The EU Court of Justice clarified that a de-duplication system of recorded TV broadcasts, allowing widespread access to protected works through online TV retransmission via commercial customers, does not fall within the scope of the "private copying" exception. Additionally, the Court clarified that facilitating online retransmission by merely providing the necessary hardware and software, enabling commercial customers to offer replays to their customers, does not constitute a communication to the public (Case C‑426/21).
• To refresh your memory
i) “Private copying” exception
Article 2 of Directive 2001/29 (“InfoSoc Directive”) provides that authors have the exclusive right to authorise or prohibit reproductions of their work. Article 5(2)(b) of the InfoSoc Directive provides for an exception to the exclusive right to reproduction, the so-called “private copying” exception. This exception, once transposed by Member States into their national legislation, allows natural persons to make copies of protected works for their private use and for non-commercial purposes without the rightsholders' consent.
ii) Communication to the public
Article 3 of the InfoSoc Directive provides that authors have the exclusive right to authorise or prohibit any communication to the public of their protected works. The notion of “communication to the public” includes two cumulative criteria, namely (i) an act of transmission or retransmission of a work and (ii) the communication of that work to a public.
• Facts of the case
Ocilion provides an Internet television service (“IPTV service”) to commercial customers such as network operators, telephone companies and hotels (“the network operators”).
By using Ocilion’s IPTV services, these network operators are able to offer their end-users a dual functionality. The IPTV service consists of both (i) the retransmission of television programs and (ii) the possibility for end-users to temporarily record programs via an online video recorder (continuous or one-off recordings). The recorded material is made available to any other end-user programming the same recording due to a de-duplication process, which prevents multiple copies from being made.
This service is offered either (i) as an on-premises solution, in which Ocilion makes the necessary hardware and software available to the network operators with technical support, or (ii) as a cloud-hosting solution, directly managed by Ocilion.
Seven.One Entertainment Group GmbH and Puls 4 TV GmbH & Co (“Seven.One and others”), are TV broadcasting companies that hold retransmission rights over TV programs made available via the IPTV service. They objected to two aspects of Ocilion's IPTV service features.
Seven.One and others argued that there was (i) a violation of their exclusive right of communication to the public of their television programs, as they did not consent to the retransmission of this content through Ocilion’s service, and (ii) a violation of their exclusive right of reproduction, since the means in which Ocilion's online recorder operates does not fall within the "private copying" exception.
The case was brought before the Supreme Court of Austria, which referred two preliminary questions to the Court concerning:
(i) the legality of the IPTV service in the light of the “private copying” exception, and;
(ii) the liability of online TV service providers providing on-premises IPTV services in the light of an act of communication to the public.
• Findings of the Court
i) First preliminary question – the “private copying” exception
Firstly, the Court reiterated that the concept of “reproduction” must be construed broadly to ensure a high level of protection for the rightsholders.
The referring court doubted whether the findings of VCAST could be applied to a service such as the one offered by Ocilion. As a reminder, VCAST offered a B2C service for the remote recording of private copies by actively involving itself in the recording and without the rightsholder's consent. In that regard, the Court held that, since legal persons are excluded from the benefit of the exception, Ocilion – offering its service in the context of its commercial activity – in any event cannot be considered as making a copy falling within the private copying exception.
Ocilion argued, however, that its IPTV service is limited to the mere provision of a tool enabling an end user to replay television programs on his/her own initiative and solely for his/her private purposes. It further stated that the de-duplication technique it uses does not unreasonably prejudice the legitimate interests of exclusive rightsholders.
The Court rebutted Ocilion’s argument on various grounds.
Firstly, the Court found that the content recording and the making available of these recordings to an “indeterminate number of end users” is “the main interest of the offer provided”, giving the IPTV service an underlying commercial interest that falls out of the scope of Article 5(2)(b) of the InfoSoc Directive. Secondly, taking into account the principle of technological neutrality, the system used does not satisfy the 3-step-test provided for in Article 5(5) of the InfoSoc Directive, as access to recorded broadcasts may unreasonably prejudice the legitimate interest of exclusive rightsholders and undermine the fair balance between their interests and those of end-users.
In those circumstances, the Court ruled that the service offered by Ocilion is not covered by the “private copying” exception.
ii) Second preliminary question – the communication to the public
In analysing the second question, the Court noted that Ocilion itself does not provide end users with access to protected works. Although Ocilion provides the network operators with the hardware and software necessary for that purpose, and even though the use of such tools is necessary for end-users to be able to re-watch TV broadcasted content, only the network operators can be found to provide end-users with access to protected works. Hence, Ocilion does not play an “indispensable role” in providing such access, with the result that it cannot be deemed to have performed an act of communication to the public.
The Court added that the mere knowledge that this IPTV service may be used to access protected broadcasting content without the rightholders’ consent is not in itself sufficient to establish an infringement.
In those circumstances, the Court, referring to Recital 27 of the InfoSoc Directive, ruled that the mere provision of hardware and software that enables a customer to allow its own customers to replay online television broadcasts, does not constitute a communication to the public.
• Final remarks
With this decision, the Court clarified the scope of the “private copying” exception for a specific kind of (expanded) service offered in a B2B context with de-duplication recording facilities.
The commented decision also adds another chapter to the already complex saga of the interpretation of the concept of communication to the public. In this regard, it is still unclear why the question referred to by the Austrian Court was limited to the on-premise service, to the exclusion of the cloud-based service offered by Ocilion.
For further information about this case and/or for general legal advice relating to intellectual property, please contact Karel Janssens and/or Marion Nuytten.