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Media Update October 2011

25 Oct 2011

European Court of Justice Ruling in use of Foreign Decoder Cards to view Premier League matches in the UK

Judgement of the ECJ has been given in this case concerning pub landlady Karen Murphy's broadcast of a live Premier League football game in her pub using a Greek satellite decoder card.

The ECJ has ruled that the grant by the Football Association Premier League ("FAPL") of exclusive satellite broadcast licenses to broadcasters for the territory of one or more member states which contained terms prohibiting the sale by such broadcasters of decoder cards for use outside their licensed territory, is a restriction of competition contrary to article 10(1) of the Treaty on the Functioning of the European Union. It also held that UK legislation which makes it unlawful to import and sell in the UK such decoder cards is an unlawful restriction on the supply of services contrary to EU law.

The reference to the ECJ came as a result of sets of proceedings brought by FAPL to the High Court. The first was related to three test cases brought by the FAPL against suppliers (including QC Leisure) of Greek satellite decoder cards to pubs in the UK, that enabled the reception of foreign broadcasters' transmissions of live Premier League matches. Proceedings were also brought for copyright infringement under the Copyright Designs and Patents Act 1988 ("CDPA") against four pubs that had screened the matches using the Greek decoder cards, alleging infringement of copyright of FAPL's copyright works within the broadcasts (eg the opening sequence, pre-recorded clips from other FAPL games and the Premier League anthem), by creating copies of the works in the internal operation of the satellite decoder itself and by communicating them to the public.

A criminal prosecution was also brought by FAPL against publican Karen Murphy, alleging breach of section 297(1) of the CDPA in respect of two matches screened at her pub using one of the Greek decoder cards. Ms Murphy was convicted and on her appeal to the High Court various questions were referred to the ECJ.

It is important to note that while the ECJ found that the FAPL's prohibition on broadcasters selling decoder cards outside their licensed territory was unlawful as well as UK legislation making it unlawful to import and supply such cards, it also found that broadcasts using such foreign decoder cards to customers in a pub constituted "communication to the public" of the copyright works included in the broadcast and hence an infringement of copyright. So, while it seems that individuals in the UK cannot be prevented from buying decoder cards from other EU countries for their own private viewing at home of FAPL matches, it does not mean that UK pub landlords can do the same in order to show live broadcast matches to their customers if the broadcasts of such matches also contain copyright protected works such as the logo of the League and other branded material visible on the screen.  In these circumstances it would seem they would still need a licence from the FAPL to show the matches.

All that is clear at the moment is Mrs Murphy is not going to have a criminal record as her current conviction will be quashed.  Apart from this, everything is left up in the air.  What the Court seems to be saying is that copyright in broadcasts of sports events is effectively exhausted (so that re-transmission cannot be impeded) where licensees in certain national territories are required to pay unreasonably high fees.  In the absence of Community legislation protecting sporting events as such (as opposed to how they are packaged) the Court is saying that there is no countervailing justification for allowing segmentation of the single market where excessively high national territorial licence revenues (assumed to be present) are protected by import bans on decoders and other similar methods. 

The applicability of this principle to situations where artistic performances are broadcast in the EU on a territorial basis and where licence fees are reasonable (whatever that is) is not clear at all.  But it is at least arguable that the judgment is sport specific which will be a relief to the cultural industries.

(Murphy -V- Media Protection Services Ltd and Football Association Premier League Ltd and Others -V- QC Leisure and Others, Joined Cases C-403/08 and C-429/08, 4 October 2011).

Enterprise Investment Scheme State Aid Approval

The European Commission has approved for State aid purposes the changes to EIS schemes' level of tax relief and investment limits announced in the 2011 Budget.

It has approved the increase of the rate in income tax relief to 30% in respect of investments made in EIS qualifying companies on or after 6 April 2011. This was included in the Finance Act 2011.

It has also approved the increase in the individual investment limit from £500,000 to £1,000,000 in respect of investments made on or after 6 April 2012. It is intended to include the investment limit increase in the Finance Act 2012.

Copyright Term of Sound Recordings Extended to 70 years

The European Council has adopted a Directive amending the Copyright Term Directive, which amongst other things, extends the period of copyright protection for sound recordings from 50 to 70 years from first publication or communication to the public.

This follows a proposal in 2008 from the Commission to extend protection to 95 years (as in the USA) and extensive lobbying from record companies and various high profile artists, such as Cliff Richard, who did not want to see recordings of their works falling into the public domain in their lifetime.

The other main terms of the Directive are:

• record companies to pay 20% of revenues earned during the extended term into a fund intended to benefit session musicians who received only one-off payments for their performances on a recording.
• If the record company stops marketing a recording during the extended term the rights in the recording will revert to the performer. The performer will first have to notify the record company of his or her intention to terminate the contract and the record company will have a year in which to start marketing the recording again in order to prevent losing the rights to the performer.
• record companies will not be able to set off royalties due to the performer in the extended period against monies previously owing under the contract between them. The extended period will start with a so-called "clean slate".
• harmonisation of period of protection of co-written works. The 70 year copyright period for co-written works will start on the death of the last surviving co-writer, whether they be the writer of either lyrics or music.

Member states have two years in which to implement the legislation and in 2012 the Commission is to investigate whether a similar extension should be granted in respect of audio-visual works.