Reed Smith Client Alerts

Authors: Nick Swimer Stephen Edwards

TVC operates an internet-based live stream service, carrying a number of broadcasters’ channels. ITV, Channel 4 and Channel 5 issued proceedings against TVC in relation to the unauthorised transmission of both their public service broadcast (PSB) channels (ITV1, C4 and Five) and their non-public service channels (ITV2, ITV3, ITV4, E4, Film4, Demand5, etc.).

The original High Court decision in July 2011, as affirmed in a further judgment of 7 October 2013 after reference of an issue to the Court of Justice of the European Union, held that:

  1. TVC had infringed the broadcasters’ copyright by streaming the non-PSB channels to the public and therefore TVC was required to cease streaming these channels.
  2. Section 73 of the Copyright, Designs and Patents Act includes a copyright exception in relation to the retransmission of the PSB channels by ‘cable’, as long as the retransmissions are regionalised. The exception permits such retransmissions without the need to obtain the permission of the broadcasters or of the owners of copyright works included in the channels. The court could see no reason why the cabling system inherent in the internet should not be regarded as ‘cable’ for this purpose. Therefore, TVC could continue streaming the PSB channels on its website (subject to regionalising the services), although not to mobile devices via mobile networks (the 3G or 4G networks).
  3. It was not possible to interpret section 73 so as to be compatible with the European Union’s Information Society Directive harmonising certain aspects of copyright and related rights.

Both the broadcasters and TVC appealed the decision. The broadcasters appealed because they said that the High Court was wrong to conclude that cable meant anything other than a dedicated cable network operated by a conventional cable programme provider (i.e. the cable system used by Virgin Media to retransmit the channels on its TV platform) and TVC appealed on the basis that cable should also include mobile transmissions. Both the UK Government and Virgin Media intervened in the proceedings: the UK Government broadly in support of the broadcasters’ appeal, and Virgin Media broadly in support of TVC’s appeal.

The three presiding Court of Appeal judges (LJs Kitchin, Underhill and Arden) dismissed TVC’s appeal, rejecting all arguments that section 73 extended to transmission to mobile devices via mobile networks. As regards the broadcasters’ appeal, the judges agreed that the matter turns on the interpretation of Article 9 of the EU Information Society Directive.

Article 9 relates to the continued application of existing provisions of national law and includes provisions dealing with “access to cable of broadcasting services”. While this provision makes no mention of copyright and suggests that it has more to do with broadcasters’ right to access cable infrastructure, than with a right for cable operators to carry the PSB services without permission, TVC argued that section 73 is such an existing provision and that the term ‘cable’ used in it was broad enough to include the internet. The broadcasters contended that to the extent Article 9 applies in this case, the reference to cable carries a narrow definition confined to traditional cable operated by conventional cable operators.

The three judges had mixed views on what the position might be, but all agreed that any decision was not straightforward and must be left until the meaning of Article 9 and its application to existing national provisions dealing with “access to cable of broadcasting services” has been clarified by the European Court. This is the second time the UK courts have had to call upon the European Court to address complex questions of copyright in these proceedings.

Interestingly, the judgment also makes passing reference to a letter of formal notice sent by the European Commission to the UK Government concerning section 73. Although the Government has yet to publish anything about this notice, it would appear that separate to these proceedings, the Commission has commenced an infringement action against the Government on section 73, as it considers that the entire provision is incompatible with EU law. If there were no longer a right for cable platforms to carry the PSB channels pursuant to section 73, this could pave the way for the PSB’s to charge retransmission fees. On 15 January this year the Secretary of State, Sajid Javid, confirmed in the House of Commons that there would be a broader Government consultation on retransmission fees, while on 15 February the Government’s spokesman in the House of Lords wound up a debate on section 73 by referring to that imminent consultation in terms that suggested that repeal was the likely outcome.

While the broadcasters may be reasonably satisfied with the Court of Appeal’s decision, they are likely to feel frustrated by the ongoing delay in a final decision being reached. They have succeeded in stopping TVC from streaming their non-PSB channels on any platform and all of their channels to mobile. Moreover, TVC is required, at least, to regionalise the PSB channels when making these available on the internet.

In addition, there now appear to be three roads which may well lead to TVC having to take down the PSB services entirely: (1) the European Court finds that Article 9 of the EU Information Society Directive does not support TVC’s position; (2) the EU proceedings against the Government in relation to section 73 are successful; or (3) the UK Government repeals section 73 of its own volition on completion of its consultation. The tide would seem to be running very much in the broadcasters’ favour.

Client Alert 2015-083