Pub landlady scores goal in fight for foreign football streaming rights

In what could prove to be the undoing of the cartels sporting associations and broadcasters have been running in relation to transmission rights, the European Court of Justice (ECJ) has today released a the view of Advocate General Julianne Kokott, who states that territorial exclusivity agreements relating to the transmission of football matches are contrary to European Law.

What this means: pubs and clubs that currently stream football matches via foreign broadcasters or using foreign decoders may be allowed to do so (but its not a done deal and there is likely to be heavyweight commercial push back against this).

Background to the case: The Football Association Premier League (FAPL) holds the rights to broadcast Premier League matches to broadcasters. It sells these on a country by country (territory) basis so for example, in the UK BSkyB is licensed to broadcast while across Europe other broadcasters may be licensed to screen matches to viewers in their respective territories. In recent years there has been a trend in pubs and clubs plugging into foreign satellites or streaming broadcasts from foreign websites as well as several companies actually going around selling foreign decoders and cards. This naturally caused great displeasure among FAPL and UK broadcasters losing subscriptions.

The UK legal actions: Two cases originating in the UK were referred to the ECJ. The first involved FAPL and suppliers of foreign decoding equipment, the second involved a pub landlady from Portsmouth. We’ll stick to the pub landlady as that makes for a more entertaining read…

The pub landlady gets busted
Karen Murphy is the landlady at a pub called the Red White and Blue in Southsea (near Portsmouth). She didn’t want to pay expensive sports TV subscriptions to Sky Sports (BSkyB) so got hold of another decoder that let her link the TV in her pub to a Greek satellite provided by NOVA under the “LiveS7” channel logo. Job done and her customers were able to watch Premiership football matches – in particular Bolton Wanderers v Tottenham Hotspur and Portsmouth v Bolton Wanderers in August and September of 2006.

Not long after, she was busted by Media Protection Services who specialise in seeking IP enforcement using the criminal sanctions of the Copyright Designs and Patents Act 1988 (CDPA). Murphy ended up in front of Portsmouth Magistrates Court where she was convicted of “dishonestly receiving a programme included in a broadcasting service provided from a place in the United Kingdom with intent to avoid payment of any charge applicable to the reception of the programme” contrary to section 297(1) of the CDPA. She admitted her actions but was not happy with being prosecuted for them and subsequently appealed to the Crown Court (which dismissed her appeal) and then to the High Court which in 2007 also dismissed her appeal in relation to the IP infringement under CDPA but did so subject to a point of European law. That point was the same one as arose in the other legal action by FAPL against equipment suppliers and resulted in both cases being referred to the ECJ.

Article 81 of the EC Treaty
Art 81 provides “The following shall be prohibited as incompatible with the common market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market” and specifically where these “directly or indirectly fix purchase or selling prices or any other trading conditions”.

The question before the ECJ
Are the restrictions imposed by the FAPL that limit the licensing of transmission and viewing rights to territories contrary to Art 81?

The knock-on issue for the UK courts
If the license agreements are found to be in breach of Art 81 then should UK/Member State courts be imposing and prosecuting IP infringement where the basis of that infringement is founded on copyright law which if enforced in favour of the rights holder would result in judgments that were supporting rights that run contrary to European Law.

The View of Advocate General Kokott

The key points she notes are:
(1) that European Law does not make it possible to prohibit the live transmission of Premier League football matches in pubs and clubs using foreign decoding cards or equipment.
(2) that the exclusivity rights in question (those currently imposed by FAPL) have the effect of partitioning the internal EU market into separate national markets and this amounts to a serious impairment of the freedom to provide services.
(3) that the contractual restriction on using decoder cards in their State of origin only for domestic and private use, but not for commercial use (which attracts higher subscription charges) also cannot justify a territorial restriction of the freedom to provide services.

Specifically in relation to copyright law she noted:
In relation to the question of whether showing live transmissions of football matches in pubs and clubs infringes the exclusive right of communication to the public of protected (copyright) works within the terms of the Copyright in the Information Society Directive, as EU stands, there are no comprehensive rights that protect the communication of a broadcast to the public where no entrance fee is charged.

She further noted that the application of the principle of the freedom to provide services is also consistent with the Satellite and Cable Directive and with EU competition law generally. Further, the Conditional Access Directive does also not prevent the use of foreign decoder cards in member states.

What next
The view of Advocate Kokott is not the final ruling on the matter but it is persuasive as the European Court of Justice is likely to follow her steer on the issue. BUT it would then be for member states including the UK to follow the direction of the ECJ in the application of domestic laws – in other words – the UK courts would have to align their judgments to this. However, member states could still make their own legislative provisions that allow authors (copyright holders) to object to communication of their works in pubs and clubs.

If the ECJ delivers a ruling in line with with Kokott's view then this could have far reaching implications for all such agreements - so not just rights in football but other sports such as motor racing, tennis, golf etc. The end effect could be that rights owners have to licence their copyright (such as rights to broadcast the images of sporting events) across the EU as a whole and not be able to segment it into different territories. This would be good news for consumers and in line with the principles of free trade and a shared EU but bad news for rights holders and their revenues. So if it came to that then Mediabeak thinks there would be two responses - first there would be the commercial response and right holders would find other ways of recouping their revenues (so far higher licence fees to offset the segmentation and allow for pan European coverage) and the legislature would need to respond to what is a challenge to various domestic copyright laws and their enforcement. Watch this space!

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