Apologies for going on about football. I’ve got a bee in my bonnet about the suggestion that today’s ECJ ruling leaves room for the FA Premier League to use copyright law to continue preventing pubs from using foreign decoders to broadcast matches.

In its carefully-worded statement on the ruling, the Premier League makes much of what it calls the complexity of the case. It’s a skilful attempt to persuade the world that the ruling’s less of a defeat than it is. I’m particularly interested in this paragraph:

We are pleased that the judgment makes it clear that the screening in a pub of football-match broadcasts containing protected works requires the Premier League’s authorisation. Currently only Sky and ESPN are authorised by the Premier League to make such broadcasts.

Actually the judgment doesn’t make clear that pub screenings of football matches containing copyright-protected works requires the Premier League’s authorisation at all. It simply says such screenings involve communication to the public of those works within the meaning of article 3 of the Copyright Directive. Not the same thing.

Even more interesting is the clever way in which the second sentence of the paragraph appears to be connected logically to the first. Actually the connection is more tenuous. The first sentence includes the claim that screening matches in pubs requires authorisation. If this is true, it must be as true for pubs showing matches broadcast by Sky as it is for pubs showing matches broadcast by anyone else.

The second is not about screening matches in pubs, but about making broadcasts of matches to pubs and homes. Unless all other exclusive deals within the EU have now expired, I don’t think it can be true that only Sky and ESPN are authorised to do make such broadcasts. When Karen Murphy showed NOVA matches, NOVA was also authorised to make broadcasts. What the Premier League must mean is that only these firms have been authorised to make broadcasts in Britain. That they’ve omitted that qualification is, I suspect, deliberate and legally revealing.

If the Premier League is trying to claim that pubs screening Sky matches in the UK (including copyright material) are implicitly authorised to do so by “piggy-backing” on Sky’s authorisation to broadcast them, fair enough; but it must follow that pubs screening NOVA matches are similarly authorised to do so on the basis of NOVA’s authorisation. Unless you think the EU market can simply be partitioned nationally, Karen Murphy must be in the same position, with regard to copyright, as “Sky pubs”. In other words, the Premier League’s resort to copyright is just a rearguard attempt to partition the market all over again, and falls down on exactly the same legal grounds as its attempt to stop the sale and use of foreign decoders.

I’ve referred to drugs because the more I think about it, the more I think the legal issues here are analogous to those with which the ECJ has considered many times over the years in cases involving “parallel trading” in licensed medicines. Parallel trading occurs where a drug manufacturer sells its drugs in one market – say the UK – at a high price, while selling the same drugs in another market – say, Greece – at a much lower one. Parallel traders try to take advantage of the differential by re-importing the drugs from Greece to the UK, perhaps undercutting the manufacturer’s desired UK price. This is all quite similar, if you think about it, to the way in which the Premier League is trying to partition the live football market and the way Karen Murphy and the suppliers of her decoder in effect “reimported” live football from Greece.

It’s well established in the drugs cases that the right of a manufacturer to use intellectual property law – in that case, trademarks – to inhibit parallel imports is very limited. Paragraph 23 of case C-207/10 Orifarm makes the point:

the trade mark proprietor’s opposition to the repackaging of products bearing the mark, in that it constitutes a derogation from free movement of goods, cannot be accepted if the proprietor’s exercise of that right constitutes a disguised restriction on trade between Member States …

The drug parallel import cases show clearly that intellectual property rights do not simply “trump” internal market law, enabling rights holders to partition the EU market. The reverse is true: where there’s a conflict, internal free market rights can effectively limit the scope of intellectual property rights.

There’s no reason to think the Premier League’s in a stronger position than drug manufacturers. On the contrary, they’re in a weaker position because pub landlords don’t even have to “repackage” football matches. They simply give viewers access to the exact same service the Premier League has authorised to be shown within the EU, without the slightest interference with anthems, logos or any other copyright material.

Since my previous post, I’ve read one or two suggestions on the web and Twitter that Karen Murphy didn’t actually win against the Premier League, because its copyright in its anthem etc. means she can’t show NOVA matches anyway. Dan Sabbagh on the Guardian website for instance writes:

Unfortunately, the court held that pubs – who are in effect trying to profit from getting cheaper foreign decoder cards – can’t benefit. That’s because she was breaching the copyright of the Premier League, not by showing live coverage of the football match itself, but by broadcasting the Premier League’s logo or anthem without permission.

I think he goes too far here, though: the ECJ said only that Karen Murphy was communicating material to the public for the purposes of the Copyright Directive. It did not say that by doing so she actually breached anyone’s copyright, or could be prevented from showing matches.

I explained in my previous post that I doubt intellectual property rights over things like the Premier League anthem can be used to get round EU internal market rules. I say that partly because of section 31 of the Copyright, Designs and Patents Act – but mainly because I don’t think EU law is quite such an ass as that.

It’s worth reading the opinion of Advocate General Kokott in the case, which while not binding, indicates that her thinking on this is similar to mine. At paras. 229-230 she considers whether free movement law necessarily defeats copyright in these circumstances. Admittedly she doesn’t go quite that far:

229. A prohibition of reception would clearly be reasonable if rights existed to the whole broadcast or substantial parts which permitted an objection to be made to its communication in a pub.

230. If, on the other hand, secondary elements are involved, the economic value of which represents only a very small portion of the value of the broadcast as a whole and which are only of very low importance or are even without importance for viewers, it would be disproportionate to prohibit the reception of the broadcast as a whole for their protection. This does not rule out ensuring an adequate remuneration in some other way. A flat-rate levy paid to a collecting society by publicans .. might be imagined ..

What she says offers very little support, though, to the view that pubs can’t show matches using foreign decoders at all. We are surely not dealing here with copyright over the whole broadcast, but only of secondary elements, without importance for viewers.

I’m not sure even AG Kokott’s analysis gets to the bottom of it, though. I wonder in what sense Karen Murphy (say) could be said to breach copyright at all, if a publican using Sky to broadcast matches does not. You might say, ah, well, but the “Sky pub” has been granted implied permission to show broadcast material. Fine. But if that’s right, then a “NOVA bar” in Greece has been granted exactly the same implied permission – and so has Karen Murphy. The entire thrust of the ECJ’s ruling is that she’s just as legitimate a user of Premier League matches as they are.

On what basis could Karen Murphy be treated less favourably than a NOVA bar in Greece or a Sky pub in England, and be threatened with a copyright action if they’re not? Only on the basis that she happens to be based in the UK, not Greece; or that she happens to be using a Greek broadcaster, not a British one. Either approach again runs straight into internal market law, and the fact that by treating her differently on either basis, the Premier League would be attempting to partition the market, and either discriminate on grounds of nationality, or restrict free movement of services or freedom of establishment, depending on how you look at it. It would surely be difficult to justify such a discriminatory copyright enforcement policy as proportionate.

That’s why I doubt the Premier League can succeed in maintaining a nationally partitioned market by copyright enforcement alone.

Today the Grand Chamber of the ECJ gave its preliminary ruling in two joined cases, FA Premier League v QC Leisure and others and Murphy v Media Protection Services. The ruling isn’t on BAILII yet; but it is available on the ECJ’s own website. [Update: here’s the BAILII version].

The case is rightly being reported as a victory for the pub landlady Karen Murphy, whose criminal conviction under section 297(1) of the Copyright, Designs and Patents Act for dishonestly receiving a broadcast with intent to avoid payment, although technically still good in law until her case returns to the High Court, will surely now be quashed, since the ECJ has ruled that it’s contrary to internal market law, specifically the freedom to provide services under article 56 of the Treaty on the Functioning of the EU (TFEU). Rather than buying a Sky subscription for her pub, she’d obtained a decoder for a cheaper Greek satellite service from a firm called NOVA. It was this that Portsmouth Magistrates’ Court saw as dishonest, Ms. Murphy having been privately prosecuted by Media Protection Services, a company used by the Premier League, in the ECJ’s words to

to conduct a campaign of prosecutions against public house managers using foreign decoding devices

The background to this is the FA Premier League’s practice of selling rights to show its matches on a territorial basis within Europe. Perhaps no one wants the buy the right to broadcast them across the whole of Europe; I don’t know. In any case, in addition to the right to broadcast live matches within the UK, the Premier League sells the right to broadcast matches in other countries, like Greece – subject to the condition that the foreign broadcasters such as NOVA encrypt their broadcasts so that they can’t be received outside Greece. What the Premier League have objected to is the sale by firms like QC Leisure of decoding equipment enabling British viewers to see NOVA’s matches; and the use of those decoders by people like Ms. Murphy to circumvent the Premier League’s deal with Sky, and show matches in their pubs more cheaply. The Premier League started civil copyright proceedings against QC Leisure; in Ms. Murphy’s case, they chose to use the criminal law, and to give her a criminal record.

It’s clear from the questions referred to the ECJ by the High Court in these two cases that complex arguments have been deployed by the Premier League to defend its commercial practice in terms of various Directives, or a combination of them. But the preliminary ruling seems to me an example of the ECJ at its lucid best. The entire purpose of internal market law is to tear down the artificial walls states might erect between their national markets, and create one single internal market in the EU. Firms who attempt unilaterally to maintain partitioned national markets by legal action will always “need a miracle” if that action is challenged in EU law. The ECJ’s played a blinder here, realising the Premier League dived, and Ms. Murphy never touched them.

Discussing the legitimacy of selling exclusive national right at a premium, the ECJ (at para. 115 of the ruling) cuts through the Premier League’s tactical defences with a simple long ball over the top:

such a premium is paid to the right holders concerned in order to guarantee absolute territorial exclusivity which is such as to result in artificial price differences between the partitioned national markets. Such partitioning and such an artificial price difference to which it gives rise are irreconcilable with the fundamental aim of the Treaty, which is completion of the internal market.

The reason I say the result was 2-0 is that the ruling is a double whammy. Not only does the ECJ rule that UK legislation protecting the Premier League’s revenue is contrary to internal market rules. It also says that the Premier League’s contracts with foreign licensees such as NOVA breach EU competition law, specifically article 101 TFEU, since it’s an agreement whose object is the prevention, restriction or distortion of competition (para. 139 of the ruling):

an agreement which might tend to restore the divisions between national markets is liable to frustrate the Treaty’s objective of achieving the integration of those markets through the establishment of a single market. Thus, agreements which are aimed at partitioning national markets according to national borders or make the interpenetration of national markets more difficult must be regarded, in principle, as agreements whose object is to restrict competition within the meaning of Article 101(1) TFEU

In early reaction I’ve seen and heard this morning, journalists are keen to stress the complexity of the judgment and that the Premier League may take some comfort from what the ECJ said about its having copyright in certain elements of broadcasts (para. 149):

FAPL can assert copyright in various works contained in the broadcasts, that is to say, in particular, the opening video sequence, the Premier League anthem, pre-recorded films showing highlights of recent Premier League matches, or various graphics.

I don’t think that comfort is real, though. The ECJ goes on (para. 182) to rule that technical reproduction of these graphics etc. within decoders and receivers falls within an exception

laid down in Article 5(1) of the Copyright Directive and may therefore be carried out without the authorisation of the copyright holders concerned.

As far as the actual showing of the graphics etc. to the pub audience is concerned, it’s true that the ECJ rules (para. 207) that

‘communication to the public’ within the meaning of Article 3(1) of the Copyright Directive must be interpreted as covering transmission of the broadcast works, via a television screen and speakers, to the customers present in a public house.

That appears at first blush to concede to the Premier League the right to sue pubs for breach of copyright for showing their customers copyright elements (the anthem etc.) as part of match broadcasts.

I doubt even that can work for them, though. Article 5.3(i) of the Copyright Directive provides that

Member States may provide for exceptions or limitations to the rights provided for in Articles 2 and 3 in the following cases: …

(i) incidental inclusion of a work or other subject-matter in other material

and section 31(2) of the Copyright, Designs and Patents Act 1988 is an example of just such an exception, making it lawful for Ms. Murphy to communicate to the public those copyright works lawfully included by NOVA in its broadcast. The one tiny crumb remaining might be the right to sue her for breach of copyright for allowing her customers hear the Premier League “anthem”; that’s because of the special position regarding musical works under section 31(3).

But even if the Premier League can prove Ms. Murphy doesn’t show matches with the volume turned down, I doubt they can seriously frustrate the entire purpose of EU internal market law based on attempts to enforce copyright in the anthem alone – however often they decide to play it. Its lawyers may well write letters trying to convince firms and consumers that they’re still taking legal risks by using foreign decoders, and many people may be convinced for a time at least. That time will be very commercially valuable for the Premier League. But I expect it to last only as long as it takes the ECJ to rule on the matter again.