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Thursday, 3 February 2011

Breaking news: competition trumps IP in footie decoder pub brawl

With so little time in which to make their oral submissions to the Court
of Justice, counsel had to resort to extreme measures to make their point
At the time of posting this item, there's no sign of the Advocate General's keenly-awaited Opinion in Cases C-403/08 and C-429/08 Football Association Premier League Ltd & Others v QC Leisure & Others, Karen Murphy v Media Protection Services Ltd. There is however this press release from the Curia. It reads as follows:
"In the view of Advocate General Kokott, territorial exclusivity agreements relating to the transmission of football matches are contrary to European Union law

European Union law does not make it possible to prohibit the live transmission of Premier League football matches in pubs by means of foreign decoder cards

The Football Association Premier League Ltd (the FAPL) is the marketing organisation for the top English football league. The FAPL essentially grants its licensees the exclusive right to broadcast matches and exploit them economically within their respective broadcasting areas, generally the country in question. In order to safeguard this exclusivity, licensees are obliged to prevent their broadcasts from being able to be viewed outside their respective broadcasting areas. To that end, each licensee is required to encrypt its satellite signal and to transmit it in encrypted form to subscribers within its assigned territory. Subscribers can decrypt the signal using a decoder, which requires a decoder card. The exclusivity agreement also imposes restrictions on the circulation of authorised decoder cards outside the territory of each licensee.

The main proceedings in the present references for preliminary rulings concern attempts to circumvent this exclusivity. Companies import decoder cards from abroad, in the present proceedings from Greece, into the United Kingdom and offer them to pubs at more favourable prices than the broadcaster in that State. This practice makes it possible for pubs in the UK to show the live transmission of Premier League football matches using a Greek decoder card. The FAPL is attempting to stop that practice by means of a judicial ruling. Case C 403/08 concerns civil-law actions brought by the FAPL against the use of foreign decoder cards. Case C 429/08 relates to criminal proceedings which have been brought against the landlady of a pub who used a Greek decoder card to show Premier League matches. The High Court has, in each set of proceedings, referred several questions to the Court of Justice on the interpretation of EU law.
Advocate General Juliane Kokott explains that the exclusivity rights in question have the effect of partitioning the internal market into quite separate national markets, something which constitutes a serious impairment of the freedom to provide services.

With regard to possible justification for the restriction of the freedom to provide services, the Advocate General examines the protection of industrial and commercial property and, in particular, addresses the question whether live satellite transmissions of football matches involve rights the specific subject-matter of which requires a partitioning of the internal market. In this connection she first states that the specific subject-matter of the rights in live football transmissions lies in their commercial exploitation. In the present cases, the live transmission of Premier League football matches is exploited, in particular, through the charge imposed for the decoder cards. Advocate General Kokott takes the view in this connection that the economic exploitation of the rights in question is not undermined by the use of foreign decoder cards, as the corresponding charges have been paid for those cards. Whilst those charges are not as high as the charges imposed in the United Kingdom, there is, according to the Advocate General, no specific right to charge different prices for a work in each Member State.

Rather, it forms part of the logic of the internal market that price differences between different Member States should be offset by trade. The marketing of broadcasting rights on the basis of territorial exclusivity is tantamount to profiting from the elimination of the internal market. Consequently, the specific subject-matter of the rights in the transmission of football matches does not justify a partitioning of the internal market, and thus also does not justify the resulting restriction of the freedom to provide services.

Advocate General Kokott further takes the view that the contractual restriction on using decoder cards in the State of origin only for domestic or private use, but not for commercial use – for which a higher subscription charge is payable – also cannot justify a territorial restriction of the freedom to provide services. The Member State concerned may, however, in principle make provision for rights which allow authors to object to the communication of their works in pubs.
So far as concerns the question whether the showing of live transmissions of football matches in pubs infringes the exclusive right of communication to the public of protected works within the terms of the Copyright in the Information Society Directive , the Advocate General explains that, as EU law stands at present, there are no comprehensive rights which protect the communication of a broadcast to the public where no entrance fee is charged.

Advocate General Kokott further expresses the view that the application of the principle of the freedom to provide services is also in line with the Satellite and Cable Directive and with European competition law. Equally, neither does the Conditional Access Directive constitute a barrier to the use of foreign decoder cards".
See also IPKat posts of 7 December 2007 here and 24 June 2008 here.

STOP PRESS: the AG's Opinion has now been posted on the Curia website here.  It's more than 250 paragraphs long ...

2 comments:

AndyJ said...

This opinion caused me to muse on the underlying raison d'etre of the broadcasting right. In reality it has no direct connection with other form of IP such as copyright, designright or patents, because it is a purely commercial activity without any of the creative ingredients of originality, inventive step, distinctiveness etc which underly the other IP forms. What is broadcast may well contain those things, but the actual broadcast is no more than a commodity like a loaf of bread. Even the transmission of a carrier signal, with no information modulated onto it constitutes a broadcast. When that is coupled to the fact that what is being broadcast in this instance (football) has no performance or other creative right associated with it, one can see how far we have come from the Statute of Anne in pursuit of mammon.

Mediabeak said...

This is going to get interesting as it is another test of the parameters of copyright v commercial/competition law. For copyright to work one needs to protect and encourage the protection of creative endeavours while for the open market to work one has to allow for cross border trade and access to commodities. What we have here is a clash between what is arguably not particularly creative - though as a football match it is a form of performance - but something that is highly commercial. So it falls between the two types of law and their respective intents. Copyright law has not evolved to line BSkyB's coffers while competition law has been implemented and evolved to ensure the likes of BSkyB do not abuse their position in the market. So in this case, assuming the Art81 argument prevails, then the legal issue is how does copyright law respond to this? At a commercial level it won't take a genius or even a lawyer to work out that if the ECJ ruling results in rights holders having their slice and dice IP monopoly diluted by being forced to offer a pan European license, then they will simply adjust their pricing structures to recoup their losses. So what might seem like a short term win for pub landladies and others may translate into a general price hike across Europe while the respective legislatures figure out how to align EU competition law with the various IP related directives and domestice IP laws.

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