Advocate General Opinion in FA Premier League v QC Leisure Action before the courts to protect exclusive rights to broadcast football matches
On 3 February 2011 the Advocate General gave her opinion in the Football Association Premier League v QC Leisure case (“FAPL case”). This will be followed later this year by a judgment of the Court of Justice of the European Union (“Court of Justice”) in a long running legal battle concerning the use of foreign satellite decoder cards for broadcasts of FAPL football matches. The case raises complex issues of broadcasting rights originating from the Conditional Access Directive (Directive 98/84/EC) and copyrights in the broadcasts of the matches, as well as the delicate interface between competition law and the EU legal principle of freedom to provide services. In particular, the opinion expresses the view that territorial exclusivity agreements which prohibit the live transmission of football matches by the means of foreign decoder cards are not generally justified under EU law.
The state of play so far
FAPL is the owner of copyright in various copyright works comprising the feed of each FAPL football match that can be licensed to foreign broadcasters. The feed broadcasts are made by way of encrypted signals via satellite.
Broadcasters supply decoders to their customers in the respective territories to allow them to receive broadcasts.
The foreign broadcasters are required by the terms of their licences with FAPL to undertake to procure that no device is knowingly authorised or enabled such that the broadcast can be viewed outside the relevant licensed territory. Foreign broadcasters are also prohibited from supplying non-UK decoder cards for use in the UK and their customers are not authorised to view or receive broadcasts within the UK. FAPL brought three separate actions against:
- QC Leisure and others and AV Station Plc and others (importers and suppliers of equipment to bars and pubs in the UK). FAPL claims that the defendants have supplied pubs in the UK with non- UK decoder cards sourced illicitly in Greece; and
- Michael Madden and others (publicans who FAPL claims have been using non-UK decoder cards in order to broadcast live FAPL football matches in the UK).
FAPL claims that the defendants have infringed various provisions of the Copyright, Designs and Patents Act 1988. The defendants claim that the cross-border trade in decoders was lawful based on various provisions of EU law, arguing that:
- Conditional Access Directive: the decoder cards were not “illicit devices” because they had been manufactured legitimately;
- Free movement: any prevention on the use of the decoders in another EU Member State would amount to a quantitative restriction on the free movement of goods (and would also be a restriction on the freedom of foreign broadcasters to provide services in another EU Member State);
- Competition: the prohibition on foreign broadcasters from supplying decoder cards for UK use is based on restrictive agreements contrary to (what is now) Article 101 of the Treaty on the Functioning of the EU (“Article 101”).
The High Court rejected an application by FAPL for summary judgment. On 24 June 2008, the High Court referred a number of questions to the Court of Justice for a preliminary ruling to enable it to make a final decision on the claims advanced under the Conditional Access Directive and in relation to breach of copyright.
In a similar case, on 16 July 2008 the High Court referred to the Court of Justice for a preliminary ruling a number of issues raised in an appeal by Karen Murphy against her conviction for screening a broadcast of UK FAPL matches which she received from a Greek broadcaster which had the rights to screen the matches in Greece (rather than from Sky which holds the UK rights from FAPL). The High Court requested the Court of Justice to rule on similar issues to those in the FAPL (QC Leisure) case (the two cases have been joined and the Advocate General’s opinion covers both).
The Advocate General Opinion
The FAPL case raises the familiar tension between the rightsholder’s claim to protect its investment in the right to control transmission of encrypted broadcasts, against the background of single market integration and unrestricted competition.
According to the Advocate General:
- Scope of the Conditional Access Directive and the meaning of “illicit device”: a device is only ‘illicit’ where it has been manufactured or modified with the intention of providing access to a broadcast without the consent of the rights-holder. Where a device has been made with the consent of the rights-holder and sold subject to limitations on use it does not become an illicit device because it has been imported and used in an unauthorised way.
- Acts of copyright infringement alleged to have been committed by the defendants: the display of a broadcast on a television screen amounts to an act of reproduction of the broadcast which is not permitted. Other acts claimed to be infringements were not; showing a television programme in a pub is not a ‘communication to the public’ of the broadcast (where such broadcast does not contain any underlying works eg a script) and acts of reproduction of the broadcast occur when only 4 frames are reproduced in the memory buffer of the decoder however no infringement occurs because such reproduction is transient and part of the process of communicating the broadcast.
- Whether there is a general defence to the infringement of copyright under the Satellites and Copyright Directive (Directive 93/83): the consent required from the rightsholder in the country of transmission, for transmission of the broadcast, must include the right to carry out any acts of reproduction which are necessary for the broadcast to be received and watched (including abroad).
- Free movement (whether the relief sought by FAPL would infringe the EU provisions on the free movement of services): there is no justification for restricting the free movement of services as a fee was charged for showing the broadcast both in the UK and in Greece; it is not necessary for rights-holders to partition the market in order to protect the value of the rights in the broadcast.
- Competition law (the legal test that a national court should apply and the circumstances that it should take into account in deciding whether an export restriction infringes competition EU law (Article 101): where a programme provider enters into exclusive licences and a contractual obligation is included in each requiring the broadcaster to prevent its satellite decoder cards from being used outside the licensed territory, it is not necessary to show that the agreement has the effect of preventing, restricting or distorting competition. In other words, such agreements are caught by the competition law prohibition on restrictive agreements in Article 101(1) on the basis that their “object” is to prevent, restrict or distort competition. It is true that the Advocate General acknowledges that such an agreement can escape a competition law violation by satisfying the requirements for exemption on a selfassessment. However, a person relying on such a defence must show “convincing arguments and evidence”. Similar considerations should apply as in examination of whether a restriction of freedom to provide goods or services is justified.
UEFA - a further broadcasting case kicked to Europe
Very similar issues have also arisen in a new case, Union of European Football Associations (UEFA) v Euroview Sport Ltd. This followed a judgment of the Court of Justice rejecting the application of UEFA and others (including Sky) to participate in the FAPL case. Following the Court of Justice ruling, UEFA started separate UK proceedings against Euroview Sport Ltd seeking to prevent it from dealing in foreign decoder cards providing access to foreign transmissions of live UEFA matches.
On 16 April 2010, the High Court referred various questions to the Court of Justice. Most of these are the same as those in the FAPL case relating to the Copyright, Designs and Patents Act 1988 and the Conditional Access Directive. The High Court considered that UEFA could add a new perspective on the referred questions. No date has been set for an Advocate General opinion in this case.
The Advocate General’s opinion in the FAPL case provides important guidance on the scope of restrictions which can be placed on broadcasters of sports events and on the steps that rights-holders can take to prevent access to broadcasts outside the authorised territories. The Court of Justice does not determine the dispute itself; it is for the national court to dispose of the case before it in accordance with the Court’s judgment.
If the Advocate General’s opinion is followed by the Court of Justice, this will fortify the view that competition law defences to infringement of copyright and criminal prosecutions could be a legitimate issue for examination in national proceedings. More widely, the view that exclusive licences in this context are restrictive by object may invite further scrutiny of such contractual arrangements and may provide a hook for importers to challenge restrictions on cross-border trade.
While the specific details of the case deal with sports rights, the final Court of Justice judgment conceivably has implications for the wider audio-visual sector spanning the film, TV and music industry. The owners of broadcasting rights, distributors and licensees will need to keep their eye on the ball for the next round of decision-making.