The Court of Justice of the European Union has ruled that cloud-based, commercial nPVRs cannot rely on the private copying exception under EU law if the service also involves a communication to the public. nPVRs are internet-enabled personal video recorders which allow users to record and store television programmes on the service provider’s servers.
Businesses should not undertake ventures which provide private individuals with a cloud service for the remote recording of private copies of works protected by copyright if that venture is conducted by means of a computer system, the provider actively involves itself in the recording, and the rights holder has not provided consent. There is a possibility that such ventures may be undertaken if a licence (to communicate works to the public) is obtained, however the CJEU ruling is not clear on this point, therefore any such licences should be carefully considered.
Vcast, a UK company, provided an nPVR to its customers which enabled them to record programmes broadcast by Italian television organisations. The user would select the programme they wished to record, and the recording system would record and store the programme on its own cloud storage facility (Vcloud), from where the user could access the recording. The user could also request that the recording be transferred to the user’s own chosen cloud storage facility (for example, Drive, OneDrive, Dropbox, etc.). Vcast sought a declaration that its activities were lawful, arguing that the private copying exception under Italian law applied. This exception is broadly similar to the private copying exception in English law, in that the authorisation of the copyright holder is not needed for reproductions on any medium made for private use and for ends that are neither directly nor indirectly commercial, provided that the rights holder receives fair compensation.
The CJEU ruled that Vcast did not just organise the reproduction of the programmes, but it also made the programmes available so as to enable the reproduction (users could directly stream them from the service). Vcast was therefore responsible for acts of both reproduction and communication. That communication was held to be a communication to the public since each communication was made under specific technical conditions using a means of transmission different to the original broadcast. The court held that, due to the accompanying communication to the public that takes place, the act of reproduction could undermine the rights of the rights holder therefore it could not fall within the private copying exception.
The facts of this case and of the service being provided were specific, and the CJEU’s judgment failed to comment on whether services similar to Vcast’s would be similarly prohibited. For example, it is not clear whether nPVRs which compensate rights holders, or do not ‘actively involve’ themselves in the recording/communication process (i.e. no additional step beyond the mere provision of a cloud service for the remote recording of private copies) would fall foul of the law. In light of these uncertainties, we anticipate there will be subsequent referrals to the CJEU requesting further guidance on streaming services, the judgment, and/or the concept of ‘active involvement’.
Case C-265/16 Vcast Ltd v RTI SpA EU:C:2017:913 (29 November 2017).