Case law Developments in PIL

AG Szpunar on the Territorial Scope of the Right of Communication to the Public

The author of this post is Lydia Lundstedt, who is a Senior Lecturer at the Stockholm University.


On 20 October 2022, Advocate General Szpunar delivered his opinion (not yet available in English) in Grand Production (C-423/21) on the interpretation of Article 3(1) of Directive 2001/29/EC on the harmonisation of certain aspects of copyright and related rights in the information society.

Marta Requejo Isidro reported on the questions referred by Oberster Gerichtshof (Austria) here.

In essence, the first question in the case is whether a streaming platform operator that retransmits tv broadcasts can be said to communicate works contained in those broadcast to the public in the meaning of Article 3(1) when internet users circumvent geo-blocking measures that the operator put into place to block access to the EU territory. Article 3(1) reads:

Member States shall provide authors with the exclusive right to authorise or prohibit any communication to the public of their works, by wire or wireless means, including the making available to the public of their works in such a way that members of the public may access them from a place and at a time individually chosen by them.

Background

The plaintiff, Grand Production d.o.o., a company incorporated under Serbian law, produces audio-visual entertainment programmes which are broadcast on Serbian territory by a Serbian broadcaster. The third defendant, GO4YU d.o.o Beograd (hereinafter GO4YU), also incorporated under Serbian law, has an agreement with the Serbian broadcaster to retransmit the broadcasts on its streaming platform. GO4YU Belgrade does not have the right however to retransmit Grand Production’s programmes outside Serbia and Montenegro and must block access to these programmes outside these territories. GO4YU’s platform is otherwise available both inside and outside Serbia. The first and fourth defendants are Austrian companies related to GO4YO that market the platform and conclude contracts with subscribers of the platform and the second defendant is a chairman of the board and sole shareholder of one of these related companies.

Grand Production claims that the defendants are infringing its copyright because its programmes are accessible on GO4YU’s platform to users worldwide. It claims that users can circumvent GO4YO’s geo-blocking measures and that GO4YO is aware of this. Grand Production applied to the Austrian courts for world-wide interlocutory measures against all defendants but only succeeded in obtaining an order against GO4YU Belgrade limited to the territory of Austria. Grand Production appealed to the referring court.

Platform Operator Infringes if Works are Accessible in the EU …

AG Szpunar opined that concept of ‘communication to the public’ within the meaning of Article 3(1) applies to a situation where the operator of a streaming platform retransmits works contained in a television broadcast originally made outside the EU, when the works are accessible without restriction within the EU (paras 22-26).  Szpunar explained that the CJEU’s decision in ITV Broadcasting (C-607/11) made clear that Article 3(1) covers a retransmission of works in a television broadcast where the retransmission is made by an organisation other than the original broadcaster, over the internet, even though the other organization’s subscribers are within the reception area of the television broadcast and may lawfully receive the broadcast on their televisions (para 22).

Szpunar explained that the fact that the subscribers in the ITV case were in the reception area of the television broadcast did not mean that the ITV case did not apply in a situation where the subscribers were not in reception area of the television broadcast. Szpunar noted that the CJEU made this clarification to respond to the argument that there was no “new public”, that is, a public different from the public to which the original television broadcast was directed. The CJEU held that the new public criterion was not relevant where the internet retransmission was made by different technical means from the original television broadcast.

The AG concluded that if an internet retransmission is also available outside the territory in which the original television broadcast was received, it is necessarily addressed to a wider audience than that of the television broadcast in question and therefore a fortiori constitutes a communication to the public within the meaning of Article 3(1) (para 23).

Szpunar also explained that the fact that the original television broadcast is directed at a territory outside the EU does not preclude a retransmission of that broadcast on the internet from being regarded as a communication to the public within the meaning of Article 3(1), ‘in so far as that retransmission is available in the territory to which the [Infosoc] directive applies.’ (para 25).

… unless the Operator Uses Geo-blocking Measures

AG Szpunar opined however that if an operator of a streaming platform that retransmits television broadcasts containing works uses geo-blocking measures, it does not infringe the communication to the public right in Article 3(1), even though users circumvent these measures to access the works on the territory of the EU (para 45).

AG Szpunar explained that pursuant to CJEU case law, digital rights management tools which include geo-blocking can give rise to legal effects under EU law (para 31). AG Szpunar referred inter alia to the CJEU’s decisions in Svensson (C-466/12) and VG Bild-Kunst (C-392/19), where the CJEU explained that the operator of a website could use access restrictions and anti-embedding measures to limit the public to which the works contained therein are communicated and that anyone circumventing these restrictions would communicate the works to a new public. AG Szpunar maintained that similar reasoning could be applied to geo-blocking measures such as those at issue in the case at hand:

If the copyright owner (or its licensee) has applied such a blocking measure, its transmission is directed only to the circle of persons who access the protected content from the territory defined by the copyright owner (i.e. the territory where access is not blocked). The rightholder therefore does not make any communication to the public in other territories.

If Grand Production’s entertainment programmes on GO4YU Belgrade’s streaming platform are subject to geo-blocking in such a way that access to them can in principle be obtained only from Serbia and Montenegro, GO4YU Belgrade does not carry out any communication of these programmes to the public within the European Union. (para 36-37) (my translation).

AG Szpunar explained that the mere fact that the operator of the platform is aware that users might circumvent the geo-blocking measures is not sufficient for holding the operator responsible, but that the situation would be different if the operator had “deliberately applied ineffective” geo-blocking measures (42-44).

With respect to the second question which concerned whether the related companies could be directly liable for the communication to the public, AG Szpunar opined that companies that have no influence on either the content made available on the platform or on the geo-blocking measures do not themselves communicate the works to the public within the meaning of Article 3(1) (46-53).

Side-steps whether the “Centre of Interests” Basis for Jurisdiction Applies to Copyright Infringements on the Internet

AG Szpunar proposed that the referring court’s third question on the interpretation of Article 7(2) of the Brussels I bis Regulation be dismissed because it was not relevant to the outcome of the dispute in the case at hand.

In essence, the national court asked whether the CJEU’s case law on violations of personality rights on the internet should be applied to copyright infringements on the internet. The referring court noted that the CJEU’s case law on the application of Article 7(2) to copyright infringement on the internet had been criticized. Pursuant to this case law (Pinckney (C-170/12) and  Pez Hejduk (C‑441/13)), the CJEU held that given the territorial nature of copyright protection, a court seised on the basis of the occurrence of damage within its territory has jurisdiction to rule only on the damage caused within its own territory and that the courts of other Member States retain jurisdiction to rule on the damage to copyright caused in their respective territories.

This is in contrast to the Court’s case in Bolagsupplysningen and Ilsjan (C-194/16) and eDate Advertising and others (C-509/09 and C-161/10) on violations of personality right on the internet, where the courts of the Member State where the victim has its centre of interests has jurisdiction to rule on all damage and can hear actions for rectification and removal of unlawful content.

AG Szpunar explained however that Article 7(2) of the Brussels I bis Regulation is not applicable to the case at hand. The third defendant is domiciled outside the EU (in Serbia) so in accordance with Article 6(1) of the Brussels Recast, the Austrian courts are to apply their national rules on jurisdiction. The other three defendants are domiciled in Austria so in accordance with Article 4 of the Brussels Recast, the Austrian courts’ jurisdiction is not territorially limited. Moreover, AG Szpunar noted that there is no indication that Grand Production (the would-be victim) has its centre of interest in Austria.

Comment

I was surprised that AG Szpunar did not refer to the CJEU case law in Football Dataco (C‑173/11) concerning an infringement of a sui generis database right and L’Oréal (C-324/09) concerning trade mark infringement where the Court held that the mere fact that a website containing protected content (e.g. data or a trademark) is accessible in a particular Member State is not sufficient for concluding that the operator of the website is infringing in that Member State (see Football Dataco (C‑173/11), para 36-41 and L’Oréal (C-324/09), para 64-67).

The CJEU explained that if mere accessibility was sufficient, websites, although obviously targeting persons outside the territory of a Member State, but nevertheless technically accessible in that State, would wrongly be subject to the application of that Member State’s laws. The CJEU held that it was up to the national courts to assess on a case-by-case basis whether there is evidence that discloses an intention on the part of the operator to target persons in that Member State (or the EU in the case on an EU trademark).

According to the CJEU, some factors that could disclose such an intention were whether the content of the website was of particular interest to users in the Member State, whether the website operator’s renumeration was based on the number of users from that Member State, whether the Top-Level Domain was a country code of the Member State. I agree with AG Szpunar’s conclusion that an operator that uses effective geo-blocking measures does not disclose an intention to target persons in the blocked Member State. That said, the mere fact that a website operator neglects to use such measures should not automatically lead to the conclusion that the operator infringes in every Member State where the website is technically accessible.

With respect to question about the interpretation of Article 7(2), I think the CJEU’s case law is clear that the centre of interest basis of jurisdiction does not apply to infringements of intellectual property rights due to the territorial nature of protection. This is certainly the case for the economic right associated with copyright. The situation might be different however if an author alleged an infringement of moral rights. This was however not the case here. Moreover, as AG Szpunar rightly explained, Article 7(2) was not applicable to the case.

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