Reed Smith Client Alert

Authors: Nick Swimer Stephen Edwards

Following the Court of Justice of the European Union’s (“CJEU”) judgment on 7 March 2013, in which it confirmed that TVCatchUp’s streaming service, which live streams all of the channels broadcast by ITV, Channel 4 and Channel 5 (“Broadcasters”), infringed the Broadcasters’ communication to the public right, the case returned to the High Court, which handed down a formal Order 10 October 2013.

The Order confirms that TVCatchUp has infringed the Broadcasters’ film and broadcast copyrights by live streaming:

  • The Broadcasters’ public service channels, being ITV1, Channel 4 and Channel 5 (PSB Channels), by streaming these on mobile networks
  • The Broadcasters’ other channels (such as ITV2, ITV3, E4, More4, Film4 and 5USA) by streaming these online and on mobile networks

TVCatchUp remains entitled to live stream the Broadcasters’ PSB Channels pursuant to section 73 of the Copyright, Design and Patents Act 1988 (CDPA). However, notwithstanding that finding, it is overwhelmingly clear that the High Court considers the Broadcasters to be the material winner and somewhat hard done by in relation to its section 73 finding.

Section 73 of the CDPA is a copyright exception designed to allow cable operators the right to transmit the PSB Channels without having to obtain permission from the Broadcasters or from the owners of copyright in any works included in the PSB Channels. While the Court accepted TVCatchUp’s argument that the Internet is essentially a cable delivery system, and therefore falls within the scope of the section 73 exception, the Order makes clear that the exception is ultra vires the EC Infosoc Directive, which sets out an exhaustive list of permissible copyright exceptions that may be adopted by Member States, and such list does not include cable retransmission. Given the clear statement by the High Court in that regard, it is difficult to see how the UK Government can now avoid having to take action to abolish the exception. Indeed, in its recent action paper: Connectivity, Content & Consumers, DCMS, perhaps with this litigation in mind, states at page 26 that it is looking at how access to the PSB Channels on the major television platforms can be delivered at no cost to either the PSBs or the platforms “without allowing other kinds of online services to exploit PSB content, with no benefit flowing to the PSB”.

It is certainly very difficult to see how TVCatchUp can continue to claim an overall victory, as it did following the CJEU judgment, notwithstanding the position in relation to section 73, given the terms of the Order, in which the High Court:

  • Awards the Broadcasters an injunction requiring TVCatchUp to cease transmitting the digital channels online and all of the Broadcasters’ channels, including the PSB Channels, on mobile networks
  • Requires an inquiry as to the damages caused to the Broadcasters, or at the Broadcasters’ option, an account of profits (and TVCatchUp is required to supply information about its revenue and costs for this purpose)
  • Requires the parties to publish on the press release sections of their websites, a statement simply directing readers to the terms of the Order, to avoid any further comment or discussion on their websites when providing the text of or link to the Order
  • Requires TVCatchUp to pay 80% of the Broadcasters’ costs and make an interim payment on account of those costs in the sum of £200,000 by 4 November 2013

While to us, the future does look bleak for the TVCatchUp service, it has been given permission to appeal the High Court’s decision that it is not entitled to live stream the PSB Channels across mobile networks, presumably because the Defendant considers that mobile network should fall within the meaning of “cable” in section 73. This would seem an improbable stretch of the meaning of “cable”. At the same time, the Broadcasters have also been given permission to appeal the finding that the Internet falls within the meaning of “cable”. As we outlined in our previous Article on this topic, Internet delivery does not always and only involve the use of cable; wireless communication links are frequently used within the Internet transmission chain. And, as we have pointed out, the above Order does put into question the continued retention of section 73 as an exception to copyright, even for ‘traditional’ cable networks.

 

Client Alert 2013-266