No cheers for rights

There has been much press comment on the European Court of Justice decision in the cases brought by the FA Premier League (FAPL) against the sellers and users of satellite TV decoder cards, shipped from Greece to the UK and used in British pubs—including Karen Murphy’s The Red, White and Blue—to screen live Premier League games.

The cards had been bought from Nova, a Greek satellite provider. Nova was under contract with FAPL to ensure that it broadcast only to Nova subscribers and not to sell the decoder cards outside Greece. Needless to say, as the Nova subscription cost a lot less than one available via a UK satellite provider, enterprising middlemen sold the cards to UK pubs.  Criminal proceedings were subsequently started against Mrs Murphy and other licensees of pubs using the cards. The ECJ ruled that:

The use of contract and Intellectual Property laws by FAPL to split Europe into national markets was not justified by any motive other than maximising revenue, and that motive did not satisfy the test for the exception to the general rule that people must be free to provide and receive services across European borders.

The FAPL’s contracts, which prohibited broadcasters from allowing export of the cards (and thereby the broadcast services) from Greece, were a prima facie breach of the rules on anti-competitive agreements, and as the Premier League had no economic justification for this, they were unlawful.

Despite being about football, the case has significant ramifications for electronically delivered content, including e-books. As everyone knows, if different publishers have the same language rights in different parts of the European Economic Area (EEA), nothing can be done to stop parallel imports of physical books from one publisher’s territory into another’s under the free movement of goods principle, because otherwise there would be a partitioning of the EEA market.

It was always thought (based on some ’80s ECJ cases) that the same did not apply to electronic delivery of content, because it was classified as “services” not “goods”, meaning that absolute territoriality could be enforced for downloads such as e-books. This judgment makes it clear, however, that the rules on broadcasts (and other electronically delivered content, including e-books) are subject to the same rules of free movement as goods are.

It follows that any case trying to enforce territorial rights within the EEA would probably fail. As an example, a UK publisher who has exclusive UK and Ireland English language rights would not be able to prevent sales to UK consumers of English language e-books published by a different publisher under a licence covering EEA countries excluding the UK and Ireland. Having “all EEA” rights will therefore become increasingly important for publishers.