or two paragraphs of an article are critical to ensure that readers continue to read the complete article. These elements are the most important in an article to entice the reader to continue to read. It takes great skill to write the headline and introductory paragraphs in such a way as to attract and retain the reader's interest.
68.3 Moneyweb's headline was: "Defencex mastermind rallies support". Fin24 merely proceeded to change one word in its headline: 'Defencex boss rallies support'.
68.4 Fin24's slavishly reproduced headline was also carried, with no attribution to Moneyweb, in the following tweet which Fin24 published through its handle @Fin24 to more than 25 000 followers on 10 March 2013: "Defencex boss rallies support n24.cm/13NXys5"
68.5 The URL (web address) at the end of the tweet links to the Fin24 article. A copy of the relevant part of Fin24's Twitter is attached marked Annexure "RvN10.3"and "RvN10.4".
68.6 Within the first three paragraphs of the Fin24 article, Moneyweb was not referenced as the source of the article. The only reference to Moneyweb was in the second paragraph where the Fin24 article stated that the information was sourced from a Moneyweb reporter who gained access to the closed meeting. This gives the impression that Fin24 interviewed the Moneyweb reporter. A representative of Fin24 did not interview the reporter and the reference did not explain that the particular quotation was taken verbatim from an article published on Moneyweb.co.za. Accordingly, the re-used content has not been appropriately attributed to Moneyweb.
69 Neither the Fin24 article nor the tweet provided a hyperlink to the original article on Moneyweb.co.za so that the reader could click to read the original Moneyweb article.
69.1 The absence of the hyperlink in the article was later remedied after I complained about Fin24's conduct, as I explain below.
69.2 However, even then the Fin24 page and hyperlink do not make clear that the link is to the original and complete Moneyweb article.
Indeed, there is no indication to the reader that the hyperlink is to a further (and more extensive) article at all.
69.3 If Fin24 were serious about giving Moneyweb appropriate credit and attribution, it would have prefaced the hyperlink with a statement such as "To read the original Moneyweb article, click here" or "To read the complete Moneyweb article, click here". That would not have sufficed to render the Fin24 article lawful, but would have at least ameliorated the problem somewhat.
69.4 However, the Fin24 article does no such thing. The only word hyperlinked is "Moneyweb" and the hyperlink style used is the identical hyperlink style used when Fin24 mentions a prominent person and the hyperlink then does nothing more than link to a short profile of the person from Who's Who Southern Africa. As an example of this I attach a Fin24 article titled "Zuma slams NDP critics" from 27 March 2013, marked Annexure "RvN11", including a second copy, which shows the information that appears if a reader clicks on the hyperlink to "Jacob Zuma". Thus, the ordinary reader would not understand that the hyperlink is to enable him or her to read the original and complete Moneyweb article.
69.5 This is evident in the low referral rate these hyperlinks generated. A referral rate refers to the number of readers who click on a hyperlink on one page to access more information on another. In this case it refers to the number of individuals who clicked on the Moneyweb hyperlink Fin24 inserted in articles copied from Moneyweb.
69.6 To gauge the referral rate, I refer to a referral report from Google Analytics, attached marked Annexure "RvN12". The report highlights the referral traffic from Fin24 to Moneyweb. Google Analytics is a well-known and widely used traffic measurement tool to individual websites. Moneyweb and Fin24 both use Google Analytics to gauge traffic trends.
69.7 The report shows just how few Fin24 readers have clicked on the Moneyweb hyperlinks in this Fin24 article (and the other Fin24 articles at issue) to initiate a visit to the home page or the particular article page on Moneyweb. A "visit" represents the number of individual sessions initiated by visitors who clicked on the particular link.
69.8 In the examples of the plagiarised articles referred to above and below, the referral rates are as follows:
Referral visits from Fin24 to Moneyweb
Page views of Moneyweb article
Annual packages for MPSs reach well over R1m
Group Five feels the pinch
McDonald's plans to launch McKitchen
Hout Bay castle sells for R23m
Angloplats' Griffith responds to Shanbangu outburst
Defencex boss rallies support
Defencex boss breaks the silence
69.9 The Google Reports confirming the traffic to the individual articles are attached marked Annexures "RvN13.1" to "RvN13.7" respectively. The referral rate in the table is calculated by dividing the number of referral visits to Moneyweb from Fin24 by the page views the Moneyweb article received.
69.10 It would be interesting to note what the page views on the equivalent Fin24 articles were and to calculate the referral rate based on the traffic these Fin24 articles received. Fin24 is invited to provide this information. In the absence of Fin24 providing this information, Moneyweb will ask this Court to draw the inference that the number of views Fin24 obtained in respect of the articles is (a) far in excess of the number of people who clicked through to the Moneyweb articles and (b) is also in excess of the total number of people who viewed the Moneyweb articles.
69.11 From the table above it is clear that the links in the Fin24 articles to their Moneyweb sources were in fact inconsequential. Fin24 readers just do not click on these links to read the original story.
70 The Fin24 article on Defencex (Annexure "RVN10.2") did contain content that was not in the Moneyweb article, but it was largely generic of nature. The "news value" of this additional information was much less than the content that had been taken from the Moneyweb article. Only at the very end of the Fin24 article, does it refer to the Moneyweb article, when it references Moneyweb twice.
71 I became aware of the Fin24.com article early on 11 March 2013. Particularly given the history of the copying of the articles I have mentioned in a previous section of this affidavit, I was very upset and finally proceeded to take steps to seek to resolve the situation.
71.1 I tried to contact Fadia Salie, the editor of Fin24. When I could not get hold of her, I contacted Jannie Momberg, editor of News24. Having worked at Media24 for many years, I know Momberg fairly well.
71.2 I phoned Momberg shortly after 8am on 11 March 2013 and expressed my dismay at the way the article was used on Fin24, and the fact that the Fin24 article did not even contain a hyperlink back to the original Moneyweb article. Momberg asked me to put my concerns in writing and to email the relevant links to him.
71.3 I promptly sent this information to him and again expressed my concerns about the blatant copying of the Moneyweb content. Momberg's reply acknowledged that a hyperlink to the original article was indeed omitted, but informed me that this was rectified after I lodged my complaint. He denied that the content was stolen from Moneyweb. He acknowledged that the "first few paragraphs were based on the Moneyweb article", but additional information, which was not in the Moneyweb article, was also used to enrich the story. He labelled the article as a good "example of aggregation".
71.4 I decided thereafter that I should send a follow-up email which highlighted the similarities between the two articles and which demanded that the article be removed from Fin24.com.
71.5 I then sent a final email to Momberg in which I demanded the removal of the article from Fin24.com. Momberg refused and reaffirmed his position in his email response to me that the information was used in accordance with fair use procedures. Copies of the email correspondence referred to above between Momberg and myself are attached marked Annexure "RvN14".
71.6 I also subsequently phoned Fadia Salie, editor of Fin24, during the course of my communication with Momberg. She acknowledged that it was she who had re-written the Moneyweb Defencex article in accordance with Fin24 guidelines.
71.7 I invite the respondents to make available to this Court the guidelines to which Salie referred as well as any other guidelines used by Fin24 or Media24 regarding the use of articles/copy from other publications. In the event that no such guidelines exist, I invite Salie to indicate as much under oath in her answering affidavit.
71.8 Salie also stated that she did send a journalist to the Defencex event, but this reporter could not get access to the venue. There was no reference in any Fin24 article that a Fin24 journalist was at the event, but could not gain access. In any event, I subsequently established that this explanation was untrue, as I have explained above.
72 Fin24's unlawful copying of the Moneyweb article resulted in a significant loss in traffic for Moneyweb. Google indexed Fin24's article above the original Moneyweb article, notwithstanding that Fin24's article was copied from the Moneyweb article. This would have diverted traffic from Moneyweb directly to Fin24. It is difficult to calculate the actual financial loss Moneyweb has suffered as a result of Fin24's actions.
73 Moneyweb invested money, time and other resources to send a journalist to the event and to sponsor the entry fee. Fin24.com merely copied the most important information in the story, rewrote this information slightly, added generic and less important information and then initially labelled it as "aggregation" and subsequently sought to justify its actions as "fair usage". I deny it is either. On the contrary, I consider this to be dishonest plagiarism of the highest order, which is unlawful.
74 What makes the conduct of Fin24 even more egregious is that, in order to protect the integrity of its own publications, Media24 does not appear to permit this form of copying from its own titles. This special form of copying, which is claimed to represent "fair usage", seems to be reserved for third party publications. Thus, I believe there are internal limitations within Media24 of what articles News24 and its divisions, such as Fin24, can reproduce from Media24's respective print titles. I invite the respondents to indicate what the position is in this regard. For example, Sake24, the financial insert published in the Media24 daily newspapers, published at least one article about Defencex, which Fin24 did not translate, republish, reference or rewrite, as was the case with the Moneyweb article. This article is attached marked Annexure"RvN15". This article was published on 3 March 2013, three days before Fin24 published its first article about the scheme on 6 March 2013.
The second Defencex copying by Fin24
75 Regrettably, the copying by Fin24 of Moneyweb's work on the Defencex story did not end there. On 30 June 2013 Malcolm Rees managed to track down the Defencex mastermind Chris Walker, and interviewed him. This followed an extensive investigation into Walker's activities and his related schemes. Rees spent a significant amount of time to understand Walker's modus operandi and the investigation entailed much research and discussions with related parties. The investigation led Rees to a Soweto-based office of MyFunLive, a related scheme, where he managed to obtain Walker's contact details.
76 Two other Moneyweb journalists, Julius Cobbett and Sasha Planting, were also involved with the investigation and covered the official legal proceedings of the Defencex case. At the time this investigation was one of the most comprehensive within Moneyweb. It is an example of the significant resources required to uncover schemes of this nature.
76.1 During the particular interview, Rees spoke to Walker as a prospective investor and asked detailed questions about the schemes. The nature of the interview is important, as Walker has never responded to a request for comment from Moneyweb. It appears that he has also ignored requests from other media institutions as I am not aware that he was quoted in any other article or broadcast.
76.2 The following day, 1 July 2013, Moneyweb published the article Chris Walker breaks the silence, attached marked Annexure "RvN16.1".
In the first few paragraphs Rees provided context of the interview and some conclusions drawn from this first audience with Walker. The bulk of the article is a transcription of the questions Rees put to Walker and Walker's answers.
76.3 Eleanor Seggie and myself edited the article. Seggie wrote the headline after discussion with Rees and myself.
77 On 4 July, Fin24 published the article Defencex boss opens up to Moneywebattached marked Annexure "RvN16.2". This article is a substantial copy of the Moneyweb article and another example of how Fin24 tries to circumvent its own low cost strategy.
78 In some ways this Fin24 article is the worst case yet of the blatant plagiarism and copyright infringement of Moneyweb articles. Fin24 did not accurately convey the context of the interview, namely that Rees spoke to Walker as a potential investor. From the Fin24 article it seems as if Walker is aware that Rees is a journalist. I also highlight the following extracts from the articles:
78.1 The Moneyweb article's sub-headline and first few paragraphs read:
"Defencex mastermind: SARB thinks I'm the biggest criminal in SA. JOHANNESBURG - Chris Walker, the mastermind behind the R800m Defencex scheme has likened the insurance industry and the banks to Ponzi schemes, while admitting that his battles with the Reserve Bank (SARB) could never have been won. He also claims not to have profited from his embattled business and suggests that the accounts linked to Net-Income- Solutions were frozen to protect the profit seeking interests of the banks and to allow liquidators and attorneys a slice of the R349m pie."
78.2 Fin24's article contains the following:
"They think I am the biggest criminal in SA at the moment," said Walker. He likened the insurance industry and the banks to Ponzi schemes, while admitting that his battles with the Reserve Bank could never have been won. He also claimed not to have profited from his embattled business and suggested that the accounts linked to Net Income Solutions were frozen to protect the profit-seeking interests of the banks, and to allow liquidators and attorneys a slice of the R349m pie."
78.3 The rest of the article quotes unashamedly from the Moneyweb article. Although Fin24 adds some additional information, this information is secondary and is not transformative of the article.
78.4 Fin24's article draws the same conclusions from the interview as Rees did and then seeks to misrepresent them as their own. If this was a university essay by a student, where the students had been given the text of the interview and asked to summarise it, and a student had copied our conclusions, including the grammar and syntax, one would expect that they would be penalized for plagiarism. So not only has Fin24 copied our story, but our entire introduction. That introduction encapsulates the entire interview. It uses original words and concepts, etc. The Fin24 story attributes the interview, but not the conclusions and summary, which is a direct copy from the Moneyweb article.
78.5 This copying indicates that the lull in lifting Moneyweb's content since
11 March, when Fin24 lifted the first Defencex article, was only temporary in nature. It was evident that since I confronted Momberg and the Second Respondent on this date, Fin24 had become more circumspect in lifting other Moneyweb content. This does not mean that its practices have ceased. Fin24 has simply transferred its attention to other industry players.
78.6 The latest Fin24 article suggests that Fin24 believes it can avoid liability by attribution alone. Prior to the Fin24 article published on 3 July, Fin24 usually only referenced the source of the article once or twice. The article published on 3 July referenced Moneyweb no less than five times, one being in the actual headline. However, the extent of the attribution is still wholly insufficient, and the extent of the direct copying has become more blatant.
78.7 What remains the case is that Fin24 has copied verbatim the heart and conclusion of the Moneyweb article and claimed the same as its own original work, despite its liberal reference to Moneyweb.
COPYRIGHT INFRINGEMENT AND UNLAWFUL COMPETITION
79 The present application thus relates to seven different Fin24 articles. They are:
79.1 The article of 26 July 2012: "‘MPs to get huge salary hikes", previously attached marked Annexure "RvN3.2";
79.2 The article of 14 August 2012: "Group Five feels the pinch", attached marked "Annexure RvN4.2";
79.3 The article of 27 August 2012: "McDonald's to launch ‘McKitchen', previously attached marked Annexure "RvN5.2";
79.4 The article of 17 September 2012: "Hout Bay castle sells for R23m", attached marked Annexure "RvN6.3";
79.5 The article of 16 January 2013: "Amplats CEO cites JSE rules", attached marked Annexure "RvN7.2";
79.6 The article of 10 March 2013: "Defencex boss rallies support" , previously attached marked Annexure "RvN10.2"; and
79.7 The article of 4 July 2013: "Defencex boss opens up to Moneyweb" previously attached marked Annexure "RvN16.2".
80 I have already analysed the last two articles in some detail. I attach also, marked Annexure "RvN17" hereto, an analysis of the first five articles, in which I highlight the extent of the unlawful copying by Fin24. I pray that it be read as incorporated herein.
81 What is clear is that, in respect of each of the seven articles complained of, Fin24 has reproduced (i.e. copied) a substantial part of the prior Moneyweb article and that the latter was used as the source for doing so.
82 It is Moneyweb's case that the seven Fin24 articles constitute a breach of Moneyweb's copyright as well as a species of unlawful competition. Moneyweb seeks declaratory and interdictory relief in this regard.
The Copyright Act
83 I am advised that the Moneyweb articles at issue are literary works eligible for copyright under the Copyright Act. Each article at issue is an original literary work in terms of the Copyright Act and required skill and expertise to produce.
84 The copyright in the articles produced vests in Moneyweb by operation of law, but in any event, the copyright in the articles also vests in Moneyweb in terms of each journalist's contract of employment or service.
84.1 Confirmatory affidavits will be signed by Kim Cloete, Sasha Planting, Eleanor Seggie, Julius Cobbett, Malcolm Rees and Monique Vanek, substantially in accordance with the drafts annexed hereto marked Annexures "RvN18.1" to "RvN18.6" respectively, and will be filed evenly herewith. These affidavits themselves will contain an assignment of copyright to Moneyweb, lest there be any doubt about the matter.
84.2 Micel Schnehage, after battling a long illness, has sadly passed away, and there is no confirmatory affidavit from her.
84.3 All of the above journalists are "qualified persons" in terms of section 3(1)(a) of the Copyright Act in that they are South African citizens or domiciled or resident in South Africa. Moneyweb is a "qualified person" in terms of section 3(1)(b) of the Copyright Act in that it is incorporated under the laws of South Africa.
84.4 In relation to my involvement in the articles concerned, I emphasise that I also work under an employment contract with the Applicant. I am a "qualified person" in terms of the Copyright Act. All the literary works written for Moneyweb by me are written in the course and scope of my employment, in terms of my contract of employment. Accordingly, Moneyweb is, by operation of law, the owner of the literary works that are referred to in this affidavit of which I am the author. I in any event hereby assign all my copyright in such literary works to Moneyweb.
85 In publishing the Fin24 articles, the respondents have engaged in or caused the unauthorised and unlawful reproduction, use, publication and distribution of Moneyweb's copyrighted works. At no stage did Moneyweb or I give permission to Fin24 in this regard.
86 The attempt (mentioned above) by Fin24 to suggest that there is no infringement of copyright because the conduct outlined above amounts to "fair use" is not sustainable. The relevant exception appears in section 12(1) of the Copyright Act and is as follows:
12. General exceptions from protection of literary and musical works.-
(1) Copyright shall not be infringed by any fair dealing with a literary or musical work-
(c) for the purpose of reporting current events-
(i) in a newspaper, magazine or similar periodical...
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.
87 Even assuming that the reference in section 12(1)(c)(i) to a "newspaper, magazine or similar periodical" includes a website such as Fin24, the conduct of Fin24 is still not rendered lawful by the section.
88 First, for the exception in this section to apply the source must be mentioned, as well as the "author if it appears on the work". The references to Moneyweb as the source of the articles concerned are wholly insufficient. The failure of Fin24 to properly attribute is also evident from the fact that it does not mention the author of any of the Moneyweb articles at issue, although Moneyweb does not seek to rely on this technical point alone.
89 Second, and critically, the manner in which the Fin24 articles copy from the Moneyweb articles do not amount to "fair dealing" at all. Having regard to the relevant factors enunciated by both our courts and foreign courts and the facts set out in this affidavit, Fin24's conduct does not amount to fair dealing and is not rendered lawful by section 12 of the Copyright Act.
90 The relevant factors in this context of fair dealing include:
90.1 the timing of the re-use;
90.2 the purpose and character of the re-use;
90.3 the existence and extent of attribution to the source and author of the of the original content;
90.4 the nature of the original content;
90.5 the amount and substantiality of the portion taken; and
90.6 the effect of the re-use upon the potential market.
91 While the relevant legal principles concerning fair dealing are a matter for argument, I draw attention to one relevant South African source which is helpful in regard to understanding what fair dealing does and does not entail. The source concerned is the Avusa Editorial Policy, a copy of which is attached marked Annexure "RvN19".
91.1 Avusa is now known as the Times Media Group and owns a large number of newspapers, magazines and online publications, including the Sunday Times, The Times, Business Day, the Sowetan, the Financial Mail, BDlive, Timeslive and others.
91.2 The Avusa Editorial Policy includes the following section on plagiarism, which I quote for the sake of convenience:
We give credit whenever we use another person or entity's words, ideas, opinions or theories.
We give credit whenever we use information from another source.
We place quotations in quotation marks, and properly attribute reported speech.
We do not borrow excessive amounts of copy, even when properly attributed. When in doubt, check with an editorial manager.
We do not change a few words in a sentence or paragraph and pass these off as our own.
We do not fabricate comments and situations.
Where reporters pull together international stories from other sources, all sources must be acknowledged. No bylines will appear unless the reporter has done substantial original work on the story.
Plagiarism is a breach of the trust our readers have in us and reflects badly on the entire newspaper. Reporters caught plagiarising will face disciplinary action and, possibly, dismissal. Columnists and occasional contributors will not be used by the newspaper if they are caught plagiarising. A first offence will result in disciplinary action.
Stories will be randomly checked for plagiarism."
92 Fin24's conduct in publishing the articles concerned (all of which remain on its website online) breaches the Copyright Act.
93 In addition, I submit that Fin24's publication of the articles at issue amounts to unlawful competition at common law in relation to Moneyweb. In view of the facts set out in this affidavit, I submit that it is clear that Fin24 has unlawfully sought to derive an advantage over Moneyweb, one of its key competitors, by making impermissible use of the time, effort, money and skill expended by Moneyweb to produce the articles concerned. The factors mentioned above in paragraph 90 are again relevant here.
94 I emphasise in this regard that plagiarism is strongly condemned by the South African media community. This is demonstrated by the Press Code of South Africa.
94.1 The Press Code is a voluntary code adopted by what is loosely called the "print" media, but which includes also various online publications. This is made clear by clause 5.1.3 of the Constitution of the Press Council of South Africa, which states, "The jurisdiction of the PCSA extends to the electronic media of member publications." A copy of the Constitution of the Press Council is attached marked Annexure "RvN20.1".
94.2 Both Media24 (the publisher of Fin24) and Caxton (under which Moneyweb falls) are subject to the Press Council and Press Code and, thus, Fin24 and Moneyweb are also subject to the Code.
94.3 A copy of the Code is attached marked Annexure "RvN20.2". Clause 2.8 states unambiguously that "Journalists shall not plagiarise."
94.4 The Code thus makes quite clear that the industry does not tolerate plagiarism. Yet, that is precisely what Fin24 has engaged in.
THE PATTERN OF FIN24'S UNLAWFUL MODUS OPERANDI
95 Finally, it is also now clear that Fin24's unlawful behaviour is not limited only to articles it copies from Moneyweb.
96 This is demonstrated by three recent examples of the same similar unlawful conduct by Fin 24 in respect of articles published by:
96.1 IOL (the online version for newspapers published by Independent Newspapers);
96.2 mybroadband (a website publishing news regarding technology issues and business technology); and
96.3 BDlive (the online edition of Business Day).
97 In relation to IOL:
97.1 On 9 June 2013 at 11:19, IOL published an article attached marked Annexure "RvN21.1", titled 'US blacklists two SA firms'. It contains the following text in the first six paragraphs, and the eighteenth paragraph:
"The US Treasury this week blacklisted two South African-registered companies, identified as key nodes in a complex operation allegedly laundering billions of dollars into the global economy, on behalf of the leadership of beleaguered Iran.
The two entities - One Vision Investments 5 (Pty) Ltd (OVI) and One Class Properties (Pty) Ltd (OCP) - are linked to a property portfolio worth billions of rands, which includes several landmark developments in Cape Town.
They were named in the US Treasury announcement as part of a tangled network of 37 companies operating around the globe, but ultimately traced back to an Iranian controlling entity colourfully named The Execution of Imam Khomeini's Order. (EIKO).
The blacklisting means that the companies are forbidden from doing business in or with the US.
The properties involved are project-managed by the South African Siltrust Group of companies, but majority-owned by OVI and OCP, as well as a third Iranian-owned entity, which was not listed by the US Treasury.
Asked to comment this weekend, Siltrust's Mustour Abrahams confirmed OVI and OCP's funding for, and majority ownership of the portfolio, and his company's role as contracted developer and operator.
OCP director Taj Anvary yesterday confirmed that he was Iranian by birth, but told Weekend Argus he had taken out South African citizenship, and had no dealings whatsoever with the Khamenei government."
97.2 On the same day at 16:47, Fin24 published an article attached markedAnnexure "RvN21.2", titled 'US Treasury blacklists two SA firms'. In addition to the similarity in the headline, the first eight paragraphs of the report copy extensively from the IOL article. The most obvious examples of text lifted virtually verbatim are underlined in what follows:
"Two South African-registered companies, one managed by an Iranian by birth, have been blacklisted by the US Treasury.
This means they are forbidden from doing business in or with the US.
The US Treasury said earlier that nearly 40 companies had been banned under the execution of Imam Khomeini's Order (Eiko), because they generated money from state business for Iran's leaders and worked to evade international sanctions.
The two South African companies blacklisted by the Treasury were named as One Vision Investments 5 and One Class Properties.
They were both linked to property portfolios worth billions of rand. Both properties were project-managed by the SA Siltrust group of companies, but majority-owned by OVI and OCP, as well as a third
Iranian-owned entity, which was not listed by the US Treasury, iOL said in a report.
Asked to comment, Siltrust's Mustour Abrahams confirmed OVI and OCP's funding for, and majority ownership of the portfolio, and his company's role as contracted developer and operator. OCP director Taj Anvary confirmed that he was Iranian by birth, but said he had applied and received South African citizenship and had no dealings whatsoever with the Iranian government."
97.3 There is only a single reference to IOL, in the sixth of these eight paragraphs.
97.4 I point out also that if one uses Google to search for the phrase "US blacklists SA firms", the first reference that is produced is Fin24 and, only thereafter, IOL. In this regard, I refer to the report attached
marked Annexure "RvN21.3". The effect of this that an ordinary reader looking for an article on the subject is most likely to read the copied article on Fin24, rather than the original on IOL.
98 In relation to mybroadband:
98.1 On 17 March 2013, mybroadband published an article attached markedAnnexure "RvN22.1", titled 'Prices from 2003 to 2013: Broadband vs DStv vs Petrol vs Electricity'. It contained the following centre table compiled by mybroadband to illustrate the comparison of price changes of various products over ten years:
98.2 On 18 March 2013, Fin24 published an article attached marked Annexure "RvN22.2", titled 'Broadband bucks petrol, power price surge'. Fin24 does not merely summarise the findings of mybroadband, but reproduces the same table, without a single change to the manner in which the original data is represented:
99 In relation to BDlive:
99.1 On 2 August 2013 at 05:51, BDlive published an article attached markedAnnexure "RvN23.1", titled ''Few farm job losses' despite big minimum wage hike'. It contained the following text in the fifth and sixth paragraphs:
"University of Pretoria economist Frikkie Liebenberg said on Thursday: "The drop in employment is a very small one given the magnitude of the numbers and the size of the increase in the minimum wage. I don't think that the hype over the minimum wage was warranted.
University of Stellenbosch agricultural economist Nick Vink said that anecdotal evidence collected from surveys of the top 10 agricultural industries showed job losses would be nowhere near what had been predicted."
99.2 On the same day at 07:56 (just two hours later), Find24 published an article attached marked Annexure "RvN23.2", titled 'Hype over farmworker pay unwarranted'. It copied significant parts of the BDlive article, including the following which appear as the fourth and fifth paragraphs of the article:
"The drop in employment is a very small one given the magnitude of the numbers and the size of the increase in the minimum wage," University of Pretoria economist Frikkie Liebenberg was quoted as saying.
"I don't think that the hype over the minimum wage was warranted."
Agricultural economist Nick Vink at the University of Stellenbosch said that anecdotal research from the top 10 agricultural industries showed that the magnitude of job cuts would be nowhere near what had been predicted."
100 These three examples demonstrate that Fin24 has engaged in a pattern of unlawful conduct and that this forms an important part of its modus operandi. They also demonstrate that these practices are likely to affect the industry as a whole - not only Moneyweb - unless this Court makes clear that they are unlawful.
101 In all the circumstances, Fin24's conduct in publishing the seven articles complained of is unlawful.
102 Moneyweb accordingly seeks a declaratory order to this effect, coupled with an order interdicting Fin24 from continuing to publish the articles concerned and directing that the articles be removed from its website within twenty-four hours of this Court's order.
103 Moneyweb also seeks a declaratory order that Fin24 is liable for the damages suffered by it as a result of the unlawful conduct concerned. Given that it is not practical to have the quantum of such damages determined in application proceedings, Moneyweb seeks to have the quantum of damages determined in a damages enquiry. This damages enquiry will also deal with the extent of Fin24's liability for additional damages in terms of section 24(3) of the Copyright Act. Moneyweb will contend in this regard that, having regard to inter alia the flagrancy of Fin24's infringement and the benefit accruing to it, effective relief requires the award of additional damages in terms of this section.
104 It bears emphasis that plagiarism and copyright infringement are the scourges of the local and international media industries. Publishers normally act ruthlessly when journalists are found to have plagiarised the content of others, and guilty parties are ostracized within the media fraternity. The same must apply to publishers who adopt an editorial policy to encourage this practice due to a cost savings strategy.
105 Fin24's actions also have wider repercussions than just their effect on Moneyweb. As a collective, the media is a critical stakeholder in and guardian of the South African democracy. Investigative journalism and investment in unique and original content is critical for the industry to fulfill this role. This role will be threatened if publishers such as Fin24 are allowed to continue with the conduct complained of. By granting the limited relief sought in this application, a clear message will be sent to publishers that it is not permissible to cross the boundary between ethical and fair usage of others efforts, for the legitimate purpose of reporting news and the impermissible use of the intellectual property of others for monetary gain.
106 I accordingly pray for an order in terms of the Notice of Motion to which this affidavit is attached.
I hereby certify that the deponent knows and understands the contents of this affidavit and that it is to the best of his knowledge both true and correct. This affidavit was signed and sworn to before me at SANDTON on this the day of August, 2013, and that the Regulations contained in Government Notice R.1258 of 21 July 1972, as amended, have been complied with.
COMMISSIONER OF OATHS
Full names: Address: Capacity:
Source: Moneyweb, September 6 2013
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