COPYRIGHT / COMPETITION
By David Pearce writing for the IP Kat
In a judgment of over 45,000 words and 98 pages, handed down this morning in the case of the Football Association Premier League & others v QC Leisure & others  EWHC 1411 (Ch), the Honourable Mr Justice Kitchin has delivered a tentative blow against the rights of satellite broadcasters such as BSkyB to protect their exclusive rights to broadcast football games to subscribers in individual EU countries. The three combined actions involved in this case concerned the use of foreign decoder cards in the UK to access foreign transmissions of live Premier League football matches. The claimants complained that the dealing in and use of such cards in the UK involved an infringement of their rights under s.298 of the CDPA 1988, as amended, and of the copyrights in various artistic and musical works, films and sound recordings embodied in the Premier League match coverage. The defendants argued that the use of copyright law to effectively prevent them from using decoder cards in the UK which had been legitimately bought in other EU states was contrary to EC law. Several Directives were cited, the key one being 98/84/EC, also known as the Conditional Access Directive. The main issue (of many) appeared to be whether the decoder cards (bought in Greece, imported and used in the UK) were to be regarded as “illicit devices” under the terms of this Directive.
Both sides put their arguments at length, and yet Kitchin J felt that he was unable to come to a definite conclusion, considering that a proper interpretation was not clear and that this was an issue that should be referred to the European Court of Justice. He did, however, offer a ‘provisional’ view that the defendants’ arguments should be preferred, providing the following reasons (at paragraphs 79-84): “First, the Recitals do recognise the need for legal protection of broadcasting and information society services whose remuneration relies upon conditional access. For example, Recital (6) expressly acknowledges the development of a wide range of such services has the potential for increasing consumer choice and contributing to cultural pluralism but that the viability of such services often depends upon the use of conditional access in order to obtain the remuneration of the service provider. Moreover, the Recitals make clear that disparity between national rules concerning the legal protection of services based upon, or consisting of, conditional access was considered liable to create obstacles to the free movement of goods and services and that a Directive was needed to provide for an equivalent level of protection between Member States. Further, the use of the word necessary in Recital 13 indicates that appropriate legal protection against illicit devices was considered a proportionate measure and that no less a restrictive measure would suffice to protect this legitimate policy object. However, I do not believe these considerations, of themselves, assist in determining the scope of definition because the protection of the service provider against pirate cards would seem to meet all these policy objectives. I believe some indication of the intention behind this measure can, however, be derived from Recitals (13) and (15), read as a whole. The former refers to protection against the placing on the market of a device which enables or facilitates without authority the circumvention of any technological measures designed to protect the remuneration of a legally provided service. The latter explains that commercial activities in relation to such devices are detrimental to consumers who are misled about the origin of illicit devices. Both Recitals suggest to me that the Directive is concerned with the production and placing on the market of devices which do not have their origin in a legitimate service provider rather than the unauthorised use of devices which do originate from a legitimate service provider.
Second, Article 1 makes clear that the objective of the Directive is to approximate provisions in Member States concerning measures against illicit devices which give unauthorised access. However, I do not think it can be inferred the Directive is concerned only with effect, as the claimants contend. To the contrary, it seems to me that if this were the position then there would have been no need to limit its scope to illicit devices. Rather, it would have been directed to all devices which are used give unauthorised access.
Third, this impression is reinforced by the definitions of Article 2. A “conditional access device” means equipment or software designed or adapted to give access to a protected service. This suggests to me that it is concerned with the physical nature of the device or, as the defendants say, with its inherent nature. Similarly, an “illicit device” is a conditional access device which is designed or adapted to give such access without the authorisation of the service provider. Once again, it is the physical or inherent nature of the device which must confer this characteristic. This is the natural interpretation of the words used.
Fourth, and as the defendants submit, any reading of this definition which means that a device is “illicit” or “not illicit” depending upon where it is intended to be used is wholly unworkable given the infringing acts defined in Article 4 and the Community wide scope of the prohibitions. These are acts performed by manufacturers and dealers, not end users, and no mens rea or mental element is involved. Equipment becomes an “illicit device” upon its manufacture in any Member State of the Community; a device which is not illicit to begin with cannot change its status by reason of the subjective intention of a dealer as to the place where it is to be used. Indeed, a dealer may not even know where an end user intends to use a device which is supplied by a dealer to another dealer or to an end user.
Fifth, I agree with the defendants that it is very hard to see what substance there can be to Article 3(2)(b) if the interpretation for which they contend is not correct.”
There were a whole raft of issues considered in much detail, which the IPKat will leave for other readers to delve into for themselves, including of course the central issue of the applicability of Article 81 EC. Kitchin J concluded as follows (at paragraph 385):
“The issues in this case have at their heart the proper interpretation of a number of instruments of Community legislation concerning the cross-border broadcasting of television programmes by satellite. There can be no doubt that recent years have seen a proliferation of encrypted television channels which are accessible only on payment of a fee. Yet the broadcasting organisations responsible for the transmissions are often prohibited from permitting viewers in other Member States to access the encrypted programming; and this is so even when such viewers are prepared to make the requisite payment. This prohibition stems from the desire of rightholders to extract what they perceive to be the fair remuneration to which they are entitled. However, it creates a tension with the concept of a Community audiovisual area and the principles of an internal market without frontiers, and it is this tension which is reflected in the multitude of claims and defences deployed in this case. I have made such findings as I can. But I believe the issues which I have identified and upon which the assistance of the Court of Justice is sought are so fundamental that they should be considered as a whole by the Court at the earliest opportunity. I therefore invite the parties to make submissions on the precise wording of the questions to be referred and to suggest, if so advised, any additional questions for this court’s consideration.”
The IPKat is pleased on the one hand that this important issue is getting the attention it deserves. BSkyB have for years been able to charge several thousand pounds to UK pubs for the right to show football matches on their premises to paying customers, when similar rights in Greece cost only a few hundred pounds. Many pubs across the country have been complaining bitterly that this is daylight robbery (see, for example, the Morning Advertiser to find out more). If Community legislation on free movement of goods and services is to mean anything, this surely must be an issue that goes to the heart of the matter. Is the current decoder card market a legitimate sub-division of the common market, allowing consumers a fair share of the benefit, or is it contrary to the principles of Article 81 EC? On the other hand, however, the IPKat is slightly disappointed (although not in the least surprised) that the issue has been so clouded with Directive after Directive, when the fundamental issue appears to be quite clear: are these devices “illicit” or not (the IPKat thinks not)? We will now have to wait an indeterminate amount of time for the issue to be considered, via the process of Chinese whispers that is the ECJ referral procedure, and then finally decided by the High Court (although even then the issue will almost certainly not stay there).
UPDATED AUGUST 14TH: http://www.out-law.com/page-9222
The second phase of Karen Murphy’s appeal is listed for 25th & 26th June at the Divisional Court, when the court will consider the EU law issues.