Facts

The claimants were a number of national broadcasters, including ITV and Channel 4. The defendant, TV Catchup Limited (TVC), operated a website at www.tvcatchup.com, which enables members of the public to watch live UK television on computers, smartphones and games consoles. Individuals have to sign up first as members. The terms of membership included confirming you held a valid TV licence and were based in the UK. Once signed up, members can then select a stream of the programme being broadcast on the selected channel at that time. This is subject to a slight delay because, importantly, TVC first shows members one of its own advertisements before the live stream is started. TVC is in fact rather misleadingly named – it is not a video-on-demand (VOD) service. The streaming of the channels is live with, as mentioned, a pre-roll advert being inserted before the viewer can watch the channel itself.

At no stage during the process is the whole, or any part, of the video stream stored on any permanent storage medium belonging to TVC or the end-user. However, at each step of the process there is a small amount of data from the video stream stored on the buffers of TVC’s servers. This issue is important because of a defence brought by TVC that any infringement was not substantial.

The various broadcasters brought proceedings for copyright infringement. Back in November 2010, TVC actually applied for summary judgment in its favour, arguing that the claim had no reasonable prospect of success. The judge, Mr Justice Kitchin, refused this and the case proceeded to trial with the claimants arguing the following points:

  • Firstly, that copyright in the broadcasts and films was infringed by the communication of them to the public. "Communication to the public" being one of the acts restricted by copyright under section 20 of the Copyright, Designs and Patents Act 1988 (CDPA).
  • Secondly, that copyright in the broadcasts and films was infringed by the making (or authorisation of the making) of transient copies of the broadcasts and films on TVC servers and on the screens of users.

In response, TVC's main arguments (excluding a complicated claim that section 20(1) of the CDPA was ultra vires by not being enacted properly under the European Communities Act 1972) were that:

  • TVC was not communicating the films or broadcasts to the public within the meaning of that section of the CDPA.
  • Any transient copies of films or broadcasts that were made on servers or screens did not constitute substantial parts of those broadcasts, and were therefore non-infringing.
  • It had a defence under section 28A of the CDPA. This provides that a literary work is not infringed by the making of a temporary copy which is transient or incidental, which is an integral and essential part of a technological process and the sole purpose of which is to enable (a) the transmission of the work in a network between third parties by an intermediary or (b) a lawful use of the work, provided that it has no independent economic significance. This is similar to the "mere conduit" exception in the E-Commerce Directive.
  • In relation to the regional channels it streamed, TVC also argued that it had a defence under section 73 of the CDPA. This section applies where a wireless broadcast made from within the UK is received and immediately re-transmitted by cable. It states that copyright in any work included in a broadcast is not infringed to the extent that the broadcast is made for reception in the area in which it is re-transmitted by cable and forms part of a "qualifying service" – essentially the main Public Service Broadcasters. This is a novel defence and the TVC argued it applied to those channels that were "made for reception" in the area to which it was streaming them.

Decision

The judge dismissed the ultra vires claim, and said that his provisional view on the various claims was that:

  • TVC was indeed communicating films and broadcasts to the public. However, he needed to refer this question to the ECJ for a preliminary ruling.
  • TVC was not reproducing a substantial part of the broadcasts in its buffers and on users' screens, but again he would refer this question to the ECJ for a preliminary ruling.
  • TVC was reproducing a substantial part of the films in its buffers and on users' screens, but this would ultimately depend on the outcome of the questions referred to the ECJ in the Football Association Premier League (FAPL) v. QC Leisure case, on which judgment is to be given on 4 October 2011.
  • The section 28A defence applied to the reproductions in the buffers, but not on the screens. However, this would ultimately depend on the outcome of the FAPL case.
  • TVC had a defence under section 73 of the CDPA in relation to regional services, except to the extent that these were to mobile phones or to areas outside the relevant region.

Analysis

Was TVC “Communicating to the Public”?

Being able to stop unauthorised "communications to the public" is a useful weapon for copyright owners. This right was introduced by the 2001 Copyright Directive. Article 3 of the Directive provides (among other things) for an exclusive right for broadcasters to communicate fixations of their broadcasts to the public. However, the difficulty lies with what constitutes a "communication to the public", which is not clear. In particular, there is still debate about what "public" means in this context.

The broadcasters argued that a work could be "communicated to the public" via a transmission that was made subsequently to the original act of communication – i.e. subsequently to the original broadcast, for example, by ITV – and to a different public. In support of this, they cited the Spanish case Sociedad General de Autores y Editores de Espana v. Rafael Hoteles SL, which the ECJ heard in 2006. This involved a communication of works to the public by a hotel which transmitted television broadcasts received by it via television sets in hotel rooms. TVC sought to distinguish the Rafael Hoteles case by pointing out that it involved an intervening organisation that owned or controlled the equipment on which the public were viewing the broadcasts. TVC argued that, in the present case, it had no ownership or control of the equipment on which users of its service viewed films or broadcasts. TVC also argued that "communication to the public" did not encompass the mere provision of technical means to assist users in receiving signals that they could equally well receive by other means. In effect, it said that users of TVC could equally turn on their TV sets and lawfully watch ITV and the other channels that were also available through the TVC website.

The judge said that Rafael Hoteles did not clarify whether there was a communication to the public when an intervening organisation, acting for its own profit, intervened in full knowledge of the consequences of its acts and in order to attract an audience to its own transmission and advertisements, and it did this in order to communicate an original broadcast signal to members of the public who would in fact be able to access the original broadcast signal using their own television sets or laptops in their own homes. He therefore proposed to refer this question to the ECJ for a preliminary ruling.

Helpfully, however, the judge did express his own provisional view on this question:

  • He felt it was necessary to construe the concept of "communication to the public" widely, and only exclude from it activities the purpose was supportive of the original broadcaster's intention to have the signal received in the target area. Conversely, activities that competed with the original broadcast and were aimed at attracting the target audience away from direct reception of the signal amounted to independent exploitation, and would tend to fall within the meaning of "communication to the public".
  • The judge considered that TVC's interception and making available of the signal on the internet did amount to communication to the public, because:
    • the activity of intervention and making available via the internet was in simple terms, what you would view as a "communication to the public";
    • TVC was not merely providing technical means to ensure or improve reception; it was providing an alternative service that competed with that of the original broadcaster, contained its own advertising content and was operated for profit. That service was, in Floyd J's view, an independent exploitation of the material;
    • TVC members might constitute a "new public" despite the fact that they could equally well receive the signal on their domestic televisions or computers; and
    • the multiple individual communications to individuals via the TVC service, taken in aggregate, amounted to a communication to the public rather than private communications to individuals. This follows the Rafael Hoteles case where communication to individuals in hotel rooms could nonetheless still constitute a "communication to the public".

Was TVC Making Copies of a Substantial Part of any Broadcast or Film?

TVC admitted that the buffers on its servers created transient copies of parts of broadcasts and films, but said that these did not amount to the whole or a substantial part of any broadcast or film.

In looking at the question, the judge stated that the meaning of the term "reproduction in part" was the subject of a pending preliminary ruling of the ECJ in FAPL. The Advocate General in the FAPL reference had considered that the individual frames amounted to a substantial part of the works in question, and that the display of a broadcast on the screen amounted to reproduction.

Floyd J said that the facts in the present case were more in favour of a finding of reproduction in part than the facts of FAPL had been, at least as far as the storage of films in the buffers was concerned, because longer sections of the works were stored. He decided, however, not to make a decision on the issue until the ECJ had ruled in the FAPL case.

In relation to reproduction of the broadcasts, the defendant argued that more had to be taken in order to infringe. Floyd J said that his provisional opinion was that TVC did not authorise the reproduction, either in whole or in part, of any broadcast, either in the buffers or on users' screens. In his view, it was not clear that what existed in the buffers or on the screen at any point in time could properly be regarded as a part of the broadcast. He added that there could only be infringement if he were to accept the "cumulative approach" to infringement of broadcast copyright. However, this issue raised a question that was not due to be answered in the FAPL preliminary ruling, and which needed therefore to be referred to the ECJ in this case.

Did the Section 28A Defence Apply to Copyright in Broadcasts?

The judge's provisional finding that there was no reproduction of the broadcasts meant that he did not have to consider the application of the section 28A defence. However, he did so in case the finding is subsequently found to be incorrect.

The claimants argued that section 28A did not apply to TVC because the rights listed in the provision did not include broadcast copyright. The defendant responded by saying that section 28A departed in this regard from Article 5(1) of the Copyright Directive.

Floyd J said that he had been shown no evidence of any policy reason for the omission of broadcast copyright from the list in section 28A. In addition, interpreting section 28A as including broadcast copyright did not seem to be inconsistent with any other provision of the CDPA. As a result, the judge said that he would, if necessary, construe section 28A as applying to copyright in broadcasts, in accordance with the Copyright Directive.

He then applied section 28A to the facts to determine whether it gave TVC a defence. He noted the five requirements of the defence, set out in the ECJ’s decision in the Infopaq International A/S v. Danske Dagblades Forening (Case C-5/08):

  • the copy must be temporary;
  • the copy must be transient or incidental;
  • the copy must be an integral and essential part of a technological process;
  • the sole purpose of the process must be to enable: (i) a transmission of the work in a network between third parties by an intermediary; or (ii) a lawful use of the work; and
  • the act must have no independent economic significance.

The judge found that TVC's copies were temporary, transient and an integral and essential part of the technological process of streaming. The issue of independent economic significance was not as clear cut. It was reasonably certain that any copies contained in the buffers had no economic significance as such, although the ECJ could potentially find otherwise. However, reproduction on users' screens might well have such significance. The judge stated that the ECJ's ruling on the FAPL reference should help to clarify this point.

Section 73 Defence

The judge's decision on whether the section 73 defence applied rested on his interpretation of the word "cable" used in the section. The stream entered the internet by cable, but the last part of the transmission might be wireless: for example, where the viewer was using a wireless broadband connection or was watching the stream on a mobile phone. The judge considered that, while the internet itself should be regarded as cable, any streaming to mobile phones would be outside the scope of the defence. He said that if he did not find this to be the case, the defence would be available even if the initial re-transmission were by cable to an antenna for widespread broadcast.

The judge also accepted the claimants' argument that, because TVC's broadcasts of London regional services were transmitted indiscriminately (and not specifically to London users), they were not "made for reception" in the area into which they were re-transmitted, and did not attract the defence.

He did however find that the defence applied to the main "qualifying services" (i.e. ITV, BBC channels and Channel 4) in question, except in respect of re-transmissions that were to mobile phones or for reception outside the regional area of the service in question.

What Does This Decision Mean for the Media and Entertainment Industry?

The ECJ's ruling is likely to have a significant impact on commercial streaming of third party broadcasts, as it will help determine whether these types of live streaming services can continue to re-transmit without obtaining the consent of the broadcasters. The judge's provisional view is favourable to the broadcasters' position in his finding that the streaming does infringe broadcast copyright, but it remains to be seen whether the ECJ's guidance will be consistent with that conclusion.

In reading the judgment, it is clear that the judge considers it to be important that TVC's activities were "for profit". TVC is taking the broadcasters' feed and deliberately building a business off the back of this without the rights holders' consent. Although it is necessary to seek ECJ clarification, the judge's sympathies (as was the case in the Newzbin 2 case) very much lie with the rights owners. This is a trend that will be very much welcomed by many rights holders.