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England and Wales High Court (Chancery Division) Decisions


You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Football Association Premier League Ltd & Ors v QC Leisure & Ors [2008] EWHC 1411 (Ch) (24 June 2008)
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Cite as: [2008] EWHC 1411 (Ch)

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Neutral Citation Number: [2008] EWHC 1411 (Ch)
Cases No: HC07 C04418, HC07 C00082, HC07 C01749

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
INTELLECTUAL PROPERTY

Royal Courts of Justice
Strand, London, WC2A 2LL
24 June 2008

B e f o r e :

THE HONOURABLE MR JUSTICE KITCHIN
____________________

Between:
Football Association Premier League Limited
NetMed Hellas SA
Multichoice Hellas SA



Claimants
- and -



(1) QC Leisure (a trading name)
(2) David Richardson
- and -
(1) AV Station Plc
(2) Malcolm Chamberlain
- and –
(1) Michael Madden
(2) Sanjay Raval
(3) David Greenslade
(4) S.R. Leisure Limited
(5) Phillip George Charles Houghton
(6) Derek Owen








Defendants

____________________

Mr James Mellor QC, Mr Nicholas Green QC, Miss Charlotte May, Mr Aidan Robertson and Mr James Whyte instructed by DLA Piper UK LLP on behalf of the Claimants
Mr Martin Howe QC, Mr Andrew Norris, Mr Thomas St Quintin and Mr StephenVousden instructed by Molesworth Bright Clegg on behalf of AV Station Plc and Mr Chamberlain and OBG Cameron Banfill LLP on behalf of the other Defendants
Hearing dates: 15, 17,18, 21 – 25, 28 – 30 April and 1 – 2 May, 5 June 2008

____________________

HTML VERSION OF JUDGMENT
____________________

Crown Copyright ©

    MR. JUSTICE KITCHIN :

    Introduction

  1. These three actions concern the use of foreign decoder cards in the UK to access foreign transmissions of live Premier League football matches. The claimants complain that the dealing in and use of such cards in the UK involves an infringement of their rights under s.298 of the Copyright Designs and Patents Act 1988, as amended, ("the CDPA") and of the copyrights in various artistic and musical works, films and sound recordings embodied in the Premier League match coverage.
  2. The Premier League is the leading professional football league competition for football clubs in England. The first claimant ("FAPL") is the vehicle through which the 20 Premier League clubs operate the competition. Each of those clubs owns one share in FAPL.
  3. FAPL's activities include organising the filming of Premier League matches and licensing the rights to broadcast them. The exclusive rights to broadcast the live matches are divided territorially and by three-year terms. The evidence in the actions before me relates to live broadcasts for the term that covered the 2004/5, 2005/6 and 2006/7 seasons. However, the claimants seek relief in respect of future seasons too.
  4. Licensees of live broadcasts are permitted to sub-license their rights, and the claims in these actions relate to live satellite transmissions made by sub-licensees in Greece, the Middle East and North Africa.
  5. In Greece, the sub-licensee was (and remains) the second claimant ("NetMed"). Matches are broadcast on "SuperSport" channels on the "NOVA" platform, which is owned and operated by the third claimant. The second and third claimants are under the same ultimate ownership, and are collectively referred to as "NOVA". Reception of SuperSport channels is enabled by a NOVA satellite decoder card.
  6. In the Middle East and North Africa, the sub-licensee was (but is no longer) a holding company called Arab Media Corporation ("AMC"). Matches were broadcast on channels produced by Arab Radio and Television Network ("ART"), a subsidiary of AMC, and transmission of the signals was handled by another AMC subsidiary called Jordan Media City ("JMC"). Reception of ART sports channels is enabled by an ART or "Arabesque" (collectively "ART") satellite decoder card.
  7. In the UK, the exclusive licensee for UK live broadcasts was (and remains) BSkyB Ltd ("Sky").
  8. The claimants say that the practice of licensing sports broadcast rights on a territorial basis is both justifiable and well established. However, it is seriously threatened by the activities of those who deal in foreign decoder cards. In summary, if a pub or a bar in the UK wishes to screen English Premier League football, the publican can at present take one of two routes. He can take out a commercial subscription from Sky, which costs several thousands of pounds a year, depending on the size of the pub or bar; or he can buy a cheaper foreign decoder card and decoder box, possibly intended for domestic use, from an unauthorised dealer. For example, NOVA cards and ancillary equipment can be acquired for about £700 a year. The effect of these activities is, say the claimants, extremely serious. They undermine the exclusivity, and hence the value, of the rights licensed in any particular territory. Whichever broadcaster sells the cheapest decoder cards has the potential to become, in practice, the EU wide broadcaster with the result that broadcast rights in the EU will have to be licensed on an EU wide basis. This will result in a serious loss of revenue both to the FAPL and other broadcasters and so undermine the viability of the services they provide.
  9. Consequently the claimants have brought what they see as three test cases. Two of the actions are brought against suppliers of equipment and satellite decoder cards to pubs and bars, which enable the reception of non-Sky satellite channels (including NOVA or ART channels) that carry live Premier League matches. The third action is against licensees or operators of four pubs that have shown live Premier League matches broadcast on ART channels.
  10. More specifically, the defendants in the first action (HC06C04418) are QC Leisure and Mr David Richardson. It has become clear that QC Leisure is in fact the trading name of Mr Richardson. He is a supplier of satellite equipment and decoder cards, including both NOVA cards from 2006 and ART cards from 2004 to about February 2007.
  11. The defendants in the second action (HC07C00082) are AV Station PLC ("AV") and Mr Malcolm Chamberlain, its sole director. AV supplied NOVA decoder cards from June 2005 to February 2007 but has never traded in ART decoder cards.
  12. The third action (the "Madden" action) (HC07C01749) relates to four pubs:
  13. i) "The Pig & Whistle", of which the first defendant, Michael Madden, is the licensee.

    ii) "Earls", which involves the second to fourth defendants. The owner of Earls is the fourth defendant, S.R.Leisure Ltd ("SR"). The second defendant, Sanjay Raval, is the sole director of SR. The third defendant, David Greenslade, is employed as Earls' manager and licensee, but the claimants indicated during the course of the trial that the claim is no longer pursued against him.

    iii) "The Crabtree Inn", of which the fifth defendant, Philip Houghton, is the licensee.

    iv) "London House", of which the sixth defendant, Derek Owen, is the licensee.

    At each of these pubs, screening of live Premier League matches using an ART decoder card is admitted.

  14. In these circumstances the claimants say the defendants have infringed their rights under s.298 of the CDPA by trading in or, in the case of the Madden defendants, being in possession for commercial purposes of decoder cards designed or adapted to give access to their services without authorisation. Further, the claimants contend the Madden defendants have infringed their copyrights by creating copies of the works in the internal operation of the satellite decoder and by displaying the works on screen, in each case contrary to s.17 of the CDPA, by performing, playing or showing the works in public contrary to s.19 and by communicating the works to the public contrary to s.20; moreover, the AV and QC defendants have infringed the claimants' copyrights by authorising these acts by the Madden defendants and by others to whom they have supplied decoder cards.
  15. The defendants respond that the claim is wholly misconceived. They submit this is not a case about pirate decoder cards because all the cards in issue have been issued and placed upon the market by the relevant satellite broadcaster. Rather, they say, the case is about cross-border trade in lawful decoder cards issued by the relevant satellite broadcaster and the cross-border reception of broadcasting services within the European single market. They argue that broadcasters or programme content providers have no right to interfere with cross-border reception in an effort to divide the single market into differentially priced zones and to restrict competition between FAPL's licensees.
  16. As will be seen, the contentions of the parties require a consideration of a number of provisions of Community law:
  17. i) Council Directive 89/552/EEC of 3 October 1989, as amended by Directive 97/36/EC, on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities (the TV Without Frontiers Directive). This abolishes regulatory barriers to cross-border broadcasting by establishing a system in which broadcasts are regulated in the home country of the broadcaster and in that country only.

    ii) Council Directive 93/83/EEC of 27 September 1993 on the coordination of certain rules concerning copyright and rights related to copyright applicable to satellite broadcasting and cable retransmission (the Satellites and Copyright Directive). This is relevant to the claimants' attempt to invoke national copyright law to prevent cross-border reception of satellite broadcasts.

    iii) Directive 98/84/EC of the European Parliament and of the Council of 20 November 1998 on the legal protection of services based on, or consisting of, conditional access (the Conditional Access Directive). This is plainly the key Directive governing the alleged cause of action under s.298 of the Act, since s.298 in its present form is intended to transpose this Directive into national law. Directive 98/84/EC cross refers to Directive 89/552/EEC for the definition of television broadcasting.

    iv) Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society (the Copyright and Information Society Directive). This contains a number of relevant provisions relating, in particular, to reproduction rights, rights to communicate works to the public and various exceptions to reproduction rights in the case of transient or incidental copying.

    The issues

  18. A host of issues fall to be determined, both of law and fact. During the course of the trial the parties identified no fewer than 40, and yet more emerged in correspondence after its conclusion which required a further hearing day. Rather than list them individually, I would summarise them as follows:
  19. Issues relating to Directive 98/84/EC

    i) The scope of Directive 98/84/EC and, in particular, the meaning of the expression "illicit device". The claimants say it applies to all decoder cards which give unauthorised access to a protected service. The defendants say it does not apply to parallel imported decoder cards and hence the claim must fail against all the defendants.

    ii) Whether, on the assumption the cards in issue are illicit devices, FAPL has a cause of action under Directive 98/84/EC. FAPL puts its case a number of ways but essentially contends that it does because it is the provider of a protected service and its interests are affected by the defendants' activities. The defendants say it does not because the decoder cards do not give access to the service which FAPL provides. Instead, they give access to the broadcasting services provided by NOVA and ART. The Directive confers a right of action on service providers in respect of decoder cards which give access to the service provider's own service. It is not intended to confer a right to control cards issued by downstream broadcasters upon all and any upstream providers of programme material to those broadcasters.

    iii) Whether there can be a claim under Directive 98/84/EC against the Madden defendants. These defendants say any claim under the Directive must fail because they have never been in possession of the cards in issue for commercial purposes and consequently have never engaged in an infringing activity within the meaning of the Directive.

    Authorisation by NOVA and ART

    iv) Whether NOVA or FAPL has authorised the circulation and use of NOVA decoder cards outside Greece; further, and as a sub-issue, whether the NOVA cards were issued to domestic or commercial subscribers.

    v) Whether FAPL or ART has authorised the circulation and use of ART countdown decoder cards in the EU.

    The copyright works

    vi) Subsistence of and title to copyright in the various works relied upon.

    vii) Which works were actually broadcast by NOVA and ART.

    viii) Issues arising in relation to particular copyright works, namely sound recordings, musical works and action replays.

    The Madden defendants

    ix) The activities of the Madden defendants.

    The acts of infringement

    x) Infringement by copying in the decoder and on television screens. This raises issues as to whether copies of a substantial part of any relevant copyright work are made in the decoder boxes or on the television screens and whether a defence is available under s.28A or s.72 of the CDPA.

    xi) Infringement by communication to the public.

    xii) Infringement by performing, playing or showing the works in public and whether a defence is available under s.72 of the CDPA.

    Particular issues of or relating to Community law

    xiii) Whether there is a general defence to the infringement of copyright claims under Directive 93/83/EEC .

    xiv) Whether the claimants are seeking relief in respect of the NOVA cards (and the ART cards in so far as I find FAPL or ART consented to their importation into the EU) which would amount to a quantitative restriction on trade between Member States or a measure having equivalent effect within the meaning of Article 28 EC or a restriction on the freedom of foreign broadcasters to provide services and customers to receive services contrary to Article 49 EC.

    xv) FAPL's licensing agreements restrict each licensee from supplying (even passively in response to an unsolicited order) or permitting the use of its decoder cards outside its licensed territory. The defendants say these contractual restrictions seek to provide absolute territorial protection to each licensee contrary to Article 81 EC.

    xvi) Whether it is appropriate to make a preliminary reference to the Court of Justice under Article 234 EC.

    Ancillary points

    xvii) Whether the QC and AV defendants have authorised the infringement of copyright by their customers, including the Madden defendants.

    xviii) The personal liability of Mr Chamberlain and Mr Raval.

    xix) Whether the claimants are potentially entitled to additional damages under s.97(2) of the CDPA.

  20. I would re-iterate, these are the main issues. There are others with which I must deal in addressing the infringement claim in respect of each category of copyright work relied upon. But before considering the various claims in detail I must provide a little more of the factual background.
  21. The factual background

    Broadcasting of the Premier League matches

  22. The position was explained by Mr Weingarten, an in house solicitor at the FAPL and was mostly unchallenged. Accordingly, what follows in this section of the judgment is largely taken from his witness statements.
  23. Every year FAPL organises a competition in which all 20 member clubs play against each other twice – the Premier League matches. FAPL is authorised by its member football clubs to license broadcasters throughout the world to provide audio-visual coverage of these matches. FAPL's strategy is to bring the competition to viewers throughout the world while maximising the value of its media rights to the member clubs. A high proportion of the revenue generated by FAPL derives from the sale of these rights. This revenue has been, and remains, vital to the quality of the competition and FAPL's success.
  24. Maximising the value of FAPL's rights not only enhances the revenue streams of the Premier League clubs, but also provides financial support for grassroots football and the numerous football-related projects supported by FAPL. For example, it has recently been announced that FAPL will give the Football League a solidarity package estimated to be worth potentially in excess of £90 million over the 2007-2010 seasons which will go towards youth development, community grassroots projects, redistribution to lower league clubs and payments to clubs relegated from the Premier League. FAPL's ability to invest in football at all levels is a direct result of its ability to maximise the value of its broadcast rights.
  25. The rights to broadcast Premier League matches live are offered to broadcasters by open competitive tender and for a fixed term. Rights for the UK and Ireland are sold separately from those for the rest of the world. Bidders for territories throughout the rest of the world are invited to submit offers on a variety of bases: global, regional or territory by territory. The market (through the nature of the bids) then determines the territorial basis on which FAPL sells its international rights. However, historically, there has been only limited demand from bidders for global or pan-European rights and usually only from rights agencies (being agencies which acquire rights with the intention of sub-licensing them) rather than broadcasters. This is chiefly because broadcasters typically operate on a territorial basis, serving the domestic market either in their own country, or in a small cluster of neighbouring countries with a common language (for example, German-speaking countries). During the 2004-2007 seasons, 204 countries received broadcasts of the matches.
  26. The successful bidder for a package of live rights in respect of any particular territory is granted the exclusive right to screen the matches in that package live within its territory, although that right may be sub-licensed to one or more sub-licensees (subject to the approval of FAPL). The grant of exclusivity is, says Mr Weingarten, necessary in order to realise the optimum commercial value of the rights. Broadcasters are prepared to pay a premium to acquire exclusivity. This allows them to differentiate their services from those of their rivals and so enhances their ability to generate revenue. The presence of competing live transmissions of the same matches in the same territory destroys this exclusivity and thereby diminishes the value of the rights.
  27. The broadcast of matches for viewing in England is precluded for a period each week pursuant to Article 48 of the Statutes of the Union des Associations Europιennes de Football ("UEFA"). UEFA is the governing body for football in Europe. The Premier League Rules, which govern the relationship between FAPL and its member clubs, require that FAPL itself and each of its member clubs comply with the statutes and regulations of UEFA. Pursuant to the regulations governing the implementation of Article 48 of the UEFA Statutes, each national football association may designate in each week a period of two and a half hours during which the broadcasting of football matches within the territory of that national association is prohibited. This period is known as the "Closed Period". The Football Association in England has designated 2.45pm to 5.15pm on Saturday afternoons as the Closed Period. Other countries have Closed Periods at different times. The purpose of Article 48 and the Closed Period is to ensure that spectators are not deterred from attending football matches whether professional, amateur or at a local level or from participating in grassroots football.
  28. Mr Weingarten also explained, and I accept, that the grant of broadcasting rights for sporting events on an exclusive territorial basis is an established and accepted commercial practice amongst rights-holders and broadcasters throughout Europe. To protect this territorial exclusivity, each broadcaster undertakes in its licence agreement with the FAPL to encrypt its satellite-delivered signal.
  29. The creation of the Premier League match feeds – in outline

  30. During the 2004-2007 seasons, each match was filmed by the BBC or Sky. The process by which the matches are filmed, prepared for transmission and transmitted to viewers was accurately summarised by FAPL as follows:
  31. i) At the match, several cameras capture the live action. An outside production facility at the match selects which camera's output is to be used at any moment for the live broadcast. Its output, along with the ambient sound captured at the match (together referred to as "the Clean Live Feed"), is transmitted along fibre optic cable (via BT Tower) to a production facility operated in London by IMG Media Limited ("IMG").

    ii) IMG adds logos, video sequences, on-screen graphics, music and English commentary to the Clean Live Feed. The resulting signal is referred to as "the World Feed".

    iii) The World Feed is then transmitted by IMG along fibre optic cable back to BT Tower, where it is compressed and encrypted, and transmitted by satellite to the foreign broadcaster.

    iv) The foreign broadcaster decrypts and decompresses the World Feed, so that it can add its logo and possibly some commentary. The signal is then compressed and encrypted again, and transmitted via satellite to subscribers.

    v) Subscribers receive the signal using a small satellite dish. The signal is decrypted and decompressed in a decoder, which requires for its operation a decoder card.

    vi) During play of the football match, the foreign broadcaster superimposes only its channel logo in the corner of the image and may add a commentary. Outside play (i.e. before kick-off, during half-time and after full-time), the foreign broadcaster may or may not use the World Feed, which during these times either carries live footage from the football ground or pre-recorded programming.

    vii) The whole process of transmission of the live signal from the football pitch to the subscriber takes approximately 5 seconds.

    The Clean Live Feed

  32. The manner in which the Clean Live Feed is produced was explained in the statement of Mr Darren Long, the Head of Sky Sports operations. Once again, this was not in dispute and can be summarised as follows.
  33. Sky arranges for a number of cameramen to film the match. Generally they use between 20 and 25 cameras. These capture the activity on the pitch in digital form and also have inbuilt microphones which capture the ambient sound from different parts of the stadium. Sky also arranges for a production team to be present. The production team is led by a Match Director who takes decisions about which camera's output appears on the Clean Live Feed at any particular time. He is assisted by an assistant producer (known as a VT co-ordinator) who makes action replays (referred to as "Action Replay Films") available for the Match Director to include in the Clean Live Feed. These occur where the production team has decided that a particular incident warrants being shown again either in normal time or in slow motion. The output from each camera is recorded (to produce what is known as a "Match Film"), and the output of any one camera can be re-wound to show a particular incident again. For example, while the teams playing in the match are walking back to the half way line after a goal has been scored, the production team may re-show the goal. The replays are usually from the cameras situated at the 18 yard line. It is the VT co-ordinator who chooses which camera's output will be used for replays (sometimes replays include more than one angle) and makes the action replays available on one or more of four 'lines' for the Match Director to insert into the Clean Live Feed. The Action Replay Films are not pre-recorded as such but are inserted into the Clean Live Feed using a vision mixer and by playing the relevant parts of the underlying recorded Match Films. The Vision mixer has two outputs; one is the Clean Live Feed which is sent to IMG and the second is known as the Sky Dirty Feed which is the Sky branded version of the Clean Live Feed and is ultimately broadcast on Sky channels.
  34. The World Feed

  35. IMG carries out the Premier League's international production function on its behalf. The Clean Live Feed is carried (via BT Tower) by private fibre optic cables to mediahouse, IMG's technical facility in Chiswick. Here, IMG's production team (which comprises both IMG employees and freelancers contracted to IMG) adds graphics, music, additional video sequences and commentary (either sent from the ground or produced at mediahouse), to create the World Feed. The video sequences of particular significance in the context of this case are the following:
  36. i) The Opening Sequence Film

    The World Feed commences with an introduction or opening sequence ("the Opening Sequence Film"), which is a pre-recorded video sequence of football action, graphics (the "Opening Sequence Graphics Film") and stills of certain players. The graphics include the Premier League logos (the "Logos"). The football action shots are derived from recently recorded footage of previous matches including the Match Films, recordings of the Clean Live Feed (the "Clean Live Feed Film") and World Feed (the "World Feed Film") and films made by IMG employees or freelancers who attend matches and record footage such as pre-match crowd build up and interviews with players ("IMG Match Films"). The Opening Sequence Film is accompanied by the Premier League anthem ("the Anthem").

    ii) The Match Highlights Film

    During half time and at full time, the World Feed includes highlights of the match. These are created by IMG by selecting images from the Clean Live Feed Film and recording them onto a hard disc in a particular order to make the "Match Highlights Films". These films may be accompanied by the Anthem.

    iii) Previous Highlights, Next Match Preview and Special Feature Films

    Before the start of the match, the World Feed includes pre-recorded films showing highlights of the last Premier League matches played by the teams in the current match (the "Previous Highlights Films") and which may again be accompanied by the Anthem. At half time, there is a recorded preview of the teams' next Premier League matches (the "Next Match Preview Film") and a special feature comprising a "test your knowledge" quiz or telling a story of a particular player, manager or incident (the "Special Feature Film").

    iv) On Screen Graphics Films

    At various points before and during the match, moving graphics are included in the World Feed. These include the Team Bar, the Previous Performance Bar and the Yellow Card Bar. They are recorded digitally in a form from which a moving image may be reproduced.
  37. The World Feed produced by IMG is compressed and encrypted and uplinked from the UK to the Eutelsat (for Europe), Intelsat (for Asia) and Panamsat (for the Americas) satellites. Foreign broadcasters who have been directly or indirectly licensed by the Premier League are then able to receive the World Feed on payment of a charge, and transmit it to their own subscribers in their assigned territories.
  38. Greece

  39. For the 2004/2005, 2005/2006 and 2006/2007 seasons, a company called TV Prosports Limited was authorised by FAPL to broadcast the Premier League matches live in Greece.
  40. As I have mentioned, NetMed was the sub-licensee of those rights under a written agreement dated 6 August 2004 (the "NetMed Agreement") which required it to undertake that all of its transmissions capable of reception outside Greece were securely encrypted and that it would not knowingly authorise any person to view any such transmissions outside Greece.
  41. The material terms of the NetMed Agreement, which are mirrored in the agreements of other licensees, were summarised by Mr Weingarten as follows. Clause 2.1(a) granted NetMed the rights, amongst others, in Greece alone "to make and to authorise the simultaneous re-transmission of: (i) a single Live Transmission OR Delayed Transmission of each Premier League Match", where a "Delayed Transmission" meant a Transmission of a recording of a Premier League Match in full and without editing, as though it were a Live Transmission, commencing within twenty-four hours after the end of the relevant Premier League Match, a "Live Transmission" meant any live and simultaneous Transmission of a Premier League Match in its entirety, and "Transmission" meant any broadcast or transmission in analogue or digital format of audio-visual images made by licensed delivery systems.
  42. Pursuant to Clause 10.1, NetMed agreed it "shall not interrupt a Live Transmission or a Delayed Transmission of a Premier League Match (except during the half-time interval) and shall not broadcast any material during the half-time interval of a Premier League Match except for advertisements, promotional material and/or analysis of or discussion about that Premier League Match and/or material related to Premier League Matches."
  43. Pursuant to Clause 10.2, NetMed had to ensure that its (and any permitted sub-licensee's) transmissions "shall not be capable of reception and/or decryption by any viewer outside of" Greece.
  44. Pursuant to Clause 12.1(b)(i), NetMed undertook that all of its transmissions capable of reception outside Greece "shall be securely encrypted and shall not be receivable by any person outside [Greece] in unencrypted form and that no device (including but not limited to any "smart card" and/or any decoding equipment which is necessary to decode or encrypt any such Transmission) … shall be knowingly authorised or enabled by or with the authority of the Licensee and/or any Permitted Sub-Licensee and/or any distributor, agent or employee of the Licensee or any Permitted Sub-Licensee so as to permit any person to view any such Transmission outside [Greece] in an intelligible form".
  45. In practical terms NetMed was therefore prohibited from supplying NOVA decoder cards for use outside Greece.
  46. In April 2007, NetMed renewed directly with FAPL its contract for the 2007/2008, 2008/2009 and 2009/2010 seasons, once again for the territory of Greece.
  47. Pursuant to these arrangements, NOVA has accessed the Eutelsat satellite feed and has requested up to six Premier League matches per week. As Mr Papastathopoulos, NOVA's legal advisor, explained to me, the matches are an integral and important part of Greek SuperSport branded channels' schedule and they are selected on the basis of a number of factors, including the current Premier League standings of the clubs involved in any particular match and the preferences of a Greek audience for teams with Greek players in their squads.
  48. Upon receipt of the World Feed signal, it is decompressed and decoded by NetMed and then passed to the NOVA broadcasting centre. Here the SuperSport logo and Greek commentary are added. Moreover, editorial decisions are made as to when the World Feed is used and interrupted, and over other programming elements. NOVA uses the Opening Sequence Film and Previous Match Highlights Films depending upon the end time of the previous programme and the duration of the commercials. At half time it does not generally use Next Match Preview and Special Feature Films but does use Match Highlights Films, again depending on the duration of commercials. Post match films are used depending on the end time of the match and the duration of the commercials before the start of the next programme. As I elaborate in addressing the copyright claim, it is apparent from recordings made by NOVA of aspects of three particular broadcasts that the amount of the World Feed it uses varies to some degree from match to match.
  49. It follows from the above that the only elements broadcast by NOVA alongside the World Feed are the SuperSport logo and the Greek commentary. NOVA subscribers can elect, using their set-top boxes, to listen either to that Greek commentary or to the original English commentary.
  50. The NOVA signal is then compressed and encrypted using Irdeto encryption and multiplexed with other services before being uplinked to the Hotbird satellite.
  51. Members of the public are able to watch SuperSport channels by subscribing to the relevant NOVA bouquet of channels. These subscriptions are available, together with NOVA decoder cards, set top decoder boxes and other associated hardware, from about 1600 retail outlets in Greece. They may be taken out for up to 12 months and the subscriber must provide a name, local Greek address and a local Greek telephone number. Subscriptions can be taken out for private or commercial purposes. In the case of a private subscription, the subscription agreement provides the subscriber is only permitted to view the NOVA bouquet of channels for his and his family's personal use and only at his home or workplace.
  52. North Africa and the Middle East

  53. For the 2004/2005, 2005/2006 and 2006/2007 seasons IMG was authorised by FAPL to broadcast Premier League matches live in the Middle East and North Africa. ART was the sub-licensee of those rights (via AMC). Its sub-licence came to an end in the spring of 2007.
  54. In a similar manner to NOVA, AMC has, pursuant to these arrangements, accessed the Eutelsat feed. At least during the 2006/2007 season, it seems it requested every available Premier League match.
  55. Upon receipt of the World Feed signal it was decompressed and decoded. Then, depending upon the match, it was treated in one of two ways. For the matches of more importance to the Arab speaking world ART produced what it described as a "studio" match. In the case of these matches, ART provided a studio with live commentators, who would provide a commentary before the match, during the match and at half and full time. As a result it generally did not use the Opening Sequence, Match Highlights, Previous Match Highlights, Next Match Preview or Special Features Films from the World Feed. Instead, the ART broadcast would cut to the studio for the live commentators to give their views, and for some general studio discussion. At the beginning of the match ART would join the World Feed in time to see the players coming onto the pitch and the on screen graphics showing the players for each team.
  56. In the case of non-studio matches, ART would use almost the entire World Feed. The only exception was that, at half time, after showing the Match Highlights Film, ART would go to a commercial break. After the break, ART would introduce some graphics film footage showing other matches coming up on the ART channels and then the operators would try (not always successfully) to cut back to the World Feed in time for the Special Features Film.
  57. As in the case of NOVA, the only elements broadcast alongside the World Feed were the ART logo and the Arabic commentary. The logo was layered on top of the World Feed and the original English language commentary was left unaltered.
  58. At all material times ART has broadcast a wide range of programming, including six sports channels. However it puts together different packages for different territories and arranges them so that they only include those channels and programming in respect of which it has the relevant rights.
  59. In the case of the Premier League matches, the signal was compressed, encrypted using Irdeto encryption, multiplexed with other services and then uplinked by JMC for satellite broadcast and intended reception in the Middle East and North Africa. For historical reasons that broadcast had a double leg. The signals were first uplinked to the Nilesat satellite. The signal was received in Italy and decoded. It was then re-encrypted using Viaccess encryption and uplinked to the Hotbird satellite. The parties were agreed that for the purposes of these proceedings I should ignore the double leg and treat the ART uplink and broadcast as having been made from Italy. Specifically, the defendants in the QC and Madden actions have admitted for the purposes of these proceedings only that that the ART sports channels are protected services of television broadcasting within Directive 98/84/EC.
  60. The footprint of the Hotbird satellite extends over North Africa and the Middle East and members of the public in those territories were able to watch the Premier League matches broadcast by ART by buying a pre-paid ART "countdown" decoder card and inserting it into a standard set top decoder box. These countdown cards were activated when first placed in the decoder box and lasted for a fixed period of time. They could be bought from a number of authorised distributors, most of which were subsidiaries of an associated company, Arab Digital Distribution ("ADD"). The distributors were warned that the cards were not to be sold outside their territories but, until December 2005, the cards themselves carried no indication of this restriction. As from that time, the cards carried a copyright warning in English, French and Arabic that they were not to be used outside the territory in which they were sold and that such use would constitute a criminal offence.
  61. In addition to the countdown cards, ART issues subscription decoder cards for use in Europe. These are also marketed by ADD or its subsidiaries. However, none of the ART sports channels (and, in particular, no Premier League programming) has ever been available to European subscribers. European decoder cards only provide access to programming in respect of which ART owns worldwide rights.
  62. I must return to the details of the components of the various broadcasts and the particular activities of the defendants when addressing the issues arising in relation to the allegations of authorisation and copyright infringement but I need say no more for the moment. I can now turn to the claim for infringement of s.298 of the CDPA and the scope of Directive 98/84/EC.
  63. Section 298 of the CDPA – general

  64. The claim in respect of the decoder cards turns on the scope of ss.298 and 299 of the CDPA, which read, so far as relevant:
  65. "298.— Rights and remedies in respect of apparatus, &c. for unauthorised reception of transmissions.
    (1) A person who–
    (a) makes charges for the reception of programmes included in a broadcasting service provided from a place in the United Kingdom or any other member State,
    (b) sends encrypted transmissions of any other description from a place in the United Kingdom or any other member State, or
    (c) provides conditional access services from a place in the United Kingdom or any other member State,
    is entitled to the following rights and remedies.
    (2) He has the same rights and remedies against a person–
    (a) who–
    (i) makes, imports, distributes, sells or lets for hire, offers or exposes for sale or hire, or advertises for sale or hire,
    (ii) has in his possession for commercial purposes, or
    (iii) instals, maintains or replaces for commercial purposes,
    any apparatus designed or adapted to enable or assist persons to access the programmes or other transmissions or circumvent conditional access technology related to the programmes or other transmissions when they are not entitled to do so, or
    (b) who publishes or otherwise promotes by means of commercial communications any information which is calculated to enable or assist persons to access the programmes or other transmissions or circumvent conditional access technology related to the programmes or other transmissions when they are not entitled to do so,
    as a copyright owner has in respect of an infringement of copyright.

    …………….

    (7) In this section "apparatus", "conditional access technology" and "encrypted" have the same meanings as in section 297A, "transmission" includes transmissions as defined in that section and "conditional access services" means services comprising the provision of conditional access technology.
    299.— Supplementary provisions as to fraudulent reception.
    ……………
    (4) Where sections 297 and 298 apply in relation to a broadcasting service, they also apply to any service run for the person providing that service, or a person providing programmes for that service, which consists wholly or mainly in the sending by means of telecommunications system of sounds or visual images, or both.
    (5) In sections 297, 297A and 298, and this section, "programme" and "broadcasting" and related expressions, have the same meaning as in Part I (copyright)."
  66. Section 299(5) takes one back to s.6 for the definitions of "programme" and "broadcasting". This reads, so far as relevant:
  67. "6-(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,
    and which is not excepted by subsection (1A); and references to broadcasting shall be construed accordingly.
    (1A) ….
    (2) An encrypted transmission shall be regarded as capable of being lawfully received by members of the public only if decoding equipment has been made available to members of the public by or with the authority of the person making the transmission or the person providing the contents of the transmission.
    (3) References in this Part to the person making a broadcast, or a transmission which is a broadcast are -
    (a) to the person transmitting the programme, if he has responsibility to any extent for its contents, and
    (b) to any person providing the programme who makes with the person transmitting it the arrangements necessary for its transmission;
    and references in this Part to a programme, in the context of broadcasting, are to any item included in a broadcast.
    (4) For the purposes of this Part, the place from which a wireless broadcast is made is the place where, under the control and responsibility of the person making the broadcast, the programme-carrying signals are introduced into an uninterrupted chain of communication (including, in the case of a satellite transmission, the chain leading to the satellite and down towards the earth).
    (4A) ….
    (5) References in this Part to the reception of a broadcast include reception of a broadcast relayed by means of a telecommunications system.
    (5A) The relaying of a broadcast by reception and immediate re-transmission shall be regarded for the purposes of this Part as a separate act of broadcasting from the making of the broadcast which is so re-transmitted."
  68. The claimants say the defendants have infringed these rights because:
  69. i) The Clean Live Feed and the World Feed are programmes included in a broadcasting service provided by FAPL from the UK within the meaning of s.298(1)(a).

    ii) The transmissions provided by NOVA are programmes included in a broadcasting service provided from Greece within the meaning of s.298(1)(a).

    iii) NOVA charges subscribers directly for the reception of SuperSport transmissions; FAPL charges subscribers indirectly for the reception of the Clean Live Feed and the World Feed.

    iv) In the alternative, the Clean Live Feed and World Feed are encrypted transmissions "of any other description" within the meaning of s.298(1)(b).

    v) In the further alternative, the provision of the Clean Live Feed and the World Feed is a service provided by FAPL for NOVA within the meaning of s.299(4).

    vi) The defendants are dealing in or possess for commercial purposes ART and NOVA decoder cards which are designed or adapted to enable persons to access the programmes or other transmissions when they are not entitled to do so.

    Directive 98/84 EC (The Conditional Access Directive)

  70. Section 298 was substituted by SI 2000/1175 and is intended to implement Directive 98/84/EC. It is well established that a domestic statute enacted or amended to implement an EC Directive must be construed in conformity with and to achieve the result intended by the Directive. Unfortunately, in this case, as in others in the IP field, the draftsman has not used the words of the Directive with the result that the parties agreed I should address the issues of interpretation which arise by reference to the Directive itself.
  71. I was referred to the following Recitals (with references omitted):
  72. "(1) Whereas the objectives of the Community as laid down in the Treaty include creating an ever closer union among the peoples of Europe and ensuring economic and social progress, by eliminating the barriers which divide them;
    (2) Whereas the cross-border provision of broadcasting and information society services may contribute, from the individual point of view, to the full effectiveness of freedom of expression as a fundamental right and, from the collective point of view, to the achievement of the objectives laid down in the Treaty;
    (3) Whereas the Treaty provides for the free movement of all services which are normally provided for remuneration; whereas this right, as applied to broadcasting and information society services, is also a specific manifestation in Community law of a more general principle, namely freedom of expression as enshrined in Article 10 of the European Convention for the Protection of Human Rights and Fundamental Freedoms; whereas that Article explicitly recognizes the right of citizens to receive and impart information regardless of frontiers and whereas any restriction of that right must be based on due consideration of other legitimate interests deserving of legal protection;
    (4) Whereas the Commission undertook a wide-ranging consultation based on the Green Paper 'Legal Protection of Encrypted Services in the Internal Market'; whereas the results of that consultation confirmed the need for a Community legal instrument ensuring the legal protection of all those services whose remuneration relies on conditional access;
    (5) Whereas the European Parliament, in its Resolution of 13 May 1997 on the Green Paper, called on the Commission to present a proposal for a Directive covering all encoded services in respect of which encoding is used to ensure payment of a fee, and agreed that this should include information society services provided at a distance by electronic means and at the individual request of a service receiver, as well as broadcasting services;
    (6) Whereas the opportunities offered by digital technologies provide the potential for increasing consumer choice and contributing to cultural pluralism, by developing an even wider range of services within the meaning of Articles 59 and 60 of the Treaty; whereas the viability of those services will often depend on the use of conditional access in order to obtain the remuneration of the service provider; whereas, accordingly, the legal protection of service providers against illicit devices which allow access to these services free of charge seems necessary in order to ensure the economic viability of the services;
    …..….
    (11) Whereas the disparity between national rules concerning the legal protection of services based on, or consisting of, conditional access is liable to create obstacles to the free movement of services and goods;
    (12) Whereas the application of the Treaty is not sufficient to remove these internal market obstacles; whereas those obstacles should therefore be removed by providing for an equivalent level of protection between Member States; whereas this implies an approximation of the national rules relating to the commercial activities which concern illicit devices;
    (13) Whereas it seems necessary to ensure that Member States provide appropriate legal protection against the placing on the market, for direct or indirect financial gain, of an illicit device which enables or facilitates without authority the circumvention of any technological measures designed to protect the remuneration of a legally provided service;
    …………..
    (15) Whereas those commercial activities are detrimental to consumers who are misled about the origin of illicit devices; whereas a high level of consumer protection is needed in order to fight against this kind of consumer fraud; whereas Article 129a(1) of the Treaty provides that the Community should contribute to the achievement of a high level of consumer protection by the measures it adopts pursuant to Article 100a thereof;
    (16) Whereas, therefore, the legal framework for the creation of a single audiovisual area laid down in Council Directive 89/552/EEC of 3 October 1989 on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities should be supplemented with reference to conditional access techniques as laid down in this Directive, in order, not least, to ensure equal treatment of the suppliers of cross border broadcasts, regardless of their place of establishment;
    ….
    (21) Whereas this Directive is without prejudice to the application of any national provisions which may prohibit the private possession of illicit devices, to the application of Community competition rules and to the application of Community rules concerning intellectual property rights;
    (22) Whereas national law concerning sanctions and remedies for infringing commercial activities may provide that the activities have to be carried out in the knowledge or with reasonable grounds for knowing that the devices in question were illicit;
    (23) Whereas the sanctions and remedies provided for under this Directive are without prejudice to any other sanction or remedy for which provision may be made under national law, such as preventive measures in general or seizure of illicit devices; whereas Member States are not obliged to provide criminal sanctions for infringing activities covered by this Directive; whereas Member States' provisions for actions for damages are to be in conformity with their national legislative and judicial systems;
    (24) Whereas this Directive is without prejudice to the application of national rules which do not fall within the field herein coordinated, such as those adopted for the protection of minors, including those in compliance with Directive 89/552/EEC, or national provisions concerned with public policy or public security,"

  73. The relevant Articles of the Directive provide (again, with references omitted)
  74. Article 1
    Scope
    The objective of this Directive is to approximate provisions in the Member States concerning measures against illicit devices which give unauthorised access to protected services.
    Article 2
    Definitions
    For the purposes of this Directive:
    (a) protected service shall mean any of the following services, where provided against remuneration and on the basis of conditional access:
    - television broadcasting, as defined in Article 1(a) of Directive 89/552/EEC,
    - radio broadcasting, meaning any transmission by wire or over the air, including by satellite, of radio programmes intended for reception by the public,
    - information society services within the meaning of Article 1(2) of Directive 98/34/EC of the European Parliament and of the Council of 22 June 1998 laying down a procedure for the provision of information in the field of technical standards and regulations and of rules on information society services,
    or the provision of conditional access to the above services considered as a service in its own right;
    (b) conditional access shall mean any technical measure and/or arrangement whereby access to the protected service in an intelligible form is made conditional upon prior individual authorisation;
    (c) conditional access device shall mean any equipment or software designed or adapted to give access to a protected service in an intelligible form;
    (d) associated service shall mean the installation, maintenance or replacement of conditional access devices, as well as the provision of commercial communication services in relation to them or to protected services;
    (e) illicit device shall mean any equipment or software designed or adapted to give access to a protected service in an intelligible form without the authorisation of the service provider;
    (f) field coordinated by this Directive shall mean any provision relating to the infringing activities specified in Article 4.
    Article 3
    Internal market principles
    1. Each Member State shall take the measures necessary to prohibit on its territory the activities listed in Article 4, and to provide for the sanctions and remedies laid down in Article 5.
    2. Without prejudice to paragraph 1, Member States may not:
    (a) restrict the provision of protected services, or associated services, which originate in another Member State; or
    (b) restrict the free movement of conditional access devices;
    for reasons falling within the field coordinated by this Directive.
    Article 4
    Infringing activities
    Member States shall prohibit on their territory all of the following activities:
    (a) the manufacture, import, distribution, sale, rental or possession for commercial purposes of illicit devices;
    (b) the installation, maintenance or replacement for commercial purposes of an illicit device;
    (c) the use of commercial communications to promote illicit devices
    Article 5
    Sanctions and remedies
    1. The sanctions shall be effective, dissuasive and proportionate to the potential impact of the infringing activity.
    2. Member States shall take the necessary measures to ensure that providers of protected services whose interests are affected by an infringing activity as specified in Article 4, carried out on their territory, have access to appropriate remedies, including bringing an action for damages and obtaining an injunction or other preventive measure, and where appropriate, applying for disposal outside commercial channels of illicit devices.

    The definitions

  75. Article 2 of the Directive refers to Directive 89/552/EEC (the TV Without Frontiers Directive) for the definition of "television broadcasting" and to Directive 98/34/EC of the European Parliament and Council of 22 June 1998 (the Information Society Services Directive) for the definition of "information society services".
  76. (a) Directive 89/552/EEC (The TV Without Frontiers Directive)

  77. This Directive is primarily concerned with the regulation of the content of broadcasting services and establishes a system in which broadcasts must comply with the law of the country from which they emanate.
  78. This is reflected in Recitals 3 and 12:
  79. "(3) Whereas broadcasts transmitted across frontiers by means of various technologies are one of the ways of pursuing the objectives of the Community; whereas measures should be adopted to permit and ensure the transition from national markets to a common programme production and distribution market and to establish conditions of fair competition without prejudice to the public interest role to be discharged by the television broadcasting services;
    (12) Whereas it is consequently necessary and sufficient that all broadcasts comply with the law of Member State from which they emanate;"
  80. Article 1 contains the definitions and, most importantly:
  81. "For the purpose of this Directive:
    (a) 'television broadcasting' means the initial transmission by wire or over the air, including that by satellite, in unencoded or encoded form, of television programmes intended for reception by the public. It includes the communication of programmes between undertakings with a view to their being relayed to the public. It does not include communication services providing items of information or other messages on individual demand such as telecopying, electronic data banks and other similar services;
    (b) 'broadcaster' means the natural or legal person who has editorial responsibility for the composition of schedules of television programmes within the meaning of (a) and who transmits them or has them transmitted by third parties;"

    (b) Directive 98/34/EC (The Information Society Services Directive)

  82. So far as relevant, this reads:
  83. Article 1
    For the purposes of this Directive, the following meanings shall apply:
    …
    2. 'service', any Information Society service, that is to say, any service normally provided for remuneration, at a distance, by electronic means and at the individual request of a recipient of services.
    For the purposes of this definition:
    - 'at a distance' means that the service is provided without the parties being simultaneously present,
    - 'by electronic means' means that the service is sent initially and received at its destination by means of electronic equipment for the processing (including digital compression) and storage of data, and entirely transmitted, conveyed and received by wire, by radio, by optical means or by other electromagnetic means,
    - 'at the individual request of a recipient of services' means that the service is provided through the transmission of data on individual request.
    An indicative list of services not covered by this definition is set out in Annex V.
    This Directive shall not apply to:
    - radio broadcasting services,
    - television broadcasting services covered by point (a) of Article 1 of Directive 89/552/EEC"
  84. It is to be noted that the definitions are therefore mutually exclusive. A service cannot be both a television broadcasting service and an information society service.
  85. I can now consider each of the three points of interpretation in turn.
  86. Illicit device

  87. This underpins the whole claim. The parties agree this expression plainly includes pirate decoder cards (by which I mean cards made and issued by third parties without the authorisation of the protected service provider). The claimants say, but the defendants dispute, that it also includes any decoder cards which are used to give access to the protected service without authorisation, even if they have been issued by the service provider. If the defendants are right then the claim must fail because the decoder cards in issue were, in the case of the NOVA cards, issued to subscribers in Greece and, in the case of the ART cards, sold in North Africa. I should note at this point that the claimants expressly disclaimed reliance upon the fact that the NOVA cards were procured and activated by providing false names and addresses. Their contention is more fundamental. They say the decoder cards sold by the defendants give access to their protected services in the UK without authorisation, and that is enough to satisfy the definition.
  88. In support of their submissions the parties each rely on the wording of the Directive and upon the context in which and the purpose for which it was adopted. In this regard they have taken me to the travaux prιparatoires and to the Green Paper referred to in Recital (4).
  89. The claimants submit as follows. First, the essential purpose of the Directive is to outlaw unauthorised access and protect the remuneration of the service provider. This is apparent from Recitals (3) to (6) and (13). These refer to the need to protect services whose remuneration and viability relies upon conditional access. Recital (13) is of particular importance. This expressly recognises the need for protection against devices which enable or facilitate without authority the circumvention of technological measures designed to protect the remuneration of a legally protected service. In particular:
  90. i) The use of the word "necessary" signals that the prohibition of illicit devices is a proportionate measure, that is to say, it is necessary in order to protect a service provider's remuneration and no less a restrictive measure will suffice to protect this legitimate policy object. This recital is, say the claimants, an answer to any argument from the defendants on proportionality.

    ii) The protection which Member States must provide must be broad and cover both "direct and indirect" gain, including publicans who gain from increased trade in their pubs.

    iii) An illicit device is one which "enables" or "facilitates" the circumvention of any technological measures (here, encryption) which are designed to protect the service provider's remuneration. In this case an ART or NOVA card supplied by QC and AV for use in the UK plainly "enables …. without authority" the decryption of the signal in the UK.

    iv) For the same reason each of those cards "facilitates …. without authority" the circumvention of technology designed to protect the remuneration of the service provider.

    v) In Recital 13 (and in Article 2), the word "designed" is used in the sense of "the purpose of".

    vi) Finally, Recital 13 makes it clear (along with Recitals 3,4,5 and 6) that the essential purpose of the Directive is to protect the service, not the sale of devices.

  91. Second, Article 1 makes clear the objective of the Directive is to approximate laws in Member States concerning measures against devices which give unauthorised access. In short, the focus of the Directive is on the effect of such devices.
  92. Third, the Directive draws no distinction between pirate and non-pirate devices. This is clear, inter alia, from Article 2(c) and 2(e):
  93. i) Article 2(c) defines "conditional access device" as any equipment or software designed or adapted to give access to a protected service in an intelligible form.

    ii) Article 2(e) defines "illicit device" as any equipment or software designed or adapted to give access to a protected service in an intelligible form without the authorisation of the service provider.

  94. The claimants point out that the two provisions are identically worded save for the inclusion at the end of Article 2(e) of the words "….without the authorisation of the service provider". It follows, they say, that the only distinction between a legitimate and an illegitimate device lies in the authorisation of the service provider. If the device gives access without authorisation it is an illicit device. If the device gives access with authorisation, it is not.
  95. Fourth, the claimants contend that even on a plain reading of the terms of Article 2(e) the devices sold and used by the defendants are illicit devices:
  96. i) First, they are clearly devices (decoder cards) which (when used with an appropriate decoder box) are "designed to give access" to a protected service within the UK. This is their purpose and effect.

    ii) Second, it is clear there is no authorisation from the service provider (whether FAPL, NOVA or ART) for such access in the UK.

  97. Fifth, the claimants say that the remuneration of the service provider is undermined as much by parallel imports as it is by pirate devices. In short, the Directive aims to give protection against all unauthorised access. At the heart of the Directive are, they say, the notions of "authorisation" and "prior individual authorisation" and it is the authorisation which is given which governs the situation. It is also inherent in the concept of individual authorisation that it can be limited geographically or for particular purposes.
  98. The defendants respond that the purpose of the Directive is not, as the claimants contend, to give to service providers of lawful decoder cards a right to control their circulation or place of use and so divide the single European market into zones with differential pricing. On the contrary, the purpose of the Directive is to facilitate the undistorted operation of the single market by giving to service providers a Community-wide right to suppress the manufacture of and commercial dealings in pirate cards which give access to protected services for free, and further to remove obstacles to the free circulation of cards which might previously have arisen from pre-existing provisions of national law. At the outset they point to the "Treaty bases" of the Directive, namely first, Articles 57(2) and 66 (now Articles 47(2) and 55), which are in Part II, Title III of the Treaty on "Free Movement of Persons, Services and Capital" and second, Article 100a (now Article 95). Article 66, by reference to Article 57(2), authorises the making of harmonising directives for the purpose of making it easier to provide services across national borders. Article 100a authorises harmonisation measures in aid of the establishment and functioning of the single market. The "single market" is defined in Article 8a (now Article 14) as "an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured in accordance with the provisions of this Treaty." In the light of these provisions, they say it is essential that the Directive's substantial purpose and effect should have been to eliminate obstacles to trade between Member States in goods and services.
  99. The defendants then turn to the Recitals to the Directive. They say that the objective of removing barriers to cross border broadcasting is made explicit in Recitals (1), (2), (3) (in referring to Article 10 of the European Convention for the protection of Human Rights and Fundamental Freedoms and the right of citizens to "receive and impart information regardless of frontiers"); (11) (in observing "the disparity between national rules concerning the legal protection of services based on conditional access is liable to create obstacles to the free movement of services and goods"), and (12) (in observing "Those obstacles should therefore be removed by providing for an equivalent level of protection between Member States").
  100. As to the substantive terms of the Directive, the defendants say that the definition of "illicit device", read in the light of Recital (6), can only be referring to pirate decoder cards which permit access to a protected service free of charge. Moreover, in order to fall within the definition the equipment or software concerned must inherently be a device which gives access to the protected service without authorisation.
  101. The defendants also draw support from Article 3 and suggest that on the claimants' apparent construction of the Directive, it is hard to see what content Article 3(2) would have.
  102. The arguments of both sides are powerful and the proper interpretation of the expression "illicit device" is not clear. I have carefully considered whether this is an issue which should be referred to the Court of Justice at this stage and, for reasons which I elaborate later in this judgment, I have concluded that it is. However, in case it may be of assistance to the Court, I offer my own provisional view.
  103. I think the arguments of the defendants are to be preferred. My reasons are these. First, the Recitals do recognise the need for legal protection of broadcasting and information society services whose remuneration relies upon conditional access. For example, Recital (6) expressly acknowledges the development of a wide range of such services has the potential for increasing consumer choice and contributing to cultural pluralism but that the viability of such services often depends upon the use of conditional access in order to obtain the remuneration of the service provider. Moreover, the Recitals make clear that disparity between national rules concerning the legal protection of services based upon, or consisting of, conditional access was considered liable to create obstacles to the free movement of goods and services and that a Directive was needed to provide for an equivalent level of protection between Member States. Further, the use of the word necessary in Recital 13 indicates that appropriate legal protection against illicit devices was considered a proportionate measure and that no less a restrictive measure would suffice to protect this legitimate policy object. However, I do not believe these considerations, of themselves, assist in determining the scope of definition because the protection of the service provider against pirate cards would seem to meet all these policy objectives.
  104. I believe some indication of the intention behind this measure can, however, be derived from Recitals (13) and (15), read as a whole. The former refers to protection against the placing on the market of a device which enables or facilitates without authority the circumvention of any technological measures designed to protect the remuneration of a legally provided service. The latter explains that commercial activities in relation to such devices are detrimental to consumers who are misled about the origin of illicit devices. Both Recitals suggest to me that the Directive is concerned with the production and placing on the market of devices which do not have their origin in a legitimate service provider rather than the unauthorised use of devices which do originate from a legitimate service provider.
  105. Second, Article 1 makes clear that the objective of the Directive is to approximate provisions in Member States concerning measures against illicit devices which give unauthorised access. However, I do not think it can be inferred the Directive is concerned only with effect, as the claimants contend. To the contrary, it seems to me that if this were the position then there would have been no need to limit its scope to illicit devices. Rather, it would have been directed to all devices which are used give unauthorised access.
  106. Third, this impression is reinforced by the definitions of Article 2. A "conditional access device" means equipment or software designed or adapted to give access to a protected service. This suggests to me that it is concerned with the physical nature of the device or, as the defendants say, with its inherent nature. Similarly, an "illicit device" is a conditional access device which is designed or adapted to give such access without the authorisation of the service provider. Once again, it is the physical or inherent nature of the device which must confer this characteristic. This is the natural interpretation of the words used.
  107. Fourth, and as the defendants submit, any reading of this definition which means that a device is "illicit" or "not illicit" depending upon where it is intended to be used is wholly unworkable given the infringing acts defined in Article 4 and the Community wide scope of the prohibitions. These are acts performed by manufacturers and dealers, not end users, and no mens rea or mental element is involved. Equipment becomes an "illicit device" upon its manufacture in any Member State of the Community; a device which is not illicit to begin with cannot change its status by reason of the subjective intention of a dealer as to the place where it is to be used. Indeed, a dealer may not even know where an end user intends to use a device which is supplied by a dealer to another dealer or to an end user.
  108. Fifth, I agree with the defendants that it is very hard to see what substance there can be to Article 3(2)(b) if the interpretation for which they contend is not correct.
  109. I believe the position of the defendants also derives support from a consideration of the context in which the Directive occurs and the objectives pursued by the rules of which it is part. I discuss this in greater detail later in this judgment (see paragraphs [283]-[294] and [320]-[328]) but for present purposes confine myself to the Green Paper and to the circumstances in which Recital 13 was introduced into the draft Directive by a relatively late amendment.
  110. The Green Paper, dated 6 March 1996, is expressly referred to in Recital 4 and must therefore have formed part of the material to which the European Parliament and Council had regard. It is entitled "Legal protection for Encrypted Services in the Internal market" and explains the nature of the European market in encrypted services, the Recommendations of the Council of Europe made in September 1991, the various solutions adopted by Member States to address the problem of illicit reception of encrypted services, the view of the Commission that differences in those solutions could create obstacles to the free movement of goods and services and the need for and potential types of Community action.
  111. Chapter 1 explains that technological developments have produced rapid changes in the European audiovisual landscape and allowed for a steady expansion in the supply of services which depend upon encryption for their viability. In elaborating the nature of the market, it recognises a number of reasons for encryption which include ensuring payment by subscribers, the possibility of increasing advertising revenue, accurately targeting services to the requirements of the users and simplifying the acquisition of broadcasting rights. In this regard it notes at p.11:
  112. "Traditionally, however, broadcasting rights are granted on a territorial basis, which means access often has to be limited to viewers within a specific geographical or common language area. Encryption allows the operator to restrict the reception of the signal exclusively to those territories for which rights have been acquired."
  113. It then points out (at pp.17-19) that the market is exposed to piracy and, in particular, that the manufacture and marketing of unauthorised decoding devices and the manipulation of authorised devices so as to allow access to a service on breach of the conditions laid down by the service provider has become highly lucrative and has a number of adverse consequences.
  114. Chapters 3 and 4 respectively outline the recommendations of the Council of Europe and of WIPO, and analyse the solutions provided by national legislation to the problem of illicit reception of encrypted services.
  115. Chapter 4 then addresses the issue of barriers to the efficient operation of the internal market. Section 1 (pp.34-36) suggests that protection of the encryptor against manufacturers and distributors of unauthorised decoding devices would be justified as pursuing public interest objectives in that it would protect the encryptor against those who might fraudulently profit from his activities and protect the public against devices which, as they are not official, would no longer guarantee reception of the service if the operator were to change the system. It explains the Commission view that such prohibitions would respect the proportionality criterion since:
  116. "…they confine themselves to prohibiting the marketing of devices manufactured without the prior authorisation of the encryptor, irrespective of their domestic or foreign origins; therefore they do not go beyond what is necessary for the attainment of the objective.34 Finally, they also respect the substitution and equivalence criterion, since there are no alternative and less restrictive measures that would ensure the desired protection."
  117. Footnote 34 is of importance. It contains this qualification:
  118. "By contrast, if the prohibitions in question were applied to the import and marketing of devices manufactured and marketed in the Member State of origin with the consent of the encryptor, they would be liable to result in economic barriers which would be disproportionate to the objective, and therefore incompatible with the principles on the free movement of goods as interpreted by the Court."
  119. Two points emerge from these passages. First, the Commission envisaged protection against the manufacture and distribution of unauthorised (that is to say, pirate) decoder cards. Second, it was the opinion of the Commission that it would be disproportionate to provide protection against the circulation of decoder cards originally placed on the market with the consent of the encryptor. This is confirmed by the conclusion on p.37:
  120. "In conclusion, an obstacle to the free movement of decoding devices manufactured and marketed in the State of origin, without the prior consent of the encryptor, may be justified by consumer protection and the fairness of commercial transactions, as well as by the protection of industrial or intellectual property."
  121. In section 2, the Commission then expresses in similar terms its views as to compatibility of restrictions on decoder cards with the Treaty rules on freedom of services.
  122. Finally, Chapter 5 considers the potential different types of Community action and proposes, in section 5, and in view of the proportionality principle, various prohibited activities. In so far as they refer to decoder cards they are all qualified by the phrase:
  123. "devices intended to permit access to encrypted services without the authorisation of the encryptor "
  124. I agree with the defendants that the Commission cannot have envisaged this phrase would cover devices put on the market with the consent of the encryptor in the light of the views it has expressed earlier.
  125. The defendants rely on these observations for two purposes, both of which I consider to have merit:
  126. i) As an expression of the Commission's legal opinion on the scope and application of rules of the Treaty on free movement of goods and services. They say that whilst the Court of Justice is not bound to follow the Commission's opinion on a legal issue, it is plainly not acte claire that the Commission's opinion was wrong;

    ii) As informing the interpretation of the Directive subsequently adopted. They submit it is inconceivable that the Commission would have proposed a measure which it believed to be contrary to the Treaty.

  127. The defendants further say, again, in my judgment, with some force, this legal opinion of the Commission is fundamental to the legislation. If the Parliament or the Council had amended the measure so that it had the effect of applying to the import and marketing of devices put on the market in the Member State of origin with the consent of the encryptor, the Commission would have been bound to advise the Parliament and Council of its opinion that such an alteration would take the measure outside the scope of the Treaty bases in Articles 57(2), 66 and 100a.
  128. My view is further reinforced by the circumstances in which Recital 13 was introduced into the draft Directive. This was a late amendment and led to the production by the Commission of a formal opinion under Article 189B(2)(d) of the EC Treaty in which it explained the purpose of the Directive as follows (on p.2) :
  129. "The proposed Directive will require Member States to prohibit and provide appropriate sanctions against a wide range of commercial piracy activities that relate to illicit (pirate) decoders, smart cards and software which allow the circumvention of conditional access systems and the reception of a service free of charge.
    The proposal concerns commercial piracy activities against protected services"
  130. Parallel importation of goods issued by or with the consent of the rights holder would not normally be described as piracy.
  131. Who has a relevant cause of action under Directive 98/84/EC?

  132. It is to be remembered that the only claimants are FAPL and NOVA. No claim is brought by an ART entity although, of course, FAPL claims in respect of the dealings in and use by the defendants of both ART and NOVA cards.
  133. Accordingly, and on the assumption the claimants are right as to the correct interpretation of "illicit devices", the question then arises as to who has a cause of action under Directive 98/84/EC in respect of the NOVA and ART cards in issue in these proceedings. In this regard it is important to consider who is providing a protected service under the Directive and what kind of service it is, since FAPL is claiming a right to control the circulation and use of decoder cards issued by its customers which give access to the customers' respective broadcasting services and not (at least directly) to FAPL's World Feed signal.
  134. The position of NOVA can be dealt with shortly. The parties all accept that NOVA provides a protected service within the meaning of Article 2 of the Directive, namely its television broadcasting service which is provided against remuneration and on the basis of conditional access, and that it can properly claim in respect of infringing activities in relation to illicit devices which give access to that service. However, the parties fundamentally disagree as to whether FAPL has any claim at all.
  135. The claimants say that FAPL is a provider of services within the meaning of Directive 98/84/EC because:
  136. i) FAPL makes the initial transmission by satellite in encoded form of television programmes (i.e. the Clean Live Feed, a fortiori, the World Feed) intended for reception by the public. This comprises a television broadcasting service within the definition in Art 2(a) by reference to Article 1(a) of Directive 89/552/EEC (the TV Without Frontiers Directive). It is also a service provided against remuneration (directly to the foreign broadcast licensee such as NOVA and ART, and thereby indirectly to the consumer) and on the basis of conditional access (the transmissions are encrypted).

    ii) Further or alternatively, FAPL provides the communication of programmes between undertakings with a view to their being relayed to the public. This comprises a television broadcasting service within the definition in Art 2(a) by reference to Article 1(a) of Directive 89/552/EEC. It is also a service provided against remuneration (directly to the foreign broadcast licensee such as NOVA and ART, and thereby indirectly to the consumer) and on the basis of conditional access (the transmission is encrypted).

    iii) Alternatively, FAPL provides an information society service within the meaning of Directive 98/34/EC (the Information Society Services Directive). In particular, provision of the World Feed is a service

  137. Moreover, they say the defendants are each engaging in infringing activities within the meaning of Article 4 of the Directive which affect the interests of FAPL. It follows that pursuant to Article 5, the UK must ensure that FAPL has access to appropriate remedies which include bringing this action, obtaining an injunction and any other appropriate remedies.
  138. This, the claimants say, is achieved by the provisions of s.298 (set out at paragraph [53] above) and the defendants have infringed the rights conferred by carrying out the activities summarised in paragraph [55] above.
  139. More specifically, the claimants explain their case in the following way, using NOVA as an illustration - the position in relation to ART being essentially the same. They say FAPL provides programmes to NOVA and NOVA provides those same programmes in its broadcast. They both contain the same live signal of the match – the visual coverage of the action and ambient sound, together with the availability of the English commentary – which is what the viewers want to watch. Adding the small NOVA logo and taking editorial decisions as to when the broadcast should cut to and from the World Feed, for example at half time to allow for the showing of advertisements, does not mean that a different programme is broadcast.
  140. During the course of the hearing I understood the claimants to refine their arguments, once again, using NOVA as an illustration. Their primary contention is that the subscriber has access to two protected services. One is a broadcasting service provided by NOVA and the second is a broadcasting service provided by FAPL. In the case of the latter, FAPL provides authorisation via NOVA. Accordingly, they both have a cause of action in respect of dealings in illicit devices which give access to those services.
  141. The claimants then have alternative "fall back" arguments. The first runs as follows. FAPL is providing a protected service, namely a broadcasting service or an information society service, which is accessed by NOVA. NOVA is also providing a broadcasting service which is accessed by the subscriber. However, the subscriber is also indirectly accessing the FAPL "first leg" service, with FAPL's authorisation given via NOVA. Once again, they both have a cause of action in respect of dealings in illicit devices which give direct access to NOVA's service and indirect access to FAPL's service.
  142. The second alternative argument is much the same as the first. However, here the claimants say that FAPL has a cause of action in respect of dealings in illicit devices which give access to NOVA's service because it is also the supplier of a protected service and its interests are affected by such activities.
  143. The defendants say that FAPL's arguments are completely misconceived. They accept that NOVA is providing a protected service which falls within Article 2(a), first indent, of the Directive as it consists of television broadcasting, as defined in Article 1(a) of Directive 89/552/EEC. However, they say FAPL is not a broadcaster within Directive 89/552/EEC, and nor is FAPL's transmission an act of television broadcasting within the terms of that Directive. This is because of the definition of "broadcaster" in Article 1(b), which I have set out in paragraph [62] above.
  144. In this regard, the defendants say, and I accept, that NOVA composes its schedules of television programmes which include individual events provided by suppliers of sports programme material such as FAPL and others. None of those individual suppliers has editorial responsibility for NOVA's schedules. Indeed, it is clear that NOVA exercises editorial control not merely at the level of deciding which match programmes to put on within its overall schedules, but at the more detailed level within individual programmes of deciding when to introduce visual images from FAPL's World Feed, when to cut them off, and over what other elements to insert to make up the overall programme.
  145. The defendants also say that that the reference in Article 1(a) of Directive 89/552/EEC that broadcasting includes "the communication of programmes between undertakings with a view to their being relayed to the public", when taken in conjunction with the definition of "broadcaster" in Article 1(b), is limited to a situation where a whole service consisting of schedules of programmes is relayed over the networks of others, such as a cable network. Further, it follows from the first sentence of Article 1(a) that the programmes should be transmitted in the form in which they are intended to be received by the public. This does not happen in the present case, where FAPL merely transmits material which its customers utilise as they wish in composing their own match programmes.
  146. The defendants say that this is the only interpretation consistent with the purpose and structure of Directive 89/552/EEC, which is to ensure that broadcasting is subject to regulation at one point only and not subject to multiple regulatory control by multiple Member States. Thus, NOVA's broadcasts are subject to regulation in Greece because that is where NOVA puts together its schedules of sporting programmes. NOVA's broadcasts of FAPL matches are not subject to regulation in the UK because they are drawing a feed signal from the UK; it would, the defendants argue, be absurd and unworkable if regulatory control over NOVA's output were to pass from country to country depending upon whatever live sporting event NOVA happened to be carrying at any particular time. It would also make a nonsense of the requirements of Article 4 which reserve a majority proportion of a broadcaster's transmission time for European works. Such provisions by their nature can only apply to broadcasters who transmit whole schedules of programmes, not to purveyors of live feeds from individual sporting events such as FAPL.
  147. The correct analysis, submit the defendants, is that FAPL's customers are broadcasters who provide services falling within the first indent of Article 2(a) of Directive 98/84/EC, whilst FAPL's World Feed is an information society service falling within the third indent of that Article (see paragraph [58] above). Matches are provided to FAPL's broadcasting customers at their individual request via FAPL's conditional access system.
  148. However, in either case, the defendants say that FAPL's World Feed is a separate protected service from the protected services of each of its customers, having its own encryption and decryption system and the Directive only gives protection against illicit devices which give access to a protected service in an intelligible form. It does not extend to devices which give access to other services to which a protected service may feed material. Nor does it extend rights to other persons who may feed material to the provider of the relevant protected service.
  149. The defendants support these submissions with two powerful arguments. First, they say the fact that the link from FAPL is encrypted, or that a satellite is used rather than a land line, is a matter of convenience for FAPL and its customers which has no relevance to the recipients of satellite broadcasts from FAPL's customers. The signal sent on the World Feed could in principle be sent by an unencrypted secure land line, and indeed is sent by this method to broadcasters who are closer than NOVA and ART, including TPS France. It would be very odd if the fact of sending a signal via an encrypted link were in some way to spread its effect downstream and so entitle the provider to control conditional access devices which control access to downstream services. Secondly, they say that the consequences of the claimants' arguments are potentially very significant. Decoder cards for a satellite broadcasting service would need to be authorised not only by the satellite broadcaster itself, but by every programme content provider who provides content during the period of validity of a decoder card via an electronic link.
  150. I have reached the conclusion that this is another point of interpretation which is not clear and which must be referred to the Court of Justice. However, again I offer my own opinion. Notwithstanding the force of the defendants' arguments, I favour the submissions of the claimants and would be minded to conclude that FAPL does have a cause of action in respect of pirate NOVA and ART cards and, it would follow, in respect of the unauthorised use of the decoder cards in issue in these proceedings if, contrary to my provisional view, they are right as to the correct interpretation of the expression "illicit device".
  151. Despite the complexity of the arguments tendered by the claimants, I think the scheme of the Directive is relatively straightforward. Its objective is to approximate provisions in Member States concerning measures against illicit devices which give unauthorised access to protected services (Article 1). As has been seen, "illicit device" means equipment or software designed to give access to a protected service in an intelligible form without the authorisation of the service provider (Article 2(e)). Infringing activities are defined by reference to illicit devices (Article 4) and finally, Member States are obliged to take the necessary measures to ensure that providers of protected services whose interests are affected by an infringing activity have access to appropriate remedies (Article 5). So a convenient starting point is to identify the relevant protected service and the person who has provided it. It is by reference to the authorisation of this person that the term "illicit device" is defined and, as it seems to me, it is to this person that a remedy must be provided if his interests are affected by an infringing activity.
  152. I therefore begin with a consideration of whether FAPL is providing a protected service and whether, to take a non contentious example, pirate NOVA or ART cards give unauthorised access to it. I incline to the view that FAPL is providing a television broadcasting service, as defined in Article 1(a) of Directive 89/552/EEC, for the following reasons.
  153. First, it transmits television programmes intended for reception by the public. It matters not that the transmission is not direct because Article 1(a) expressly says that "television broadcasting" includes the communication of programmes between undertakings with a view to their being relayed to the public. Those programmes comprise the visual coverage, ambient sound and English language commentary of the individual Premier League matches and they are embodied in the World Feed and (in the case of the visual coverage and the ambient sound only) in the Clean Live Feed. It is true that FAPL's customers add their own logos and, on occasion, commentary. They also cut to and from the World Feed, depending on their own schedules but they do not interrupt the coverage of the matches. I do not think these steps change the essential identity of the programmes themselves.
  154. In expressing this provisional view I feel supported by the decision of the Administrative Court in Murphy v Media Protection Services Ltd [2007] EWHC 3091 (Admin). This case concerned an appeal by way of case stated against the dismissal of an appeal against a conviction of Ms Murphy for dishonestly receiving a programme included in a broadcasting service provided from a place in the UK with intent to avoid the charge applicable to the reception of the programme, contrary to s.297 of the CDPA. In short, Ms Murphy had been screening Premier League matches in her pub using a NOVA card supplied by AV.
  155. Section 297(1) of the CDPA reads:
  156. "A person who dishonestly receives a programme included in a broadcasting service provided from a place in the United Kingdom with intent to avoid payment of any charge applicable to the reception of the programme commits an offence and is liable on summary conviction to a fine not exceeding level 5 on the standard scale."
  157. The similarity between the words of s.297 and s.298 (set out in paragraph [53] above) is immediately apparent. Moreover, s.299(5) (also set out in paragraph [53] above) provides that the expressions "programme" and "broadcasting" and related expressions in both s.297 and s.298 are to have the same meaning as in Part I, that is to say as defined in s.6.
  158. However, it must be acknowledged that in the Murphy case the court did not consider it a legitimate approach to construe s.297 by reference to Directive 89/552/EEC or, I would add, by reference to Directive 93/83/EEC. Rather, it concluded (at [36]):
  159. "……The question is to be answered by identifying what is said to be the "programme included in a broadcasting service", then determining where that broadcasting service is provided from. Employing the definitions of s.6 CDPA, a "programme" is "any item included in a broadcast", itself defined as "an electronic transmission of visual images, sounds or other information". We do not consider that for this purpose a "broadcasting service" is anything more than a succession of such transmissions. In every case, however, it must be determined whether the broadcast, and so the programme, is capable of being lawfully received by members of the public. In the present case, there is no doubt that the core of the transmissions received by Ms Murphy, the visual images and the ambient sound of the matches themselves, was transmitted for simultaneous reception by members of the public and was capable of being lawfully received by them from BSkyB."
  160. It then proceeded to consider whether, for the purposes of s.297, it was a requirement that the broadcasting service or broadcaster providing the programme in question had to be based in the UK and concluded at [37] to [38]:
  161. "37. The question in every case is to identify the "programme" received by the Defendant. In the present case, the programme in question comprised visuals and ambient sound transmitted from the ground in the United Kingdom, the broadcasting service being the supply of such programmes for simultaneous reception by members of the public in the UK. The fact that this programme had added to it, first, an English commentary and, second, a Greek commentary and a Greek visual logo, did not change the identity of the programme as received by the Appellant.
    38. The question is accordingly ambiguous, since it is necessary in every case to identify the first point at which the programme which is the subject of the charge came into existence to be included in the broadcasting service. The place from which the broadcasting service is provided is the point at which the initial transmission of the programme for ultimate reception by the public took place. That place is the United Kingdom."
  162. Importantly for present purposes, the court was of the view that the addition to the Live Feed of an English commentary (to make the World Feed) and then a Greek commentary and Greek visual logo did not change the identity of the programme.
  163. I should note the court also considered whether FAPL and BSkyB were broadcasters or whether they provided a broadcasting service and determined, at [39]:
  164. "It is not clear to us why this question arises. The question is the identification of the broadcasting service, not the person responsible for it. It seems to us, however, that both FAPL and BSkyB are the broadcaster for this purpose, since it is they who have editorial responsibility "for the composition of schedules of television programmes" so far as the transmitted match is concerned."
  165. Second, I must address the defendants' contention that the definition of "television broadcasting" in Article 1(a) of Directive 89/552/EEC must be qualified by reference to the definition of "broadcaster" in Article 1(b). This is an important point. For if the defendants are right then I see considerable force in their submission that FAPL is neither a broadcaster nor engaging in television broadcasting. I say this essentially for the reasons which the defendants give. In summary, FAPL does not provide whole schedules of programmes which are then simply relayed over the network of others. Nor does FAPL have editorial responsibility for the schedule of programmes which NOVA broadcasts. From a practical perspective, I think that NOVA is the entity which must be subject to the regulatory regime contemplated by Directive 89/552/EEC. Otherwise, as the defendants put it, responsibility for the contents of the transmission would "flicker" between FAPL and NOVA and regulatory control would pass backwards and forwards from one country to the other depending on what was being broadcast at any particular moment in time.
  166. However, I do not think it is appropriate to qualify the definition of "television broadcasting" in this way because Article 2(a) of Directive 98/84/EC is clear in referring only to Article 1(a) of Directive 89/552/EEC. This is a sensible scheme. Directive 98/84/EC is concerned with the protection of services whose remuneration relies upon conditional access and identifies the service provider as the person from whom authorisation must be obtained. Directive 89/552/EEC, on the other hand, is concerned with regulation and hence, quite naturally, identifies the broadcaster as the person with editorial responsibility for the composition of whole schedules of programmes. Moreover, this interpretation is consistent with the position adopted in relation to radio broadcasting which is defined in Article 2(a) of Directive 98/84/EC in similar terms as meaning "any transmission by wire or over the air, including by satellite, of radio programmes intended for reception by the public". There is no requirement here that the service provider must have responsibility for the composition of whole schedules of radio programmes.
  167. Third, I recognise that NOVA and ART each compose their own schedules of programmes and incorporate the World Feed into those schedules in the manner I have described. They are undoubtedly engaging in television broadcasting within the definition of that expression in Article 1 of Directive 89/552/EEC. However, I do not think this creates any inconsistency. It seems to me to be perfectly possible to have a number of protected services in a single encrypted transmission for which one operator acts as gatekeeper and so provides a conditional access service. Likewise, I see no reason why that operator cannot act both as gatekeeper and provide another protected service himself.
  168. Fourth, I think the World Feed is transmitted against remuneration (in the form of the subscriptions or fees paid by the final consumers and, in turn, the fees paid by NOVA and ART to FAPL). It is also provided on the basis of conditional access. Here I see the relevant conditional access not as the access gained by NOVA and ART to the encrypted World Feed but rather the conditional access of the final consumers to the encrypted NOVA and ART sports channels which include the programmes broadcast by FAPL. In this respect I agree with the defendants that the signal sent on the World Feed could, in principle, be sent by an unencrypted secure land line. However, this does not mean that rights are extended to any person who may feed material to the supplier of a protected service, nor that authorisation is needed from every provider of programme content. Authorisation is only needed from the suppliers of protected services. Moreover, this will not present a problem in practice because the final consumer will enter into a single contract as a result of which he will obtain all the necessary authorisations together in one package.
  169. The final question is whether, to pursue the non contentious example, pirate NOVA or ART cards are designed or adapted to give access to FAPL's service without FAPL's authorisation and whether FAPL's interests are affected. The answer, as it seems to me, is yes. Accordingly, I would be minded to conclude that FAPL is the provider of a protected service and would have a cause of action in respect of the NOVA and ART cards in issue, assuming it is right as to the proper interpretation of the expression "illicit device".
  170. Commercial purposes

  171. The point here is a very short one. The Madden defendants argue that their possession of illicit devices is not for "commercial purposes" within the meaning of Article 4 of Directive 98/84/EC.
  172. The claimants say that the language of the Directive makes a clear distinction between possession for private and commercial purposes. They refer, in particular, to the wording of Recital 21:
  173. "Whereas this Directive is without prejudice to the application of any national provisions which may prohibit the private possession of illicit devices …"

    and contrast this with the words "possession for commercial purposes" used in Article 4.

  174. Hence, the claimants argue, possession is either domestic or commercial and that there cannot be anything in between. The effect of the defendants' arguments is, they say, to create a gap in protection somewhere between private possession and possession for onward trade and that this would undermine the objective of the Directive to protect the remuneration of the service provider in a manner which is totally arbitrary and inexplicable.
  175. The defendants, on the other hand, focus on Recitals 13 to 15 of the Directive which, they say, indicate the Directive is concerned with commercial activities relating to the placing on the market of decoder cards. Hence the provision is aimed at persons who are stocking illicit devices for resale, hire or installation, rather than persons who are holding such devices for their own end use, even if that use is in a business context. The purpose of the prescribed infringing acts is to cut off supplies of illicit devices to end users rather than to penalise end users for possession or use. They also note that the Directive deliberately fails to render actual use an infringing act, whether in the course of a business or not, and suggest that it would be a very odd result if, having failed to prohibit use in the course of a business as such, the Directive were indirectly to strike at end users for mere possession.
  176. This is another question of interpretation which I believe must be submitted to the Court of Justice. However, my own provisional view is that the claimants' submissions are to be preferred. The expression "possession for commercial purposes" seems to me to be sufficiently general to encompass both possession for the purposes of trade and possession for commercial use and I agree with the claimants that the Directive appears to draw a distinction between private possession and commercial possession. The latter is an infringement but the former is not. This distinction is, I believe, quite logical. It is traders in and business users of illicit devices who are likely to cause the most damage to service providers.
  177. Authorisation by NOVA

  178. The defendants argue that NOVA has consented to or acquiesced in the circulation and sale of NOVA decoder cards throughout Europe and, in particular, in the UK. This is deployed as a defence to any claim under Directive 98/84/EC (on the assumption they are wrong as to the proper interpretation of the expression "illicit device") and also to the claim by FAPL for infringement of UK copyright. Consent or acquiescence is to be inferred, they say, from a number of matters.
  179. First, the defendants point to a number of aspects of the way in which the NOVA business is presented from which, they submit, it can be seen that the whole NOVA offering is targeted at an international audience. In particular they highlight, and I accept:
  180. i) The NOVA website intended for viewers has complete versions in both Greek and English.

    ii) Channel listings on that website are in Greek and English.

    iii) User Guides are provided on the website in Greek and English.

    iv) The electronic programme guide is provided in Greek and English.

    v) The SuperSports channels show football leagues from around the world.

    vi) The SuperSports channels show live cricket, when there are only a handful of cricket clubs in Greece.

    vii) The SuperSports channels show rugby, when there are only eight teams in Greece.

    viii) The Filmnet channels carry Hollywood films, and they do not contain Greek films.

    ix) Channel names in Roman script and English language are targeted at an international audience.

  181. The defendants also say, and again I accept, that the above activities and the maintenance of a complete dual language set up on website, programme guides and sports sound tracks must involve a lot of money and effort and that NOVA must consider there is enough of a demand, or intended customer base, to warrant that investment.
  182. NOVA's position was explained by Mr Spiros Papastathopoulos, its legal advisor. All the above matters were put to him in the course of cross examination and he responded that NOVA is part of a multinational group of companies and has many subscribers in Greece who do not speak Greek. Moreover, sport in general is popular in Greece, minority sports such as rugby are gaining in popularity, and that some sports such as cricket and rugby are of particular interest to subscribers in Cyprus. I found Mr Papastathopoulos to be an honest witness and I accept his evidence.
  183. The defendants also say that NOVA has shown only a limited desire to enforce its territorial restrictions and that it has turned "a blind eye" to the export of its decoder cards. Moreover, NOVA provides an easy route for card exports by allowing dealers to circumvent its registration procedures and activate cards on behalf of users.
  184. It is true that the dealers have been allowed to activate cards on behalf of customers but, as Mr Papastathopoulos explained, it is not always possible to determine whether the supplier is calling or the customer. In addition, NOVA has tried to take action against piracy but has real practical problems taking action against traders selling NOVA cards for use outside Greece.
  185. Overall, and having heard Mr Papastathopoulos, I do not accept that NOVA has consented, explicitly or implicitly, to the sale or use of NOVA cards outside Greece. Nor do I accept it has turned a "blind eye" to such activities or encouraged them or created any expectation they are acceptable. If NOVA and FAPL otherwise have a cause of action under Directive 98/84/EC, this defence fails on the facts. It also provides no answer to any claim FAPL may have for infringement of UK copyright.
  186. Domestic or commercial subscriptions

  187. I am also invited to consider a further sub-issue in relation to NOVA decoder cards, namely whether the NOVA cards supplied by QC and AV were issued to domestic or commercial subscribers. Mr Papastathopoulos explained that a private subscription costs at least €676.8 (if paid on a monthly basis) or €684 with one bonus month free if pre-paid. The price for a commercial subscription is based on the number of seats in the bar or pub, and costs at least €1080.
  188. Mr. Richardson paid between €640-730 for his NOVA cards and Mr Chamberlain between €657-682. I accept the claimants' submission that it is obvious that these defendants would not have been able to purchase commercial cards at these prices.
  189. The claimants say this is another manifestation of the more general point that anyone who obtains and uses a NOVA decoder card in the UK does so without authorisation. I accept that general proposition. It would apply as much to anyone who uses any decoder card outside the scope of his subscriber agreement. However, for the reasons I have explained, whether it provides the claimants with a cause of action under Directive 98/84/EC must depend upon the proper interpretation of that Directive and, in particular, upon the scope of the expression "illicit device". However, it is another reason why these matters in themselves provide no defence to the claim by FAPL for infringement of UK copyright.
  190. Authorisation by ART

  191. The defendants contend that ADD or ART expressly permitted and authorised the sale of the ART cards in issue to end users in the UK or, alternatively, the defendants were entitled to infer that ADD and ART consented to such sales. Once again, this is deployed as a defence to any claim under Directive 98/84/EC (on the assumption the defendants are wrong as to the proper interpretation of the expression "illicit device") and also to the claim by FAPL for infringement of UK copyright.
  192. This contention has two limbs. The first is based upon the evidence of Mr Richardson and is to the effect that the importation into the UK of ART cards and their supply to QC for resale here was organised and arranged by a Mr Bertolelli, the Distribution Manager of ADD, from which Mr Richardson and the Madden defendants were entitled to infer that ART consented to such importation and resale.
  193. The second limb is more fundamental and is that, absent an explicit statutory basis for discriminating between goods placed on the market inside or outside the EU, the sale of goods on a foreign market without any express restriction which is brought to the attention of purchasers carries an implied authorisation to use them. This argument was only developed in correspondence after the substantive hearing and is based on the decision of the Court of Appeal in Betts v Wilmott (1871) LR 6 Ch 239.
  194. The defence based on Mr Bertolelli

  195. The evidence of Mr Richardson in relation to Mr Bertolelli was not entirely consistent, but I do not regard this as surprising because he was trying to remember events that took place some four years ago. Nevertheless, I feel able to make the following findings.
  196. Mr Richardson originally obtained ART decoder cards from various internet based businesses but found that they were selling so well he decided to contact ART directly to see if he could obtain them at wholesale prices. He noted that the name ADD and a German contact number appeared on the back of certain decoder cards. Upon ringing that number in about early 2004 and explaining that he wanted to buy ART decoder cards, he was told he needed to speak with a Mr Luc Bertolelli who was presently unavailable. He was also told that Mr Bertolelli was involved in the sale of satellite cards throughout Europe and to other countries as well. Mr Richardson left his details and Mr Bertolelli subsequently returned his call.
  197. Mr Richardson explained to Mr Bertolelli that he wanted to purchase ART decoder cards direct from ADD with fixed period access to the Arabesque satellite network. He also told him that the cards were for use in the UK, that many of his customers were likely to be interested in football and that he intended to make the cards available to anyone interested in buying them, including publican