Today the Grand Chamber of the ECJ gave its preliminary ruling in two joined cases, FA Premier League v QC Leisure and others and Murphy v Media Protection Services. The ruling isn’t on BAILII yet; but it is available on the ECJ’s own website. [Update: here’s the BAILII version].

The case is rightly being reported as a victory for the pub landlady Karen Murphy, whose criminal conviction under section 297(1) of the Copyright, Designs and Patents Act for dishonestly receiving a broadcast with intent to avoid payment, although technically still good in law until her case returns to the High Court, will surely now be quashed, since the ECJ has ruled that it’s contrary to internal market law, specifically the freedom to provide services under article 56 of the Treaty on the Functioning of the EU (TFEU). Rather than buying a Sky subscription for her pub, she’d obtained a decoder for a cheaper Greek satellite service from a firm called NOVA. It was this that Portsmouth Magistrates’ Court saw as dishonest, Ms. Murphy having been privately prosecuted by Media Protection Services, a company used by the Premier League, in the ECJ’s words to

to conduct a campaign of prosecutions against public house managers using foreign decoding devices

The background to this is the FA Premier League’s practice of selling rights to show its matches on a territorial basis within Europe. Perhaps no one wants the buy the right to broadcast them across the whole of Europe; I don’t know. In any case, in addition to the right to broadcast live matches within the UK, the Premier League sells the right to broadcast matches in other countries, like Greece – subject to the condition that the foreign broadcasters such as NOVA encrypt their broadcasts so that they can’t be received outside Greece. What the Premier League have objected to is the sale by firms like QC Leisure of decoding equipment enabling British viewers to see NOVA’s matches; and the use of those decoders by people like Ms. Murphy to circumvent the Premier League’s deal with Sky, and show matches in their pubs more cheaply. The Premier League started civil copyright proceedings against QC Leisure; in Ms. Murphy’s case, they chose to use the criminal law, and to give her a criminal record.

It’s clear from the questions referred to the ECJ by the High Court in these two cases that complex arguments have been deployed by the Premier League to defend its commercial practice in terms of various Directives, or a combination of them. But the preliminary ruling seems to me an example of the ECJ at its lucid best. The entire purpose of internal market law is to tear down the artificial walls states might erect between their national markets, and create one single internal market in the EU. Firms who attempt unilaterally to maintain partitioned national markets by legal action will always “need a miracle” if that action is challenged in EU law. The ECJ’s played a blinder here, realising the Premier League dived, and Ms. Murphy never touched them.

Discussing the legitimacy of selling exclusive national right at a premium, the ECJ (at para. 115 of the ruling) cuts through the Premier League’s tactical defences with a simple long ball over the top:

such a premium is paid to the right holders concerned in order to guarantee absolute territorial exclusivity which is such as to result in artificial price differences between the partitioned national markets. Such partitioning and such an artificial price difference to which it gives rise are irreconcilable with the fundamental aim of the Treaty, which is completion of the internal market.

The reason I say the result was 2-0 is that the ruling is a double whammy. Not only does the ECJ rule that UK legislation protecting the Premier League’s revenue is contrary to internal market rules. It also says that the Premier League’s contracts with foreign licensees such as NOVA breach EU competition law, specifically article 101 TFEU, since it’s an agreement whose object is the prevention, restriction or distortion of competition (para. 139 of the ruling):

an agreement which might tend to restore the divisions between national markets is liable to frustrate the Treaty’s objective of achieving the integration of those markets through the establishment of a single market. Thus, agreements which are aimed at partitioning national markets according to national borders or make the interpenetration of national markets more difficult must be regarded, in principle, as agreements whose object is to restrict competition within the meaning of Article 101(1) TFEU

In early reaction I’ve seen and heard this morning, journalists are keen to stress the complexity of the judgment and that the Premier League may take some comfort from what the ECJ said about its having copyright in certain elements of broadcasts (para. 149):

FAPL can assert copyright in various works contained in the broadcasts, that is to say, in particular, the opening video sequence, the Premier League anthem, pre-recorded films showing highlights of recent Premier League matches, or various graphics.

I don’t think that comfort is real, though. The ECJ goes on (para. 182) to rule that technical reproduction of these graphics etc. within decoders and receivers falls within an exception

laid down in Article 5(1) of the Copyright Directive and may therefore be carried out without the authorisation of the copyright holders concerned.

As far as the actual showing of the graphics etc. to the pub audience is concerned, it’s true that the ECJ rules (para. 207) that

‘communication to the public’ within the meaning of Article 3(1) of the Copyright Directive must be interpreted as covering transmission of the broadcast works, via a television screen and speakers, to the customers present in a public house.

That appears at first blush to concede to the Premier League the right to sue pubs for breach of copyright for showing their customers copyright elements (the anthem etc.) as part of match broadcasts.

I doubt even that can work for them, though. Article 5.3(i) of the Copyright Directive provides that

Member States may provide for exceptions or limitations to the rights provided for in Articles 2 and 3 in the following cases: …

(i) incidental inclusion of a work or other subject-matter in other material

and section 31(2) of the Copyright, Designs and Patents Act 1988 is an example of just such an exception, making it lawful for Ms. Murphy to communicate to the public those copyright works lawfully included by NOVA in its broadcast. The one tiny crumb remaining might be the right to sue her for breach of copyright for allowing her customers hear the Premier League “anthem”; that’s because of the special position regarding musical works under section 31(3).

But even if the Premier League can prove Ms. Murphy doesn’t show matches with the volume turned down, I doubt they can seriously frustrate the entire purpose of EU internal market law based on attempts to enforce copyright in the anthem alone – however often they decide to play it. Its lawyers may well write letters trying to convince firms and consumers that they’re still taking legal risks by using foreign decoders, and many people may be convinced for a time at least. That time will be very commercially valuable for the Premier League. But I expect it to last only as long as it takes the ECJ to rule on the matter again.

2011-10-04T15:32:12+00:00Tags: , , |