ITV v TV CatchUp Ltd: the end of the road for TV Catchup?

15 / 11 / 2013

The Chancery Division has recently handed down an order in ITV v TV Catchup Ltd which prohibits the defendant, TV Catchup Ltd, from streaming certain free-to-air tv channels via its online service at www.tvcatchup.com. The case revolved around whether TV Catchup Ltd was infringing ITV, Channel 4 and Channel 5’s copyright in their broadcasts by making available to the public all the free-to-air UK channels over its website. After initial hearings in 2011, the High Court referred a number of questions to the Court of Justice of the European Union (“CJEU”) regarding the key aspects of a claim for infringement of copyright by a communication to the public. The recent order draws on the CJEU ruling and may bring the matter to its conclusion, although both parties have been granted leave to appeal on certain aspects of the case.

 Introduction

The right for the owner of a copyright work to authorise or prohibit its “communication to the public” is set out in Section 20(1) of the Copyright, Designs and Patents Act 1988 (“CDPA“) which implements Article 3 of the Copyright Directive[1].

Section 20(2) of the CDPA clarifies that a “communication to the public” means a communication by “electronic transmission”.

The ITV v TV Catchup Ltd case provides valuable guidance on how the concept of a “communication to the public” should be interpreted.

ITV v TV Catchup

ITV, Channel 4 and Channel 5 (the “Broadcasters“) have been battling with TV CatchUp Ltd (“TVC“) for a number of years over the live streaming of the Broadcasters’ channels on TVC’s website.

TVC offers access to all of the free-to-air UK channels, including those of the Broadcasters and all the BBC channels, to any subscriber who signs up to the service on its website, www.tvcatchup.com.  (The name “TV Catchup” is actually a little misleading as subscribers are not able to view content on demand, although this was previously the case. The service now only allows subscribers to view an internet stream of the live broadcast.)

When a subscriber signs up to the service he must confirm that he is both located in the United Kingdom and entitled to watch UK television, i.e. he holds a valid TV licence. Therefore, strictly the only people that should be able to access TVC’s online service are those that could at any point simply switch on their televisions and watch any of the free-to-air broadcasts.

TVC is free to its subscribers but the service is funded by advertising. Advertisements are shown both before the live broadcast is made available to the subscriber and later around the video stream (known as “in-skin” advertising). The advertisements in the original broadcasts remain unaltered.

TVC do not have permission from the Broadcasters to stream their live broadcasts and, since the Broadcasters themselves are also funded predominantly through advertising, TVC is in effect in direct competition with them.

The High Court Claim

The Broadcasters’ claim was heard in the Chancery Division in 2011, with initial hearings in June and July of that year and a further hearing in November[2].

The Broadcasters claimed to own the copyright in two types of works in their channels: broadcasts and films[3]. Although it appears from the judgement that TVC may initially have raised some form argument against the Broadcasters’ ownership of the copyright in these types of works, this was later dropped.

The Broadcasters claimed that their copyrights in both the broadcasts and films were being infringed in two ways:

  1. by a communication of the works to the public; and
  2. by the making, or authorising the making of, transient copies of the works in TVC’s servers and on the screens of users.

It is claim 1.) that proved to be the main point of contention in the case.

Communication to the Public.

TVC raised a number of defences to claim a).

First, TVC asserted that Subsection 20(1)(c) of the CDPA was not validly enacted. TVC claimed that under the Copyright Directive, the general right of authors to prohibit or authorise the communication to the public of their copyright works was restricted to the so-called “Berne Convention rights”, meaning literary, dramatic, musical or artistic works only.

TVC argued that since Subsection 20(1)(c) of the CDPA extends this general right to broadcasts, the Subsection should have been enacted by primary legislation rather than secondary legislation.

Since TVC’s claims represented a challenge to primary legislation, the court allowed the Secretary of State for Business, Innovation and skill to make certain submissions.

Having heard these submissions, and those of the Broadcasters, Mr Justice Floyd rejected TVC’s arguments. He held that the amendments made when implementing the Directive into UK law were “closely and naturally related to the purpose of the Directive” and the Minister was within his powers to enact Section 20(1)(c) in its current form.

Secondly, TVC claimed that even if Subsection 20(1)(c) was validly enacted, TVC’s actions did not amount to a communication to the public.

TVC argued that because each subscriber logged on individually to its service through a series of one-to-one connections, there was no “public” within the meaning of the CDPA.

TVC further argued that previous case law of the Court of Justice of the European Union (“CJEU“) stated that any communication must be to a “new” public different from that which the owners of the copyright works envisioned when they provided permission for the original broadcast.

Mr Justice Floyd stated that it was unclear from the previous case law whether or not TVC’s actions did constitute a “communication to the public” within the meaning of the CDPA, and he therefore referred certain questions to the CJEU.

The Referral to the CJEU

The following questions were referred to the CJEU:

  1. 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 either throughout the territory of a Member State or within a geographical area within a Member State;

(b)      a third party ([that is to say,] an organisation other than the original broadcaster) provides a service whereby individual subscribers within the intended area of reception of the broadcast who could lawfully receive the broadcast on a television receiver in their own homes may log on to the third party’s server and receive the content of the broadcast by means of an internet stream?

  1. 2.     Does it make any difference to the answer to the above question if:

(a)      the third party’s server allows only a “one-to-one” connection for each subscriber whereby each individual subscriber establishes his or her own internet connection to the server and every data packet sent by the server onto the internet is addressed to only one individual subscriber?

(b)      the third party’s service is funded by advertising which is presented “pre-roll” ([that is to say,] during the period of time after a subscriber logs on but before he or she begins to receive the broadcast content) or “in-skin” ([that is to say,] within the frame of the viewing software which displays the received programme on the subscriber’s viewing device but outside the programme picture) but the original advertisements contained within the broadcast are presented to the subscriber at the point where they are inserted in the programme by the broadcaster?

(c)      the intervening organisation is:

(i)      providing an alternative service to that of the original broadcaster, thereby acting in direct competition with the original broadcaster for viewers; or

(ii)      acting in direct competition with the original broadcaster for advertising revenues?

Communication?

In order to answer the first and main question, the CJEU said it was first necessary to determine the concept of a “communication”.

The CJEU noted that the principal objective of the Copyright Directive was “to establish a high level of protection of authors allowing them to obtain an appropriate reward for the use of their works, including on the occasion of communication to the public”[4].

Further, Recital 23 of the Copyright Directive states “This right should be understood in a broad sense covering all communication to the public not present at the place where the communication originates”.

The CJEU concluded from this that, given the need to interpret “communication” broadly, it followed that each transmission or retransmission of a work which uses a specific technical means must be authorised by the author.

The CJEU concluded that the making available of works through the retransmission of a television broadcast over the internet using a specific technical means different from that of the original communication must qualify as a “communication”. Consequently, that retransmission cannot be exempted from the need for authorisation.

Public?

TVC had argued in the High Court that its subscribers did not constitute a “public” within the meaning of the CDPA since each individual accessed the service through a one-to-one connection.

The CJEU noted that previous case law suggested that the term “public” referred to an “indeterminate number of potential recipients and implies, moreover, a fairly large number of persons“[5].

The CJEU referred to the case of SGAE v Rafaele Hoteles[6]. SGAE is a Spanish rights-holders association that brought a claim against the defendant hotel chain for distributing broadcast signals received by them to rooms within their hotel without permission. The defendant had argued that since the communication was to individual hotel room occupants who separately were of very little economic interest, there was no “public” within the meaning of the Directive. However, the CJEU said that it was necessary to look at the cumulative effect of making the work available to such potential viewers.

The CJEU applied this reasoning in the present case and concluded that it was irrelevant that TVC’s subscribers accessed the work individually, since the use of one-to-one connections did not prevent a large number of people having access to the same work at the same time. The Court was, therefore, satisfied that the works had been presented to the “public”.

New Public

Finally, the CJEU addressed the issue of whether or not there needed to be a “new” public in order for copyright infringement to have taken place.

The Court again referred to SGAE v Rafaele Hoteles and also the Football Association Premier League cases[7] in which the Premier League had claimed that the broadcast of its matches in pubs using foreign decoder cards was unlawful. In the Premier League case, the CJEU had held that in order for there to be a communication to the public within the meaning of Article 3 of the Copyright Directive “it is also necessary for the work broadcast to be transmitted to a new public, that is to say, to a public which was not taken into account by the authors of the protected works when they authorised their use by the communication to the original public”.

However, the CJEU went on to distinguish the present case from those earlier cases. It held that in those earlier cases, the Court was examining a situation in which an operator had made accessible the original broadcast containing protected works by its deliberate intervention, meaning that the original broadcast was communicated to the public by the third party operator.

In contrast, in the present case, the CJEU held that it was dealing with a situation where there was first a transmission of works included in a terrestrial broadcast and then a second transmission over the internet. The CJEU held that since there were two separate transmissions, using two technical conditions, each must be authorised individually and separately by the authors concerned. It held that since there were two separate transmissions, it was no longer necessary to deal with the requirement that there must be a new public (which is only necessary in the single transmission situation in the earlier cases).

The CJEU was, therefore, satisfied that TVC’s actions did constitute a communication to the public of the Broadcasters’ copyright works.

The additional questions referred

Question 2)a) had already been answered by the Court in its examination of the main issue.

With regard to question 2)b), the CJEU said that the fact that TVC was a profit-making venture which benefitted from advertising revenue was “not irrelevant” but was not an essential condition of a claim for infringement by communication to the public.

Finally, with regard to question 2)c), the CJEU held that neither the Directive nor the case law suggested that the fact that the organisations were in a competitive relationship was relevant. It concluded, therefore, that this had no influence on the answer to the first and main question.

The High Court Order

Following the CJEU ruling, the Chancery Division issued an order on 10 October 2013 (the “Order“). A copy of the Order can be found at http://tvcatchup.com/press/8

The Order stipulates that TVC has infringed the Broadcasters’ film and broadcast rights by streaming to members of the public via its website:

a)     all and any streams of the following channels: ITV+1, ITV+2, ITV2+1, ITV3, ITV3+1,ITV4+1, 4+1, E4, E4+1, CITV, More4, More4+1, Film4, Film4+1, 4seven, 4music, 5+1, 5USA, 5USA+1, 5*;

b)    any streams of ITV, Channel 4 and/or Channel 5 to mobile devices via any mobile telephone network; and

c)     any streams of ITV, Channel and/or Channel 5 to users situated out of the region to which the original broadcasts were made.

However, TVC’s transmission of the original free-to-air channels – ITV, Channel 4 and Channel 5 – over the internet to users situated in the UK is notably missing from the above list since, in relation to these channels, TVC was able to rely on the defence set out in Section 73 of the CDPA. The Order provides no further commentary on this defence, although this may follow when a full judgement is issued. The Order also states at paragraph 4 that section 73 of the CDPA is not compatible with Article 5(3)(o) of the Copyright Directive which suggests we could see a change in UK law in this respect in the future.

The Order restrains TVC from communicating the above channels to the public in the circumstances set out above (with the exception of the channels to which the Section 73 defence applies). It also requires TVC to supply the Broadcasters with certain financial information to allow the Broadcasters to decide whether to seek damages or an account of profits which will be dealt with in a separate hearing. TVC are required to pay 80% of the Broadcasters’ costs, with an initial payment of £200,000. Each of the parties are also required to make a copy of the Order available on their respective websites for a period of 6 months.

Comment

This case appears to indicate an expansion of the concept of a “communication to the public” in order to meet the principal objective of the Copyright Directive which is to establish a high level of protection for authors. The CJEU judgment clarifies that a communication using a one-to-one or individual connection does not prevent such a communication being to the “public”. The judgement also explains that the requirement for a “new” public, that was set out in previous CJEU case law, does not extend to a case where a different technical means of transmission is used from the original transmission in order to communicate copyright works to the public.

Since the issue of the Order, TVC’s online offering of live channels has been reduced significantly. Whether TVC survives in the future is likely to depend on whether it can reach an agreement with the Broadcasters to license the right to communicate their works to the public.