A few days ago, the Court of Justice of the European Union (CJEU), Europe’s highest court, handed down a ruling which will be of interest to copyright holders who supply copy protected works and those who manufacture and supply devices designed to circumvent the copy protection. The result of the ruling is that those devices will, in certain circumstances, be lawful. 

Background

The judgment concerned the interpretation of the Copyright Directive. The Directive requires EU Member States to legally protect copy protection measures, defined as “technological measures that effectively restrict acts not authorised by the rightholders of any copyright …without, however, preventing the normal operation of electronic equipment and its technological development”.  In particular, the Directive requires Member States to prohibit the manufacture and distribution of devices designed to circumvent such technological measures.  However, the Directive states that the legal protection given to technological measures should “respect proportionality and should not prohibit those devices or activities which have a commercially significant purpose or use other than to circumvent the technical protection”. 

This dispute

This dispute involved Nintendo, the manufacturer of DS and Wii games consoles, both of which had built-in technological measures designed to prevent the use of illegal copies of video games.  Nintendo issued proceedings in Italy against PC Box Srl which sold mod chips and other devices that enabled users to play non-Nintendo games on the consoles by circumventing the built-in technological measures.  Nintendo sought an injunction prohibiting the sale of the devices.  PC Box argued that the effect of the technological measures was to prevent the use of legal independent software on the consoles.  It claimed that the purpose of its devices was to enable MP3 files, movies and videos to be read on the  consoles, so that they could be ‘fully used’.  The Italian court called on the CJEU to interpret the scope of legal protection for technological measures under the Copyright Directive. To the extent that they went beyond the prevention of copyright infringement (by prohibiting the use of illegal games) and stopped independent software being used on the consoles, were Nintendo’s technological measures legally protected? 

The judgment

The CJEU held that, in order to be legally protected under the Copyright Directive, technological measures must be proportionate, meaning that they must not prohibit activities or devices that have a commercially significant purpose or use other than the infringement of copyright. To assess whether technological measures are proportionate the court should look at the purpose of the circumvention devices and the extent to which they are being used for non-infringing as well as infringing purposes. 

This ruling is interesting in acknowledging that circumvention devices may be used for legitimate, non-infringing purposes and, to the extent that they are, may be lawful.  Overall, the ruling is good news for those video-games players who want to make ‘full use’ of their consoles but is disappointing for consoles manufacturers who may only be able to enforce their technological measures to the extent that they prevent copyright infringement.  

The application of the CJEU’s ruling to the facts of the Nintendo dispute has been handed back to the Italian courts, so the factual outcome is as yet unknown.