Court decision on watching foreign broadcasts of sporting events

In a copyright infringement action brought by the FA Premier League against both importers of decoder cards and pub landlords accused of using the cards to access live Premier League matches broadcast from other EU Member States, the High Court has referred questions to the European Court of Justice (ECJ).

Facts

The FA Premier League (‘the Premier League’), brought proceedings against those it alleged had imported decoder cards as well as against pub landlords who it claimed had shown matches on their premises using the imported cards. The foreign decoder cards in question were for use in the UK to gain access to other European transmissions of Premier League matches. The Premier League alleged the defendants had infringed their broadcasting rights under section 298 of the Copyright, Design and Patents Act 1988 (amended in light of Directive 98/84), as well as the copyright in the various works that make up the coverage of the matches.

The defendants argued that to halt the use in the UK of the decoder cards, bought from a legitimate source in another EU Member State, would not be in accordance with EC law. Their primary argument was that the ‘Conditional Access Directive’ (Directive 98/84/EC), so named as it concerns the “legal protection of services based on, or consisting of, conditional access”, was not relevant to the decoder cards in issue. The defendants submitted that the Directive was specifically targeted at the use of “illicit devices”, which the devices in question were not, regardless of whether they were ultimately put to unauthorised use.

The defendants also stated that the importation and use of foreign decoder cards purchased in another Member State was permitted under the fundamental EC Treaty provisions relating to the free movement of goods and services, and that the licensing agreements the Premier League had in place with foreign broadcasters were anti-competitive and in breach of Article 81(1) of the EC Treaty.

In relation to the 81(1) defence, which the Premier League had previously and unsuccessfully tried to have struck out by way of summary judgment, the defendants submitted that preventing the supply of the relevant devices for use in the UK so as to ensure territorial exclusivity was a prohibited agreement or decision between undertakings which had as its “object or effect the prevention, restriction or distortion of competition within the common market”.

Decision

Mr Justice Kitchen decided to refer all the key issues in the case to the ECJ, arguing that they were “so fundamental that they should be considered as a whole by the Court at the earliest opportunity”. Mr Justice Kitchen acknowledged there was a clear tension between rights holders, seeking to be remunerated for licensing and making available their wares for public consumption, and “the concept of a Community audiovisual area and the principles of an internal market without frontiers”. The tension had spawned, in this case, a raft of claims and defences which Mr Justice Kitchen felt the ECJ was better equipped to weigh up and rule on, particularly as most of the arguments were ultimately founded in Community Law.

The High Court did, however, provide a series of observations in relation to the central issue of whether the decoder cards featured in this case were to be considered “illicit devices” for the purposes of Directive 98/84/EC, and ultimately favoured the defendants’ argument that unauthorised use alone was not caught by the Directive. Mr Justice Kitchen held the view that the claimant’s interpretation of the term did not stand up to scrutiny, and to apply it would create a contextual anomaly in the Directive. It could not possibly be the case, he stated, that a device could mutate from being licit to illicit depending on the “subjective intention of a dealer as to the place where it is to be used”, particularly where the legitimate dealer may not (and may not be able to) know of the device’s intended use. The only common-sense and workable interpretation, therefore, was that the Directive was aimed at protecting services based on conditional access devices that were “designed or adapted” to give unauthorised access.

Comment

Owing to the interplay of conflicting IP and EC law issues, this case is likely to run for some time yet. The potential repercussions, particularly for the Premier League, and other organisations using conditional access devices to generate significant revenue from territorially exclusive broadcasting and copyright related rights, are considerable. Allowing the importation and use of foreign decoder cards in the UK would call into question the sustainability of the Premier League’s broadcasting business model. For many pub landlords, the right to showcase football matches comes at too high a price, with the rights to show the same matches elsewhere on the continent often acquired at a fraction of the cost. However, the question for rights holders is what viable alternatives there are that will safeguard their revenue stream and embrace the concept of competition both within and between Member States, all the while ensuring levels of IP infringement are contained.