A catch for TVCatchup – limits of the cable defence

Posted: November 14, 2013

On 10 October 2013 the High Court handed down a formal Order, [i] confirming the judgment of the Court of Justice of the European Union (CJEU) dated 7 March 2013. [ii]  The CJEU found that the streaming service operated by TVCatchup Limited infringed the claimants’ right of communication to the public.  The Order does, however, allow TVCatchup to continue to stream public service broadcaster (PSB) channels (i.e. ITV1, Channel 4 and Channel 5) live via cable in the UK, by virtue of the cable re-transmission defence under section 73 of the Copyright, Designs and Patents Act 1988 (CDPA). 

Background

TVCatchup is a service that allows users to receive near-simultaneous online streams of free-to-air UK television broadcasts.  These broadcasts are transmitted unaltered by TVCatchup, and it generates revenue by displaying some of its own adverts before and during the programmes.  TVCatchup creates a one-to-one connection to each user from its servers, and one of its terms and conditions is that its users must have a valid TV licence.  It uses geo-blocking technology to ensure that only UK-based users are able to access the service.

Seven UK broadcasters and TV content production companies, including ITV, Channel 4 and Channel 5, jointly brought proceedings in the High Court, and the case first went to trial in June 2011.  They claimed that copyright in their broadcasts and in the underlying films had been infringed, including by communication to the public under section 20 of the CDPA, which implemented Article 3(1) of the Copyright Directive. [iii]

On 14 November 2011 Mr Justice Floyd referred two questions for preliminary determination to the CJEU:

1. Does the right to authorise or prohibit a “communication to the public of their works by wire or wireless means” in Article 3(1) of Directive 2001/29 extend to a case where:

(a) authors authorise the inclusion of their works in a terrestrial free-to-air television broadcast which is intended for reception throughout the territory; and

(b) a third party provides a service whereby individual subscribers who could lawfully receive the broadcast on a television may log on to the third party’s server and receive the content of the broadcast by means of an internet stream?

2. Does it make any difference if the third party’s server allows only a “one-to-one” connection; the third party’s service is funded by advertising; or the intervening organisation is acting in direct competition with the original broadcaster?

CJEU judgment

The CJEU found that each new transmission and re-transmission of a work using a specific technical means constituted a communication.  Therefore the re-transmission of a terrestrial television broadcast over the internet must be considered a communication for the purposes of Article 3(1) of the Copyright Directive.

The court ruled that a “public” referred to an indeterminate, but large, number of potential recipients, and that the cumulative effect of the number of users accessing the same work is a relevant factor in determining the size of the potential audience.  The court did not agree with TVCatchup’s argument that the one-to-one communication by TVCatchup to its users precluded a public from forming.

The CJEU therefore found that TVCatchup’s service did constitute a communication to the public and rejected the relevance of other factors, such as the service’s funding by advertising or competition with original broadcasters.

High Court Order

Following the CJEU judgment, TVCatchup issued a defiant press release stating that the judgment only affected a handful of the channels carried by the service.  This is not the reality of the High Court Order, however, and it is difficult to see how TVCatchup can continue to trumpet a victory after this decision, despite the court’s application of section 73 of the CDPA.

The High Court Order states that TVCatchup has infringed the claimants’ film and broadcast copyrights by streaming to members of the public via its service at www.TVCatchup.com:

(a) any streams of the following digital channels broadcast by one or more of the claimants, namely: ITV+1, ITV2, ITV2+1, ITV3, ITV3+1, ITV4, ITV4+1, 4+1, E4, E4+1, CITV, More4, More4+1, Film4, Film4+1, 4seven, 4music, 5+1, 5USA, 5USA+1 and 5*;

(b) any streams of the PSB channels to mobile devices via any mobile telephone network; and/or

(c) any streams of the PSB channels to users situated outside the region to which the original broadcast was made.

In light of this, the Order granted the claimants an injunction, requiring TVCatchup to cease transmitting the digital channels online and all of the claimants’ channels (including the PSB channels) on mobile networks.  The Order requires an inquiry as the damages caused to the claimants or an account of profits and requires TVCatchup to pay 80% of the claimants’ costs.

To the extent that TVCatchup streamed the PSB channels to UK members of the public by cable (including internet transmission, but not transmission via mobile networks), the High Court found that TVCatchup had not infringed the claimants’ copyright, by virtue of section 73 of the CDPA.

Cable re-transmission defence

The defence under section 73 of the CDPA in its current form was originally designed to encourage cable roll-out in the 1980s and 1990s as a competing platform to terrestrial television.  It allows cable operators the right to transmit the PSB channels without having to obtain permission from their broadcasters or from the owners of any of the copyright works broadcast on the PSB channels.  Section 73 provides that copyright in a qualifying service is not infringed where it is received and immediately re-transmitted via cable.  For the defence to apply, the broadcast must be re-transmitted only to users situated in the region where the original broadcasts were made.

Despite finding that the section 73 defence applied here, the court made a clear declaration at paragraph 4 of the Order that it is not possible to interpret section 73 “so as to be compatible with” Article 5(3)(o) of the Information Society Directive. [iv]  While section 73 allows for cable transmission though the internet, Article 5(3)(o) of that Directive sets out a list of copyright exceptions to the right of communication to the public under Article 3, provided that they “only concern analogue uses”.  Plainly, cable transmission through the internet is digital and so does not fall within this strict analogue category.  The court was bound to apply section 73 here, but the wording of the Order is unequivocal and the UK has acted outside the scope of the Information Society Directive in making this defence available.

In view of this litigation and the impending Order, the continued inclusion of section 73 in the CDPA as it is currently worded was debated in the House of Lords on 18 June 2013 in the context of the Intellectual Property Bill.   Lord Clement-Jones stated that the interpretation of section 73 by the High Court in this case “is not an interpretation that can ever have been intended by Parliament – and nor, based on correspondence with the Intellectual Property Office, is it one that the Government believe is correct”. [v]  It was confirmed that the Government intended to review the statute, and the Government published a policy paper on 30 July 2013. [vi]  It is aiming to find a way in which access to the PSB channels on the major television platforms can be delivered to consumers, at no cost to the PSB channels or platforms, without allowing exploitation of PSB channels by other kinds of online services.

The Order will certainly limit the services that TVCatchup can now provide, but it has been given permission to appeal the High Court’s decision that it is not entitled to stream the PSB channels live across mobile networks.  Nonetheless, it seems improbable that the court will be willing to extend the application of section 73, in light of its declaration that section 73 is incompatible with the Information Society Directive.

Comment

The Government’s ongoing review will give Parliament a chance to reconsider the aim of section 73 and to ask whether its current outcomes are still relevant to public policy objectives.  Amending and tightening it to ensure that the beneficiaries of the clause are the intended platforms that are acting within the law seems wise.  Section 73 continues to provide broadcasters and consumers with an efficient route to access the PSB channels that most cable subscribers want.   Broadcasters have also been lobbying Government to see an end to fees that they have to pay to platform providers to carry their PSB content.  The question remains, however, how legislation can be drafted effectively to ensure that there is a level playing field between all platforms, with zero fees and zero revenue lost by the PSB broadcasters.

Gillie Abbotts
Article written for Entertainment Law Review.

[i] ITV Broadcasting Ltd v. TVCatchup Limited, Order of Floyd LJ, dated 10 October 2013, High Court of Justice, Claim No. HC10C01057.
[ii] Case C 607/11 ITV Broadcasting Ltd v TVCatchup Ltd, Judgment of the Court (Fourth Chamber), 7 March 2013.
[iii] 2001/29/EC.
[iv] Directive 2001/29/EC.
[v] Lords Hansard, 18 Jun 2013: Column GC91.
[vi] Department for Culture, Media and Sport, Connectivity, Content and Consumers: Britain’s digital platform for growth, July 2013, p. 26.