Tuesday, 8 November 2011

TV Catchup paused as High Court refers to Europe

This Current Intelligence note refers to the then-pending ruling of the Court of Justice of the European Union in Case C-403/08 Football Association Premier League and Others, which has since been delivered here.

Authors: Joel Smith and Emily Mallam (Herbert Smith, London)

ITV Broadcasting Ltd and Others v TV Catchup Ltd [2011] EWHC 1874 (Pat), Patents Court, England and Wales, 18 July 2011

Journal of Intellectual Property Law & Practice (2011), doi: 10.1093/jiplp/jpr156, first published online: November 4, 2011

The High Court has referred to the ECJ questions concerning communication of films and broadcasts to the public.

Legal context

This was a copyright action brought by ITV Broadcasting Limited and others (‘ITV’) against TV Catchup Limited (TVC). TVC had previously applied unsuccessfully for summary dismissal of the action on the basis that ITV had no chance of succeeding at trial.

Facts

TVC operated a live streaming service of broadcast television programmes over the internet so that users could watch live television on their computers, tablets, and smartphones. The material streamed included programmes and films in which ITV owned the copyright. In order to take advantage of this service, users had to create an account and agree to certain terms, confirming that they held a valid TV licence and that they would restrict the use of TVC to their country of residence.

The TVC service was supported by advertisements which were shown before the live stream of the broadcast. Any advertisements that formed part of the live stream were shown unaltered. Since further advertisements surrounded the TVC live stream, TVC was in direct competition with ITV.

The TVC service was administered by capturing the broadcast signals using a single domestic television aerial, processing them through several servers. At no stage during the streaming process was any of the stream stored on a permanent storage medium. However, at each step, a small amount of data from the video stream (a few seconds worth) was held in the memory of the servers for the purposes of buffering the live stream.

ITV alleged that TVC infringed its copyright in two categories of work; broadcasts and films. The alleged infringement occurred by (a) communicating the works to the public and (b) making, or authorizing the making of, transient copies of the works in TVC's servers and on the screens of users.

TVC's defences in relation to broadcasts


Denying infringement by communication of works to the public, TVC argued that

  1. the amended version of section 20(1)(c) of the Copyright, Designs and Patents Act 1988 (‘CDPA’) which creates a general communication to the public right in respect of broadcasts, was invalidly enacted and
  2. in any event, what TVC did was not a ‘communication to the public’.

As to making or authorizing the making of transient copies of broadcasts, TVC argued that

  1. the copies were not substantial parts of the works relied on and
  2. section 28A of the CDPA, which says that the making of temporary copies that have no independent significance will not infringe copyright, applies.

TVC also raised a defence under section 73(2)(b) of the CDPA, which allows broadcasts to the re-transmitted by cable.

TVC's defences in relation to films


TVC raised the same defences in relation to films, save that there was no challenge to the validity of the legislation on communication to the public insofar as it related to films.

Analysis

Was section 20(1)(c) of the CDPA ultra vires?

Article 3 of Directive 2000/29 on the harmonization of certain aspects of copyright and related rights in the information society (the ‘InfoSoc Directive’) established a general ‘communication to the public’ right for broadcast copyright owners. The Copyright Related Rights Regulations 2003 introduced a new section 20(1)(c) and section (2) to the CPDA, which now reads:
(1) The communication to the public of the work is an act restricted by copyright in-
(a) a literary, dramatic, musical or artistic work,
(b) a sound recording or film, or
(c) a broadcast.
(2) References in this Part to a communication to the public are to a communication to the public by electronic transmission, and in relation to a work include-
(a) the broadcasting of the work;
(b) the making available to the public of the work by electronic transmission in such a way that members of the public may access it from a place and a time individually chosen by them.
TVC alleged that (i) since this amendment required primary legislation, it could not be implemented via the 2003 Regulations and (ii) the Regulations were drafted on the mistaken assumption that Article 3 of the InfoSoc Directive required Member States to extend an exclusive right over communication to the public to broadcasts. ITV (and the Secretary of State) argued that, to the extent that the amendment went further than required, it fell within the powers given to the Secretary of State under section 2(2) of the European Communities Act 1972: this confers a general power to legislate to satisfy European obligations.

Floyd J rejected TVC's submission that section 2(2) was merely for ‘filling the cracks’ in Community legislation and explained that it went further. He agreed with the submission by the Secretary of State that the addition of section 20(1)(c) to the CPDA: had the effect of restricting wireless transmission for on demand access; made it a restricted act to make a transmission wirelessly for reception at two or more places and extended to anything else properly characterized as a communication to the public by electronic means. Since these amendments were closely related to the subject matter of the Infosoc Directive and helped to fulfil its harmonizing function, Floyd J did not think that section 21(1)(c) went further than Article 3 of the Infosoc Directive; nor was it ultra vires.

Communication to the public

ITV alleged that TVC was communicating its broadcasts and films to the public under section 20 of the CPDA. By section 20(2) ‘communication to the public’ means communication to the public by electronic transmission. Recital 23 in the InfoSoc Directive indicates that the communication to the public right should be
… understood in a broad sense covering all communication to the public not present in the place where the communication originates.
ITV cited Article 11bis(1)(ii) of the Berne Convention and argued that, whenever there is an intervention by a broadcasting organization other than the original one, there is a communication to the public within the exclusive right of the copyright owner and which it is entitled to control: the signal was re-transmitted to members of the public who were not the direct recipients of the signal.

TVC referred to the Rome Convention Intergovernmental Committee, 12th Session (Geneva, 5–7 July 1989), which said of ‘Cable distribution’:
It does not amount to distribution by cable of the broadcast of the work concerned where the broadcast, received by an aerial larger than generally used for individual reception, is transmitted by cable to individual receiving sets within a limited area consisting of one and the same building or a group of neighbouring buildings, provided that the cable originates in that area and is made without gainful intent …
TVC submitted that this demonstrates that not every physical act of distribution of a broadcast signal is a communication to the public: merely providing technical assistance to allow people to access more readily what they could receive by other means was not such a communication.

Floyd J referred to the ECJ decision in Sociedad General de Autores y Editores de Espana (SGAE) v Rafael Hotels SL where distribution by hotel proprietors of broadcast signals received by them to rooms in their hotels did constitute a ‘communication to the public’ under Article 3(1) of the InfoSoc Directive. This case sought to clarify whether there was a communication to the public when an intervening organization, acting for its own profit, intervenes in full knowledge of the consequences of its acts and in order to attract an audience to its own transmission to members of the public who would otherwise be able to access the transmission.

Floyd J indicated that in his view, given the broad meaning which the InfoSoc Directive requires for ‘communication to the public’, the natural meaning of that expression should not be narrowly construed. He distinguished between acts that are purely supportive of the original broadcaster's intention and those intended to attract the audience of the original broadcaster away from direct reception of its signals, the latter being within the notion of communication to the public. Said the judge, TVC's interception of ITV's broadcasts, making them available to the public, amounted provisionally to a ‘communication to the public’. However, he referred the question to the ECJ for its opinion.

Reproduction right and substantial part

When it copied the broadcasts for a transient period via the buffers, was TVC copying a whole or substantial part of the broadcast or film? Floyd J thought that TVC both produced and authorized the reproduction of a substantial part of the films, but not the broadcast, in the buffers and on the screens—subject to anything that the ECJ say in their ruling on Football Association Premier League v QC Leisure.

Does section 28A apply to broadcast copyright?

In defence of the allegation of making or authorizing the making of transient copies of broadcasts, TVC invoked section 28A of the CDPA:
Copyright in literary work, other than a computer program or a database, or in a dramatic, musical or artistic work, the typographical arrangement of a published edition, a sound or recording film, is not infringed by the making of a temporary copy, which is transient or incidental, which is an integral and essential part of a technological process and the sole purpose of which is to enable-
(a) transmission of the work in a network between third parties by an intermediary; or
(b) a lawful use of the work;
and which has no independent economic significance.
This defence only applies if, contrary to the judge's provisional view, reproduction of the broadcasts is found.

While section 28A implements Article 5 of the InfoSoc Directive, which does apply to broadcasts, its list of rights to which the defence applies omits broadcast copyright. Floyd J considered that, since no policy reason was advanced for this omission and it would not be inconsistent to read section 28A as if it included a reference to broadcast copyright, the Marleasing principle should be applied and the court should construe section 28A as including broadcasts.

Doing just this, Floyd J agreed that the copies made by TVC were temporary and transient. Further, if TVC successfully argued that the activities were not a communication to the public, the copies were a lawful use of the work. As to whether the reproduction in the buffers and the screens had real economic significance, Floyd J said that, since the position would be clarified in the ECJ ruling on Football Association Premier League v QC Leisure, he would defer judgment until its outcome.

Section 73 CPDA

Under section 73 of the CPDA:
… where a wireless broadcast is made from a place in the UK and immediately re-transmitted by cable:
(2) The copyright in the broadcast is not infringement-
(a) if the re-transmission by cable is in pursuance of a relevant requirement, or
(b) if and to the extent that the broadcast is made for reception in the area in which it is re-transmitted by cable and forms part of a qualifying service.
(3) The copyright in any work included in the broadcast is not infringed if and to the extent that the broadcast is made for reception in the area in which it is re-transmitted by cable; but where the making of the broadcast was an infringement of the copyright in the work …
ITV argued that ‘cable’ should be construed narrowly, excluding transmission over the internet—which often encompasses transmission over a wireless network. TVC said that, while this was sometimes so, it is only the re-transmission that must be by cable, which was always the case here. Floyd J thought that, to take advantage of section 73, the entire transmission of the broadcast should be by cable. TVC could not accordingly take advantage of the defence where their re-transmissions were for reception by a mobile telephone.

ITV further argued that, since TVC transmitted the London regional services to regions where the signal could not usually be picked up, the broadcasts were not ‘made for reception’ in the area into which they were transmitted. TVC disagreed: it was technically possible to receive any of the ITV regional services anywhere with correct equipment, for instance by entering a postcode for a different region in a Freesat box. Floyd J concluded that it would be an incorrect interpretation of the legislation if it were to reference areas where to broadcast was ‘receivable’ rather than where it was ‘made for reception’. Accordingly, the section 73 defence would not be available where TVC transmitted outside the regional area of the service in question.

Practical significance

While the court's analysis of both the factual and the legal issues raised by the parties is of great interest, at this stage it is hard to predict the degree of practical significance to attach to it since it could be some years until the ECJ rules on the referred questions. In the meantime TVC continues to offer its services.

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