Football Association Premier League Limited & Others v QC Leisure & Others

The Football Association Premier League Limited is the governing body of the English Football Premier League which is inclusive of 20 Premier League Football Clubs.

The Premier League owns various copyrights in the feed of each Premier League football match and these are sold to broadcasters.

Sky Sports currently hold the license for the UK broadcasting rights and have recently announced they will screen over 115 games for the 2011/2012 season.

However each Premier League football match is filmed and packaged so that broadcast rights can also be licensed to foreign broadcasters. The foreign broadcasters are required by the terms of their licence agreement with the Premier League to undertake to procure that no device is knowingly authorised or enabled so as to permit anyone to view any such match outside of their particular licensed territory.

The Premier League claimed that the Defendants supplied pubs in the UK with non-UK decoder cards sourced through subterfuge from a variety of countries within and outside the EU, which lead to the televising of live Premier League matches in bars and pubs. By purchasing the decoder equipment from Greece, in this case, the bars and public houses were able to save thousands of pounds in fee’s in which they normally would have had to pay to their exclusive license holder.

The Premier League asserted that these actions infringed their rights under s.298 of the Copyrights, Designs and Patent Acts 1988 (CDPA) and their copyrights in the footage.

The Defendants claimed that the cross-border trade in decoder cards was lawful even without the Premier League’s consent under the CDPA and certain provisions of EC law, including in particular Directive 98/84/EC (the Conditional Access Directive), and sought a reference to the European Court of Justice.

It is important to note that no decision has yet been made by the European Court of Justice, however Advocate General (AG) Kokott is of the view that territorial exclusivity agreements relating to the transmission of live football matches are contrary to EU law relating to ‘free movement of services’.

The High Court referred a number of questions to the ECJ on the interpretation of EU law. AG Kokott has given her advice and reasoning based on the questions below:

1. Whether decoder cards purchased in Greece and imported into the UK for use in the UK are “illicit devices” within the meaning of Directive 98/84 on the legal protection of conditional access services (the “Conditional Access Directive”) and therefore prohibited;

AG Kokott holds the opinion that Article 2(e) of the CA Directive is not directed to preventing the use of an access device against the will of the service provider, but required equipment designed or adapted to give access without the permission of the service provider. Thus, the decoder cards in question were specifically designed to provide access with the permission of the Greek service provider. AG Kokott finished this point by suggesting that the decoder cards were not modified so as to make them illegal by virtue of importation into the UK.

2. The meaning of “communication to the public” under Article 3 of Directive 2001/29 on the harmonisation of certain aspects of copyright and related rights in the information society (the “Copyright Directive”);

AG Kokott asserted that there are no comprehensive rights protecting the communication of a broadcast to the public in the absence of an entrance fee. Article 3(1) covers only communication of works to a public which is not present at the place in which the communication originates.

3. Questions on the interpretation of the Treaty Rules on free movement of goods and services under Articles 28, 30 and 49 EC (Articles 34, 36 and 56 TFEU) in the context of the Conditional Access Directive;

AG Kokott explained that the territorial exclusivity rights in issue had the effect of partitioning the internal market into quite separate national markets, something which constitutes a serious impairment of the freedom to provide services. In considering whether this restriction was justified under Article 36 TFEU in order to protect industrial and commercial property, Advocate General Kokott determined that the specific subject-matter of the rights in live football transmissions lies in their commercial exploitation through the charge imposed for decoder cards. She considered that such exploitation is not undermined by the use of foreign decoder cards, as corresponding charges were paid for those cards. Whilst those charges are not as high as the charges imposed in the UK, there is no specific right to charge different prices for a work in each Member State, and the Premier Leagues approach of marketing the broadcasting rights on a territorially exclusive basis amounts to profiting from the elimination of the internal market. Accordingly, a partitioning of the internal market for the reception of satellite broadcasts was not necessary in order to protect the specific subject matter of the rights to live football transmissions and was therefore not a justified restriction of the freedom to provide service.

4. A question on the interpretation of the Treaty rules on competition under Article 81 EC (Article 101 TFEU).

Finally AG Kokott held that the provision in the exclusive licences requiring the broadcasters to prevent their satellite decoder cards from being used outside the licensed territory had the same effect as an agreement to restrict parallel trade and was therefore liable to prevent, restrict or distort competition. Such restrictions are classified as serious restrictions under Article 101(1) TFEU (restrictions by object) and there is no need to demonstrate actual anti-competitive effects.

To conclude, if the ECJ were to follow AG Kokott’s opinions on the aforementioned matters, there will be major implications and changes as to how rights holders exploit their content through sales to broadcasters. Rights holders may no longer be able to segment the market on a territorial basis. Consumers may also be able to buy rights to content through the subscription to foreign broadcasters and use their decoder cards. The knock on effect of such would see broadcasters paying substantially less for content rights, and reducing their prices to consumers.

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