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Tuesday, 4 October 2011

More competition for Europe's football industry

Now drinkers can enjoy the IPKat's football prowess via Greek decoders
Breathlessly back on the blog after this morning's envigorating copyright and trade mark law training session with a bright and bushy-tailed batch of trainees, this Kat now turns to the main news of the moment, today's momentous ruling of the Court of Justice in Joined Cases C-403/08 Football Association Premier League Ltd, NetMed Hellas SA, Multichoice Hellas SA v QC Leisure, David Richardson, AV Station plc, Malcolm Chamberlain, Michael Madden, SR Leisure Ltd, Philip George Charles Houghton and Derek Owen and C-429/08 Karen Murphy v Media Protection Services Ltd [and if you think that's a long name for a case, just wait till you read the judgment, which runs to 211 paragraphs, adds Merpel]. According to this morning's press release from Curia:

"A system of licences for the broadcasting of football matches which grants broadcasters territorial exclusivity on a Member State basis and which prohibits television viewers from watching the broadcasts with a decoder card in other Member States is contrary to EU law

The screening in a pub of football-match broadcasts containing protected works requires the authorisation of the author of those works

The Football Association Premier League (‘the FAPL’) runs the Premier League, the leading professional football league competition in England, and markets the television broadcasting rights for Premier League matches. It grants broadcasters, under an open competitive tender procedure, an exclusive live broadcasting right for Premier League matches on a territorial basis. As the territorial basis generally corresponds to a single Member State, television viewers can watch only the matches transmitted by the broadcasters established in the Member State where they reside.

In order to protect such territorial exclusivity and to prevent the public from receiving broadcasts outside the relevant Member State, each broadcaster undertakes, in the licence agreement concluded with the FAPL, to encrypt its satellite signal and to transmit the signal, so encrypted, by satellite solely to subscribers in the territory which it has been awarded. Consequently, the licence agreement prohibits the broadcasters from supplying decoder cards to persons who wish to watch their broadcasts outside the Member State for which the licence is granted.

The disputes giving rise to the present cases concern attempts to circumvent that exclusivity. Certain pubs in the United Kingdom have begun to use foreign decoder cards, issued by a Greek broadcaster to subscribers resident in Greece, to access Premier League matches. The pubs buy a card and a decoder box from a dealer at prices lower than those of Sky, the holder of the broadcasting rights in the United Kingdom.

Since the FAPL takes the view that such activities undermine the exclusivity of the television broadcasting rights and the value of those rights, it is seeking to bring them to an end by means of legal proceedings. The first case (C-403/08) concerns a civil action brought by the FAPL against pubs that have screened Premier League matches by using Greek decoder cards and against the suppliers of such decoder cards to those pubs. The second case (C-429/08) has arisen from criminal proceedings against Karen Murphy, the landlady of a pub that screened Premier League matches using a Greek decoder card. In those two cases, the High Court of Justice of England and Wales has referred a number of questions concerning the interpretation of European Union law to the Court of Justice.

In its judgment delivered today, the Court of Justice holds that national legislation which prohibits the import, sale or use of foreign decoder cards is contrary to the freedom to provide services and cannot be justified either in light of the objective of protecting intellectual property rights or by the objective of encouraging the public to attend football stadiums [says the IPKat, given the fact that IP protection is always subject to the overriding pro-competitive objectives of the European Union's competition policy, this was a foregone conclusion].

So far as concerns the possibility of justifying that restriction in light of the objective of protecting intellectual property rights, the Court observes that the FAPL cannot claim copyright in the Premier League matches themselves, as those sporting events cannot be considered to be an author’s own intellectual creation and, therefore, to be ‘works’ for the purposes of copyright in the European Union [Not so fast, says the Kat: cannot specific "set pieces" which are practised to perfection in training and then executed on-field be regarded as choreographed dramatic works which are entitled to protection?  Merpel agrees, pointing out that some of the most spectacular penalty-area dives are quite magnificant performances which it would be sad if the the law failed to protect them. But this is only a side issue, as the next paragraph explains].
Also, even if national law were to confer comparable protection upon sporting events – which would, in principle, be compatible with EU law – a prohibition on using foreign decoder cards would go beyond what is necessary to ensure appropriate remuneration for the holders of the rights concerned.
In this regard, the Court observes, first, that when calculating such appropriate remuneration it is possible to take account of the actual and potential audience both in the Member State of broadcast and in any other Member State where the broadcasts are received, and that it is thus not necessary to limit the free movement of services within the European Union. Second, payment by the television stations of a premium in order to ensure themselves absolute territorial exclusivity goes beyond what is necessary to ensure the right holders appropriate remuneration, because such a practice may result in artificial price differences between the partitioned national markets. Such partitioning and such an artificial price difference are irreconcilable with the fundamental aim of the Treaty, which is completion of the internal market.
For similar reasons, a system of exclusive licences is also contrary to European Union competition law if the licence agreements prohibit the supply of decoder cards to television viewers who wish to watch the broadcasts outside the Member State for which the licence is granted.
It is true that European Union competition law does not, in principle, preclude a right holder from granting to a sole licensee the exclusive right to broadcast protected subject-matter by satellite, during a specified period, from a single Member State of broadcast or from a number of Member States of broadcast. However, the licence agreements must not prohibit the broadcasters from effecting any cross-border provision of services that relates to the sporting events concerned, because such an agreement would enable each broadcaster to be granted absolute territorial exclusivity in the area covered by its licence, would therefore eliminate all competition between broadcasters in the field of those services and would thus partition the national markets in accordance with national borders.
Finally, as regards the questions asked concerning the interpretation of the Copyright Directive, the Court notes first of all that only the opening video sequence, the Premier League anthem, pre-recorded films showing highlights of recent Premier League matches and various graphics can be regarded as ‘works’ and are therefore protected by copyright. By contrast, the matches themselves are not works enjoying such protection [One wonders whether future broadcasts will be split-screen affairs, with copyright-protected items being constantly on view, to be on the safe side ...].
That being so, the Court decides that transmission in a pub of the broadcasts containing those protected works, such as the opening video sequence or the Premier League anthem, constitutes a ‘communication to the public’ within the meaning of the copyright directive, for which the authorisation of the author of the works is necessary, because when a pub transmits those works to the customers present on the premises the works are transmitted to an additional public which was not considered by the authors when they authorised the broadcasting of their works.".
The full ruling of the Court of Justice looks like this:

"1. ‘Illicit device’ within the meaning of Article 2(e) of Directive 98/84 ... on the legal protection of services based on, or consisting of, conditional access must be interpreted as not covering foreign decoding devices (devices which give access to the satellite broadcasting services of a broadcaster, are manufactured and marketed with that broadcaster’s authorisation, but are used, in disregard of its will, outside the geographical area for which they have been issued), foreign decoding devices procured or enabled by the provision of a false name and address or foreign decoding devices which have been used in breach of a contractual limitation permitting their use only for private purposes.

2. Article 3(2) of Directive 98/84 does not preclude national legislation which prevents the use of foreign decoding devices, including those procured or enabled by the provision of a false name and address or those used in breach of a contractual limitation permitting their use only for private purposes, since such legislation does not fall within the field coordinated by that directive.

3. On a proper construction of Article 56 TFEU:

– that article precludes legislation of a Member State which makes it unlawful to import into and sell and use in that State foreign decoding devices which give access to an encrypted satellite broadcasting service from another Member State that includes subject-matter protected by the legislation of that first State;

– this conclusion is affected neither by the fact that the foreign decoding device has been procured or enabled by the giving of a false identity and a false address, with the intention of circumventing the territorial restriction in question, nor by the fact that it is used for commercial purposes although it was restricted to private use.

4. The clauses of an exclusive licence agreement concluded between a holder of intellectual property rights and a broadcaster constitute a restriction on competition prohibited by Article 101 TFEU where they oblige the broadcaster not to supply decoding devices enabling access to that right holder’s protected subject-matter with a view to their use outside the territory covered by that licence agreement.

5. Article 2(a) of Directive 2001/29 ... on the harmonisation of certain aspects of copyright and related rights in the information society must be interpreted as meaning that the reproduction right extends to transient fragments of the works within the memory of a satellite decoder and on a television screen, provided that those fragments contain elements which are the expression of the authors’ own intellectual creation, and the unit composed of the fragments reproduced simultaneously must be examined in order to determine whether it contains such elements.

6. Acts of reproduction such as those at issue in Case C-403/08, which are performed within the memory of a satellite decoder and on a television screen, fulfil the conditions laid down in Article 5(1) of Directive 2001/29 and may therefore be carried out without the authorisation of the copyright holders concerned.

7. ‘Communication to the public’ within the meaning of Article 3(1) of Directive 2001/29 must be interpreted as covering transmission of the broadcast works, via a television screen and speakers, to the customers present in a public house.

8. Council Directive 93/83 ... on the coordination of certain rules concerning copyright and rights related to copyright applicable to satellite broadcasting and cable retransmission must be interpreted as not having a bearing on the lawfulness of the acts of reproduction performed within the memory of a satellite decoder and on a television screen".
This Kat was expecting this very result for the reasons given, as he told Mrs Kat yesterday evening, but this really wasn't a difficult result to predict.  What is more difficult to predict is how the football broadcasting establishment will respond. One thing is crystal clear, though: whatever FAPL and its colleagues do will have to be palpably compatible with the aims of European competition policy or it will never get off the ground.

More coverage can be found on the Guardian, Sky News and BBC.

Great acting by footballers here, here and here

For a critique of the Advocate General's Opinion in this case and a perspective on the possible commercial impact of a ruling adverse to the plaintiffs, see Nick Bitel, "European Court Case could threaten Cultural and Sporting Diversity", here.

16 comments:

David said...

pools panel result - score draw!

:-)

Andrew Robinson said...

I'm pleasantly surprised to find the directorial aspect of coverage of matches (choice of camera angles, when to cut between them, zooming, focusing etc.) not being mentioned as copyrightable work.

I wonder if this has implications for the National Portrait Gallery, where (despite making far fewer creative choices) simply faithfully reproducing public domain artworks was argued to be a creative act?

Anonymous said...

Ok, great. We have a decision on technology developed in the stone age.

Does this mean it will take another ten to twenty years before we receive a decision on blocking webcasts in other countries?
I have lived abroad for four years and each time I wanted to watch the eight o'clock news of my home country during the Olympics, it was blocked as national television was not allowed to send images from the Olympics to my country of residence at that moment.

This decision is of great importance to one single European Market in a general sense. But I would have been really happy if they would have touched matter like using proxies or IP address spoofing to access content that would be blocked using an IP address assigned to the country of residence.

Anonymous said...

Jeremy, some of the dives practised by professional footballers are of such artistic content that their transmission should, in my opinion, also be susceptible to copyright protection.

Would it be possible for Sky to transmit individual subliminal frames containing copyright material in order to protect their business? I understand that subliminal advertising is banned but perhaps transmission of the right holder's information might be acceptable.

Ron said...

In view of S 72 (1) CDPA 1988, even if the introductory film is protected by copyright, showing the broadcast will not be an infringement of copyright in the film, as long as the audience have not paid an admission charge or been charged a premium price on any purchases made during the transmissiion.

Or is there some aspect of EC law that allows this provision of national law to be over-ridden?

Peter said...

How broadly applicable is the court's move against territorial exclusivity? Film rights, for example, are packaged out with rigorous exclusivity - and often with some overarching control by the rights holder - to different countries. Does the ruling imply that on the digital playing field, the French distributor of a film could start competing with the British distributor for British consumers?

Anonymous said...

Sticking just to broadcast TV and radio, either by satellite or internet, I wonder if this judgement can be invoked to prevent, for example, Sky refusing to supply decoder cards to non-UK/ROI residents, which is their present policy? I recall that certain advertisers wished to segment their campaigns in certain countries, requiring the likes of Sky, and indeed the BBC, not to make things available "overseas" as mentioned above.

That being said, in the noisy corner of Europe which I occupy, we see the same adverts in different languages from the surrounding countries over cable TV, which would appear to undermine the argument for strict segmentation, and the multi-national channels we receive such as Discovery often make use of local ad-insertion arrangements, so this isn't a technical problem.

Language and culture offer a high enough natural barrier, after this ruling any other barrier would seem to be unacceptable. Except to local monopolists, of course!

David said...

Ron

I imagine it is a terms and conditions issue, rather than an IP issue.

Sky supply me a sky box and dish for non-commercial use, if I wanted to allow members of the public into my house (and maybe sell them beer) then I'd be in breach of those terms and conditions and would have to pay substantially more for the right to do so. Sky would also provide me with a different feed with a little pub glass logo so their rights enforcers can easily see if I've paid the right fee.

Andrew Robinson said...

@Ron and @David

As I understand it, Karen Murphy bought the right to show matches in a Greek pub, and successfully argued that this right can't be limited to just one member state and is de facto a right to show matches in any European pub. The question of charging pubs more than private individuals wasn't touched on by either side in this particular case.

PaulH said...

Doesn't this cut the FA's business model off at the knees? Not to mention all other sports, motor racing, horse racing?
I'm astounded by this. If there's no copyright in the filming of the match itself, then there's nothing to stop someone who has managed to get access to it streaming it to all and sundry. Blur the logos, and bingo, no infringement at all.
Oh, you'll miss the pre match anthems, what a pity.

Rob said...

PaulH: The court has recognised that FAPL has the exclusive right to exploit the sporting event. It's just not an IP right. The FAPL and its clubs go to great security lengths to protect that exclusive right by keeping other cameras out of the stadia. Having said all of that - I don't like the inference that there is no IP in the intellectual creation of the production team. There is a lot of original skill and effort that goes into producing a world class feed.

Anonymous said...

The strapline to the photo accompanying this article suggests that we can enjoy a beer whilst watching the football. However it should be noted that this is only true if this is in your own home - Murphy still fell foul of the "communicating to the public" aspect. The number of misleading articles on this topic is surprising!!! :)

Andrew Robinson said...

@Anonymous

Given the price paid by Murphy for her Greek decoder according to the BBC, either the Greek economy is in trouble because they are paying far too much for satellite TV, or she did actually buy the more expensive 'pub' license that includes the right to 'communicate to the public'.

PaulH said...

Rob: Thanks for responding. I was unsure what the exploitation right was based on - simply contracts? national copyrights going further than the EU directive? As for keeping other cameras out, this doesn't address the problem of someone getting hold of the video feed and simply redirecting it. Again, I suppose this could be covered by contract, but ip is supposed to simplify this - after all, you can only enforce the breach against the person you have a contract with.
I think their reasoning on copyright was sloppy and could cause uncertainty; it implies there is no copyright in filming anything that does not have an underlying copyright - does this apply to street scenes, ex tempore interviews, film of the natural world? they would've done better to rule there was copyright but it was unenforcable.

Anonymous said...

Andrew: the English court did consider that point before making the reference: "Finally, the Respondent's note refers to Kitchin J's findings at paras. 145 to 146 of his judgment where he referred to an issue whether the NOVA cards supplied by QC and AV were issued to domestic or commercial subscribers, and recorded that the evidence before him was to the effect that a private subscription for a NOVA card cost at least €676.8 annually if paid on a monthly basis or €684 annually with one bonus month free if pre-paid. On the other hand, the price for a commercial subscription was said to be based on the number of seats in the relevant bar or pub with a minimum cost of €1,080 per annum. The learned Judge also recorded that the price paid by Mr Chamberlain (who is accepted to be the alter ego of the company AV, which sold the Appellant her NOVA decoder equipment) was between €657 and €682 per NOVA card."

Andrew Robinson said...

@ Anonymous thanks, that's information I'd not seen reported anywhere. This raises 2 more interesting points... did Chamberlain mislead Murphy, and if so, how does (what is presumably) a matter of Greek contract law apply to a third party in a different country?

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