Sky's still the limit for Premier League football

This article was included in the winter 2011/12 issue of snIPpets - the intellectual property newsletter.

The judgment of the Court of Justice of the European Union ("CJEU") in the conjoined cases C-403/08 (FA Premier League (“FAPL”) v QC Leisure) and Case C-429/08 (Karen Murphy v Media Protection Services Limited) may on first reading seem to open the door for UK pub landlords to legitimately use foreign decoders to screen live Premier League football; but a closer look into the IP-related aspects of the judgment shows that, even though the broadcasting may have to review their licensing arrangements in light of the decision, Sky (and to a lesser extent ESPN) is still the limit when it comes to screening football to the public in the UK.

Background

Karen Murphy, the landlady of the Red, White and Blue pub in Portsmouth, was using an imported Greek decoder to show Premier League football matches rather than pay for the official UK broadcasts from Sky TV.  She was prosecuted under s. 297 of the Copyright, Designs and Patents Act 1988 ("CDPA) and convicted of dishonestly receiving a programme with intent to avoid payment of any applicable charge.  On appeal, the High Court referred a list of questions to the CJEU.

Decision

On 4 October 2011 the CJEU handed down its long-awaited decision; it held that licences which grant broadcasters territorial exclusivity and prohibit viewers from watching broadcasts with a decoder card in other Member States is contrary to EU law.  It rejected the Premier League’s argument that the restriction could be justified by the objective of protecting intellectual property rights in order to ensure appropriate remuneration for rights-holders; the restriction had gone beyond what was necessary, and "appropriate" did not mean "highest possible".  FAPL's licence agreements constituted a restriction on competition which was prohibited by Article 101 of the Treaty on the Functioning of the European Union.

On the questions relating to IP, the Court stated that FAPL could not claim copyright in the footage of the matches themselves, as they could not be considered to be the author's own intellectual creation and therefore "works" for the purposes of copyright.  Copyright could only subsist in the Premier League anthem, pre-recorded films showing highlights of previous matches and various in-game graphics.

Finally, the Court held that transmission of such works that did attract copyright constituted a "communication to the public" under Article 3(1) of the Copyright Directive (2001/29/EC), for which transmission would require the authorisation of the author of the work; this was because customers in a pub constituted an additional public not contemplated by the original authors.

In practice

There is no doubting the far-reaching implications of this decision; the practical consequences of the judgment transcend football and even sports broadcasting in general, and potentially affect pan-European licensing of any digital media, including films, television programmes and any manner of live events that have trans-continental appeal. The view of the European Commission seems to be that this ruling will result in increased consumer welfare through lower prices and increased choice of providers.  The risk of this approach, however, is that prices will plummet as consumers simply purchase from the cheapest supplier in the EU.  This may eventually damage the product, as a decrease in revenue could result in star footballers looking to other countries’ leagues for larger pay packets.  The Premier League may choose to adopt a pan-European licensing model to protect against such an eventuality, or may even, though unlikely due to large start-up costs, launch its own EU-wide channel and sell directly to consumers.  Looming large over all of this, however, is the growing threat of the internet and illegal streaming, a threat potentially far greater than parallel importing, and one that shows no sign of abating.

Comment

The decision of the CJEU is still to be applied by the English courts, and the final judgment will hopefully elucidate some of its practical implications.  In the meantime rights-holders must think very carefully about their European licences and whether they need, or desire, to amend them in order to avoid falling foul of this landmark decision.  In the case of sports licensing this may not be necessary; the ruling of the Court on the meaning of "communication to the public" means that publicans will be unable to broadcast using foreign decoders if features such as highlights and in-game graphics and logos are sufficiently embedded and cannot be removed.  Individual consumers, on the other hand, will be able to use foreign decoders for private viewing, but rights-holders will have to decide whether possible exploitation of the consumer market by parallel importers will noticeably damage revenues of their specific product.

Nicholas Buckland, Trainee Solicitor, IP Protection and IP Enforcement and Litigation at Fieldfisher.