On 23 January 2014, the European Court of Justice (“ECJ”) issued a judgment in response to a request from the Tribunale di Milano (“Milan Court of First Instance”) for a preliminary ruling on two questions regarding the scope of technological protection measures as articulated in Article 6 of Directive 2001/29/EC of the European Parliament (the “Copyright Directive”). The ECJ maintained that Article 6 of the Copyright Directive legally protects rightholders from establishing technological mechanisms to prevent unauthorized use, but ruled that courts should consider whether alternative technology could have protected against unauthorized use while also allowing the use of legitimate multimedia produced by other manufacturers.

The case opposed Nintendo to PC Box. Nintendo manufactures and sells portable DS-game consoles and fixed Nintendo Wii-consoles. Nintendo also installs “recognition systems” and “key codes” to prevent the use of unauthorized copies of Nintendo videogames. These “technical protection measures” interact to identify copies and restrict unauthorized use, i.e., videogames and multimedia content without a key code cannot be used on either the portable or the fixed Nintendo Wii-consoles.

PC Box sells Nintendo game consoles and additional software called “homebrews” specifically designed to avoid Nintendo’s key codes and recognition systems. This software is made by independent producers and can deactivate the technical protection measures (key codes and recognition systems) that Nintendo installed to prevent illegal use of videogames. Nintendo sued PC Box and 9Net before an Italian court, arguing that the principle purpose of the PC Box equipment was to circumvent Nintendo’s protection measures. However, PC Box opined that the Nintendo protection measures prevent the full use of the consoles by restricting the device to read only Nintendo videogames.

The Copyright Directive emphasizes the need for Member States to legally protect technological measures implemented to effectively prevent unauthorized use, but it does not clearly establish how broad the technological measures may extend. Nintendo’s technological protection measures prevent the use of not only unauthorized copies of Nintendo videogames but also prevent legal videogames by other manufacturers. Thus, Nintendo’s key codes and recognition systems obstruct the use of illegal copies of games, and make it impossible to use videogames of other producers on the Nintendo devices.

The ECJ ruled that protective measures that require interaction between the videogame and the console fall under the concept of “effective technological measures” if their objective is to prevent or limit unauthorized use of protected material.  However, a producer of videogame consoles should only invoke the digital protection of its videogames if the protection system is aimed to make the use of illegal copies of videogames impossible or harder. Protection should not prevent the use of non-infringing software (games) from other legitimate producers if an alternative technology accomplishes the same protection but does not restrict the use of non-infringing software at a comparable cost.

Here, the court should look at whether alternative technological measures could have protected Nintendo’s rights without restricting the use of legal third-party activity. The court should look at evidence of actual use and how often PC Box’s devices are used to allow unauthorized copies of Nintendo games, compared to how often PC Box’s devices are used for legal purposes that do not infringe Nintendo copyrights.

The decision maintains the required legal protection for Nintendo’s technological measures to prevent unauthorized use, but it does not condemn PC Box, on the condition that PC Box can prove that the use of its devices was lawful. National courts must still decide whether other measures causing less interference while still providing adequate protection are available, including a consideration of the different costs of these measures, as well as the purpose of the device used by PC Box whether the PC Box device is used primarily to play legal non-Nintendo games or, more often, to play illegal unauthorized copies of Nintendo games.

The case (C-355/12) can be found on http://www.curia.europa.eu