Still on the CJEU Nintendo ruling and its implications for the videogame industry

Yin Harn Lee portrayed
while surely contemplating
recent CJEU
copyright decisions

A few days ago the Court of Justice of the European Union (CJEU) issued its decision in Case C-355/12 Nintendo v PC Box [noted here and here], in which it held that - in certain circumstances - it may be lawful to circumvent a protection system. This Kat is under the impression that this ruling is fairly a relevant one in the process of CJEU-led construction of EU copyright. 

This is why she asked videogame (law) expert [and player, wonders Merpel?], copyright devotee and Cambridge University PhD candidate Yin Harn Lee to let IPKat readers know about her impressions of the Nintendo ruling.

Here's what Yin Harn writes:

"The decision of the CJEU in Case C-355/12 Nintendo v PC Box marks a key moment in the protracted, multi-jurisdictional legal battle currently being waged by major videogame console manufacturers Nintendo and Sony against the manufacturers and suppliers of console modification devices such as modchips. In essence, the CJEU ruled that, in order to be entitled to legal protection under article 6 of the Information Society Directive, technological protection measures (‘TPMs’) embedded into videogame consoles must be proportionate, in that they should not have the effect of prohibiting activities or devices that have a commercially significant purpose or use other than the infringement of copyright. In assessing whether such TPMs are proportionate, national courts should have regard to the purpose of the circumvention devices complained of and the extent to which they are used by third parties for non-infringing as well as infringing purposes.

A particular point of interest in the CJEU’s decision is its ruling that videogames are complex multimedia creations containing graphic and sound elements and do not consist solely of computer programs; accordingly, they fall at least in part within the scope of copyright protection conferred the Information Society Directive, and not solely within the scope of the Software Directive. 

As this blog has highlighted previously, this may have the effect of confining the applicability of the CJEU’s earlier ruling in Case C-128/11 UsedSoft [one of this Kat's obsessions: see here] to subject matter that falls exclusively within the scope of the Software Directive. In light of this development, the view taken by certain videogame news outlets (see eg here, here, here and here) post-UsedSoft that European videogame players would be free to resell copies of videogames acquired through digital distribution channels now appears premature. 

This aspect of the CJEU’s decision also raises questions concerning the extent to which its ruling in UsedSoft is applicable even to ‘pure’ software products, bearing in mind that most contemporary software provides users with graphic user interfaces (‘GUIs’) for ease of navigation, and that the CJEU has previously held that a GUI is not ‘a form of expression of a computer program’ falling within the scope of the Software Directive, but is instead protected as a copyright work under the Information Society Directive provided that it is its author’s own intellectual creation (see Case C-393/09 Bezpečnostní softwarová asociace, reported here). 

The argument can therefore be made that even ‘pure’ software products will not necessarily fall entirely within the scope of the Software Directive and hence become subject to the principles laid down in UsedSoft, at least to the extent that their component GUIs qualify for copyright protection as original works under the Information Society Directive.

The CJEU’s recognition in Nintendo that modchips and similar devices may be used for non-infringing in addition to infringing purposes, and that the extent to which these devices are put to non-infringing uses is relevant to the assessment of the national courts, may afford some consolation to videogame players. 

Alexander is wondering:
(1) whether he will make it to the
next level at last, and
(2) what on earth are modchips?

Gamers have frequently sought to justify the use of such devices on the basis that they are instrumental for achieving various legitimate aims, including the playing of ‘homebrew’ games created by individual console owners for other console owners, videogames lawfully imported from other jurisdictions, and backup copies of lawfully purchased videogames. However, certain national courts – in particular, the British courts – have tended not to give close consideration to arguments of this nature when deciding cases involving modchips. 

The ruling of the CJEU lends greater weight to these arguments by requiring national courts to take into account the legitimate uses to which such devices may – and are – put. In this regard, it should be noted that Nintendo has since issued a press release asserting that it "only ever utilises technological protection measures which are both necessary and proportionate to prevent widespread piracy of its intellectual property" and that "the preponderant purpose of the circumvention devices marketed by PC Box is to enable piracy of legitimate video games"; accordingly, it "is confident that the application of the guidance set out by the CJEU relating to proportionality will enable the Milan Tribunal to determine that the sale of circumvention devices is unlawful". 

These are, however, findings of fact that will have to be made by the national court, whose judgment will no doubt be keenly awaited by the videogame industry and gamers alike."

Many thanks Yin Harn for this thought-provoking analysis. What do IPKat readers think?