What are the commercial consequences of the removal of ‘Film’ from s72 CDPA 1988?

Précis

The Football Association Premier League Ltd & others vs QC Leisure & Others (C-403/08) (along with the inter-linked case of Karen Murphy vs Media Protection Services Ltd (C-429/08) is well known for its impact and implications of broadcasting on a territory by territory basis (namely any agreement to stop cross-border provision of broadcasting is deemed to be anti-competitive), but they are also responsible for the UK Government’s change to s72 of the CDPA 1988 resulting in the ‘film’ element being removed from the exception, potentially creating an opportunity for rightholders to commercialise in a fast changing broadcasting environment.

What?

Television broadcasts can contain a number of different copyrights, typically any one broadcast contains copyrights in:

• The broadcast itself (eg a BBC broadcast);

• Literary works (eg a script);

• Artistic works (eg graphics);

• Musical works;

• Dramatic works (eg choreography);

• Any sound recording; and

• The ‘Film’ – this subsists of two elements (i) the creative aspect (cinematographic work); and (ii) the non-creative recording (the "fixation"). This applies to all audio-visual content and is not just film in the motion picture sense.

The Copyright Designs and Patents Act (“CDPA”) 1988 provides copyright owners the right to control how their rights are shown, played or communicated to the public. However there are exceptions set out in the legislation and s72 of the CDPA 1988 is one of them. Before recent changes to the legislation were enacted, s72 provided that those who broadcast television or radio in public places where there was no admission fee could do so without a licence from some but not all of the relevant rightholders, namely those who held rights in the broadcast, sound recordings (unless an excepted one) or any film included within the broadcast.

Historically, an exception was introduced into the Copyright Act 1956 to enable those who show or play television or radio in publically accessible places, where there is no admission fee, to do so without the need for multiple licences covering the numerous copyrights that may exist in a broadcast. This theme was maintained by Parliament by way of s72 in the 1988 version of the CDPA, the government’s objective was to reduce the burden of excessive licensing, something which has been lost since the latest amendment.

Since its enactment, s72 CDPA 1988 has been amended to ensure compliance with EU law through the Copyright and Related Rights Regulations 2003 which implemented Directive 2001/29/EC (on the harmonisation of certain aspects of copyright and related rights in the information society, “InfoSoc Directive”) and as a result the exemption had a very narrow scope covering only the broadcast itself, limited sound recordings, and any film included within a broadcast, and most practitioners thought that this narrow scope was very clear.

The Football Association Premier League Ltd & others vs QC Leisure & Others case (C-403/08) (“FAPL”) tested the scope of this exemption. Later the exemption and its applicability and the definition of ‘film’ were called into question in subsequent government consultations, examining whether the definition of ‘film’ in the CDPA 1988 was compatible with EU law.

In summary, the FAPL case held that pub owners were communicating copyright works to the public by playing a broadcast, and that s72(1) of the CDPA provided that there was no infringement of any copyright in the broadcast or any film included in the broadcast if there was no admission fee to the pub, but this would not apply to other protectable works in the broadcast (such as the artistic and musical works and other works listed above). It was also held that the act of supplying decoder cards was authorisation of any infringing acts by the pub owners and that the licence terms prohibiting broadcasters supplying decoder cards outside of their exclusive territory was anti-competitive.

This case highlighted the inconsistency between UK and EU law. EU law only permits an exemption for the film fixation (the second element of the definition of film and not the first element, the cinematographic work). Arguably, UK law went beyond what is permitted in Article 5(5) of the InfoSoc Directive. This alongside the fact that commercial entities were using this exemption to justify not purchasing commercial licences and the fact rightholders had difficulty controlling their rights to get adequate remuneration led to two Government Consultations to amend the wording.

The first consultation attempted to align UK law with EU law by clarifying that the exemption would only apply to the producer’s rights in film fixation and narrowed the scope further to ensure that commercial premises could not rely on it to show exclusive subscription broadcasts in public without an appropriate licence. This however, did not appear to work, the current UK definition of film ‘recording on any medium from which a moving image may by any means be produced’ (s5B CDPA 1988) does not mirror with that of EU law, the two elements, the cinematographic and fixation are intertwined and combined into one, furthermore sporting events cannot be intellectual creations meaning there would never be a cinematographic right to them. The consultation received 19 responses, the majority of which felt this option would cause further legal uncertainty in relation to licencing of rights and a lot more amendments were required to distinguish between the two elements of film rights. The majority also supported the removal of ‘film’ completely from the exception, despite organisations that show broadcasts in public raising a concern that it would lead to additional costs for small businesses and it went against the government’s original purpose of preventing an excessive licensing structure. These responses led to a second consultation.

The second consultation addressed the removal of ‘film’ completely from the exception, thus avoiding the need to redefine ‘film’. This consultation had 10 respondents who all agreed, which subsequently resulted in the successful removal of ‘film’ from s72 CDPA 1988, which was implemented on 15 June 2016.

So What?

While the main objectives may have been met and there is now greater clarity in the law by way of a simplistic amendment, rightholders can bring enforcement actions more easily and commercial premises no longer have an exemption from obtaining legitimate subscription licences. The historic intention to reduce the opportunity for excessive licensing has been softened and, arguably, lost completely.

For small commercial businesses, it is important to recognise that now as a result of this change, irrespective of whether a commercial subscription or free to air broadcasting is in place, technically, if a ‘film’ is broadcast in premises to the public where there is no admission fee, the rights owners can legitimately seek a licensing fee. This is not covered by a TV licence. This change allows owners of copyright in film fixation (predominately producers or broadcasters) to request a licencing fee for viewers of their content in public premises.