What issues does the Directive deal with?

1.The Country of Origin principle

Satellite broadcasters in the EU have benefitted from the rule established by the Cable & Satellite Directive that, for copyright purposes, broadcasting by satellite takes place only in the single member state where the signals begin their journey, not in every member state in which the signals can be received. No similar rule applies at present to online transmissions; yet broadcasters’ online transmissions such as simulcasts, catch up services and provision of ancillary material have become a normal part of the broadcasting landscape at national level. The new Directive opens the way to cross-border provision of these services by applying the country of origin rule to them. However, the range of television content to which the new rule will apply was reduced severely during the course of the legislative stages, so that the rule will apply only to television news and current affairs programmes and to television productions fully financed by the broadcaster (other than sports events programmes). The rule will apply in full to radio content.

As to the meaning to be given to "country of origin" for such online services, this will be the EU Member State where the broadcaster has its principal establishment.

2. Retransmission

The Cable and Satellite Directive created the rule that in relation to cable retransmissions of broadcasts from other Member States, copyright owners (other than the broadcasters themselves) could only exercise their rights through collecting societies.

This principle has been extended by the Directive so as to cover retransmissions over the internet, provided these take place within a managed environment. Furthermore, Member States can apply the principle also where both the broadcast and the retransmission take place in the same Member State.

3. Direct injection

The SBS Belgium v SABAM decision of the Court of Justice of the EU demonstrated the need to establish clear rules around the phenomenon of "direct injection", where an operator of a signal distribution platform receives the signals of a channel via a 'closed' telecommunications line, rather than by receiving a broadcaster's over-the-air terrestrial or satellite signals available to the public at large. Who is to be liable for copyright clearances in such circumstances, the broadcaster or the platform operator who makes the signal available to its subscribers?

The Directive distinguishes between three scenarios:

• Where the broadcaster sends the signals to the platform operator who provides it to the operator's subscribers, this counts as a single act of communication to the public, for which both the broadcaster and the platform operator are to be liable for their respective contributions to the act, not jointly liable for the whole of the act.  Member States may apply the mandatory collective licensing rule in respect of such communications to the public.
• If at the same time as sending the signals to the platform operator, the broadcaster transmits the signals directly to the public, the broadcaster and the platform operator are each liable for their respective acts of communication to the public.
• If the platform operator's role is merely to provide a technical service to the broadcaster, enabling the broadcaster to reach its intended audience, only the broadcaster will be liable.

Transitional provisions

To allow existing contractual arrangements time to run their course or to be modified to meet the new rules, the Directive includes two transitional provisions:

• Contracts relating to catch-up services that are in existence two years after the date of the Directive can continue to apply for a further 4 years;
• Contracts dealing with direct injection can apply for a further period of 6 years.

As an anti-avoidance measure, however, such contracts may not be extended.

Conclusions

Although the Directive falls short of meeting the ambitions of the European Broadcasting Union, it does facilitate the provision of simulcasts of news and current affairs channels across EU borders, as well as of catch-up services comprising broadcasters’ fully-financed productions.

The new provisions dealing with direct injection will establish a framework within which broadcasters and platform operators can define their relationships and deal consistently with rights clearances.

Member States have two years within which to transpose the Directive's requirements into their national copyright laws. Whether the UK will do so is, of course, dependent on the outcome of its negotiations with the EU concerning Brexit.

Client Alert 2019-125