5. FAPL v QC Leisure PDF

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Joined Cases C-403/08 and C-429/08 Football Association Premier League Ltd. v QC Leisure and others; Karen Murphy v Media Protection Service Ltd. Facts: FAPL runs the Premier League and among its activities include organizing the filming of Premier League matches and the exercise of the correspondent television broadcasting rights. In this regard, FAPL grants exclusive and territorial licenses of those broadcasting rights for live transmission to the winners of an open competitive tender procedure. In order to protect the territorial exclusivity of all broadcasters, they each undertake to prevent the public from receiving their broadcast outside the area for which they hold the license. Therefore, broadcasters are in particular prohibited from supplying decoding devices that allow their broadcasts to be decrypted for the purpose of being used outside the territory for which they hold the license. However, in the UK certain restaurants and bars have begun to use foreign decoding devices to access Premier League matches, buying from a dealer a card and a decoder box which allow them to receive a satellite channel broadcast in another Member State the subscription to which is less expensive. Thus the decoder cards had been manufactured and marketed with the authorization of the service provider but are used in an unauthorized manner, since they are used outside the national territory concerned. FAPL considers that such activities are harmful to its interests because they undermine the exclusivity of the rights granted by license in a given territory and hence the value of those rights. Court’s rulings concerning free movement of goods and services: Identification of the applicable provisions: The Court analyzed if the legislation at stake should be examined from the point of the freedom to provide services or from that of the free movement of goods. In this case, the Court concluded that the national legislation concerned, above all, the freedom to provide services, since it was only directed at decoding devices as an instrument enabling subscribers to obtain the encrypted broadcasting services. Existence of a restriction on the freedom to provide services: The access to satellite transmission services such as those at issue required possession of a device whose supply was subject to the contractual limitation that it might be used only in the Member State of broadcast. Therefore, the Court considered that the contracts concluded between the broadcasters and their customers were the actual origin of the obstacle to the reception of such services, However, as the national legislation conferred legal protection on those restrictions and required them to be complied with on pain of civil-law and pecuniary sanctions, it itself restricted the freedom to provide services. Justification: FAPL, supported by the UK, French and Italian Governments, submitted that the restriction in the UK legislation could be justified in light of the rights of holders of intellectual property rights, because it was necessary to ensure that those holders remain appropriately remunerated. The Court disagreed. First, FAPL could not claim copyright in the matches themselves, as the matches could not be considered to be an author’s own intellectual creation and, therefore, to be “works” for the purposes of copyright. Second,

even though in principle EU law did not preclude national legislation that was designed to confer protection on sporting events, the restriction must not go beyond what was necessary to protect the intellectual property at issue. In the Court’s view, the prohibition on using foreign decoder cards went beyond what was necessary to ensure appropriate remuneration for the rights holders. Appropriate remuneration did not mean “the highest possible remuneration”. With regard to television broadcasting, such remuneration must be reasonable in relation to parameters of the broadcasts concerned, such as their actual audience, their potential audience and the language version. Here, the Court said, the premium paid to the right holders in order to guarantee absolute territorial exclusivity resulted in artificial price differences between the partitioned national markets. Such partitioning and such an artificial price difference to which it gave rise was irreconcilable with the fundamental aim of the TFEU, which was completion of the internal market. The Court distinguished Coditel I on the basis that, in the current case, because decoders were required, account could be taken, indeed with a “high degree of precision”, of the actual audience and the potential audience both in the Member State of broadcast and in any other Member State in which the broadcasts were also received. Nor could the restriction be justified on the basis that it was necessary in order to ensure compliance with the “closed period” rule which prohibits the broadcasting in the UK of football matches at 3.00pm on Saturday afternoons. The Court said that even if the rule, which is designed to encourage the public to attend stadiums to watch football matches, were capable of justifying a restriction on the fundamental freedoms, “compliance with the aforementioned rule can be ensured, in any event, by incorporating a contractual limitation in the licence agreements between the right holders and the broadcasters, under which the latter would be required not to broadcast those Premier League matches during closed periods”. A law prohibiting the import, sale or use of foreign decoder cards was therefore an unjustified breach of Article 56 and that conclusion was affected neither by the fact that the card had been procured or enabled by the giving of a false name and address, with the intention of circumventing the territorial restriction, nor by the fact that it was used for commercial purposes although it was restricted to private use....