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VCAST cloud television recording service constitutes unlawful communication to the public

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In its judgment on a reference from the District Court of Turin (Italy), the CJEU determined that a service enabling consumers to have free-to-air television content received remotely and directly recorded onto a personal cloud storage space, was unlawful. Although the questions referred by the Italian court were not framed as such, the CJEU used this reference to add a further gloss on the communication to the public (“CTP”) right under EU law, following a spate of recent decisions including GS MediaFilmspeler and Pirate Bay.

VCAST provided a commercial service online whereby users could select (via a programme schedule or by time slot) free-to-air TV programmes. Such programmes, received via VCAST’s own television antennae, would then be recorded directly onto cloud storage space provided by third parties, to be accessed by the relevant user at a time of their choosing. VCAST asked the Italian court for a declaratory judgment against RTI, an Italian broadcaster; RTI counterclaimed for infringement of copyright in its broadcasts. In essence, the Italian court asked the CJEU to rule on whether VCAST’s service could benefit from the private copying exception provided for under Article 5(2)(b) of Directive 2001/29/EC (the “InfoSoc Directive”), and enshrined in Italian law under Article 71 sexies of Legge n. 633/1941 on the protection of copyright. In the meantime, the referring court granted provisional measures against VCAST.

On 7 September 2017, Advocate General Szpunar gave his take on the dispute. The AG provided some interesting, albeit non-binding, commentary on the scope of the private copying exception.

To recap, the private copying exception permits (but does not require) member states to exempt from copyright infringement the copying of a copyright work by a natural person for private, non-commercial use, provided that the relevant rightholder receives fair compensation for this. The idea behind the exception is to legalise some common and minimally harmful consumer practices (e.g. uploading the contents of a music CD onto an MP3 player), while ensuring due protection for rightsholders. Those member states that have introduced a private copying exception have addressed the issue of fair compensation by introducing levies on the sale price of certain media, such as blank CDs and DVDs. Although the UK Government introduced a private copying exception in 2014, this was held to be unlawful in a judicial review spearheaded by the UK music industry, so UK law does not contain a private copying exception.

Interestingly, the AG saw little practical difference between provision of such blank media, and provision of cloud storage for copyright works. He also did not believe different principles should apply where (as in this case) the copying is done on behalf of, rather than by, the private consumer. Finally, the AG noted that it while it is technically feasible for content to be shared easily from cloud storage, the same is true of other forms of media. While none of these observations seem completely incorrect as a matter of principle, the author submits that the AG perhaps did not make sufficiently clear that, in practice, whether the private copying exception applies is a question of fact and degree.

Of course, the private copying exception is only an exception to the reproduction (copying) right, and cannot legitimise infringements way of CTP. This was an awkward problem for VCAST, because VCAST did not place any technical restrictions on who could use the service. First, there was no geo-blocking, and therefore people outside Italy could use the service. Second, there was no check on whether users already owned a television set. Therefore, there was no distinction between those users who could have (lawfully) received the relevant free-to-air content, and those who could not. Following the focus in recent CTP cases on the question of whether there has been an "intervention" and the two non-autonomous interdependent criteria of knowledge and commercial motive, this case was decided along the lines of more traditional CJEU jurisprudence on CTP. The AG noted that (i) given the facts, there was communication to a “new” public; and (ii) this was by way of a different technical means (as accessing a pre-recorded programme via cloud storage is quite different to receiving a live broadcast). Consequently, VCAST’s services went beyond mere (potentially lawful) reproduction; instead, there was “making available”, which constituted acts of CTP. Such acts were unauthorised, because (impliedly) RTI had only authorised simultaneous live broadcast within Italy of its content.

On 29 November 2017 the CJEU (much like the AG) paid little attention to the questions it was actually asked by the Italian court, and instead answered the question it really wanted to answer, namely: did VCAST’s activities amount to unauthorised CTP? In a concise judgment, and for essentially the same reasons as those relied on by the AG, the CJEU answered “yes”. Given this, there was no need to go on to consider whether the private copying exception would apply in these circumstances.

As mentioned, the AG’s comments on the potential application of the private copying exception to less traditional methods of reproduction (such as cloud storage) are of some academic interest. In the case of (for example) decentralised storage services such as iCloud and OneDrive, this makes sense. A principled distinction between CDs and DVDs on the one hand, and decentralised storage on the other, would be somewhat backward, and may have a chilling effect on productivity and even technological development. However, if the CJEU does go on develop a private copying defence for reproduction via cloud computing, this will not assist those operating potentially infringing services in the UK, because of the lack of a private copying exception under UK law.

The AG’s opinion and the judgment of the CJEU remind us that novel technologies and processes tend to enable interesting new information society services (which are not always lawful). EU law must continue to adapt and evolve (even if retrospectively) to these new developments. In general, the CJEU appears to want to be flexible and pragmatic as it is confronted with new situations, developing the law and broadening the definition of CTP as it goes in order to prevent activities which it feels are somehow "wrong", even if not directly contrary to established principles.

Authors: Alex Woolgar, Beverley Potts

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