On 24 June 2008, in The Football Association Premier League Ltd v QC Leisure [2008] EWHC 1411, the FA Premier League (FAPL) suffered another potential setback in its campaign against pub landlords using foreign decoder cards in the United Kingdom to access foreign transmissions of live Premier League football matches, and the decoder suppliers. Mr Justice Kitchin, referring a number of questions to the European Court of Justice (ECJ), has suggested that FAPL has no claim at all under the provisions of the Copyright Designs and Patents Act 1988 (CDPA) as the decoder cards do not constitute “illicit devices” as defined by the Conditional Access Directive (98/84/EC) and implemented in the United Kingdom by the CDPA.

BACKGROUND

FAPL has entered into territorially specific licensing agreements with foreign broadcasters to broadcast live footage supplied by Sky, which films the matches in the United Kingdom. At the relevant times, only Sky had the right to broadcast Premier League matches in the United Kingdom. Two of the three actions in this case were against suppliers of equipment and satellite decoder cards to pubs and bars, which enabled the reception of non-Sky satellite channels that carry live Premier League matches. The third action was against licensees or operators of four pubs that showed live Premier League matches broadcast for reception in Africa and the Middle East.

CLAIMS

FAPL made a number of claims in relation to the screening in the United Kingdom of live Premier League matches broadcast for reception overseas. The claims include copyright infringement by the possession and use of foreign satellite systems and decoder cards in order to avoid conditional access technology, and copyright infringement by the creation of copies of the broadcast within the internal operation of the satellite decoder and by displaying the works on screen. The Defendants counter-claimed that FAPL’s closed territorial licensing system, which prevents both active and passive distribution of the broadcast, infringes Article 81 and that FAPL’s limitations on the use of decoders and cards in multiple jurisdictions restricts the freedom of movement of goods within the European Union.

REFERRALS TO THE ECJ

Kitchin J referred a number of issues to the ECJ

  1. Whether a device that is not “illicit” to begin with, as defined by the Conditional Access Directive, can change its status by reason of the subjective intention of a dealer as to the place where the device is to be used. In Kitchen J’s opinion, the use of foreign decoders and cards in the United Kingdom did not fall within the definition of “Illicit device”
  2. Whether the Defendants had a defence to copyright infringement by the creation of copies on decoders and on screen under 28A CDPA, which implements the transient copying exception to reproduction right in Article 5 of the Copyright Directive (2001/29/EC). The exemption applies to “temporary acts of reproduction” (referred to in Article 2) that are transient or incidental and an integral and essential part of a technological process and whose sole purpose is to enable a transmission in a network between third parties by an intermediary, or a lawful use of a work, and which have no independent economic significance. FAPL asserts that, although the copies are transient, they do have independent economic significance since the subscription paid to the licensed broadcaster is the sole basis on which the rights holder can extract the value from the rights. Kitchin J considered this a point of interpretation that required further guidance from the ECJ. His provisional view, nonetheless, was that FAPL’s argument failed to take adequate account of the inherent value of the transient copies as such, rather than as a means of controlling the process of which they form part—“the whole point of this defence is to remove ransom strips, not to create them”.
  3. A request for guidance on the scope and purpose of Article 3 of the Copyright Directive, in particular whether the publicans had infringed copyright by communicating the works to the public contrary to Section 20 CDPA, which implements Article 3. The judge’s provisional view was that they had not communicated the works to the public within the meaning of Artic le 3 as they had simply received the signal, decoded it and displayed it on a television. In short, there had been no act of communication to the public within the Directive separate from the satellite broadcast itself.
  4. Issues relating to the freedom of movement of goods and services, in particular regarding the validity of FAPL’s licensing terms. Kitchin J noted, in relation to the claim under the Conditional Access Directive, the free movement defence would only arise if the Defendants lost on the issues of interpretation of “illicit device”.
  5. Guidance on what legal test the national courts should apply in deciding whether the export restriction in FAPL’s licences engages Article 81. FAPL has asserted that its exclusive licences of performing rights do not per se infringe Article 81, even though they confer absolute territorial protection and might prevent transmission into a neighbouring State as it is inherent in the specific subject matter and essential function of copyright for broadcasts that rights may be licensed to exclusive licensees in particular Member States.

COMMENT

FAPL sees these combined actions as test cases. What it is seeking to test turns on the interpretation of the term “illicit device” under the Conditional Access Directive. As FAPL explained to the judge, broadcasters are prepared to pay a premium to acquire exclusivity in Premier League matches and the presence of competing live transmissions of the same matches in the same territory destroys this exclusivity and diminishes the value of the rights. The United Kingdom is the prime market and FAPL fears that if pubs are given the all clear, the prices it can charge for the United Kingdom and for Ireland will plummet. The ECJ’s decision will therefore cast a crucial light on the Directive, which the European Commission hinted in a February 2008 consultation paper does not deal with the so-called grey market in audiovisual services protected by conditional access systems. As noted in the Study on the impact of the Conditional Access Directive commissioned by the European Commission for the purposes of that consultation, the grey market is “not exactly piracy but an infringement of contractual obligations imposing territorial restrictions to rights exploitation”, an observation which, if correct, appears to take FAPL’s claims outside the Directive.

That leaves copyright, which appears very much a fall back position for FAPL, one dogged by complexity and riddled with defences. Some of that complexity may be unravelled by the ECJ, which has been given a valuable opportunity to comment on the nature of transient copying and the parameters of the right of communication to the public. Let’s hope it takes it.