07 August 2011

TV Streaming: ITV Broadcasting Ltd. and Others v TV Catchup Ltd.

Art 3 (1) of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society ("the Information Society Directive") required EU member states to
"provide authors with the exclusive right to authorise or prohibit any communication to the public of their works, by wire or wireless means, including the making available to the public of their works in such a way that members of the public may access them from a place and at a time individually chosen by them."
However, art 3 (2) required member states to provide broadcasting organizations only with
"the exclusive right to authorise or prohibit the making available to the public, by wire or wireless means, in such a way that members of the public may access them from a place and at a time individually chosen by them."
The Directive was implemented in the UK by The Copyright and Related Rights Regulations 2003 which were made by the Secretary of State for Trade and Industry pursuant to s.2 (2) of the European Communities Act 1972. Reg. 6 of those regulations amended s.20 of the Copyright Designs and Patents Act 1988 in such a way as to confer upon broadcasters the same right as was to be conferred upon authors by art 3 (1) and not just those that were required to be conferred by art 3 (2).

In ITV Broadcasting Ltd and Others v TV Catchup Ltd. [2011] EWHC 1874 ITV Broadcasting Ltd and a number of other commercial broadcasters relied on that amended section to to sue TV Catchup Ltd. for converting satellite and terrestrial broadcasts into data that could be streamed to subscribers over the internet or to their tablets or mobile phones. I set out the facts and discussed the issues in Copyright: ITV Broadcasting v TV Catchup Ltd, last December when TV Catchup applied unsuccessfully to strike out the claim.

The action came on for trial before Mr. Justice Floyd in June. TV Catchup's principal argument at trial was that s.20 was ultra vires since it went further than art 3 (1) of the Directive. The company also argued that it did not reproduce a substantial part of any of the claimant's works and that in any case its activities were exempted by s.28A and s.73 of the Copyright, Designs and Patents Act 1988.

In his judgment, Mr. Justice Floyd concluded at paragraph [144] that the Secretary of State did not exceed his powers in implementing the Directive. However, he decided to refer the question of whether the defendant infringed copyright by communicating the claimants' works to the public, whether the process of converting broadcast signals into data that could be streamed to subscribers amounted to reproducing a substantial part of the claimants' broadcasts and whether the s.28A defence applied to the Court of Justice of the European Union. He also found that the s.73 defence applied except for transmissions to subscribers' mobile phones or other wireless devices or out of area.

In arriving at his decision on implementation the judge analysed the Court of Appeal's decision in Oakley Inc. and others v Animal Limited and others [2005] EWCA Civ 1191, [2006] Ch 337, [2006] 2 WLR 294 and subsequent cases from which he drew the following principles at paragraph [66]:

    "i) Section 2(2)(b) is not to be approached restrictively as if it were a Henry VIII clause: it is sui generis because it is for the purpose of implementing treaty obligations of this country: Oakley [19], [70];Ahmed [212];

    ii) The primary objective of any legislation implemented under section 2(2) must be to bring into force laws which, by treaty, the United Kingdom has agreed to make part of her laws: Oakley [39];

    iii) Section 2(2)(b) nevertheless goes further than section 2(2)(a) in that it allows for legislation which is not necessary for the implementation of a Directive: Oakley [21], [39], [47], [74];

    iv) Moreover section 2(2)(b) permits legislation to be enacted which is consistent with the Directive but which does not have the same purpose: Cukorova [60];

    v) It is thus incorrect to say that the "child" cannot be wider, larger or "greater" than the parent: Oakley [39], [47], [76];

    vi) How much further the sub-section goes cannot be defined in the abstract – one just has to apply the statutory language to the case concerned: Oakley [47], [80]; Cukorova [60];

    vii) It is not correct to ask whether the measure is distinct, separate or divorced from the Directive and only then to hold it to be unrelated: Oakley [39], [80];

    viii) A measure would not arise out of or be related to an obligation if the Minister was not at the same time bringing into force a Directive, or did not have the trigger of a Regulation becoming directly applicable: Oakley [23];

    ix) Equally, a tenuous or general relationship with the subject matter of the Directive will not be enough: Jacob LJ's example of a Directive on mistake being used to reform the whole of contract law or Moses LJ's connection with financial collateral arrangements or stability of markets: Oakley [78]; Cukurova [99];

    x) In some cases, consistency of subject matter and purpose between Directive and Regulation may not be enough: Cukurova [99];

    xi) The fact that the Directive expressly contemplates that member states may take further steps in the direction in question may be a factor indicating that the measure is within the power: Pothecary[42];

    xii) However, the fact that the measure involves an original policy choice does not necessarily take it outside section 2(2)(b): Oakley, [47];

    xiii) Measures which represent a small further step on the same path as trodden by the primary provisions of the Directive may be within the power, even if they widen the protection of the law to a wider class of individuals or cases than required by the Directive: Pothecary [42];

    xiv) The extent to which the measure is consistent with pre-existing domestic law may be a factor. So if a Directive requires a law to be enacted in relation to one species of case recognised by domestic law: it may be legitimate to legislate at the same time for a sub-species of that case: Pothecary [42]."

The former s.20 had already given some protection for broadcasts and cable programmes and there was nothing in the Directive that required the Secretary of State to revoke such protection. However, the Directive required an additional restriction of wireless transmission for on-demand access. S.2 (2) (a) of the 1972 Act confers a genera power on ministers to implement EU obligations by secondary legislation but s.2 (2) (b) enables them also to deal with matters arising out of, or relating to, such implementation. In preserving the existing protection in the amending s.20 as well as adding to it to comply with the Directive the Secretary of State was exercising the powers conferred to by s.2 (2) (b).

Although he was of the opinion that TV Catchup had communicated the claimants' broadcasts to the public a distinction had to be drawn an act that qualifies as a communication to the public and just providing a means of access and the precise boundary between the two was not clear from the Court of Justice's decision in Case C-306/05 SGAE v Rafael Hoteles SL [2006] I-11519. As Mr. Justice Floyd put it at paragraph [90]:
"What is less clear from the decision of the CJEU in Rafael Hoteles is whether there is a communication to the public when an intervening organisation, 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 and advertisements, to communicate the original broadcast signal to members of the public who would in fact be able to access the original broadcast signal using their own television sets or laptops in their own homes. Reading paragraph [40] of the judgment in isolation would give an affirmative answer. But other passages suggest that it is material to ask whether there is a "new public" and whether the hotel guests would have been able to access the broadcasts without the intervention. I consider that the principles which it is possible to extract from Rafael Hoteles do not go far enough to enable me to answer that question conclusively in the claimants' favour. I propose therefore to refer a question for the opinion of the Court of Justice on this point."
The issue on reproduction arose because the process of converting television signals into data involves the transient reproduction of the broadcast on TV Catchups computers and its subscribers' screens. Relying on Football Association Premier League Ltd. and others v QC Leisure and others [2008] EWHC 1411 the judge inclined to the view that such transient copying did not amount to reproduction of a substantial part of the protected work. However, that had been put in doubt by the Court of Justice's subsequent decision in Case C-5/08 Infopaq International A/S v Danske Dablades Forening [2009] EUECJ C-5/08, [2009] ECDR 16, [2010] FSR 20, [2009] ECR I-6569 albeit in the rather different context of scanning newspaper articles. He therefore decided to refer this point to the Court of Justice too.

The Football Association and Infopaq cases had considered the extent of the s.28A exception to the CDPA which had also been inserted by the 2003 Regulations to implement the Directive. This section provides:
    "Copyright in a 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 recording or a 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) 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."
The scope of the s.28A exception had already been referred to the Court of Justice in relation to the Football case. The judge decided to defer judgment on the point until after the Court had decided the issue.

Finally s.73 (2) of the CDPA provides:
"The copyright in the broadcast is not infringed—
(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."
A"relevant requirement" is defined by s.73 (7) as a requirement imposed by a general condition (within the meaning of Chapter 1 of Part 2 of the Communications Act 2003) the setting of which is authorised under section 64 of that Act (must-carry obligations). Sub-section (6) includes all the claimants' services as a "qualifying service". The judge thought that this section must cover streaming through wired connections to personal computers but not to tablets or mobile phones.

In its response to Hargreaves the government accepted and shared the concern that "the IP framework is falling behind and must adapt". That criticism was made a few days ago in relation to the Court of Appeal's decision in Meltwater where a licensing scheme for the use of a new technology was in place. The criticism can be made with far greater cogency to a case like this where relatively small businesses are developing a new technology that could greatly increase consumer choice of entertainment and news but which is hampered by legal uncertainties. Those uncertainties will increase rather than diminish as a result of this judgment. That is not the fault of Mr. Justice Floyd whose analysis was masterly. The difficulty arose from the legislation and case law that he had to apply.

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