July 23, 2015

This article was written by Alexander Ross, Partner and first published in Entertainment Law Review, June 2015.

The Court of Justice of European Union has found that Member States can if they wish legislate to make broadcasters’ rights wider than prescribed under Copyright Directive art.3(2), for example, to protect live broadcasts of sports events as well as fixations of broadcasts. The case was heard by three judges alone, two of whom sat for both Svensson and Bestwater. The court held that the Copyright Directive did not seek to harmonise every single provision relating to neighbouring rights across all Member States of the European Union. Member States can, therefore, extend the exclusive right of broadcasters under art.3(2)(d) regarding acts of communication to the public, which could include the broadcast of live sporting events, provided that the extension of rights does not undermine copyright protection.

The case stands in contrast to the decision in Svensson in a number of respects, but notable is the fundamental difference of approach that the CJEU took to Berne copyrights in Svensson and neighbouring or related rights in this case—a difference which we barely recognise in the United Kingdom, and a difference which in this author’s view, and in this case, is not entirely logical.

Background

The European law relevant to this case is Copyright Directive art.3 and Related Rights Directive art.8 and recital 16.

Copyright Directive art.3 provides for rights for two types of rights owners. Article 3(1) has the effect of granting to Berne authors the right to authorise any type of communication to the public of their works, including making available their works in such a way that members of the public may access them from a place and at a time chosen by them. Article 3(2) has the effect of granting to neighbouring rights owners certain rights of making available only, among them the right of broadcasters to make available fixations of their broadcasts (but not the broadcasts themselves). The reason that the more restricted right is granted to broadcasters under art.3(2) is because under art.8 of the earlier Related Rights Directive (first adopted in 1992 and codified in 2006) broadcasters (who are obviously related rights owners) had already been granted the right to communication to the public of their broadcasts if such communication is made in places accessible to the public against payment of a fee, and recital 16 of that Directive gives Members States the option of providing:

“more far-reaching protection for owners of rights related to copyright than that required by the provisions laid down in this Directive in respect of broadcasting and communication to the public.”

In this case, the claimant, C More Entertainment AB, was a Swedish company that broadcast ice hockey matches live on its website for payment of a fee. In autumn 2007, the defendant, Linus Sandberg, a Swedish national, placed links on his own website that circumvented C More Entertainment’s paywall so that users could access the live broadcasts of two particular ice hockey matches for free.

According to the CJEU’s account of the history of the case, Mr Sandberg was prosecuted in Sweden for offences against Swedish legislation on copyright and, in November 2010, was found guilty of infringing C More Entertainment’s copyright. He was fined and ordered to pay damages to C More Entertainment.

Both parties appealed the decision and in June 2011, the Swedish Court of Appeal found that no part of the commentators’, cameramen’s or producers’ work in connection with the live broadcasts reached the level of originality required for copyright protection under Swedish law. It also held that C More Entertainment was not the owner of copyright (in the Berne sense) in the broadcasts, but this did not absolve Mr Sandberg because C More Entertainment was found to be the holder of related rights, and those had been infringed by Mr Sandberg. Accordingly, it ordered Mr Sandberg to pay fines higher than those originally imposed, but slightly reduced the compensation payable to C More Entertainment.

C More Entertainment appealed to the Swedish Supreme Court, seeking a declaration that it was the holder of copyright and to have the amount of damages reviewed and increased. The main issue before the Swedish Supreme Court related to the interpretation of Copyright Directive art.3(2)(d), which gives broadcasters the exclusive right to authorise or prohibit the “making available to the public” of fixations their broadcasts, whether transmitted by wire or over the air, including by cable or satellite, “in such a way that members of the public may access them from a place and at a time individually chosen by them”, and the corresponding provisions in Swedish law.

The Swedish Supreme Court found, provisionally, that neither under the Copyright Directive nor under CJEU case law does the placing of a hyperlink on a website necessarily constitute an act of “communication to the public”. Further, the court found that Swedish legislation provided for broadcaster rights that were wider than those set out in art.3(2)(d), in that the protection afforded to broadcasters under that legislation was not restricted to making works available “on demand”, i.e. at a time and from a place chosen by the viewer. But the court clearly had sufficient doubts on both these counts to refer matters to the CJEU.

Accordingly, it stayed the proceedings and referred five questions to the CJEU, among them questions relating to hyperlinking. In response, the CJEU wrote to the Swedish Supreme Court enclosing a copy of its judgment in Nils Svensson v Retriever Sverige AB in which a number of questions had already been decided concerning whether the placing of a hyperlink on a website can be classified as an act of communication to the public. Specifically, in that case, the CJEU found that the provision of a hyperlink to copyright works is indeed an “act of communication”, but that it does not amount to an act of “communication to the public” within the meaning of Copyright Directive art.3(1) unless the hyperlink provides access which circumvents restrictions put in place by the site to protect its content.

The CJEU noted the basic principle that Copyright Directive art.3(1) refers to “any communication to the public of [the authors’] works … including the making available to the public of their works”. It followed, therefore, that the concept of “making available to the public” as set out in art.3(2) forms part of the wider concept of “communication to the public”.

Further, the CJEU held that it is clear from art.3(2) than to amount to an act of “making available to the public” an act has to meet both conditions expressed, namely that members of the public may access the protected work (a) from a place and (b) at a time individually chosen by them. Therefore, as confirmed by Copyright Directive recital 25, making available to the public is intended to refer to public access by way of “interactive on-demand transmissions”, i.e. transmissions that can be accessed by the public from a place and at a time individually chosen by them. The terminology is confusing here, and in particular the use of the word “transmissions” in recital 25 rather than “works”, because art.3(2) does not give the broadcaster the right to control whether the public can access the transmission at a time of their choosing (i.e. to switch on to a match broadcast at any time during the broadcast, which is obviously possible) but whether the public can access a copy (a fixation) of the broadcast,

Nevertheless, the question remained as to whether, notwithstanding art.3(2), Member States can grant broadcasters wider protection, which in this case amounted to an exclusive right as regards acts which could be classified as acts of communication to the public, but which did not constitute acts of making available to the public fixations of their broadcasts in such a way that members of the public might access them from a place and at a time individually chosen by them. In finding that Member States

In addition, the CJEU observed that Copyright Directive recital 20 states that the Directive was, at the time it came into force, based on principles and rules relating to intellectual property set out in other Directives already in force, including the Related Rights Directive. Article 8(3) of the Related Rights Directive art.8(3) states that Member States should give broadcasters the exclusive right to authorise or prohibit the rebroadcasting of their broadcasts by wireless means, and the communication to the public of their broadcasts, if such communication is “made in places accessible to the public against payment of an entrance fee”. But more relevant for this case, recital 16 of that Directive provides that Member States should be able to provide for more far-reaching protection for related rights owners than is provided in that Directive in respect of broadcasting and communication to the public. Accordingly, the CJEU said that Member States can grant broadcasters an exclusive right to authorise or prohibit acts of communication to the public on conditions different from those set out in art.8(3) provided that such right did not affect the protection of copyright in any way.

Therefore, the CJEU held, Copyright Directive art.3(2) has to be interpreted as not affecting the option given to Member States by Related Rights Directive recital 16 to grant broadcasters the exclusive right to authorise or prohibit any acts of communication to the public of their transmissions, provided that such protection does not undermine copyright protection. Member Statesthe public in their national legislation, which could include the broadcast of live sporting events, provided that the extension does not undermine copyright protection.

Comment

When considering this case in the light of the decision in Svensson, we should remember that the facts and issues before the CJEU in that case were different. Svensson concerned the interpretation of Copyright Directive art.3(1) and Berne copyrights, whereas this case concerned the interpretation of art.3(2) and related or neighbouring rights. Further, the acts of communication to the public in the Svensson case were not live broadcasts. Finally, the acts of communication to the public in Svensso n were available to users for free, whereas in this case C More Entertainment charged a fee for access.

The CJEU said clearly that Copyright Directive art.3(2) per se did not apply to the broadcasts in question in this case because Article 3(2) concerns “interactive on-demand transmissions”, not live broadcasts. However, the CJEU recognised that the point in issue was a separate one: can a Member State give its broadcasters wider protection than art.3(2)? For us in the United Kingdom, where the different types of copyright works are given more or less the same protection, the question seems unnecessary to ask. On the continent, where Berne copyrights and related rights are treated very differently, it is not an odd question to ask at all, and this case serves to emphasise the different approach taken to Berne copyrights and related rights on the continent.

As mentioned above, the court noted that Copyright Directive recital 7 states that the objective of that Directive is to harmonise both copyright and related rights only so far as is necessary to ensure that the functioning of the internal market is not adversely affected. That principle applies to both types of rights, but the Copyright Directive then draws the distinction between the two types of rights by granting the broad right of communication to the public to authors in art.3(1), and the limited right of making available to related rights owners in art.3(2). In applying this distinction in

Be that as it may, from a commercial and practical point of view the CJEU arguably had to find that Member States could indeed extend the exclusive rights of broadcasters in respect of the live broadcasts such as sports events, due to the vast amounts of money involved in the licensing of broadcast rights in sports events. If the court had found that the broadcast of live sports events could not be protected in this way, and that there could be no infringement of copyright where paywalls are bypassed, it would have highlighted a major flaw in the copyright acquis. It would also have caused much consternation in the world of sports rights licensing.

Our Copyright, Designs and Patents Act, like Swedish law, obviously goes further than art.3(2), because it grants the full right of communication to the public to broadcasters under s.20. The validity of s.20 was challenged by TVCatchup in their initial High Court case on the grounds that it goes further than Copyright Directive art.3(2) permits, but the challenge failed and was not appealed by TVCatchup. But the claimant broadcasters defeated the challenge without reference to recital 16. Instead, they argued that the government’s powers of implementation under European Communities Act 1972 s.2(2) extended to legislating for wider rights than art.3(2) provides. The fact that the pleadings evidently ignored recital 16 is understandable in view of the string of CJEU pronouncements that Recitals do not have the force of law, but the power of recitals should not be ignored. Take for example, the joined

On a final note, despite the decisions in Svensson, Bestwater and now C More, we still do not have a clear answer to the question of whether a link to copyright content that is freely available on the internet is still a “communication”, but not a “communication to the public”, if that original content was made freely available without the authority of the copyright owner(s). However, a closer reading of Bestwater might provide the answer, albeit an implied answer: in its order the CJEU appeared to conflate the concept of being freely available with the assumption that the availability must by definition have the authorisation of the copyright owners(s), since the decision confirms that the judgment as to whether there is further communication to the public of the freely available content rests on whether the further communication targets a new public not in the contemplation of the copyright owner(s) who authorised the initial availability. If the owner(s) did not authorise that initial availability, surely any communication of the content is communication to a new public. We now await the CJEU’s decision in the reference from the Dutch Court in Playboy Enterprises/Sanoma Media v GeenStijl.nl, which squarely addresses the still unanswered question.