Murphy v Football Association Premier League: English Landlady Looks to Score Against Exclusive Sports Broadcasting

On February 3, Juliane Kokott, the German Advocate General at the European Court of Justice (“ECJ”), published her opinion in a watershed case that could significantly impact on entertainment companies who have, until now, guarded exclusive rights to broadcasting live sports events – most notably, “football” (or “soccer”). Though non-binding, Kokott’s official advice to the ECJ will not be overlooked when the Court releases its decision later this year.

In Football Association Premier League Ltd and Others v QC Leisure and Others and Karen Murphy v Media Protection Services Ltd, Cases C-403/08 and C-429/08 – the dubbed “Murphy’s Law” case – Kokott concluded that European Union (“EU”) law does not prohibit live football matches from being shown in UK pubs through foreign broadcasters. Moreover, she found that contractual provisions that prevent conditional satellite access devices licensed to one EU Member State from being used in another Member State restrict the EU fundamental freedom to provide services set out in Article 56 of the Treaty on the Functioning of the European Union (TFEU). (The other three freedoms are the freedom of movement of people, goods and money.) An ECJ ruling similar to Kokott’s opinion could create broad implications for international copyright law.

Pub Fined £8,000 Steps Up Its Game

It all began when Karen Murphy, the landlady of The Red, White and Blue Portsmouth, England pub found an alternative to paying the more than £1,000 Sky Sports monthly subscription to show Football Association Premier League (“Premier League”) matches on her pub television. Instead, she subscribed to NOVA, a Greek satellite broadcaster, for around one tenth of the Sky subscription.  She was sent a Greek decoder card and soon began showing the Premier League football games in her pub.

Here’s the problem: in its licensing agreement with the Premier League, NOVA was clearly prohibited from supplying the decoder cards outside of Greece. Granting sports broadcasting rights on an exclusive territorial basis was a common commercial practice throughout Europe. In the UK, Premier League broadcasting rights were granted exclusively to Sky Sports and ESPN. As a result, Media Protection Services was soon knocking on Ms. Murphy’s door, and the landlady eventually found herself at the centre of criminal proceedings and fined almost £8,000 for using an “illicit access device” contrary to EU Directive 98/84. Article 4 states:

Infringing activities

Member States shall prohibit on their territory all of the following activities:

(a) the manufacture, import, distribution, sale, rental or possession for commercial purposes of illicit devices;

(b) the installation, maintenance or replacement for commercial purposes of an illicit device;

Article 2(e) defines an “illicit device”:

Definitions

For the purposes of this Directive:

….

(e) illicit device shall mean any equipment or software designed or adapted to give access to a protected service in an intelligible form without the authorisation of the service provider;

Ms. Murphy appealed to the ECJ, claiming the Premier League had breached the EU free movement of goods and services by restricting her choice of satellite broadcast providers. The Premier League, on the other hand, argued that Ms. Murphy and NOVA had infringed EU copyright law by supplying and using an illicit access device, and by communicating a copyrighted work to the public by wire or wireless means without authorization, contrary to Article 3(1) of Directive 2001/29.

The Free Movement Advantage

In her opinion, Kokott immediately discounted the argument that Ms. Murphy’s Greek decoder was an “illicit device” under Directive 98/84. She concluded that a device that was “designed” or “adapted” according to Article 2(e) meant that it was manufactured or modified “with the intention” of providing access to a protected service without the authorisation of the service provider.  Because the Greek decoder was made with the consent of the Premier League and only sold with conditions on its use, the product itself was not an “illicit device.”

Moreover, Kokott stated that showing the Premier League games in a pub did not constitute a “communication to the public by wire or wireless means” in EU law. She found that the EU legislature had yet to adopt a Berne Convention provision that identified the transmission of works “by loudspeaker or any other analogous instrument” as “public communication” of those works. Therefore, EU law had yet to contemplate situations in which the public was physically present at the place where the communication originated.  Kokott thus concluded that a copyrighted work was not communicated to the public by wire or wireless means where it was “shown, free of charge, via a single television screen and speakers to members of the public present on the premises.”

Most importantly, Kokott concluded that provisions that made broadcasting rights territorially exclusive actually contravened the EU fundamental freedom to provide services by partitioning and eliminating the internal market. She further held that such agreements pursued an “anti-competitive object” under Article 101(1) of the TFEU and could frustrate the TFEU’s objective of achieving the integration of national markets into a single EU market.  Kokott challenged the Premier League’s objections by pointing out that users such as Ms. Murphy did pay fees for the Greek decoder.

NOVA may have breached its licensing agreement with the Premier League, but that was a contractual dispute that should have been restricted to the contracting parties – an issue that may now be moot, as Kokott’s opinion effectively questions the place of such provisions in EU law at all. Although the Advocate General noted that this did not preclude national laws from prohibiting specific communications in pubs, she warned that the restriction on the freedom to provide services could not be “disproportionate” to the share of the protected rights to the broadcast.

“Europe,” the True Champion

The ECJ’s pending judgment will be an intriguing resolution, not merely as a potential blow to European sports broadcasting giants, but as a monumental decision in the EU’s course to becoming a united European economy.

In my opinion, Kokott’s advice meaningfully overlooks immediate wrongs in favour of the grand, European scheme. There is no question that NOVA had breached its licensing contract with the Premier League. It supplied numerous subscribers outside of Greece with decoders contrary to the agreement and even created a false name and residential address to overcome the contractual territorial restrictions. Kokott has also adopted a unique interpretation of EU copyright law. From an everyday perspective, a television broadcast undeniably constitutes a communication and patrons of a bar are naturally members of the public.

From a legal perspective, current Canadian law holds that a work is “communicated to the public” where: (1) it is intended to be communicated to the public, and (2) the communication is actually received by one member of the public. Surely NOVA, if not Ms. Murphy, intended the broadcast to be – and it was, in fact – viewed by the public. A viewing does not suddenly cease to be a communication merely because the audience is physically present at the premises or because the viewing is provided free of charge. These factors have not historically precluded copyright infringement.

Rather, Kokott’s emphasis on the free movement of services and the expansion of an internal European market sets this case up as the precipitous demise of well-established commercial practices in the pursuit of grand, European Union ideals. There is no doubt that major broadcasting companies will take an initial hit if the ECJ chooses to adhere to Kokott’s advice.  Consider that Sky and ESPN’s domestic contract with the Premier League has been estimated to be worth £1.78 billion pounds (CAN $2.82 billion dollars) over three years. That value would drop if Premier League could no longer guarantee exclusive national rights. Or would it?

A ruling in favour of the freedom to provide services could disincentivize Premier League from contracting again with minor national broadcasters such as NOVA. Rather, if Premier League were required to license Europe-wide broadcasting rights, there would only be a handful of broadcasting companies large enough to afford the contract. Although Kokott’s opinion has sought to diversify the European market, it could effectively squeeze out smaller national companies vying for football broadcasting rights.

“Murphy’s Law” is hailed as the case that will protect the European consumer. But it may be that regardless of the declared winner, the European consumer is bound to lose.

Update: On October 4, 2011, the ECJ released its decision, declaring that national laws which prohibit the import, sale, or use of foreign decoder cards are contrary to the EU fundamental freedom to provide services. It also ruled that while live matches themselves are not protected by copyright, “surrounding media” such as match highlights, the Premier League anthem, and other graphics are. The full judgment can be found here.