Karen Murphy, you will recall, is the pub landlady from Southsea, England who liked to entertain customers with live Premier League matches courtesy of the Greek satellite system, Nova. Accessing the matches through Nova saved her paying several thousand pounds to the Football Association’s Premier League (FAPL) authorised UK broadcaster, Sky. In light of the fact that the same issues have already been referred to the European Court of Justice (ECJ) in FAPL v QC Leisure, the UK High Court has agreed to seek guidance from the ECJ on a number of Euro defences relied on by Mrs Murphy in her appeal against convictions under the conditional access provisions of the Copyright Designs and Patents Act 1988 (CDPA). This latest judgment relates to her defence based on the free movement and competition rules of the EC Treaty and the crucial issue of whether the Greek decoder card and box were “illicit” in the sense intended by the Conditional Access Directive (98/84/EC) upon which the CDPA provisions are based.

BACKGROUND

Karen Murphy provided the drinkers in her pub with premiership football using a decoder for Nova, the Greek broadcasters, rather than taking up a subscription with Sky, the FAPL authorised broadcaster in the United Kingdom. She was convicted by Portsmouth Magistrates of two offences under Section 297(1) of dishonestly receiving a programme included in a broadcasting service provided from a place in the United Kingdom with intent to avoid payment of any charge applicable to the reception of the programme. In its first judgment on appeal from the Crown Court, the High Court held that the requisite intent to avoid a charge was proved if it were shown that the Defendant knew that the broadcaster had the exclusive right in the United Kingdom and made a charge for reception ofits broadcast, and that she made arrangements to receive its broadcast without paying that charge. Karen Murphy was therefore precluded from relying on lack of intent since this was not the first time that she had faced prosecution. However, the Courts’ conclusions were expressly subject to the points of EC law relied on by Karen Murphy.

ILLICIT DEVICES

Mrs Murphy’s first contention was that the reference to “illicit devices” in the Conditional Access Directive was restricted to pirate devices, as opposed to devices that had been manufactured and marketed with the authority of the broadcaster and that were used in an unauthorised manner, for example in another EU Member State. In other words, what Mrs Murphy was using was a genuine card. On the basis of that contention she claimed that Section 297(1) could not apply to cases where the decoder card was not claimed by the prosecution to be pirated. The defence contended that, to prosecute someone who purchased a card that was genuine would be to restrict the free movement of conditional access devices and/or the provision of protected services, contrary to both Article 3(2) of the Directive and the underlying free movement provisions of the EC Treaty. The prosecution’s view, however, was that references in the Directive to lack of authority indicated that the illicitness of a card is closely connected to the unauthoris ed use of it, which deprives the issuer of legitimate remuneration.

The Court noted that Kitchin J in FAPL v QC Leisure heard extensive argument as to the meaning of the term “illicit device” and acknowledged the arguments on both sides to be “powerful”. On the basis that the answer to the question was not clear, Kitchin J decided to refer the issue to the ECJ. On deciding to take the same course, the Court in the current case nevertheless agreed with Kitchin J’s “provisional view” that “illicit device” refers to a device that is “pirated” in the sense that it has not been manufactured and marketed by or on behalf of the relevant service provider, and of which the inherent physical nature has been adapted or designed to bypass the charging arrangements put in place by the service provider.

FREE MOVEMENT OF GOODS AND SERVICES

Mrs Murphy’s counsel contended that the prosecution under Section 297(1) was a measure having equivalent effect to a quantitative restriction on imports of decoder cards under Article 28 EC and also that it was a restriction on her ability to receive a service from another Member State within the meaning of Article 49 EC. Counsel contended that the real issue was whether or not those restrictions were justified and proportionate.

The prosecution, on the other hand, sought to rely on the ECJ decision in Coditel I [1980] ECR 881 to the effect that copyright in performances such as the showing of a film may be validly licensed and exploited on a national territorial basis without infringing the Treaty’s rules on free movement. This was because copyright in films was not to be analysed in the same way as copyright in such works as books and sound recordings. The film belonged to a category of literary or artistic work that could be infinitely repeated by way of performance. Thus the right to receive a fee for each showing of a film was “part of the essential function of copyright” in that category of artistic work. On the basis that similar arguments and counter arguments had been put by the parties to Kitchin J in FAPL and Kitchin J decided to refer the questions raised to the ECJ, the Court decided to do the same.

ARTICLE 81

That left Article 81 EC. Mrs Murphy’s case was that the FAPL’s export ban falls foul of Article 81(1) EC as being an agreement that is liable to affect trade between EU Member States, which has as its object or effect the prevention, restriction or distortion of competition within the Community. If so, it would be prohibited and automatically void under Article 81(2). In other words, if the export ban was unlawful and unenforceable such that the absolute territorial protection upon which BSkyB’s exclusive rights in the United Kingdom were based did not exist, the subscription charge exacted by BSkyB would not be “applicable” to the programme screened by Mrs Murphy. As a result, the offence of which she had been convicted would fall away.

The counter argument, based on Coditel II [1982] ECR 3381, is that Article 81 is not engaged at all. In Coditel II, the ECJ held that:

“…the mere fact that the owner of the copyright in a film has granted to a sole licensee the exclusive right to exhibit that film in a territory of a Member State and, consequently, to prohibit during a specified period, its showing by others, is not sufficient to justify the finding that such a contract must be regarded as the purpose, the means or the result of an agreement, decision or concerted practice prohibited by the Treaty.”

Again, the same issue was raised in the civil proceedings before Kitchin J who decided that it was a “question which is so intimately tied to the other issues of interpretation I have discussed that I believe it too should be referred to the Court of Justice. I would ask the court what legal test the national court should apply and the circumstances it should take into consideration in deciding whether the export restriction engages Article 81”. For these reasons, the Court concluded that a parallel reference should be made to the ECJ, presumably to be heard at the same time as the reference made by Kitchin J in FAPL v QC Leisure.

COMMENT

The “illicit device” issue became the main focus of Kitchin J’s judgment in FAPL v QC Leisure. There is a slightly different emphasis in this latest reference. Should the illicit device issue go in Mrs Murphy’s favour, then, according to the Court in this latest judgment, Mrs Murphy would not necessarily be off thehook. It would mean that “any restriction imposed by a Member State which goes beyond those specifically required by Article 3(1) must be tested separately against the basic Treaty provisions on free movement of goods and services”. In other words the prohibition in Article 3(2) on the free movement of conditional access devices and/or the provision of protected services “may not provide the Appellant with much more assistance than is already provided by the prohibitions contained in the basic Treaty provisions on free movement”.

The focus therefore shifts to the Euro defences proper and the lawfulness of the territorial restriction in the FAPL’s licences becomes the main issue. If unlawful, Mrs Murphy could not be said to be dishonestly avoiding a charge for a programme in respect of which BSkyB had the exclusive UK rights. Moreover, as the Court recognised, the basis upon which BSkyB’s subscription charge for its service should be treated as “applicable” to the Nova programmes screened by Mrs Murphy would be called into question. If there is no such basis, there is no offence under Section 297(1).