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OCTOBER 2011

Some reflections on the ECJ’s Judgment in the FAPL Cases

Readers have no doubt been inundated with material about this important Judgment.  Here Paul Herbert offers a few observations and raises a few questions about its implications.

Summary

The ECJ ruled against FAPL in holding that:

• The imported decoders were not “illicit” devices for the purposes of Art 2(e) of the Conditional Access Directive (98/84/EC);
• That contractual restrictions designed to prohibit the importation of such decoders were inconsistent with EU single market principles and contravened Art 101 of the Treaty on the Functioning of the European Union (TFEU);
• Moreover, domestic legislation prohibiting the importing of use of foreign decoding devices (ie s297(1) CDPA 88) was inconsistent with Art 56 of TFEU and could not be justified on the grounds of protecting copyright or the need to maintain the closed period for live Saturday soccer matches;
• That the showing of a live broadcast was not an infringement of the copyright in the broadcast itself since sporting events could not be said to be intellectual creations (and thus were not classified as copyright works);
• That the transient reproduction of broadcast signals in the memory of a set top box and their relay onto a TV screen was not a reproduction requiring the consent of the rights holder by virtue of Art 5(1) of the Copyright Directive (2001/29/EC).
• On the other hand, the ECJ confirmed in FAPL’s favour that:
• Whilst no copyright attaches to the relay of the live broadcast of a sporting event, the author was entitled to protection in respect of individual copyright elements comprised within those live broadcasts such as artistic works (in the form of logos); musical works (the Premier League anthem) and films (highlights packages and replays);
• Although no infringement took place in respect of the reproduction of those works through the decoder, the showing of them to customers in a pub constituted a communication to the public which is an act restricted by copyright under Art 3(1) of the Copyright Directive.  Interestingly, the Advocate General had reached the opposite conclusion in her Opinion in February 2011.

Implications

The above summary creates a misleading impression:  Although the ECJ ruled against FAPL on a number of significant points, this was a victory for the Premier League in its battle against Pubs who show live football from foreign broadcasters.

So, although Karen Murphy should see her conviction for dishonestly receiving a programme with intent to avoid the applicable subscription charges overturned when the matter returns to the High Court, triumphant headlines in the press - that she won her “David and Goliath” battle in Court, that the days of exclusive licensing by FAPL and Sky are numbered and that we can all look forward to watching live football in pubs at any time and from any source - were grossly misleading.  Pubs which use imported decoders to watch foreign broadcasts of Premier League matches will not be able to do so with impunity as they will be infringing the copyright works incorporated into those broadcasts (in contrast to the position of private viewers). 

Is this a disastrous outcome for FAPL or Sky?  Not exactly.  Although private individuals can use imported decoder cards with impunity and will not be committing any infringement of copyright in the works incorporated, they are unlikely to surrender their Sky subscriptions in vast numbers.   They would need to buy a new set top box and potentially cancel their existing Sky subscriptions and they might well face the prospect of watching their beloved team with commentary in an incomprehensible language.

Furthermore, FAPL will still be able to grant exclusive territorial licences throughout Europe, albeit that these can no longer be buttressed by any prohibition on the sale of decoders outside of the licensed territory (unless induced by active promotion of any such sales).   In addition, whilst the current arrangements with overseas licensees permit them the option of using the English commentary provided by FAPL or providing local language coverage, it would be open to FAPL to require only the local language to be used, thus creating de facto exclusivety.  This indeed was an outcome hinted at in the Advocate General’s Opinion and the ECJ’s Judgment does not contradict this. 

Clearly to the extent that there is any erosion in the extent of exclusivity granted to broadcasters, they will correspondingly pay less for those licenses.  Another solution might be for FAPL to grant EU wide licenses, though achieving compatibility in receivers and decoding equipment could be a logistical nightmare.

Is there no copyright in a broadcast?  Readers would be forgiven for asking this question since a broadcast is one of the categories of work specified in s2 CDPA 1988 as being protected by copyright and no distinction is made in that provision between live and non-live broadcasts.  However, this is apparently not consistent with the Copyright Directive, Article 3(2) of which only prohibits the relay of a broadcast by means of an on demand service.   This is of course in contrast with any copyright works featured within the broadcast in respect of which the usual principles apply.  But a live broadcast of a sporting event devoid of any featured logos, musical works or incorporated films is not protected per se.

Does the ECJ’s decision apply equally to rights in other material such as films?  FAPL argued that the territorial exclusivity of broadcasting rights in sports events should be protected on the same basis as those applying to film rights as was demonstrated in the landmark decision of the ECJ in 1980 in the Coditel case.  However, the ECJ distinguished Coditel on the grounds that those restrictions only applied to protect different windows of exploitation within film rights rather than strict territorial rights as created by FAPL’s licenses.  Although no mention of this was made in the Judgment, it would seem entirely logical that the principles of this decision should apply equally to territorial exclusivity granted in other spheres.  Exclusive licences are not prohibited per se, but contractual measures designed to enforce these such as a prohibition of sales of decoders outside the licensed territory would fall foul of EU single market principles.  Hence film distributors will be reviewing their European sales strategies in exactly the same way as sports rights holders.

What about other platforms?  The ECJ decision was specifically concerned with satellite broadcasting and the inherit inability of a satellite footprint to observe territorial boundaries.  The obvious analogy here is the internet, where territorial boundaries can only be enforced by means of geoblocking.   It is not difficult to see how an exclusive licence for online exploitation which included a requirement upon the licensee to geoblock could be subject to the same analysis and outcome as in the FAPL case. 

The case will now return to the High Court for to it apply the ECJ’s reasoning to the issues on which it sought guidance. We are unlikely to see any further surprises…

Paul Herbert
Partner

If you would like any further information about the issues raised in this article please conatact Paul Herbert (pherbert@gdlaw.co.uk) or any other member of Goodman Derrick LLP’s media team on 0207 404 0606.

This guide is for general information and interest only and should not be relied upon as providing specific legal advice.