Background

On 24 June 2008, Kitchin J handed down an extensive judgment dealing with issues concerning the use of foreign decoder cards in the UK to access foreign transmissions of live Premier League football matches. The Claimants complained that the dealing in and use of such cards in the UK involved an infringement of their rights under Section 298 of the CDPA and an infringement of various copyright works embodied in the Premier League match coverage. This article does not cover all of the issues but deals with the salient points.

The Premier League is the leading professional football league competition for football clubs in England. The first Claimant (“FAPL”) is the vehicle through which the 20 Premier League clubs operate the competition. FAPL’s activities include organising the filming of Premier League matches and licensing the rights to broadcast them. The second and third Claimants were and remain the Greek sub-licensee of Premier League broadcast rights in Greece and the Greek company which owns and operates the broadcasting platform for Premier League matches broadcast from within Greece.

The Claimants brought three test cases. Two of the actions were brought against suppliers of equipment and satellite decoder cards to pubs and bars, which enable the reception of Premier League matches broadcast from outside the UK. The third action was against licensees or operators of four pubs that showed live Premier League matches broadcast from outside the UK. Pubs and bars which show live Premier League matches broadcast from outside the UK pay less money for this service than they would pay to BSkyB Ltd (FAPL’s exclusive UK licensee) to receive broadcasts of the same football matches from within the UK.

The meaning of “illicit device” in the Conditional Access Directive

The Claimants claimed infringement of their rights under Section 298 of the CDPA. Section 298 was intended to implement the Conditional Access Directive4. The purpose of the Directive was to facilitate the undistorted operation of the single market by giving to broadcasting service providers a Community-wide right to suppress the manufacture of and commercial dealings in pirate decoder equipment and cards which give access to protected services (the scope of which includes encrypted television broadcasting services), and further to remove obstacles to the free circulation of lawful decoder equipment and cards which might previously have arisen from preexisting provisions of national law.

Article 2(e) of the Conditional Access Directive defines an “illicit device” as “any equipment or software designed or adapted to give access to a protected service in an intelligible form without the authorisation of the service provider”. The Claimants argued that two of the Defendants had provided decoder equipment and cards without their authorisation and as such, the devices were illicit devices.

The Defendants claimed that the definition of “illicit device” could only refer to pirate decoder cards which permit access to a protected service free of charge. Moreover, the Defendants’ decoder equipment and cards had been placed on the market with the authorisation of the broadcasting service provider and as such the equipment and cards could not be described as “pirate”.

The Judge said that the arguments of both sides were powerful and that the proper interpretation of the expression “illicit device” was not clear. He considered that this was an issue to refer to the ECJ.

Infringement – copying in the decoder and on the television screen

The publicans used decoder equipment and television sets to show football matches in their pubs. The Claimants claimed infringement of Section 17 of the CDPA: infringement of copyright in the football matches by the Defendants’ copying in the decoders and on television screens of film works, a musical work, a sound recording and artistic works.

In terms of copying in the decoder equipment, it was clear that fragments of the various film works, the musical work and the sound recording were stored sequentially in the decoder. The fragments individually or collectively did not amount to a substantial part of the copyright works. However, the position in relation to the artistic works (the various graphics, devices and logos) was different: the Judge accepted that these were reproduced in full within one frame of the broadcast signal in the decoder.

In terms of copying by displaying films and artistic works on television screens in pubs, with respect to the films, the Claimants’ position was no stronger than for the decoder. However, the Judge accepted that the artistic works were reproduced in full within one frame of the broadcast signal as seen on the television.

The Judge then considered whether there was a defence to copying under s.28A of the CDPA, which implements Article 5(1) of the Copyright and Information Society Directive5. Article 5(1) provides an exception to the reproduction right (and hence a defence to copying) in the case of certain transient or incidental reproductions. All elements of the defence were clearly made out except for the requirement that the copying must have no independent economic significance. The Judge said that this was a point of interpretation upon which the guidance of the ECJ was necessary.

Infringement – communication to the public

The Claimants argued that the screening of the matches in public was a communication of the works to the public contrary to s.20 of the CDPA, which implements Article 3 of the Copyright and Information Society Directive6. Although this subject merited a reference to the ECJ, it was the Judge’s provisional view that the Defendants had not communicated the copyright works to the public within the meaning of Article 3. There had been no retransmission by the publicans whether by wire or otherwise. They had simply received the signal, decoded it and displayed it on a television. The only acts of communication to the public were those of the Claimants and there was no act of communication separate from the satellite broadcast itself.

Infringement – performing, playing or showing the works in public

The Claimants also argued that the performance in public of the musical work and the playing or showing in public of the sound recording and various film works constituted performing, playing or showing the works in public contrary to s.19 of the CDPA. The Defendants did not dispute this but stated that they had a defence under s.72 of the CDPA, which provides that the showing or playing in public of a broadcast to an audience who have not paid for admission to the place where the broadcast is to be seen or heard does not infringe any copyright in the broadcast, any sound recording in it (save for one which is excepted) or any film included in it. The Judge found that the defence applied to all the film works relied upon. This left the sound recording and musical work, both of which embodied a football anthem.

The Judge held that the sound recording was an excepted sound recording for the purposes of s.72 (its author was not the author of the broadcast) and as such the s.72 defence in respect of the sound recording failed. The s.72 defence also failed for the musical work as s.72 did not provide a shield in respect of the free showing or playing of musical works.

In terms of making copies of the work in the decoder and on the television screen, the s.72 defence was limited to the free showing or playing in public or a broadcast, certain sound recordings and films included in it. It did not extend to copying.

Articles 28 – 30 EC (free movement of goods) and 49 EC (services)

The Judge said that the defence based on free movement of goods was relevant only to the claim in respect of the decoder cards in circulation within the EU.

The Defendants contended that, in trying to inhibit the circulation of lawful decoder equipment and cards, the Claimants were seeking relief which amounted to a quantitative restriction on trade between Member States or a measure having equivalent effect within the meaning of Article 28EC. Further, they contended that such a restriction was incapable of justification under Article 30EC. Likewise, the Claimants were seeking relief which amounted to a restriction on the freedom of foreign broadcasters to provide services and the freedom of customers to receive those services contrary to Article 49 EC.

The Claimants argued that the ECJ had decided that performance rights, such as copyright in broadcasts, may be validly licensed and enforced in the EU on a national basis without falling foul of the EC Treaty’s rules on free movement because of the specific subject matter and essential function of copyright protection. The fact that a fee had been paid in respect of one Member State was irrelevant because FAPL had a right to license for a fee in each Member State in which it had copyright for its broadcasts. The Judge said that this issue also needed to be referred to the ECJ for guidance.

Competition law (Article 81 EC)

The Defendants’ case under Article 81 only applied to the broadcasts made from within the EU.

FAPL had established a system of contracts which contained restrictions against the circulation of authorised decoder cards outside the respective territory of each licensee.

The Defendants argued that in the event that the interpretation of the Conditional Access Directive for which they contended was correct, it could be presumed that the export restriction had as its object the restriction or distortion of competition and it was enough to show that there was a danger that trade between Member States would be appreciably affected. The Article 81 defence was also raised against the copyright infringement claims.

The Claimants stated that it was inherent in the specific subject matter and essential function of copyright for broadcasts that rights could be licensed to exclusive licensees in particular Member States. In short, exclusive licences of performing rights did not per se infringe Article 81, even though they conferred absolute territorial protection and might prevent transmission into a neighbouring state.

This question was intimately tied to the other issues and the Judge believed it too should be referred to the ECJ.

The Judge asked for the parties’ input on the precise formulation of the questions which should be put to the ECJ.

Comment

The essence of the defence is that FAPL tries to partition the broadcasting market by prohibiting the circulation of lawful decoder cards. If the Defendants’ case is successful, it could have significant consequences for the European broadcasting market. The Defendants’ case is effectively a challenge to the way in which sports (and indeed virtually all) broadcast rights are licensed in the EU.

This article previously appeared as "A challenge to the way broadcasting rights are licensed" in 2008 WIPR Oct p.20-23.