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You are here: BAILII >> Databases >> England and Wales High Court (Patents Court) Decisions >> ITV Broadcasting Ltd & Ors v TV Catchup Ltd [2011] EWHC 1874 (Pat) (18 July 2011)
URL: http://www.bailii.org/ew/cases/EWHC/Patents/2011/1874.html
Cite as: [2011] FSR 40, [2011] EWHC 1874 (Pat)

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Neutral Citation Number: [2011] EWHC 1874 (Pat)
Case No: HC10C01057

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
PATENTS COURT

Royal Courts of Justice
Strand, London, WC2A 2LL
18/07/2011

B e f o r e :

THE HON MR JUSTICE FLOYD
____________________

Between:
(1) ITV BROADCASTING LIMITED
(2) ITV 2 LIMITED
(3) ITV DIGITAL CHANNELS LIMITED
(4) CHANNEL 4 TELEVISION CORPORATION
(5) FOUR VENTURES LIMITED
(6)CHANNEL 5 BROADCASTING LIMITED
(7) ITV STUDIOS LIMITED




Claimants
- and -

TV CATCHUP LIMITED
Defendant
- and -

THE SECRETARY OF STATE FOR BUSINESS, INNOVATION AND SKILLS

Intervenor

____________________

James Mellor QC and Jessie Bowhill (instructed by Olswang LLP) for the Claimants
Martin Howe QC and James Whyte (instructed by Hamlins LLP) for the Defendants
James Eadie QC, Charlotte May and Ben Jaffey (instructed by The Treasury Solicitor) for the Intervenor
Hearing dates: June 13, 15-17 2011

____________________

HTML VERSION OF JUDGMENT
____________________

Crown Copyright ©

    Mr Justice Floyd :

  1. TV Catchup Limited ("TVC") operate an internet based live streaming service of broadcast television programmes, including films, in which the claimants own the copyright. For historical reasons, the name TVC is inappropriate, as the service provided does not now (although it did in the past) allow users to view programs other than at substantially the same time as the original broadcast. The question which arises in this action is whether, in providing its live service, TVC are performing any of the acts restricted by the relevant copyrights and thereby infringing them.
  2. The TVC service

  3. Users of the TVC service must create an account with log in details. TVC endeavour to ensure that their viewers can only receive access to content which they are already legally entitled to watch by means of their television licence. The terms to which users must agree include the possession of a valid TV licence and to restrict use to the country of residence. The website has the facility to authenticate the user's location, and will refuse access where membership conditions are not satisfied.
  4. The TVC service is funded by advertising, that is to say by showing an advertisement before the live stream is viewed. The advertisements actually contained in the original broadcasts are retained unaltered. There is also "In-skin advertising". So the viewer sees the TVC live stream surrounded by advertising. It is because of the advertising that the claimants who broadcast commercial television channels in the UK, regard TVC as direct competitors, which they are.
  5. The TVC service is administered on their behalf by Netrino (UK) Limited, a web hosting company, although all the servers involved are owned by or leased to TVC. The servers are physically located at Netrino's data centres in Maidenhead and London Docklands. The servers employed are arranged in a sequence of four groups of servers, each group fulfilling a different function. The server groups are called (i) acquisition, (ii) encoding, (iii) origin and (iv) edge.
  6. The input signals used by TVC are the normal terrestrial and satellite broadcast signals transmitted by the claimants. The signals are captured via a single domestic TV aerial and a single satellite dish located in the Maidenhead area. Only digitally broadcast TV channels are used. Both digitally broadcast satellite signals and digitally broadcast terrestrial signals are received. They are received in a compressed format known as MPEG-2. The signals comprise multiple video streams. Each stream represents a television channel.
  7. The signals are passed by the aerial to the acquisition servers also located at the premises in Maidenhead. These servers contain conventional tuner cards which, in combination with software installed on the servers, extract individual video streams from the received signal. The output from the acquisition servers is therefore a video stream in MPEG-2 format, unaltered from the broadcast.
  8. The output from the acquisition servers is passed to the encoding servers, also in Maidenhead. The encoding servers contain software which converts the incoming MPEG-2 stream into an MPEG-4 stream, that is to say a different compression standard.
  9. The MPEG-4 stream from the encoding servers is made available to the origin servers. Commercial software called Wowza Media Server 2 is used to prepare streams of video for sending over the internet in a variety of formats. Up to this point, all channels offered by TVC are processed. Channels are, however, only processed beyond this point if at least one TVC subscriber has requested that channel. If there is no request for a given channel, the signal is discarded.
  10. Edge servers take the stream from the origin servers. The edge servers also use the Wowza software. These servers connect with a user's computer using the internet. They can also make connection with a user's mobile phone, via the internet and then via the cabling inherent in the network operator's infrastructure, making the final link by wireless transmission from the mobile base station.
  11. When an edge server receives a request for a channel from a user, then, unless it is already streaming that channel to a different user, the edge server connects to the origin server which streams that channel. The Wowza software on the edge server creates a separate stream for each user who requests a channel through it. Thus an individual packet of data leaving the edge server is addressed to an individual user, not to a class of users.
  12. The streams provided by the edge servers can be in a variety of different formats. The formats used are:
  13. i) Adobe Flash streams. These are deployed when the user is at a desktop or laptop computer. These computers will have an Adobe Flash player to enable the signal to be displayed on the screen;

    ii) HTTP streams. These are for Apple mobile devices (iPhones and iPads); These devices will use the Apple Quicktime software to display the signal on the mobile device;

    iii) RTSP streams. These are used for Android and Blackberry mobile phones. These devices have a media player able to display such a stream.

  14. A user who clicks on a channel logo on the TVC website causes the media player to connect to the TVC web server. The TVC web server checks that the user is logged in, in the UK and not using a virtual private network. If authentication is successful, the web server will return, if one is available, the URL of an advertisement to be displayed before the channel is received. For the playing of the stream, the user is provided with the URL of one of the TVC edge servers.
  15. At no stage during the process I have described is the whole or any part of the video stream stored on any disk or other permanent storage medium. All processing takes place in volatile memory. However, in each of the steps described a small amount of data from the video stream is held in the memory of the servers involved. In the case of streaming for Apple devices the servers will hold the video stream in "play list" form". At any one time the servers must hold three "play list" items of 10 seconds each, making a total of 30 seconds of stored video. In fact rather more will be stored because of the need to prepare and store the next item. So 30-40 seconds of video are stored for Apple streaming. Professor Leung, TVC's expert, said he would like to have measured this to be sure, but this is the best evidence that I have.
  16. In the case of streaming to a PC, TVC's buffers have the capacity to hold up to 8 seconds of video streaming in memory. It is, however, not sensible to configure the system in such a way that the buffer is used to its full capacity. As a rule of thumb one would want the buffers to run at less than half the capacity under normal conditions. The experts did not agree on precisely how much buffer would be used at a maximum. Professor Leung, TVC's expert, did some experiments suggesting that the maximum was 5 seconds or so. Mr Lewis, the claimants' expert thought it could be as much as 6 or 7 seconds. The precise figure will depend on the load. I propose to take the figure of 1 to 5 seconds as being that which would normally be used, whilst recognising that the range could be exceeded in periods of very high load. In the end it does not make any difference to anything I have to decide.
  17. The claimants' case of infringement and TVC's defences

  18. The claimants rely on two categories of copyright work: broadcasts and films. There is no longer any dispute that the claimants have established that copyright subsists in the broadcasts and films relied on and that it is owned by one or more of the claimants. It is, on the face of it, surprising that this was ever the subject of challenge.
  19. The claimants allege that the copyright in each category of work has been infringed by (a) communication of the works to the public and (b) by making, or authorising the making of, transient copies of the works in TVC's servers and on the screens of users. There is no allegation of infringement by "broadcasting" as opposed to "communication to the public".
  20. TVC answer the case of infringement of broadcast copyright by communication to the public in two main ways. Firstly, they say that the amended version of section 20(1)(c) of the CDPA 1988 (which creates a general communication to the public right in respect of broadcasts) was invalidly enacted, as it lay outside the power of the Secretary of State to introduce legislation under section 2(2)(b) of the European Communities Act 1972 ("ECA 1972"). It was on this issue that I allowed the Secretary of State for Business, Innovation and Skills to intervene, given that there was a challenge to the validity of primary legislation and the secondary legislation which gave rise to it. Secondly they contend that what TVC do is not in any event "communication to the public" within the meaning of the amended section.
  21. The main defences relied on by TVC in relation to the allegation of making or authorising the making of transient copies of broadcasts are, firstly, that the copies are not substantial parts of the works relied on and secondly that section 28A of the CDPA 1988 (temporary copies having no independent significance) applies.
  22. Turning to film copyright, TVC say, as with broadcasts, that their service is not a communication to the public of the film, that they are not making or authorising the making of transient copies of a substantial part of the film, and that their activity is again protected by section 28A of the CDPA 1988. There is and can be no challenge to the validity of the legislation on communication to the public insofar as it relates to films.
  23. In addition to these main defences and in relation to some only of the channels which TVC broadcast, TVC contend that they have the defence afforded by section 73(2)(b) and 73(3) of the Copyright, Designs and Patents Act 1988 ("CDPA 1988"). I will call this the "reception area" defence. If it applies, it applies to the qualifying services as a defence to both broadcast and film copyright and however the case on infringement is put.
  24. In order to address the above issues, it is necessary to set out the relevant legislative framework, as well as some legislative history.
  25. EU legislation

  26. The principal EU legislative instrument to be considered is Directive 2000/29/EC of the European Parliament and of the Council of 22nd May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society. I will call this the InfoSoc Directive for brevity, as the parties have done. The Directive has no less than 61 recitals. These stress the importance of the harmonisation of copyright laws in the context of the creation of the internal market. As its title suggests, the recitals also show that the framers of the Directive had well in mind the need for copyright to adapt to the needs of the digital era. A number of the recitals (for example (4) and (9)) refer to "a high level of protection" for intellectual property. Recital (15) expressly refers to the WIPO Copyright Treaty (of which more later) and explains that the Directive serves to implement a number of the obligations arising under that and another treaty. The recitals of particular relevance to the substantive articles of the Directive under consideration are recitals (21) to (27) and (33):
  27. (21) This Directive should define the scope of the acts covered by the reproduction right with regard to the different beneficiaries. This should be done in conformity with the acquis communautaire. A broad definition of these acts is needed to ensure legal certainty within the internal market.
    (22) The objective of proper support for the dissemination of culture must not be achieved by sacrificing strict protection of rights or by tolerating illegal forms of distribution of counterfeited or pirated works.
    (23) This Directive should harmonise further the author's right of communication to the public. This right should be understood in a broad sense covering all communication to the public not present at the place where the communication originates. This right should cover any such transmission or retransmission of a work to the public by wire or wireless means, including broadcasting. This right should not cover any other acts.
    (24) The right to make available to the public subject-matter referred to in Article 3(2) should be understood as covering all acts of making available such subject-matter to members of the public not present at the place where the act of making available originates, and as not covering any other acts.
    (25) The legal uncertainty regarding the nature and the level of protection of acts of on-demand transmission of copyright works and subject-matter protected by related rights over networks should be overcome by providing for harmonised protection at Community level. It should be made clear that all rightholders recognised by this Directive should have an exclusive right to make available to the public copyright works or any other subject-matter by way of interactive on-demand transmissions. Such interactive on-demand transmissions are characterised by the fact that members of the public may access them from a place and at a time individually chosen by them.
    (26) With regard to the making available in on-demand services by broadcasters of their radio or television productions incorporating music from commercial phonograms as an integral part thereof, collective licensing arrangements are to be encouraged in order to facilitate the clearance of the rights concerned.
    (27) The mere provision of physical facilities for enabling or making a communication does not in itself amount to communication within the meaning of this Directive.
    (33) The exclusive right of reproduction should be subject to an exception to allow certain acts of temporary reproduction, which are transient or incidental reproductions, forming an integral and essential part of a technological process and carried out for the sole purpose of enabling either efficient transmission in a network between third parties by an intermediary, or a lawful use of a work or other subject-matter to be made. The acts of reproduction concerned should have no separate economic value on their own. To the extent that they meet these conditions, this exception should include acts which enable browsing as well as acts of caching to take place, including those which enable transmission systems to function efficiently, provided that the intermediary does not modify the information and does not interfere with the lawful use of technology, widely recognised and used by industry, to obtain data on the use of the information. A use should be considered lawful where it is authorised by the rightholder or not restricted by law.
  28. The provisions of the Directive which oblige Member states to provide for the relevant rights are Articles 2 and 3. These are as follows:
  29. Article 2
    Reproduction right
    1. Member States shall provide for the exclusive right to authorise or prohibit direct or indirect, temporary or permanent reproduction by any means and in any form, in whole or in part:
    (a) for authors, of their works;
    (b) for performers, of fixations of their performances;
    (c) for phonogram producers, of their phonograms;
    (d) for the producers of the first fixations of films, in respect of the original and copies of their films;
    (e) for broadcasting organisations, of fixations of their broadcasts, whether those broadcasts are transmitted by wire or over the air, including by cable or satellite.
    Article 3
    Right of communication to the public of works and right of making available to the public other subject-matter
    1. 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.
    2. Member States shall provide for the exclusive right to authorise or prohibit the making available to the public, by wire or wireless means, in such a way that members of the public may access them from a place and at a time individually chosen by them:
    (a) for performers, of fixations of their performances;
    (b) for phonogram producers, of their phonograms;
    (c) for the producers of the first fixations of films, of the original and copies of their films;
    (d) for broadcasting organisations, of fixations of their broadcasts, whether these broadcasts are transmitted by wire or over the air, including by cable or satellite.
    3. The rights referred to in paragraphs 1 and 2 shall not be exhausted by any act of communication to the public or making available to the public as set out in this Article.
  30. Article 3(1) is dealing with what are referred to as Berne Convention works, that is to say literary, artistic, dramatic and musical works (including films). By contrast, Article 3(2) is dealing with "neighbouring" or "related" rights. It will be seen that although Article 3(1) obliges Member States to provide a general "communication to the public right" for Berne works, the only right which Member States are obliged to provide for the related rights is a "making available on demand" right.
  31. Article 5 deals with exceptions and limitations. Article 5(1) forms the basis of section 28A of the CDPA 1988 and provides:
  32. Article 5
    Exceptions and limitations
    1. Temporary acts of reproduction referred to in Article 2, which are transient or incidental [and] an integral and essential part of a technological process and whose sole purpose is to enable:
    (a) a transmission in a network between third parties by an intermediary, or
    (b) a lawful use
    of a work or other subject-matter to be made, and which have no independent economic significance, shall be exempted from the reproduction right provided for in Article 2.
  33. Article 5(1) is mandatory – "shall be exempted". In contrast Articles 5(2) and (3) allow member states to provide for additional exceptions or limitations in particular cases, one of which is Article 5(3)(o):
  34. "use in certain other cases of minor importance where exceptions or limitations already exist under national law, provided that they only concern analogue uses and do not affect the free circulation of goods and services within the Community, without prejudice to the other exceptions and limitations contained in this Article."
  35. Of course, the InfoSoc Directive is not the only intervention of the European legislature in the field of copyright, or even in copyright in broadcasts. Directive 92/100/EEC of 19th November 1992 on rental right and lending right and on certain rights related to copyright in the field of intellectual property provided by Article 8(3)
  36. "3. Member States shall provide for broadcasting organizations the exclusive right to authorize or prohibit the rebroadcasting of their broadcasts by wireless means, as well as the communication to the public of their broadcasts if such communication is made in places accessible to the public against payment of an entrance fee."
  37. That Directive was expressly without prejudice to the rights of Member States to go further in protecting owners' rights than was required by Article 8: see the penultimate (16th) recital. It was replaced by a codified version, Directive 2006/115/EC of the European Parliament and of the Council of 12th December 2006 which also contains a similar provision for Member states to go further in recital (16).
  38. Further, Council Directive 93/83/EC of 27th September 1993 on the coordination of certain rules concerning copyright and rights related to copyright applicable to satellite broadcasting and cable retransmission, required member States to provide broadcasting organisations further communication to the public rights in accordance with Article 4(1):
  39. "For the purposes of communication to the public by satellite, the rights of … broadcasting organizations shall be protected in accordance with the provisions of Articles 6, 7, 8 and 10 of Directive 92/100/EEC."
  40. Article 6 of Directive 93/83 contained an express statement about minimum protections:
  41. "Member States may provide for more far-reaching protection for holders of rights related to copyright than that required by Article 8 of Directive 92/100/ EEC."
  42. Directive 93/83 contained a restrictive definition in Article 1(2) of "communication to the public by satellite" but it has no application here.
  43. The InfoSoc Directive was made against the background of Directives 92/100, 93/83 and other Directives in the field of copyright, as recognised in recital (20):
  44. "This Directive is based on principles and rules already laid down in the Directives currently in force in this area, in particular Directives 91/250/EEC, 92/100/EEC, 93/83/EEC, 93/98/EEC (5) and 96/9/EC, and it develops those principles and rules and places them in the context of the information society. The provisions of this Directive should be without prejudice to the provisions of those Directives, unless otherwise provided in this Directive."

    International Treaties

  45. Aspects of copyright law have for a long time been the subject of agreement at international level. The treaties which embody these agreements form part of the background against which the relevant EU legislation was made.
  46. The Berne Convention for the protection of Literary and Artistic Works does not deal with broadcasts as a subject of copyright. However it deals with the restricted acts in the nature of broadcasting to be afforded to Berne Convention works in Article 11bis, which I set out below:
  47. "(1) Authors of literary and artistic works shall enjoy the exclusive right of authorizing:
    (i) the broadcasting of their works or the communication thereof to the public by any other means of wireless diffusion of signs, sounds or images;
    (ii) any communication to the public by wire or by rebroadcasting of the broadcast of the work, when this communication is made by an organization other than the original one;
    (iii) the public communication by loudspeaker or any other analogous instrument transmitting, by signs, sounds or images, the broadcast of the work.
  48. Also of relevance here is Article 8 of the WIPO Copyright Treaty (1996), which provides:
  49. "Without prejudice to the provisions of Articles 11(1)(ii), 11bis(1)(i) and (ii), 11ter(1)(ii), 14(1)(ii) and 14bis(1) of the Berne Convention, authors of literary and artistic works shall enjoy the exclusive right of authorizing 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 these works from a place and at a time individually chosen by them."
  50. Thus, at this level, authors of Berne works were to have the exclusive right of authorising communication to the public by wire or by rebroadcasting of the broadcast of the work, when this communication is made by an organization other than the original one, including the making available of those works on demand.
  51. Domestic legislation

  52. The relevant changes to United Kingdom law were introduced by the Copyright and Related Rights Regulations 2003 ("the 2003 Regulations"). These came into force in October 2003.
  53. A point which needs to be borne in mind is that the United Kingdom copyright legislation uses the term "work" comprehensively to include both Berne Convention works (literary, dramatic, musical and artistic works, including film) as well as related subject matter such as broadcasts. As a consequence, it also identified an author of the related subject matter, although the term author in these cases requires technical definition in the case of broadcasts and other related subject matter. That approach is not adopted in EU legislation, as the contrasts between recitals (23) and (24), between Articles 2(a) and 2 (b) to (e), and between Article 3(1) and 3(2) of the InfoSoc Directive show.
  54. Prior to the amendments introduced by the 2003 Regulations, the CDPA 1988 included protection as works for both "broadcasts" and "cable programme services". In very general terms (although the definitions were quite convoluted) broadcasts had to involve wireless transmission, whereas a cable programme service operated other than by wireless telegraphy. Exceptionally, transmission by microwaves was allocated to cable programme services and excluded from broadcast.
  55. To reflect this distinction in the underlying subject matter protected, section 20 of the Act before amendment provided:
  56. "The broadcasting of the work or its inclusion in a cable programme service is an act restricted by the copyright in—
    (a) a literary, dramatic, musical or artistic work,
    (b) a sound recording or film, or
    (c) a broadcast or cable programme."
  57. The 2003 Regulations amended the CDPA 1988 so as to provide an inclusive definition of broadcast to include both wireless and wired transmissions. The Queen's Printer's version of the Regulations sets out the statutory authority for the legislation: as follows:
  58. "The Secretary of State, being a Minister designated for the purposes of section 2(2) of the [ECA 1972], in relation to measures relating to copyright... in exercise of the powers conferred on her by that section, hereby makes the following Regulations:"
  59. The Explanatory Notes accompanying the Regulation state:
  60. "These Regulations implement [the InfoSoc Directive] which provides for a general and flexible legal framework at Community level in order to foster the development of the information society in the European Community...
    The [CDPA 1988] already provides protection similar to many of the obligations contained in the Directive. These Regulations amend the Act insofar as its provisions do not conform or comply with the Directive and regarding matters that are related to or consequential upon these obligations..."
  61. One of the amendments made by the Regulations was that the old distinction between broadcasts and cable transmissions was abolished. Thus section 6 provided:
  62. "(1) In this Part a "broadcast" means an electronic transmission of visual images, sounds or other information which-
    (a) is transmitted for simultaneous reception by members of the public and is capable of being lawfully received by them, or
    (b) is transmitted at a time determined solely by the person making the transmission for presentation to members of the public."
  63. Section 20 was amended by the 2003 Regulations so as to read:
  64. "(1) The communication to the public of the work is an act restricted by the copyright in –
    (a) a literary, dramatic, musical or artistic work,
    (b) a sound recording or film, or
    (c) a broadcast.
    (2) References in this Part to communication to the public are to communication to the public by electronic transmission, and in relation to a work include –
    (a) the broadcasting of the work;
    (b) the making available to the public of the work by electronic transmission in such a way that members of the public may access it from a place and at a time individually chosen by them."
  65. It is important to note that the definition of communication to the public in section 20(2)(a) and (b) makes it clear, by the use of the word "include" that it extends to the two particular cases identified, but also that it is not limited to those cases alone.
  66. So far as exceptions are concerned, section 28A provides:
  67. "Copyright in a literary work, other than a computer program or a database, or in a dramatic, musical or artistic work, the typographical arrangement of a published edition, a sound recording or a film, is not infringed by the making of a temporary copy which is transient or incidental, which is an integral and essential part of a technological process and the sole purpose of which is to enable -
    (a) a transmission of the work in a network between third parties by an intermediary; or
    (b) a lawful use of the work;
    and which has no independent economic significance."
  68. It should be noted that broadcasts are, apparently, omitted from this section.
  69. As indicated above, these amendments were made in purported reliance on ECA 1972. Section 2(2) and (4) of the ECA 1972 in the form in which they existed at the relevant time, provided:
  70. "(2) Subject to Schedule 2 to this Act, at any time after its passing Her Majesty may by Order in Council, and any designated Minister or department may by regulations, make provision—
    (a) for the purpose of implementing any Community obligation of the United Kingdom, or enabling any such obligation to be implemented, or of enabling any rights enjoyed or to be enjoyed by the United Kingdom under or by virtue of the Treaties to be exercised; or
    (b) for the purpose of dealing with matters arising out of or related to any such obligation or rights or the coming into force, or the operation from time to time, of subsection (1) above;
    (4) The provision that may be made under subsection (2) above includes, subject to Schedule 2 to this Act, any such provision (of any such extent) as might be made by Act of Parliament, and any enactment passed or to be passed, other than one contained in this Part of this Act, shall be construed and have effect subject to the foregoing provisions of this section; but, except as may be provided by any Act passed after this Act, Schedule 2 shall have effect in connection with the powers conferred by this and the following sections of this Act to make Orders in Council and regulations."

    Was section 20(1)(c) ultra vires?

  71. TVC contend, and it is common ground, that the amendment to the CDPA 1988 to introduce the new section 20(1)(c) went further than was required by the provisions of the InfoSoc Directive in creating a general "communication to the public" right for broadcast copyright owners. The Secretary of State, supported by the claimants, contend that to the extent that the amendment went further than required, it was within the powers given to the Secretary of State under Section 2(2) of the European Communities Act 1972.
  72. Mr Howe QC, for TVC, made clear that he did not contend that there was anything in section 20(1)(c) which was inconsistent with the InfoSoc Directive. It was open to Parliament to go beyond what was strictly required under the Directive by way of protection for owners of broadcast copyright. The contention is simply that the amendment required primary legislation, and went further than the permissible scope of section 2(2)(b).
  73. The case advanced in TVC's pleading went further than this dry legal contention, however. It alleged that Regulation 6 of the Regulations was drafted on the mistaken assumption that Article 3 of the InfoSoc Directive required Member States to extend to broadcasts an exclusive right over communication to the public by wire or wireless means. Accordingly, it was alleged, the Secretary of State cannot have addressed her mind to the correct questions. Although Mr Howe did not abandon this allegation, it did not seem to me in the end that the way he put his case depended on establishing these propositions. The point was in any case met by documents produced by the Secretary of State, which showed that the Secretary of State had had her attention properly drawn to the scope of the amendments which were being made.
  74. In more detail Mr Howe submitted that the power under section 2(2) should only be used for "filling the cracks" in Community legislation, or making choices of form or method. He points out that the only relevant obligations on the United Kingdom, so far as broadcasting copyright was concerned, were the limited ones in Art 8(3) of Directive 92/100 and (in relation to fixations of broadcasts) and Article 3(1) of the InfoSoc Directive: communication in public places for a fee and making available on demand. There was no requirement to extend "communication to the public" to anything other than Berne Convention works. He points out that whilst "communication to the public" has a particular meaning in relation to Berne works, derived from Berne Convention, the WIPO Copyright Treaty and the InfoSoc Directive, the use of that phrase in relation to other categories of subject matter has no basis in any of those instruments. He submits that the application of this phrase to broadcasts is simply unrelated to any change to UK copyright law required by the Directive.
  75. For their part, Mr Eadie QC on behalf of the Secretary of State and Mr Mellor QC on behalf of the claimants accepted that the amendment was not "for the purpose of implementation" within section 2(2)(a), but contended that it fell within section 2(2)(b) because it was made for the purpose of dealing with matters "arising out of or related to any such obligation".
  76. The leading case on the interpretation of section 2(2)(b) is Oakley Inc. and others v Animal Limited and others [2005] EWCA Civ 1191; [2006] Ch 337. In that case the defendants maintained that regulations passed for the purpose of implementing an EC Directive on the approximation of laws of the member states in relation to registered designs went beyond section 2(2), despite the fact that the measure adopted in that case - maintaining in force the pre-existing domestic law for designs already registered - was an express option under the Directive. The Court of Appeal pointed out that section 2(2) created a power which was sui generis and was not to be approached in the same way as so-called Henry VIII clauses, under which Parliament delegates to the executive the power to amend primary legislation. That was because section 2(2) was concerned with implementing pre-existing treaty obligations of the United Kingdom. As to section 2(2)(b), Waller LJ said at [21]:
  77. "This subsection has two aspects. It empowers the Secretary of State to produce regulations "arising out of" or "related to" … any such obligation or rights… . The words "arising out of" or "related to" seem to me … to envisage something additional, but still by virtue of section 2(4) something which if the regulations became law, can amend primary legislation."
  78. In R v Secretary of State or Trade and Industry, Ex p UNISON [1996] ICR 1003, 1014, Otton LJ had drawn a distinction between the language of section 2(2)(b) – "related to an obligation" - and something which is "distinct, or separate, or divorced from it". In two cases in the Employment Appeal Tribunal in Scotland, Addison v Denholm Ship Management (UK) Ltd [1997] ICR 770 and Perth and Kinross Council v Donaldson [2004] ICR 667, Lord Johnston had expressed the principle in much narrower terms, expressly disagreeing with Otton LJ. He said:
  79. "if the Directive is to be regarded as the parent, the child cannot be larger, wider, or have greater implications than its parent allows."
  80. In Oakley, Waller LJ did not agree either with the approach of Otton LJ in UNISON or that of Lord Johnston in the two Scottish cases. He said this at [39]:
  81. "Lord Johnson's opinion as to the ambit of the Section is not in my view right. Furthermore I can see nothing in the wording of the Section which would support the view that in some way a policy decision or a significant policy decision is automatically excluded from the ambit of Section 2(2)(b). At the same time I do not for my part equate the words "related to" or "arising from" in this subsection with "not distinct, separate, or divorced from" (the language used by Otton LJ). I would endorse his words that they should be given their natural meaning but as we know context means everything. That context is the bringing into force under Section 2 of the laws, which under the Treaties the United Kingdom has agreed to make part of its laws. The whole section is clearly primarily concerned with that obligation and the primary objective of any secondary legislation under Section 2(2) must be to do just that. Section 2(2)(b), and the words "arising from " and "related to" take their context from that being the primary purpose of Section 2. It seems to me that Section 2(2)(b) from its position in Section 2, from the fact that it adds something to both subsection (1) and (2), and from its very wording is a subsection to enable further measures to be taken which naturally arise from or closely relate to the primary purpose being achieved. I accept that I will be accused of adding the words "naturally" and "closely", but I believe that describes the context which provides the meaning of the words."
  82. Earlier in his judgment at [23], Waller LJ had given an example of a case which would not fall within "arising out of or related to":
  83. "I do not think that for example Section 2(2)(b) could allow a Secretary of State to amend by secondary legislation primary legislation, when he or she was not at the same time bringing into force a directive or without the trigger of a law becoming directly applicable under section 2(1)."
  84. May LJ put the matter in this way at [47]:
  85. "I do not consider that to hold that the making of these transitional provisions came within section 2(2)(a) has the effect of making section 2(2)(b) devoid of content. There is a distinction between providing something which, although it is a choice, is a choice which the implementation of the Directive requires you to make, and one which is not so required, but which has the effect of tidying things up or making closely related original choices which the Directive does not necessarily require. Section 2(2)(b) is confined by its words and context. Redefinition in the abstract is to be avoided. I would refrain, therefore, from deciding whether the passage in the judgment of Otton LJ in R v Secretary of State for Trade and Industry ex parte Unison [1996] ICR 1003 at 1014F-H, quoted by Waller LJ in paragraph 34 of this judgment, correctly interprets and applies section 2(2)(b). But I respectfully agree with Waller LJ that the opinion of Lord Johnson in Addison v Denholm Ship Management (UK) [1997] ICR 770 at 785C-F, quoted by Waller LJ in paragraph 35 of his judgment, is not correct."
  86. Jacob LJ dismissed, at [69] a suggestion that it made a difference that the measure was concerned with statutory monopolies which are jealously guarded. The sub-section had the same effect whatever the subject matter of the Directive. On the substance of the question he said this:
  87. [78] Of course even Otton LJ's view does not mean that the power to make subordinate legislation is virtually unlimited. Mr Howell played that old advocate's trick of putting up an Aunt Sally so as to knock it down in the hope that more would be knocked down than just Aunt Sally. He invited us to reject the view that just because a Directive contains a specific obligation, a statutory instrument can be made dealing with anything related to that obligation, that related to the obligation only in a most general sense is enough. That I am happy to accept. For instance, a Minister could not by statutory instrument change the whole law of contract just because a Directive related to some corner of contract law. But so to conclude does not advance the debate far. To say only a tenuous relationship with the subject-matter of a Directive will not do (with which I agree), does not identify what will do. "
    [79] My own view, provisional though it must be in the absence of any specific context relevant to this case, is this: that s.2(2)(a) covers all forms of implementation – whether by way of choice of explicit options or by way of supply of detail. Both of these are "for the purpose of implementing" or "enabling any such obligation to be implemented". Supplying detail required by a Directive is just that.
    [80] So s.2(2)(b) indeed adds more and Lord Johnston was wrong to say that it could not. How much more must depend on the particular circumstances of the case – the statutory language is the guide. It says "for the purpose of dealing with matters arising out of or related to". Whether a particular statutory instrument falls within those words must depend on what it purports to do and the overall context. One cannot put a gloss on the meaning. If Otton LJ was adding a gloss – "distinct, separate or divorced from it" – then I do not agree with that gloss. You just have to apply the statutory language to the case concerned. And in doing so you bear in mind that the purpose of the power given by the section is European – the Art.10 purpose.
  88. The opinions expressed in this case as to the ambit of section 2(2)(b) were, as Mr Howe pointed out, not technically necessary for the decision which they reached, as they held that section 2(2)(a) covered what the Minister had done in that case. The observations are, however, of considerable authoritative force given (a) that the court heard full argument on the point both from the parties and from the Attorney General, (b) that the Court felt it necessary to express a view in the light of the decision of the Deputy Judge in that case and the EAT in Scotland, both of whom had placed a restrictive interpretation on both sub-sections, and (c) that the interpretation of section 2(2)(b) is heavily dependent on the interpretation of section 2(2)(a) on which the opinions are authoritative.
  89. Moreover, subsequent to the decision in Oakley, the case has been treated as authoritative guidance in a number of first instance decisions: see for example Crane v Sky In-Home Service Limited and others [2007] EWHC 66 (Ch) (unreported, January 2007) at [37] a decision of Briggs J, and Cukurova Finance International Limited and another v H.M. Treasury and another [2008] EWHC 2567 (Admin) (unreported 29th September 2008), a decision of Moses LJ at first instance. In addition, in Ahmed v others v Her Majesty' Treasury (JUSTICE intervening) [2008] UKSC 5; [2010] 2 AC 534 Lord Mance, at [212] expressed himself to be in agreement with the views expressed in Oakley that the powers under section 2 were sui generis and not to be construed narrowly.
  90. Cukurova was an application for permission to apply out of time to challenge the vires of the Financial Collateral Arrangements Regulations 2003. Moses LJ, sitting in the Administrative Court, explained the approach to section 2(2)(b) as follows, at [60]:
  91. "The words "arising out of" or "related to" are themselves broad and it is those statutory words which must be applied. It adds nothing to any argument to say that those words must be broadly construed. As Waller and May LJJ recognised, the only means of limiting the effect of section 2(2)(b) was by placing the words in section 2(2)(b) in their context; but if the context is the obligation of the United Kingdom under Article 10 of the Treaty to implement directly effective Community measures by enacting legislation for the purpose of such implementation, context is but an imperfect instrument for confining the power conferred by section 2(2)(b), since section 2(2)(b) permits secondary legislation which is consistent with but does not have the same purpose. The Court of Appeal's solution is to restrict the power by using the adverbs "naturally" and "closely", all tests which are difficult to explain in the abstract, as May LJ observed."
  92. Not much can be drawn from the decision in that case, which concerned whether a sufficiently compelling case had been made out to justify an extension of time. However, at [99], Moses LJ rejected an argument that consistency of subject matter and purpose between Directive and domestic Regulation was sufficient in that case:
  93. "Reference to the subject matter being the same is far too wide and inexact a test since the subject is merely financial collateral arrangements or, even more vaguely, the stability of financial markets."
  94. In Pothecary Witham Weld (a firm) and another v Bullimore [2010] ICR 1008, Underhill J sitting as president of an Employment Appeal Tribunal decided that the application of the reverse burden of proof applied by domestic regulation in cases of victimisation (as opposed to discrimination cases as required by a Directive) was within section 2(2)(b). The Tribunal considered it material that the relevant Directive expressly preserved the right of Member States to introduce rules which were more favourable to plaintiffs, and that the application of the reversed burden of proof provisions to victimisation claims was simply a (small) further step on the same path as is trod by the primary provisions of the Directive. The Tribunal also considered it to be material that pre-existing UK statutes classified victimisation as a sub-species of discrimination. Having set out these factors the Tribunal said at [42]:
  95. "It obviously makes both for consistency of approach and for convenience in drafting to apply the burden of proof provisions to claims of victimisation as well as to "ordinary" discrimination. The course taken seems to us indeed a good example of a "closely related" choice of the kind which the Court of Appeal in Oakley held to be permissible under section 2(2)(b)."
  96. Mr Howe found some references in Hansard on which he sought to rely under the rule in Pepper v Hart [1993] AC 593, as to the scope of section 2(2)(b). He was particularly attached, perhaps understandably, to a statement by Sir Geoffrey Howe, the Solicitor General (Hansard col. 1313, 13 June 1972) which referred to use of section 2(2) for "small, minor and insignificant amendments". I did not find this exercise either admissible or of value. Firstly, the Hansard Practice Direction [1995] 1 WLR 192 was not complied with by serving extracts sufficiently in advance. Secondly, there were plainly other extracts which the Secretary of State was able to identify, which bore on the question and which indicated that the section, and in particular the words "arising out of or related to" were expressed in deliberately wide terms. Thirdly, the report of the decision of the Court of Appeal in Oakley indicates at [32] and [72] that a similar exercise was undertaken in that case and not found helpful by the court. Finally, in Thoburn v Sunderland City Council [2002] EWHC] 195 (Admin); [2003] QB 151 – the so-called "Metric Martyrs case" – Laws LJ explained why there was no ambiguity in the meaning of section 2(2) which would justify recourse to the principle in any event.
  97. I would draw the following principles from this citation of authority:
  98. i) Section 2(2)(b) is not to be approached restrictively as if it were a Henry VIII clause: it is sui generis because it is for the purpose of implementing treaty obligations of this country: Oakley [19], [70]; Ahmed [212];

    ii) The primary objective of any legislation implemented under section 2(2) must be to bring into force laws which, by treaty, the United Kingdom has agreed to make part of her laws: Oakley [39];

    iii) Section 2(2)(b) nevertheless goes further than section 2(2)(a) in that it allows for legislation which is not necessary for the implementation of a Directive: Oakley [21], [39], [47], [74];

    iv) Moreover section 2(2)(b) permits legislation to be enacted which is consistent with the Directive but which does not have the same purpose: Cukorova [60];

    v) It is thus incorrect to say that the "child" cannot be wider, larger or "greater" than the parent: Oakley [39], [47], [76];

    vi) How much further the sub-section goes cannot be defined in the abstract – one just has to apply the statutory language to the case concerned: Oakley [47], [80]; Cukorova [60];

    vii) It is not correct to ask whether the measure is distinct, separate or divorced from the Directive and only then to hold it to be unrelated: Oakley [39], [80];

    viii) A measure would not arise out of or be related to an obligation if the Minister was not at the same time bringing into force a Directive, or did not have the trigger of a Regulation becoming directly applicable: Oakley [23];

    ix) Equally, a tenuous or general relationship with the subject matter of the Directive will not be enough: Jacob LJ's example of a Directive on mistake being used to reform the whole of contract law or Moses LJ's connection with financial collateral arrangements or stability of markets: Oakley [78]; Cukurova [99];

    x) In some cases, consistency of subject matter and purpose between Directive and Regulation may not be enough: Cukurova [99];

    xi) The fact that the Directive expressly contemplates that member states may take further steps in the direction in question may be a factor indicating that the measure is within the power: Pothecary [42];

    xii) However, the fact that the measure involves an original policy choice does not necessarily take it outside section 2(2)(b): Oakley, [47];

    xiii) Measures which represent a small further step on the same path as trodden by the primary provisions of the Directive may be within the power, even if they widen the protection of the law to a wider class of individuals or cases than required by the Directive: Pothecary [42];

    xiv) The extent to which the measure is consistent with pre-existing domestic law may be a factor. So if a Directive requires a law to be enacted in relation to one species of case recognised by domestic law: it may be legitimate to legislate at the same time for a sub-species of that case: Pothecary [42].

  99. It follows that I reject Mr Howe's submission that section 2(2)(b) is merely for filling the cracks or making choices of form or method. As indicated above it goes further.
  100. In the present case section 20(1)(c) has to be viewed against the background that domestic law already gave some protection against the communication to the public of broadcasts. Miss May on behalf of the Secretary of State submitted, in my view correctly, that prior to the amendment of the CDPA 1988 by the Regulations, section 20 gave to the owner of copyright in a broadcast (as then defined) the right to prevent the following restricted acts for both fixed and unfixed broadcasts:
  101. i) Wireless broadcast or transmission for presentation to members of the public (section 20 restricts broadcasting, read with the definition of broadcast(ing) in section 6(1) as involving wireless telegraphy);

    ii) Wired transmission for reception at two or more places at the same time, on demand, or for presentation to members of the public (section 20, read with the definitions of cable programme service in section 7(1), restricts inclusion in a cable programme service, which must involve sending information other than by wireless telegraphy).

  102. Following the amendment introduced by the Regulations, all these acts will remain restricted. However section 20 as amended will also restrict wireless transmission for on demand access. This was required by Article 3(2) of the Directive for fixations of broadcasts. The amended section 20 makes it a restricted act for both fixed and unfixed.
  103. The amended section will also make it a restricted act to make a transmission wirelessly for reception at two or more places, something which is already a restricted act for wired transmission.
  104. Finally the amended section extends to anything else which can be properly characterised as a communication to the public by electronic means.
  105. I think that, taken collectively, a number of factors point to the fact that the measure under attack in the present case arose out of and was related to the United Kingdom's obligation under the Directive.
  106. First, I think the amendments are closely and naturally related to the subject matter of the Infosoc Directive. The Directive is concerned with broadcast copyright, and in particular the acts restricted thereby. The Directive is narrower still in that it is concerned with making available broadcasts to members of the public not present at the place where the act of making available originates (recital (24)). The general right of communication to the public by electronic transmission introduced into section 20 falls within that narrow subject matter.
  107. Secondly, the amendments are closely and naturally related to the purpose of the Directive. The purpose of the Directive is merely to require member states to implement the provisions of substantive law. But the Directive provides for minimum standards of harmonisation, and is enacted in a context of progressive overall European harmonisation which recognises the rights of Member States to go further than the minimum standards. It cannot be suggested that the Directive is striking a careful balance between the interests of broadcasters and of users and saying, in effect, "thus far and no further". Mr Howe did not suggest that it was, or, as I have said, that there was anything in section 20 which was inconsistent with the purpose of the Directive. The extent to which section 20 goes further than the Directive required can be fairly regarded in my judgment as a small further step along the same road as is pursued by the Directive and the other European legislation in relation to copyright.
  108. Thirdly, domestic legislation already provided for more extensive protection for broadcasts than the making available on demand right required by Article 3(2). That fact serves to reduce the gap between what is provided for by the Directive and what is given by section 20(1)(c). It reduces the size of the step along the road still further.
  109. Fourthly, I can safely put to one side the distinction between "fixations of broadcasts" required by the Directive and the application of section 20 to fixed and unfixed broadcasts. Although Mr Howe sought to make something of this initially, I cannot think that it would have been sensible or practicable to introduce a distinction based on fixation in connection with broadcasts for the purposes of a communication right where none had existed before.
  110. Fifthly, I think that given that the Directive requires a general and technologically neutral communication to the public right for Berne works, the question naturally arises whether there should be the same or different protection for related subject matter. Once a policy decision was taken, as it clearly was, to provide for such a general right for broadcasts, it made no sense to require the amendments for the two types of subject matter to be introduced by different parliamentary mechanisms. It seems to me that this is just the kind of related original policy choice which is intended to fall within section 2(2)(b).
  111. Mr Eadie described this point more generally in his skeleton as providing for a coherent scheme consistent with previous domestic law. This allowed Mr Howe a free hit, by drawing attention to the fact that the same domestic regulation failed to provide expressly for protection for transient copying to users of broadcasts in the amended section 28A. I do not think that it is really on point. Section 28A is concerned with an exception to the reproduction right, and does not throw any light on whether it was convenient and coherent to have a communication to the public right for related subject matter in addition to Berne works. In any case, for reasons which I shall explain, I consider that section 28A does apply to broadcasts.
  112. For those reasons, and despite the cogent submissions of Mr Howe, I was not in the end persuaded that section 20(1)(c) was enacted without proper powers.
  113. Communication to the public

  114. As I have indicated, TVC maintain that they are not communicating the claimants' broadcasts or films to the public within the meaning of section 20. For this purpose there is no need to distinguish between broadcasts and films, and no question of "substantial part" arises.
  115. To recapitulate, "communication to the public" means communication to the public by electronic transmission: see section 20(2) of the Act. I have already set out recital (23) in the Directive which indicates that the communication to the public right should be understood in a broad sense. That recital reflects the use of the words "any communication to the public" in Article 11bis of the Berne Convention and Article 8 of the WIPO Copyright Treaty. It is clear that the term is chosen to be technologically neutral.
  116. In Case C-306/05: Sociedad General de Autores y Editores de Espana (SGAE) v Rafael Hoteles SL [2007] Bus LR 521, the Court of Justice had to determine what was meant by "communication to the public" in a case concerned with the distribution by hotel proprietors of broadcast signals received by them to rooms within their hotels in which hotel guests can view Berne copyright works included in the broadcasts. In that case the Audencia Provincial de Barcelona had asked the Court of Justice, in essence, whether the distribution of a signal through television sets in customers' hotel rooms constituted an act of communication to the public within the meaning of Article 3(1) of the InfoSoc Directive and whether the installation of television sets in hotel rooms constituted, in itself, an act of that nature.
  117. The Court observed, in reliance on recital (23), that communication to the public must be interpreted broadly. Nevertheless, in view of recital (27), the mere installation of television sets did not constitute the act of communication to the public. The core of the Court's reasoning is at [38] to [44]
  118. "38. In a context such as that in the main proceedings, a general approach is required, making it necessary to take into account not only customers in hotel rooms, such customers alone being explicitly mentioned in the questions referred for a preliminary ruling, but also customers who are present in any other area of the hotel and able to make use of a television set installed there. It is also necessary to take into account the fact that, usually, hotel customers quickly succeed each other. As a general rule, a fairly large number of persons are involved, so that they may be considered to be a public, having regard to the principal objective of Directive 2001/29, as referred to in paragraph 36 of this judgment.
    39. In view, moreover, of the cumulative effects of making the works available to such potential television viewers, the latter act could become very significant in such a context. It matters little, accordingly, that the only recipients are the occupants of rooms and that, taken separately, they are of limited economic interest for the hotel.
    40. It should also be pointed out that a communication made in circumstances such as those in the main proceedings constitutes, according to Article 11bis(1)(ii) of the Berne Convention, a communication made by a broadcasting organisation other than the original one. Thus, such a transmission is made to a public different from the public at which the original act of communication of the work is directed, that is, to a new public.
    41. As is explained in the Guide to the Berne Convention, an interpretative document drawn up by the WIPO which, without being legally binding, nevertheless assists in interpreting that Convention, when the author authorises the broadcast of his work, he considers only direct users, that is, the owners of reception equipment who, either personally or within their own private or family circles, receive the programme. According to the Guide, if reception is for a larger audience, possibly for profit, a new section of the receiving public hears or sees the work and the communication of the programme via a loudspeaker or analogous instrument no longer constitutes simple reception of the programme itself but is an independent act through which the broadcast work is communicated to a new public. As the Guide makes clear, such public reception falls within the scope of the author's exclusive authorisation right.
    42. The clientele of a hotel forms such a new public. The transmission of the broadcast work to that clientele using television sets is not just a technical means to ensure or improve reception of the original broadcast in the catchment area. On the contrary, the hotel is the organisation which intervenes, in full knowledge of the consequences of its action, to give access to the protected work to its customers. In the absence of that intervention, its customers, although physically within that area, would not, in principle, be able to enjoy the broadcast work.
    43. It follows from Article 3(1) of Directive 2001/29 and Article 8 of the WIPO Copyright Treaty that for there to be communication to the public it is sufficient that the work is made available to the public in such a way that the persons forming that public may access it. Therefore, it is not decisive, contrary to the submissions of Rafael and Ireland, that customers who have not switched on the television have not actually had access to the works.
    44. Moreover, it is apparent from the documents submitted to the Court that the action by the hotel by which it gives access to the broadcast work to its customers must be considered an additional service performed with the aim of obtaining some benefit. It cannot be seriously disputed that the provision of that service has an influence on the hotel's standing and, therefore, on the price of rooms. Therefore, even taking the view, as does the Commission of the European Communities, that the pursuit of profit is not a necessary condition for the existence of a communication to the public, it is in any event established that the communication is of a profit-making nature in circumstances such as those in the main proceedings.
  119. The claimants focus on [40], and submit that whenever there is an intervention by a broadcasting organisation other than the original one, there is a communication to the public within the exclusive right of the copyright owner and which it is entitled to control. The re-transmitted signal will be to members of the public who are not the direct recipients of the signal. Whilst the condition in the final sentence of [42] (inability to receive the signal without intervention) is not always met, the recipients of a re-transmitted signal will enjoy the broadcast work through a different route and only on account of the intervention of the re-broadcaster. They submit that this is consistent with Article 11bis(1)(ii) in its reference to "communication … made by an organisation other than the original one", and with the Guide to the Berne Convention relied on by the Court.
  120. TVC point out that the question referred was based on the provision of TV sets by the hotel, and did not relate to a situation such as the present in which the intervening organisation does not own or control the equipment on which the member of the public chooses to view the broadcast. They also focus on [42] which they contend appears to acknowledge that the mere provision of technical means to ensure or improve reception in the catchment area would not amount to a communication to the public. They point out that the Rome Convention Intergovernmental Committee at its 12th Session (Geneva, 5 to 7 July 1989) adopted a report by committees of governmental experts setting out a number of principles. Under "Cable distribution" it adopted:
  121. "Principle AW26. It does not amount to distribution by cable of the broadcast of the work concerned where the broadcast, received by an aerial larger than generally used for individual reception, is transmitted by cable to individual receiving sets within a limited area consisting of one and the same building or a group of neighboring buildings, provided that the cable transmission originates in that area and is made without gainful intent."
  122. TVC submit that the point made here shows that not every physical act of distribution of a broadcast signal is an act of communication to the public. Merely providing technical means which assist people more easily or readily to receive what they could in principle receive by other means does not amount to a communication to the public.
  123. In support of their contention that the mere provision of technical means to assist in reception is not communication to the public, TVC refer in addition to a paragraph from the opinion of Advocate General La Pergola in Entidad de Gestion de Derechos de los Productores Audivisuales (Egeda) v Hosteleria Asturiana SA (Hoasa) case C-293/98) [2000] ECR I-629 at [22] which is cited in the opinion of Advocate General Sharpston in Rafael Hoteles at [52]:
  124. "it is all too clear - given that such retransmission is not just a technical means to ensure or improve reception of the original broadcast in the catchment area, as in the case, for example, of the installation and use of transceivers – that [the hotel proprietor] gave the hotel guests access to the protected work. If [it] had not made secondary use of broadcasts, the clients - although physically within the satellite catchment area - would not have been able to enjoy the broadcast work in any other way; they therefore constitute, in this sense, a 'new' public that differs from the primary broadcast public.
  125. It follows from the authorities and other materials to which I have made reference that there is a distinction between an act which qualifies as a communication to the public, and the provision of:
  126. i) "just a technical means to ensure or improve reception of the original broadcast in the catchment area": Rafael Hoteles at [42] and La Pergola AG in Egeda ; or

    ii) "an aerial larger than generally used for individual reception" for relaying the signal to "individual receiving sets within a limited area consisting of one and the same building or a group of neighbouring buildings, provided that the cable transmission originates in that area and is made without gainful intent" : Rome principle AW 26.

  127. As the authors of Ricketson & Ginsburg "International Copyright and Neighbouring Rights" point out at paragraph 12.38, the character of an act of secondary communication can vary widely, from the provision of a simple community antenna to a highly sophisticated receiving station which distributes broadcast programmes over a wide geographical area. They say:
  128. "In the first of these cases, however, it may be doubted whether there is a true secondary communication to the public in that the community antenna simply replaces a multitude of individual antennae on the same building or buildings and this is therefore no more than a reception of the primary broadcast. It may also be argued that there is no 'organization' which makes the communication in such a case, apart from the body representing the owners or tenants of the building in question. It can therefore be concluded that such forms of distribution fall outside the scope of Article 11bis(1)(ii), and this is the view that has been taken on a national and international level."
  129. What is less clear from the decision of the CJEU in Rafael Hoteles is whether there is a communication to the public when an intervening organisation, acting for its own profit, intervenes in full knowledge of the consequences of its acts and in order to attract an audience to its own transmission and advertisements, to communicate the original broadcast signal to members of the public who would in fact be able to access the original broadcast signal using their own television sets or laptops in their own homes. Reading paragraph [40] of the judgment in isolation would give an affirmative answer. But other passages suggest that it is material to ask whether there is a "new public" and whether the hotel guests would have been able to access the broadcasts without the intervention. I consider that the principles which it is possible to extract from Rafael Hoteles do not go far enough to enable me to answer that question conclusively in the claimants' favour. I propose therefore to refer a question for the opinion of the Court of Justice on this point. However, in case it is of assistance I will express my provisional view.
  130. Given the broad meaning which the Directive requires to be given to "communication to the public", it seems to me that any limitations on the natural meaning of the expression need to be kept within tight bounds. In my judgment, these limitations are all concerned with excusing from liability acts whose purpose is purely supportive of the original broadcaster's intention to have its signal received in its catchment area. Where, by contrast, the acts concerned are aimed in competition with the original broadcaster, and intended to attract the audience of the original broadcaster away from direct reception of its signals, they are within the notion of communication to the public. In this way, a distinction is maintained between acts of third parties which are independent exploitations of the copyright and related rights, and acts which are merely supportive of the exploitation which is inherent in the original transmission of the work.
  131. Thus in Rafael Hoteles the hotel proprietor was merely relaying the signal, but he was doing it to a new audience not within the contemplation of the copyright owner when he licensed the original broadcast. I do not take from the case any principle that it is only in those circumstances that an intervening organization makes a communication to the public. There was clearly an independent exploitation of the works.
  132. In Rafael Hoteles the Court felt that it did not have to decide whether a financial motive on the part of the intervening organisation was a necessary ingredient. Sharpston AG plainly regarded the financial motive as a factor, but not necessarily a decisive one:
  133. "[51] It is clear that in the present case first, the circle of potential recipients of the communication is both extensive and of economic significance for the author and, second, the intervening organisation making the communication does so for its own economic benefit. In such circumstances, the communication should be regarded as being made 'to the public'. I do not consider that it is necessary or appropriate to decide in the context of the present case whether economic benefit to the person responsible for making the communication is always required in order for a communication to be regarded as 'to the public' within the meaning of Article 3 of the Directive."
  134. From the judgment of the Court at [44], it seems that it regarded benefit to the hotel proprietor as relevant as well.
  135. In my provisional view, the acts of TVC in intercepting the claimants' broadcasts (and works comprised therein) and making them available via the internet amount to acts of communication to the public.
  136. Firstly, TVC's intervention is plainly by an organisation other than the original broadcaster. It is, prima facie, a "communication to the public". It is necessary to see whether it can be brought within the limitations on that term.
  137. Secondly, there is no analogy with the case of the community antenna discussed in Rome principle AW 26. Even in that case there was a proviso that the antenna was not provided with gainful intent. So the analogy breaks down even before one considers the other factors.
  138. Thirdly, TVC do not in my judgment merely provide technical means to ensure or improve reception in the catchment area of the broadcast. The service which TVC provide is an alternative service to that of the original broadcaster, including its own advertising content, and which is in competition with the service provided by the original broadcaster. It is operated for profit. It is intended to attract its own public audience. Its activities are therefore, in my view an independent exploitation, of the works and other subject matter. They are not merely supportive of the original exploitation of the work.
  139. Fourthly, I do not think that the fact that subscribers would be entitled to receive the broadcasts direct on their domestic televisions or computer screens means that the recipients of the TVC service are not a "new public". The Directive and the Act require only that the communication be to "the public", subject to the narrow limitations which I have discussed. If there is a communication to a new class of the public, then that is a clear indication that one is outside the exception. But to go further and hold that every communication to the originally contemplated class is exempted, goes much further than warranted by authority.
  140. Fifthly, the aggregate of the individual communications which TVC make at any given time is properly to be regarded as a communication to the public, as opposed to a plurality of individual and private communications. In Rafael Hoteles it was appropriate to consider the communications to the members of the public in their separate hotel rooms, and to consider as well the fact that the occupants of such rooms are regularly replaced. In my judgment it is appropriate to look cumulatively at the communications in the present case, rather than regarding them as an aggregate of individual ones. I also do not think it matters that the communications are initiated by the users. It is true that user-initiated communications are the subject of the making available right: but in my judgment such communications are a sub-set of the notion of communication to the public, not an extension of it.
  141. In connection with the correct approach to aggregating a number of private communications, TVC relied on a decision of the Court of Appeal of Singapore applying national legislation also based on Article 8 of WIPO Copyright Treaty: RecordTV Pte Ltd v MediaCorp TV Singapore Pte Ltd [2010] SGCA 43. That case involved a service by which members of the public could request RecordTV to record broadcast programmes on their behalf, on Record TV's servers. The Court held it was the end users rather than RecordTV who were making the copies of the broadcasts for the purposes of the reproduction right. Accordingly the end users were able to take account of a time-shifting defence. So far as "communication to the public" is concerned, the Court held that there had not been any communications to "the public" and RecordTV was not the party who made the communications in any event. At §26, the Court stated:
  142. "26 In any case, in view of the modus operandi of RecordTV's iDVR service, we find that any communications made by RecordTV to Registered Users who had requested the recording of a particular MediaCorp show were made privately and individually. We see no reason why the aggregate of the private and individual communications made to each of the aforesaid Registered Users should transform the nature of such communications into "public" communications. Although any member of the public could register with RecordTV to become a Registered User, he had no immediate access to all (or any) of the MediaCorp shows already recorded by RecordTV. This was because RecordTV's iDVR service was not a video-on-demand service whereby RecordTV shared a library of recorded works with Registered Users. Rather, a Registered User was only allowed to access and view time-shifted recordings of the specific MediaCorp shows which he had requested to be recorded. Thus, each Registered User had to make a request for a particular MediaCorp show to be recorded for him, and only he could access the show recorded at his request."
  143. To the extent that this conclusion is inconsistent with one of the grounds for decision in Record TV, I respectfully differ from it. Although the Singapore Court was applying a provision of Singapore law derived from the same international convention, I find it difficult to reconcile the conclusion reached there with the reasoning in Rafael Hoteles and the obvious desire in the Directive to provide for a technologically neutral definition of communication to the public. It would be an unfortunate result if a point-to-multipoint communication were to be actionable but a number of point to point transmissions were not.
  144. Finally I should deal with two other points relied on by Mr Howe. The first was that the absence of control by TVC over the equipment on which the signal is received by the viewer was a ground on which Rafael Hoteles could be distinguished. I was not persuaded by that submission. Although it is fair to say that the case was one in which the intervening organisation did provide the reception equipment, it is clear from the judgment that the infringing act was the distribution of the signal and not the provision of the apparatus. The second point was to place reliance on some extracts from Hansard recording debates on the Bill which led to the CDPA 1988. He submitted that the statements made to Parliament at this time must have informed Parliament's intention when it amended the Act in 2003. It was not clear to me that these extracts fell within the rule in Pepper v Hart, not least because the term "communication to the public" was not part of the Bill at that stage.
  145. It follows that I will refer a question to the CJEU on this issue. On this and the other issues I propose to refer I will hear counsel as to the form of the order and of the question.
  146. Reproduction right and substantial part

  147. Logically, the first question to be determined under this heading is whether, by re-transmitting the broadcasts and films, TVC make a copy of the whole or a substantial part thereof, or authorise others to do so. It is common ground that copies are created transiently in the buffers in TVC's servers and on the screen of users. TVC's case is that these transient copies do not amount to the whole or a substantial part of any broadcast or film.
  148. The leading decision on what is meant by reproduction in part, for the purposes of Article 2 of the InfoSoc Directive is Case C-5/08 Infopaq International A/S v Danske Dablades Forening. In that case the act of reproduction in question was the scanning, conversion into digital files and electronic processing of newspaper articles. The Court of Justice observed at [27] to [29] that the concept of "reproduction in part" for the purposes of Article 2 of the Directive was to be given a uniform autonomous interpretation throughout the EU. By its first question the national court had asked, in essence, whether the concept of reproduction in part encompassed the storing and subsequent printing out of a text extract of 11 words. The Court's answer was:
  149. "48      In the light of those considerations, the reproduction of an extract of a protected work which, like those at issue in the main proceedings, comprises 11 consecutive words thereof, is such as to constitute reproduction in part within the meaning of Article 2 of Directive 2001/29, if that extract contains an element of the work which, as such, expresses the author's own intellectual creation; it is for the national court to make this determination.
    49      It must be remembered also that the data capture process used by Infopaq allows for the reproduction of multiple extracts of protected works. That process reproduces an extract of 11 words each time a search word appears in the relevant work and, moreover, often operates using a number of search words because some clients ask Infopaq to draw up summaries based on a number of criteria.
    50      In so doing, that process increases the likelihood that Infopaq will make reproductions in part within the meaning of Article 2(a) of Directive 2001/29 because the cumulative effect of those extracts may lead to the reconstitution of lengthy fragments which are liable to reflect the originality of the work in question, with the result that they contain a number of elements which are such as to express the intellectual creation of the author of that work.
    51      In the light of the foregoing, the answer to the first question is that an act occurring during a data capture process, which consists of storing an extract of a protected work comprising 11 words and printing out that extract, is such as to come within the concept of reproduction in part within the meaning of Article 2 of Directive 2001/29, if the elements thus reproduced are the expression of the intellectual creation of their author; it is for the national court to make this determination."
  150. It has, however, been questioned whether a fragment consisting of up to four video frames lasting up to 160 milliseconds could amount to a sufficient part of a copyright work to come within the notion of reproduction in part, and whether, if not, it is appropriate to consider a sequence of such reproductions collectively. This was one of the issues which had to be addressed by Kitchin J in Football Association Premier League v QC Leisure [2008] EWHC 1411 (Ch); [2008] FSR 32 ("FAPL"). Kitchin J answered both questions in the negative on the basis of domestic and Australian authority: see [217] to [230]. He nevertheless referred questions to the CJEU on the interpretation of the Directive: see Question 4 recorded at [2008] FSR 901.
  151. Since then, the CJEU has decided Infopaq and the opinion of Advocate General Kokott has been rendered in the FAPL reference. Her view was that the individual frames amounted to a substantial part of the works there in question: see the opinion at [79] to [81]. She also concluded that the display of the broadcast on the screen amounted to a reproduction: see [85]. It was not necessary in consequence for her to express a view on the question of whether it was legitimate to collect together all the insubstantial parts: and it does not appear that she did so.
  152. The facts of the present case appear to me to be more strongly in favour of a finding of reproduction in part than those in FAPL, at least so far as storage of the films in the buffers is concerned. Much longer sections of the works are stored. My provisional view is therefore that TVC do reproduce and authorise the reproduction of a substantial part of the films in the buffers and on the screens. Final judgment should await the decision of the CJEU in FAPL however.
  153. Mr Howe argued that a different approach should apply to the assessment of reproduction in part in the case of the broadcasts as copyright works to that which applies to films. The copyright which arises in a broadcast arises because of the collocation of subject matter which makes up the broadcast. To amount to a sufficiently substantial part, so the argument runs, more needs to be taken than in the case of a film, where the author's intellectual creation can be taken, if the Advocate General is right, by a single frame.
  154. Mr Howe also reserved for argument in a higher court the question of whether TVC authorised the reproduction of the films and broadcasts on the screens of users. He accepted that for present purposes there was no realistic argument he could present in the face of the decision in FAPL at [379] and Twentieth Century Fox Film Corporation and others v Newzbin Limited [2010] EWHC 608 (Ch).
  155. I have come to the provisional view that TVC do not authorise the reproduction of the whole or any part of the broadcast either in the buffers or on the screens of users. The evidence does not establish that what exists in the buffers or on the screen at any given time can properly be regarded as a part of the broadcast. There could only therefore be infringement if I were to accept the cumulative or rolling approach to infringement of broadcast copyright. Kitchin J declined to do so for Berne works, following Australian authority to that effect in FAPL at [237] to [230]. I would decline to do so here for broadcast copyright for the same reasons. But it seems to me that this raises a further question as to the meaning of the Directive which is unlikely to be resolved in FAPL. I propose therefore to refer a question or questions to the CJEU on this issue as well.
  156. Does section 28A apply to broadcast copyright?

  157. This question does not arise if I am correct in my provisional conclusion that there is no reproduction in part of the broadcasts at all. But I will go on to consider it in case I am wrong about that.
  158. Article 5(1) certainly does apply to broadcasts: it provides a defence in the case of acts of reproduction as there defined in relation to any work or other subject matter. It is mandatory in its application. But in implementing Article 5(1), Parliament has, in section 28A, decided to include a list of the rights to which the defence applies, a list from which broadcast copyright is a notable absentee. Jacob LJ was known to have firm views on whether parliamentary draftsman should depart from the language of a Directive: see, amongst many examples, Markem Corporation v Zipher Limited [2005] EWCA Civ 267 at [94].
  159. Mr Mellor, no doubt conscious of the anomaly in the overall scheme of protection which this omission creates, positively suggested that an application of the Marleasing principle justifies construing section 28A so as to include broadcasts. Mr Howe, who had not initially been so bold as to place reliance on section 28A for broadcasts at all, seized on Mr Mellor's proffered suggestion.
  160. As has been pointed out in a number of cases, the approach of the English courts when interpreting statutes designed to give effect to EU legislation is to construe the English legislation so far as possible so as to make it compatible with the EU legislation: see per Arden LJ in HMRC v IDT Card Services (Ireland) Limited [2006] EWCA Civ 29; [2006] STC 1252, at [75] and [79]. That is what the Court of Justice in Marleasing S.A. v Commercial Internacional de Alimentation SA held that national courts were obliged to do. As Arden LJ went on to point out in IDT, that approach to construction goes further than permitted under purely domestic law: see for example her reference to Litster v Forth Dry Dock & Engineering Co Ltd [1990] 1 AC 546, where the House of Lords, in effect, wrote additional words into the domestic statute to bring about the effect required by the Directive. At [82], she said this:
  161. "Normally when construing domestic legislation, the English courts must find the meaning of the words which Parliament has used. In the context, however, of legislation which requires to be construed in a way which is compatible with European Union law or with the rights conferred by the European Convention on Human Rights, the English courts can adopt a construction which is not the natural one. The process, however, remains one of interpretation: the obligation imposed by the Court of Justice is only to interpret national law in conformity with a directive "so far as possible". That raises the question when a process ceases to be that of legitimate interpretation and trespasses into the field of lawmaking that is the task of Parliament and not the courts."
  162. On this latter question the Court of Appeal in IDT considered that guidance was to be obtained from the approach approved by the House of Lords in Ghaidan v Godin-Mendoza [2004] 2 AC 557 in connection with interpreting legislation following the Human Rights Act 1998 so as to be compliant with the ECHR. Arden LJ analysed the speeches in that case as follows at [89]:
  163. "The critical point made by the House of Lords in the Ghaidan case can be found in the passage from the speech of Lord Nicholls which I have set out above. Lord Nicholls accepts that the effect of interpretation in accordance with section 3 of the 1998 Act may be to change the meaning of the legislation but, as he explains, the meaning adopted by the court must not conflict with a fundamental feature of the legislation. He adopts the words of Lord Rodger that the interpretation chosen by the court must "go with the grain of the legislation". Lord Nicholls, Lord Steyn and Lord Rodger all accepted that there would be occasions when the courts could not adopt an interpretation that would make the legislation compatible with Convention rights because that would involve making policy choices which the court was not equipped to make (see [33] to [35] per Lord Nicholls, [49] per Lord Steyn and [115] per Lord Rodger). It is also clear from the Ghaidan case that the interpretation of legislation under section 3 or the Marleasing principle may involve a substantial departure from the language used though it will not involve a departure from the fundamental or cardinal features of the legislation. It is possible to read the legislation up (expansively) or down (restrictively) or to read words into the legislation. The question of whether section 3 can be applied does not depend on whether it is possible to solve the problem by a simple linguistic device."
  164. In Ghaidan, Lord Rodger put the matter in this way at [121]:
  165. "For present purpose, it is sufficient to notice that cases such as Pickstone v Freemans plc [1989] AC 66 and Litster v Forth Dry Dock & Engineering Co Ltd [1990] 1 AC 546 suggest that, in terms of section 3(1) of the 1998 Act, it is possible for the courts to supply by implication words that are appropriate to ensure that legislation is read in a way which is compatible with Convention rights. When the court spells out the words that are to be implied, it may look as if it is "amending" the legislation, but that is not the case. If the court implies words that are consistent with the scheme of the legislation but necessary to make it compatible with Convention rights, it is simply performing the duty which Parliament has imposed on it and on others. It is reading the legislation in a way that draws out the full implications of its terms and of the Convention rights. And, by its very nature, an implication will go with the grain of the legislation. By contrast, using a Convention right to read in words that are inconsistent with the scheme of the legislation or with its essential principles as disclosed by its provisions does not involve any form of interpretation, by implication or otherwise. It falls on the wrong side of the boundary between interpretation and amendment of the statute."
  166. I have not been shown any material which suggests that there was any policy reason for the omission of broadcast copyright from the list of rights in section 28A. There is nothing inconsistent with the grain of the legislation to read section 28A as if it contained a reference to broadcast copyright. No one was able to suggest that this its inclusion in section 28A to bring that section in line with Article 5(1) raised the sort of policy questions which the courts should not deal with in applying the Marleasing principle.
  167. Mr Howe suggested, as an alternative argument, that it may have been thought unlikely that the defence would be necessary in the case of broadcast copyright, given the broad interpretation of "substantial part" which he urged me to take. The temporary copies defence, he argued, is not necessary if no substantial part is taken. But I do not think that this works. The temporary, transient copy could be the whole of a broadcast. I cannot see any reason why a temporary copy defence should automatically be ruled out in those circumstances, particularly as the Directive requires it.
  168. Accordingly I would, if necessary, construe the list of rights in section 28A as including broadcast copyright. It does not matter whether one does so by saying that the list is non-exhaustive, or by reading in by implication a reference to broadcast copyright, as the effect is the same. In doing so I would be doing no more than performing the duty which has been imposed on Parliament by the Directive.
  169. Article 5(1)/ section 28A defence in the present case.

  170. In Infopaq, at [54], the ECJ pointed out that there were five cumulative requirements of the Article 5(1) defence:
  171. (i) the copy must be temporary
    (ii) the copy must be transient or incidental,
    (iii) the copy must be an integral and essential part of a technological process,
    (iv) the sole purpose of the process must be to enable (a) a transmission of the work in a network between third parties by an intermediary; or (b) a lawful use of the work, and
    iv) it must have no independent economic significance.
  172. Article 5(5) gives further guidance on how the Article 5(1) exception is to be interpreted:
  173. "The exceptions and limitations provided for in paragraph 1…shall only be applied in certain special cases which do not conflict with a normal exploitation of the work or other subject matter and do not unreasonably prejudice the legitimate interests of the rightholder."
  174. This is known as the "Berne three-step test". It argues for a narrow application of the exceptions to protection in Article 5, limited to specific cases, which does not cut across normal exploitations and which does not prejudice the rightholder.
  175. The copies made and authorised by TVC are both temporary and transient. In my judgment they are an integral and essential part of the technological process undertaken by TVC of streaming the content of the broadcasts to the subscribers to their service. As to the purpose requirement, Mr Howe abandoned reliance on purpose (a), transmission within a network between third parties and an intermediary. His contention was that, if TVC's activities do not come within "communication to the public", then they are otherwise lawful within purpose (b), and not rendered unlawful by the making of transient copies. I accept Mr Howe's submission on that point, but it has the consequence that he can only succeed on this defence if he succeeds also on "communication to the public".
  176. The real debate between the parties centred on "no independent economic significance". In FAPL Kitchin J expressed his provisional opinion as follows:
  177. 243. Applying these principles to the present case, the claimants say the creation of transient copies does have economic significance. If the pubs had a Sky subscription, there would be no independent economic significance, since Sky would have been justly recompensed. If, however, FAPL and Sky have no other basis upon which they can require payment of a licence fee then the transient copying has real economic significance since it becomes the sole basis on which the UK rights holder can extract the value from his rights.
    244. I consider this is a point of interpretation of the Directive upon which the guidance of the Court of Justice is necessary. It is closely related to other aspects of the copyright claim to which I shall shortly turn. However, my own provisional opinion is that the claimants' argument fails to take adequate account of the inherent value of the transient copies as such, rather than as a means of controlling the process of which they form part. As the defendants pithily say, the whole point of this defence is to remove ransom strips, not to create them. In the case of the transient copies made in the decoder, these would seem to have no independent value save in so far as they participate in the flow of the video and audio data to the television. However, consideration must also be given to the transient copies created on the television screen. Here it may be important to take other matters into account including the extent to which the transient copies (here the artistic works) constitute only a small part of the programming and whether it is reasonable for FAPL and Sky to seek to extract further fees in addition to those already paid.
  178. That view is supported only in part by the Opinion of AG Kokott in FAPL. She concluded that the acts of reproduction in the memory of the decoder did not have independent economic significance, whereas the reproduction on the screens of the users did: see her opinion at [94]–[96].
  179. I think it is reasonably clear that the reproductions in the buffers have no independent economic significance, but it is not impossible that the CJEU will come to a different view. It is less clear whether reproduction on the screens of the users has independent economic significance. The correct answer should be made clear by the outcome in the FAPL case. I will accordingly defer final judgment on this point.
  180. It follows, in my provisional view, that TVC reproduce in part and authorise the reproduction in part of the films but not the broadcasts. The section 28A defence does not of course arise if I am right about communication to the public. If it does arise, the position should be made clear by the judgment in FAPL. I will accordingly defer judgment on section 28A until the outcome of that case is known.
  181. Section 73

  182. Finally I turn to section 73. That section provides as follows:
  183. (1) This section applies where a wireless broadcast made from a place in the United Kingdom is received and immediately re-transmitted by cable.
    (2)The copyright in the broadcast is not infringed—
    (a) if the re-transmission by cable is in pursuance of a relevant requirement, or
    (b) if and to the extent that the broadcast is made for reception in the area in which it is re-transmitted by cable and forms part of a qualifying service.
    (3) The copyright in any work included in the broadcast is not infringed if and to the extent that the broadcast is made for reception in the area in which it is re-transmitted by cable; but where the making of the broadcast was an infringement of the copyright in the work, the fact that the broadcast was re-transmitted by cable shall be taken into account in assessing the damages for that infringement.
    (4) Where—
    (a) the re-transmission by cable is in pursuance of a relevant requirement, but
    (b) to any extent, the area in which the re-transmission by cable takes place ("the cable area") falls outside the area for reception in which the broadcast is made ("the broadcast area"),
    the re-transmission by cable (to the extent that it is provided for so much of the cable area as falls outside the broadcast area) of any work included in the broadcast shall, subject to subsection (5), be treated as licensed by the owner of the copyright in the work, subject only to the payment to him by the person making the broadcast of such reasonable royalty or other payment in respect of the re-transmission by cable of the broadcast as may be agreed or determined in default of agreement by the Copyright Tribunal.
    (6) In this section "qualifying service" means, subject to subsection (8), any of the following services—
    (a) a regional or national Channel 3 service,
    (b) Channel 4, Channel 5 and S4C,
    (c) the public teletext service,
    (d) S4C Digital, and
    (e) the television broadcasting services and teletext service of the British Broadcasting Corporation;
    and expressions used in this subsection have the same meanings as in Part 3 of the Communications Act 2003.
    (7) In this section "relevant requirement" means a requirement imposed by a general condition (within the meaning of Chapter 1 of Part 2 of the Communications Act 2003) the setting of which is authorised under section 64 of that Act (must-carry obligations).
    (8) The Secretary of State may by order amend subsection (6) so as to add any service to, or remove any service from, the definition of "qualifying service".
    (13) In this section references to re-transmission by cable include the transmission of microwave energy between terrestrial fixed points.
  184. The section provides for defences in the two cases indicated in subsection (2). They can be called the "must carry" and the "reception area" exceptions. Mr Mellor submitted that, in the light of the Infosoc Directive, it was necessary to construe section 73 restrictively, and in accordance with the Berne three-step test. He submitted that the only pigeon-hole into which section 73(2)(b) and 73(3) could be posted was that identified by Article 5(3)(o), preserving local defences limited to analogue uses. Accordingly he said that I could and should construe section 73(3) as limited to analogue uses.
  185. Mr Mellor relied on the legislative history. The forerunner of section 73 was section 40(3) of the Copyright Act 1956. The section was amended by the Cable and Broadcasting Act 1984 and then re-enacted in amended form by the 1988 Act. At each of these stages the signals in question would have been analogue. So he said that I should construe the section in the light of the InfoSoc Directive as if it were so limited.
  186. Mr Howe pointed out two difficulties which lay in the way of such an interpretation. The first is that there is express reference to S4C Digital as a qualifying service, which by definition is a digital channel. Secondly the "must carry" provisions also contain express reference to digital services.
  187. I do not think it is possible to interpret section 73 in the way contended for by Mr Mellor, even in the light of the Marleasing principles which I have discussed above. The section makes it clear that it is dealing with digital channels as well as analogue. The section and its predecessors would have applied to digital channels as and when launched in 1998, before the 2001 Directive was promulgated.
  188. Mr Mellor had other arguments as to why the section did not apply. The first was that the re-transmission must be of the unadulterated signal, whereas what the customer actually received from TVC was, first, a pre-roll advertisement, and secondly the live stream viewed within a TVC advertising frame. I cannot accept this submission. The section refers to the reception and re-transmission of a broadcast. That is what TVC do. That is what is said to found the allegations of infringement. Nothing in the section indicates that other things may not be transmitted as well.
  189. Secondly Mr Mellor submitted that the re-transmission in the case of TVC was not immediate. He relied on the pre-roll advertisements which TVC show before the live stream is transmitted to the user. I do not accept this submission either. The section only requires reception and immediate re-transmission. That is what occurs on the TVC servers. The re-transmission is as immediate as the technology allows. The fact that there is a delay between the user's request for a live stream and its reception is a different point. There is no delay in re-transmission.
  190. Next Mr Mellor submitted that "cable" must be given a narrow interpretation, so as not to include transmission over the internet. That construction would, as he recognised, differ from that adopted obiter in relation to section 70 of the Act by Peter Smith J in Sony Music Entertainment (UK) Ltd v Easyinternetcafe Ltd [2003] EWHC 62; [2003] FSR 48, following the Scottish interim decision in Shetland Times v Wills [1997] EMLR 277. But he submits that those decisions pre-date the InfoSoc Directive and are in any event not binding on me. Now I must construe "cable" so far as possible not to create an exception which goes further than permitted by the Directive. He submitted in addition that the section does not protect the transmissions in the present case which are intended for reception by mobile phone, where the last leg is wireless.
  191. Mr Howe submitted that the word "cable" should be given its plain meaning. The internet stream enters the internet by cable. It is true that in some cases the last bit of the journey of the signal may be by wireless diffusion. For example in a domestic situation where there is a wireless network, the last part of the journey would be by wireless means. Alternatively, where the transmission ends up on a mobile phone, the part of the journey from the base station to the phone would be by wireless means. Mr Howe submits that it is only the re-transmission which has to be by cable: and that is what occurs on the facts proven here.
  192. I see no reason why the cabling system inherent in the internet should not be regarded as "cable" for the purposes of the section 73 defence. So I reject the bald "internet is not cable" argument. However, to take advantage of the section it seems to me that the whole of the transmission must be by cable. If that were not so, the defence would be available if the initial re-transmission was by cable to an antenna intended for widespread broadcast. It is clear to me that the signal must reach its destination by cable for the defence to bite. Accordingly I would hold that TVC cannot take advantage of the defence where their re-transmissions are for reception by mobile phone. I think the domestic example is different, as the signal has reached its destination by cable. Mr Mellor did not press this exception.
  193. Finally Mr Mellor relied on the fact that TVC transmitted the London regional service of the commercial channels indiscriminately. The ITV regional service for London could be received via TVC in Edinburgh. Accordingly the broadcasts were not "made for reception" in the area into which they were re-transmitted.
  194. Mr Howe's answer to this was that it was technically possible to receive ITV's broadcasts in any area with appropriate equipment. There are three ways in which a viewer can receive a regional channel other than the one in which he or she is geographically situated:
  195. i) by entering a postcode for a different region, if the decoder box offers postcode functionality, as a Freesat box does;

    ii) by manually tuning to a specific regional channel on the basis of its frequency; or

    iii) by using a decoder box that can automatically tune to every channel broadcast by a satellite.

  196. Whilst I accept this factual position, I think this is to interpret the section by reference to whether the broadcast is receivable rather than whether it is "made for reception". So, on this point I would hold that the defence does not apply insofar as TVC transmit the London service for reception in areas outside London.
  197. Accordingly I would hold that TVC are entitled to the benefit of the defence under section 73, in respect of the qualifying services, except to the extent (a) that they re-transmit for reception by mobile phone and (b) for reception outside the regional area of the service in question.
  198. Overall conclusions

  199. My overall disposition of this case is as follows:
  200. i) Section 20(1)(c) was enacted with proper powers;

    ii) My provisional view is that TVC communicate the films and broadcasts to the public, but I will refer a question to the CJEU on this issue;

    iii) Subject to the outcome of FAPL my provisional view is that TVC reproduce a substantial part of the films in the buffers and on the screens;

    iv) My provisional view is that there is no reproduction of a substantial part of a broadcast in the buffers or on the screens, but I will refer a question to the CJEU on this issue;

    v) Final judgment on the application of section 28A to reproduction of the films and broadcasts in the buffers and on the screens should await the outcome of FAPL: my provisional view is that the defence applies to the reproductions in the buffers;

    vi) The section 73 defence applies to the qualifying services, but not in respect of re-transmission to mobile phones or of out of area services.

  201. As I have indicated, I will hear counsel as to the form of order and of the questions to be referred, as outlined above.


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