In Case C-355/12, Nintendo Co Ltd v PC Box Srl, the Court of Justice of the European Union has provided guidance  on the legality of using technological  measures to prevent or restrict unauthorised acts of copyright infringement in video games and  consoles. The CJEU’s decision  suggests that measures circumventing a protection system may, in  certain circumstances, be lawful.

BACKGROUND

Article 6 of the Copyright Directive (2001/29/EC) requires Member States to provide adequate legal  protection against a variety of acts or activities that circumvent, or the purpose of which is to  circumvent, effective technological measures designed to prevent or restrict acts that are not  authorised by the owner of a copyright or related right.

Nintendo issued proceedings in the Italian courts against PC Box, a company that markets “mod  chips” and “game copiers”, both devices that enable video games other than those manufactured by  Nintendo to be played on its consoles. Nintendo sought to prevent PC Box’s devices from being  offered for sale. Nintendo argued that  it  had lawfully equipped its consoles and games with  technological measures to ensure that unauthorised copies of its games could not be used with its  consoles. PC Box challenged Nintendo’s application of technological measures to its games and  consoles, contending that Nintendo’s purpose in using blocking technological measures was to  prevent the use of independent software unconnected with the illegal video games sector and to  compartmentalise the market by rendering games purchased in one geographical zone incompatible with  consoles purchased in another.

The Italian court referred two questions to the CJEU:

  1. Whether or not Article 6  covered  technological measures installed in hardware, i.e., consoles,  as well as in copyright material itself, i.e., games, even though interoperability between device  and product was thereby limited. In addition, whether or not such measures qualified for protection  under Article 6 where their  effect  was  not  merely  to  restrict  unauthorised reproduction  of  the  copyright  material,  but  also  to preclude any use of that material with other devices or of other, legitimate material with those  devices.
  2. The Italian court asked what criteria should be applied when assessing the extent to which the  purpose or use of devices, such as those of PC Box, was to circumvent technological measures.

DECISION

The CJEU held that the concept of an “effective technological measure” had to be understood broadly  to include the application of an access code or protection process (such as encryption or  scrambling). Accordingly, measures that were both incorporated in the physical housing of  videogames and in consoles,  and which required interaction between them, fell within its scope.

The CJEU further held that technological measures were only legally protected insofar as they were  intended to prevent or eliminate copyright infringement. That legal protection has to respect the  principle of proportionality, without prohibiting devices that had a lawful, commercially  significant purpose or use.

It was for the national courts to determine whether or not other measures that were not installed  in consoles could cause less interference with, or limitations to, the activities of third parties,  while still protecting the copyright owner’s rights.  Accordingly, it was relevant to take into  account, amongst other matters, the relative costs of different types of technological measures,  the technological and practical aspects of their implementation and a comparison of the  effectiveness of those different types of technological measures as regards the protection of the  copyright owner’s rights. The national courts would also need to consider the purpose of devices,  products or components that were capable of circumventing those technological measures. Evidence of  use that third parties actually made of such measures was particularly relevant. National courts  could consider matters such as how often those devices, products or components were in fact used in  disregard of copyright, as opposed to for purposes that did not infringe copyright.

COMMENT

The decision suggests that circumventing a protection system of a games console may, in certain  circumstances, be lawful. “Game copiers” and “mod chips” in fact circumvent technological measures  in consoles and games themselves, and therefore allow pirated or unauthorised copies of games to be  played. The question is  whether or not that is the primary function of such devices and the extent  to which other purposes are relevant.

It will be for the Italian court to determine the purposes of PC Box’s devices and whether or not  the technological measures taken by Nintendo are proportionate to achieve the objective of  protecting against unauthorised acts without going beyond what is necessary.