Advocate General (AG) Kokott of the European Court of Justice has issued an opinion in the cases C-403/08 and C-429/08 Football Association Premier League Ltd and Others v QC Leisure and Others and Karen Murphy v Media Protection Services Ltd.
For those not up on EU law an opinion is essentially a preliminary recommendation to the full ECJ on how it should answer questions referred to it for preliminary ruling by a member state’s court] The opinion of an Advocate General does not bind the European Court of Justice, which will deliver its judgment at a later date (I’d predict another 12 months before we see this one) , but is followed by the Court in the vast majority of instances.
The AG has concluded that EU law doesn’t make possible to prohibit live transmission of Premier League football games in pubs by means of foreign decoder cards, and territorial exclusivity agreements relating to transmission of football matches are contrary to EU law. If the full ECJ agreed with the AG this would totally change the way sports bodies can sell sports broadcasting rights in the EU. As such the money resting on the final outcome is massive.
What are the cases?
The Karen Murphy case , deals with the liability of publicans based in the UK who opt to show foreign broadcasts of Premier League games. The QC Leisure case, focuses on the companies which supply those publicans with the equipment - decoder cards - required to receive and view those foreign broadcasts, and the question as to whether licence agreement provisions restricting foreign broadcasters from selling decoders, etc., for use outside their territory, is an illegal restriction of competition contrary to Article 81 of the EC Treaty.
The cases also look at the position of the broadcasts under the Copyright Directive (2001/29/EC) and whether the communication of the broadcasts affects the right to the reproduction of those works and in these cases whether communication in pubs constitutes communication to the public; the correct interpretation of the Conditional Access Directive (98/84/EC) – because the exclusivity of satellite broadcasts in guaranteed through the encryption of the broadcast signal; and the Satellite and Cable Directive (93/83/EEC) and whether the satellite broadcast in one member state establishes the right to receive that broadcast and show it in another member state.
Conditional Access Directive
AG Kokott begins here and states that the correct interpretation of Article 2 of that Directive, which deal with ‘illicit devices’, is that it is “obvious” that a decoder card designed for the strict purpose of proving access to the broadcast of a broadcaster in one country and placed on the market by that broadcaster, is not adapted in any way by virtue of its use in another country to receive those same broadcasts.
‘illicit device shall mean any equipment or software designed or adapted to give access to a protected service in an intelligible form without the authorisation of the service provider’
However, that accepted, she adds that this does not mean that a member state can’t use national law to prevent the use of such devices outside of contractual terms, for example by providing false names/addresses to acquire the devices and or using the device for commercial purposes (in a pub for example) when it was sold for private use.
Does showing a live football game constitute a communication to the public, and if so does it infringe exclusive right of communication to the public ? AG questioned whether this question relevant to cases outcome and or whether the question is even admissible, but decided it is. This Hangs on Article 3 of the directive, and the AG gives a detail examination of it and whether Article 3 implements article 11 of the Berne convention or not.
First of the AG states that as a Satellite broadcast is already in principle communication to the public, and AG find it questionable whether a pub showing these broadcasts would be performing a retransmission to the public.
She also makes important point that there is no EU law that offers comprehensive rights protecting the communication of a broadcast to the public (outside of musical works within the broadcast for example) in absence of an entrance fee being charged.
She then deals with the previously heard Hotel cases, where the court has assumed that further communication to the public occurs when hotel patrons watch tv programmes. The profit making nature of the hotels was an important consideration in those cases and the AG points out that publican also have a profit making interest in showing football games.
However, according to the AG Article 3 must be read as only covering communication of works to a public which is not present at the place in which the communication originates. What this means, with regards to pubs the AG says, is that in must be assumed in principle that the public ARE present at the place in which the communication originates, that place being the television screen according to the AG.
The AG does say there may be an argument the it could be communication to the public, as in the hotel cases, if the signal is received in one place and then distributed to other receivers – multiple tv sets, which would seem to indicate that pub broadcasts would only not be communications to the public if they are shown on one TV, and not multiple screens and not in different rooms? Indeed the AG’s conclusion is that:
a copyright work is not communicated to the public by wire or wireless means, within the meaning of Article 3(1) of Directive 2001/29, where it is received or viewed as part of a satellite broadcast at commercial premises (for example, a bar) or shown at those premises, free of charge, via a single television screen and speakers to members of the public present on those premises.
The AG found that marketing broadcasting rights on a territorially exclusive basis amounts to profiting from the elimination of the internal market – essentially illegal under EU law. The exploitation of these rights is through the charges for the decoder cards. Such exploitation, she argues, is not undermined by the use of Greek decoder cards, as charges were legally paid for those cards. She agreed that the charges in Greece we less than those in the UK, but added there was there is no specific right to charge different prices for a work in each Member State and prices differences are offset by trade.
Here one might argue that the exploitation of these rights is through the charges for subscription to Satellite platforms and not the decoder cards, but as it is through the decoder cards that you get the content I guess it is a fair point.
The AG also found FAPL argument that closed periods for live broadcasts (which stops the Saturday 3pm ko games being screened live in UK for example) did not justify a portioning on the internal market, as the evidence before the court did not show that broadcasting the 3pm games would affect attendances of participation in sport at amateur levels in the UK, but that it would be for the English Court to decide if there was such evidence.
As to the issue of obligations on broadcasters to prevent decoder cards being used outside the licensed territory, AG Kokott said these had the same effect as agreements to prevent or restrict parallel exports, and should be treated as such. Such licences, she said, with absolute territorial protection are incompatible with the internal market and EU law.
AG Conclusions in full
252. I therefore propose that the Court answer the questions referred for preliminary ruling as follows:
1. Question 1 in Case C-403/08:
Being ?designed‘ or ?adapted‘ within the meaning of Article 2(e) of Directive 98/84/EC means the manufacture or modification of equipment with the intention of providing access to a protected service in an intelligible form without the authorisation of the service provider. Where a conditional access device is made by or with the consent of a service provider and sold subject to a limited authorisation to use the device only to gain access to the protected service in particular circumstances, that device does not therefore become an ?illicit device‘ within the meaning of Article 2(e) of Directive 98/84 if it is used to obtain access to that protected service in a place or in a manner or by a person outside the authorisation of the service provider.
2. Question 3 in Case C-429/08:
Article 3(2) of Directive 98/84 does not preclude a Member State from invoking a provision of national law that prevents use of a conditional access device in the event of breach of contractual agreements concerning the accessibility of programmes in certain Member States, following the provision of false names and/or addresses in the acquisition of the access device, or the use, for commercial purposes, of an access device intended for private or domestic use.
3. Question 4 in Case C-403/08:
(a) The question whether works have been reproduced in whole or in part must be answered by means of an interpretation of Article 2 of Directive 2001/29/EC.
(b) Acts of reproduction occur where frames of digital video and audio are created within the memory of a decoder, as those frames constitute part of the broadcast author‘s own intellectual creation.
(c) The display of a broadcast on a screen also constitutes reproduction.
4. Question 5 in Case C-403/08:
Transient copies of a work created on a television screen linked to the decoder box have independent economic significance within the meaning of Article 5(1) of Directive 2001/29, whereas transient copies created in a decoder‘s memory do not.
5. Question 6 in Case C-403/08:
A copyright work is not communicated to the public by wire or wireless means, within the meaning of Article 3(1) of Directive 2001/29, where it is received or viewed as part of a satellite broadcast at commercial premises (for example, a bar) or shown at those premises, free of charge, via a single television screen and speakers to members of the public present in those premises.
6. Question 7 in Case C-403/08:
The right to communicate copyright works by satellite under Article 2 of Directive 93/83/EC includes the right also to receive and watch that broadcast abroad.
7. Questions 6 and 7 in Case C-429/08 and Questions 7, 8(c) and 9 in Case C-403/08:
(a) Freedom to provide services under Article 56 TFEU (previously Article 49 EC) precludes provisions which prohibit, on grounds of protection of intellectual property, the use of conditional access devices for encrypted satellite television in a Member State which have been placed on the market in another Member State with the consent of the holder of the rights to the broadcast. It is irrelevant whether such devices were procured and/or enabled in the other Member State by the provision of a false name and false residential address. An individual agreement to use decoder cards only for domestic or private use also does not affect that conclusion.
(b) Freedom to provide services does not preclude national rules which allow the holder of rights to a broadcast to object to its communication in a pub, provided that the restriction of freedom to provide services stemming from the exercise of that right is not disproportionate to the share of the protected rights to the broadcast.
(c) It is irrelevant for the purposes of the present references for preliminary rulings whether the provision of national law infringes freedom to provide services because it applies to programmes included in a broadcasting service provided from a place in the United Kingdom but not from any other Member State.
8. Question 10 in Case C-403/08 and Question 8 in Case C-429/08:
Where a programme content provider enters into a series of exclusive licences each for the territory of one or more Member States under which the broadcaster is licensed to broadcast the programme content only within that territory (including by satellite) and a contractual obligation is included in each licence requiring the broadcaster to prevent its satellite decoder cards which enable reception of the licensed programme content from being used outside the licensed territory, such licence agreements are liable to prevent, restrict or distort.
competition. They are therefore incompatible with Article 101(1) TFEU; it is not necessary to show that such effects have actually occurred.
So, is that it? End of the battle? No. It may be another year before the full ECJ issues its judgement on the case. Which way is the ECJ likely to go? Hard to say, they are unlikely to disagree with all of AG Kokott’s suggestions, but they might interpret a couple of things differently.
What is certain, is that the implications, not just for the FAPL and Sky, but to any other rights holder who wants to licence content in Europe territorially and exclusively, is huge if the ECJ does back AG Kokott’s opinion. The immediate effect would see the FAPL either having to abandon territorial licensing all together or at least face the prospct of getting much less money in the next rights auction as broadcasters would not want to be paying over the odds when subscribers would legally be able to get services from another member state broadcaster for the same content, for less.
The FAPL and SKY will no doubt come out an accuse AG Kokott or trying to make law rather than interpret it, but unless they can convince the ECJ judges that she has done that, then their bluster will be just that.